exv10w1



 







Exhibit
10.1




CREDIT AGREEMENT




Dated as of March 29, 2006




among




IMATION CORP.

and

IMATION ENTERPRISES CORP.,

as the Borrowers,




BANK OF AMERICA, N.A.,

as Administrative Agent

and L/C Issuer,




and




THE OTHER LENDERS PARTY THERETO,




JPMORGAN CHASE BANK, N.A.

as Documentation Agent,




U.S. BANK NATIONAL ASSOCIATION

as Documentation Agent,




WELLS FARGO BANK, NATIONAL ASSOCIATION

as Documentation Agent,




THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

as Syndication Agent




and




BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	Section	 	Page	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	22	 
	1.03 Accounting Terms
	 	 	23	 
	1.04 Rounding
	 	 	23	 
	1.05 References to Agreements and Laws
	 	 	23	 
	1.06 Times of Day
	 	 	23	 
	1.07 Letter of Credit Amounts
	 	 	24	 
	 
	 	 	 	 
	ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	24	 
	2.01 Loans
	 	 	24	 
	2.02 Borrowings, Conversions and Continuations of Loans
	 	 	24	 
	2.03 Letters of Credit
	 	 	26	 
	2.04 Prepayments
	 	 	34	 
	2.05 Termination or Reduction of Commitments
	 	 	34	 
	2.06 Repayment of Loans
	 	 	34	 
	2.07 Interest
	 	 	35	 
	2.08 Fees
	 	 	35	 
	2.09 Computation of Interest and Fees
	 	 	36	 
	2.10 Evidence of Debt
	 	 	36	 
	2.11 Payments Generally
	 	 	36	 
	2.12 Sharing of Payments
	 	 	38	 
	2.13 Increase in Commitments
	 	 	39	 
	 
	 	 	 	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	40	 
	3.01 Taxes
	 	 	40	 
	3.02 Illegality
	 	 	42	 
	3.03 Inability to Determine Rates
	 	 	42	 
	3.04 Increased Costs
	 	 	42	 
	3.05 Compensation for Losses
	 	 	44	 
	3.06 Mitigation Obligations; Replacement of Lenders
	 	 	44	 
	3.07 Survival
	 	 	45	 
	 
	 	 	 	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	45	 
	4.01 Conditions of Initial Credit Extension
	 	 	45	 
	4.02 Conditions to all Credit Extensions
	 	 	47	 
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES
	 	 	47	 
	5.01 Existence, Qualification and Power; Compliance with Laws
	 	 	47	 
	5.02 Authorization; No Contravention
	 	 	48	 
	5.03 Governmental Authorization; Other Consents
	 	 	48	 
	5.04 Binding Effect
	 	 	48	 
	5.05 Financial Statements; No Material Adverse Effect; Solvency
	 	 	48	 
	5.06 Litigation
	 	 	49	 
	5.07 No Default
	 	 	49	 
	5.08 Ownership of Property
	 	 	49	 
	5.09 Environmental Compliance
	 	 	49	 






i









 






TABLE OF CONTENTS (Continued)




	 	 	 	 	 
	Section	 	Page	 
	5.10 Insurance
	 	 	49	 
	5.11 Taxes
	 	 	50	 
	5.12 ERISA Compliance
	 	 	50	 
	5.13 Subsidiaries
	 	 	50	 
	5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act
	 	 	50	 
	5.15 Disclosure
	 	 	51	 
	5.16 Compliance with Laws
	 	 	51	 
	5.17
Intellectual Property; Licenses, Etc.
	 	 	51	 
	 
	 	 	 	 
	ARTICLE VI. AFFIRMATIVE COVENANTS
	 	 	52	 
	6.01 Financial Statements
	 	 	52	 
	6.02 Certificates; Other Information
	 	 	52	 
	6.03 Notices
	 	 	54	 
	6.04 Payment of Obligations
	 	 	54	 
	6.05 Preservation of Existence, Etc.
	 	 	55	 
	6.06 Maintenance of Properties
	 	 	55	 
	6.07 Maintenance of Insurance
	 	 	55	 
	6.08 Compliance with Laws
	 	 	56	 
	6.09 Books and Records
	 	 	56	 
	6.10 Inspection Rights
	 	 	56	 
	6.11 Use of Proceeds
	 	 	56	 
	6.12 Additional Guarantors
	 	 	56	 
	 
	 	 	 	 
	ARTICLE VII. NEGATIVE COVENANTS
	 	 	56	 
	7.01 Liens
	 	 	56	 
	7.02 Investments
	 	 	58	 
	7.03 Indebtedness
	 	 	58	 
	7.04 Fundamental Changes
	 	 	60	 
	7.05 Dispositions
	 	 	60	 
	7.06 Restricted Payments
	 	 	61	 
	7.07 Change in Nature of Business
	 	 	61	 
	7.08 Transactions with Affiliates
	 	 	61	 
	7.09 Burdensome Agreements
	 	 	62	 
	7.10 Use of Proceeds
	 	 	62	 
	7.11 Financial Covenants
	 	 	62	 
	 
	 	 	 	 
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
	 	 	62	 
	8.01 Events of Default
	 	 	62	 
	8.02 Remedies Upon Event of Default
	 	 	64	 
	8.03 Application of Funds
	 	 	65	 
	 
	 	 	 	 
	ARTICLE IX. ADMINISTRATIVE AGENT
	 	 	65	 
	9.01 Appointment and Authority
	 	 	65	 
	9.02 Rights as a Lender
	 	 	66	 
	9.03 Exculpatory Provisions
	 	 	66	 
	9.04 Reliance by Administrative Agent
	 	 	67	 
	9.05 Delegation of Duties
	 	 	67	 
	9.06 Resignation of Administrative Agent
	 	 	67	 
	9.07 Non-Reliance on Administrative Agent and Other Lenders
	 	 	68	 
	9.08 No Other Duties, Etc.
	 	 	68	 






ii









 






TABLE OF CONTENTS (Continued)




	 	 	 	 	 
	Section	 	Page	 
	9.09 Administrative Agent May File Proofs of Claim
	 	 	68	 
	9.10 Collateral and Guaranty Matters
	 	 	69	 
	 
	 	 	 	 
	ARTICLE X. MISCELLANEOUS
	 	 	70	 
	10.01 Amendments, Etc.
	 	 	70	 
	10.02 Notices and Other Communications; Facsimile Copies
	 	 	71	 
	10.03 No Waiver; Cumulative Remedies
	 	 	73	 
	10.04 Expenses; Indemnity; Damage Waiver
	 	 	73	 
	10.05 Payments Set Aside
	 	 	75	 
	10.06 Successors and Assigns
	 	 	75	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	79	 
	10.08 Right of Set-off
	 	 	80	 
	10.09 Interest Rate Limitation
	 	 	80	 
	10.10 Counterparts
	 	 	81	 
	10.11 Integration
	 	 	81	 
	10.12 Survival of Representations and Warranties
	 	 	81	 
	10.13 Severability
	 	 	81	 
	10.14 Replacement of Lenders
	 	 	81	 
	10.15 Governing Law
	 	 	82	 
	10.16 Waiver of Right to Trial by Jury
	 	 	82	 
	10.17 Time of the Essence
	 	 	83	 
	10.18 Entire Agreement
	 	 	83	 
	10.19 [Reserved]
	 	 	83	 
	10.20 Joint and Several Liability
	 	 	83	 
	10.21 Contribution and Indemnification between the Borrowers
	 	 	84	 
	10.22 Agency of Imation for Enterprises
	 	 	84	 
	10.23 USA Patriot Act Notice
	 	 	85	 
	 
	 	 	 	 
	SIGNATURES
	 	 	S-1	 






iii




 









 





TABLE OF CONTENTS (Continued)



SCHEDULES




	 	 	 	 	 	 	 
	 

	 	 	1.01(e)	 	 	Existing Letters of Credit
	 

	 	 	2.01	 	 	Commitments and Pro Rata Shares
	 

	 	 	5.05	 	 	Supplement to Interim Financial Statements
	 

	 	 	5.06	 	 	Litigation
	 

	 	 	5.09	 	 	Environmental Matters
	 

	 	 	5.13	 	 	Subsidiaries and Other Equity Investments
	 

	 	 	5.17	 	 	Intellectual Property Matters
	 

	 	 	7.01	 	 	Existing Liens
	 

	 	 	7.03	 	 	Existing Indebtedness
	 

	 	 	10.02	 	 	Administrative Agent’s Office, Certain Addresses for Notices
	 

	 	 	10.06	 	 	Processing and Recordation Fees






EXHIBITS




	 	 	 	 	 
	 	 	Form of
	 
	 	 	 	 
	 

	 	A
	 	Loan Notice
	 

	 	B
	 	Note
	 

	 	C
	 	Compliance Certificate
	 

	 	D
	 	Assignment and Assumption
	 

	 	E
	 	Guaranty
	 

	 	F
	 	Opinion Matters
	 

	 	G
	 	Joinder Agreement






iv




 









 





CREDIT AGREEMENT




     This CREDIT AGREEMENT (“Agreement”) is entered into as of March 29, 2006, among
IMATION CORP., a Delaware corporation (“Imation”) and IMATION ENTERPRISES CORP., a Delaware
corporation (“Enterprises”), (each of Imation and Enterprises is referred to individually
herein as a “Borrower” and collectively as the “Borrowers”), each lender from time
to time party hereto (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.



     The Borrowers have requested that the Lenders provide a revolving credit facility, and the
Lenders are willing to do so on the terms and conditions set forth herein.



     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:



ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS




     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:



     “Acquisition” means any transaction or series of related transactions for the purpose
of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the
assets of a Person, or of any business or division of a Person (other than a Person that is a
Subsidiary), (b) the acquisition of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person (other than a Person that is a Subsidiary), or
otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary).



     “Administrative Agent” means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.



     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or account as
the Administrative Agent may from time to time notify the Borrowers and the Lenders.



     “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.



     “Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified. “Control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.



     “Aggregate Commitments” means the Commitments of all the Lenders.



1









 





     “Agreement” means this Credit Agreement.



     “Applicable Rate” means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):



APPLICABLE RATE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Eurodollar	 	 
	 	 	 	 	 	 	 	 	Rate + /	 	 
	 	 	Consolidated	 	Facility	 	Letters of	 	Base Rate
	Pricing Level	 	Leverage Ratio	 	Fee	 	Credit	 	+
	1

	 	£ 0.50:1
	 	 	0.15	%	 	 	0.60	%	 	 	0.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	>0.50:1 but £
1.00:1
	 	 	0.175	%	 	 	0.70	%	 	 	0.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	>1.00:1 but £
1.50:1
	 	 	0.20	%	 	 	0.80	%	 	 	0.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	>1.50:1 but £ 2.00
	 	 	0.25	%	 	 	1.00	%	 	 	0.25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	>2.00:1
	 	 	0.30	%	 	 	1.20	%	 	 	0.50	%






     Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered pursuant to Section 6.02(a); provided,
however, that if a Compliance Certificate is not delivered when due in accordance with such
Section, the next higher Pricing Level shall apply as of the first Business Day after the date on
which such Compliance Certificate was required to have been delivered, with the next higher Pricing
Level to apply as of each Business Day thereafter that the Compliance Certificate was not delivered
until the applicable Pricing Level is Pricing Level 5; provided, further, that as
of the first Business Day after the date on which such Compliance Certificate is delivered, the
Pricing Level shall revert to the applicable Pricing Level pursuant to such Compliance Certificate.
The Applicable Rate in effect from the Closing Date through the date the Compliance Certificate in
respect of the fiscal quarter ending March 31, 2006 is delivered or required to be delivered shall
be determined based upon Pricing Level 1.



     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.



     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.



2









 





     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is required by
Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit D or any other form approved by the Administrative Agent.



     “Assignment Fee” has the meaning set forth in Schedule 10.06.



     “Attorney Costs” means and includes all reasonable fees, expenses and disbursements of
any law firm or other external counsel and, without duplication, the reasonable allocated cost of
internal legal services and all reasonable expenses and disbursements of internal counsel.



     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of Imation
and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such fiscal year of
Imation and its Subsidiaries, including the notes thereto.



     “Availability Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.05, and (c) the date of termination of the commitment of each Lender
to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions, pursuant to
Section 8.02.



     “Bank of America” means Bank of America, N.A. and its successors.



     “Bankruptcy Code” means the Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.).



     “Base Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime
rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.



     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.



     “Borrower” has the meaning specified in the introductory paragraph hereto.



     “Borrower Materials” has the meaning set forth in Section 6.02.



3









 





     “Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and,
in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the Lenders
pursuant to Section 2.01.



     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, Chicago,
Illinois, San Francisco, California, or in the state where the Administrative Agent’s Office is
located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings
in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.



     “Capital Expenditures” means, in respect of any Person, for any period: (i) any
payment that is made during such period by a Person plus (ii) the aggregate amount of any
Indebtedness incurred by such Person during such period, in each case for (or in connection with)
the rental, lease, purchase, construction or use of any property the value or cost of which, under
GAAP should be capitalized or appear on such Person’s balance sheet, without regard to the manner
in which such payments (or the instrument pursuant to which they are made) are characterized by
such Person or any other Person.



     “Captive Insurance Subsidiary” means a direct, wholly-owned Subsidiary of Imation,
which is a company solely engaged in the business of providing insurance coverage to the Borrowers
and their Subsidiaries that covers risks that would be covered by a liability policy.



     “Cash Collateralize” has the meaning specified in Section 2.03(g).



     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.



     “Change of Control” means, with respect to any Person, an event or series of events by
which:



     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary
or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to
have “beneficial ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 25% or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such securities that such person or
group has the right to acquire pursuant to any option right); or



4









 





     (b) during any period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of such Person cease to be composed of individuals (i)
who were members of that board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a majority of that
board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii),
any individual whose initial nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the board of directors);
or



     (c) any Person or two or more Persons acting in concert shall have acquired by contract or
otherwise, the power to exercise, directly or indirectly, a controlling influence over the
management or policies of such Person, or control over the equity securities of such Person
entitled to vote for members of the board of directors or equivalent governing body of Imation on a
fully-diluted basis (and taking into account all such securities that such Person or group has the
right to acquire pursuant to any option right) representing 25% or more of the combined voting
power of such securities.



     “Closing Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of
Section 4.01(c), waived by the Person entitled to receive the applicable payment).



     “Code” means the Internal Revenue Code of 1986.



     “Collateral” means all property and interests in property and proceeds thereof now
owned or hereafter acquired by any Loan Party in or upon which a Lien now or hereafter exists in
favor of the Administrative Agent under or pursuant to any Collateral Document.



     “Collateral Documents” means any agreement evidencing or relating to any Cash
Collateralization undertaken hereunder, and any pledge agreement entered into hereafter provided in
respect of Pledged Foreign Subsidiaries, together with any and all UCC financing statements, and
other instruments, documents and agreements as may be executed and delivered in order to perfect,
protect or enforce the Liens created thereby.



     “Commitment” means, as to each Lender, its obligation to (a) make Loans to the
Borrowers pursuant to Section 2.01, and (b) purchase participations in L/C Obligations; in
an aggregate principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from
time to time in accordance with this Agreement.



     “Compliance Certificate” means a certificate substantially in the form of Exhibit
C.



5









 





     “Consolidated EBITDA” means, for any Subject Period, for Imation and its Subsidiaries
on a consolidated basis, an amount equal to Consolidated Net Income for such period plus
(a) the following to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and
foreign income taxes of Imation and its Subsidiaries for such period, (iii) depreciation and
amortization expense, and (iv) non-cash charges from (A) asset sales (other than sales of inventory
in the ordinary course of business), (B) asset impairments (including intangible asset
impairments), (C) severance, and (D) stock options, stock grants and similar employment
compensation arrangements, minus (b) to the extent increasing Consolidated Net Income,
non-cash gains from asset sales (other than sales of inventory in the ordinary course of business),
and cash payments made in such period on account of non-cash charges noted above expensed in a
prior period.



     “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, to (b) Consolidated Interest
Charges for the Subject Period then ending plus federal, state, local and foreign income taxes
actually paid by Imation and its consolidated Subsidiaries during such Subject Period 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.



     “Consolidated Funded Indebtedness” means, as of any date of determination, for Imation
and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of
all obligations, whether current or long-term, for borrowed money (including Obligations hereunder)
and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct, non-contingent obligations
arising under letters of credit (including standby and commercial, other than the Letters of
Credit), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, and all
obligations in respect of drawn or undrawn Letters of Credit, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts payable in the ordinary
course of business), (e) Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) Equity Payment Obligations, (g) the outstanding Memorex Earnout Obligation, to the
extent required to be reflected on such Person’s financial statements in accordance with GAAP, (h)
without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified
in clauses (a) through (e) above of Persons other than Imation or any Subsidiary, and (i) all
Indebtedness of the types referred to in clauses (a) through (h) above of any partnership or joint
venture (other than a joint venture that is itself a corporation or limited liability company) in
which Imation or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is
expressly made non-recourse to Imation or such Subsidiary.



     “Consolidated Interest Charges” means, for any period, for Imation and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount,
fees, charges and related expenses of Imation and its Subsidiaries in connection with borrowed
money (including capitalized interest) or in connection with the deferred purchase price of assets,
in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent
expense of Imation and its Subsidiaries with respect to such period under capital leases that is
treated as interest in accordance with GAAP.



6









 





     “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the Subject Period
then ending. The Consolidated Leveraged 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.



     “Consolidated Net Income” means, for any period, for Imation and its Subsidiaries on a
consolidated basis, the net income of Imation and its Subsidiaries (excluding extraordinary gains
but including extraordinary losses) for that period.



     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.



     “Control,” “Controlling” and “Controlled” have the meanings specified
in the definition of “Affiliate.”



     “Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.



     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.



     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.



     “Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise
applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by
applicable Laws.



     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans or participations in L/C Obligations required to be funded by it hereunder within one
Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.



     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith.



7









 





     “Dollar” and “$” mean lawful money of the United States.



     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.



     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent and the L/C Issuer, and (ii) unless an Event of Default has occurred and is continuing,
Imation (each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrowers or any of the
Borrowers’ Affiliates or Subsidiaries.



     “Enterprises” has the meaning specified in the introductory paragraph hereto.



     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrowers, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.



     “Equity Payment Obligations” has the meaning set forth in the definition of
“Indebtedness.”



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrowers within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Imation or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Imation or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Imation or any ERISA
Affiliate.



8









 





     “Eurodollar Base Rate” has the meaning set forth in the definition of Eurodollar Rate.



     “Eurodollar Rate” means for any Interest Period with respect to a Eurodollar Rate
Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:



	 	 	 	 	 	 	 
	 

	 	 	 	Eurodollar Base Rate
	 	 
	 

	 	Eurodollar Rate =	 	1.00 – Eurodollar Reserve Percentage	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 






     Where,




     “Eurodollar Base Rate” means, for such Interest Period, the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason, then the
“Eurodollar Base Rate” for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London Branch to
major banks in the London interbank Eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such Interest
Period.




     “Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to five decimal places) in
effect on such day, whether or not applicable to any Lender, under regulations issued from
time to time by the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.



     “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.



     “Event of Default” has the meaning specified in Section 8.01.



9









 





     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C
Issuer or any other recipient of any payment to be made by or on account of any obligation of the
Borrowers hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Borrowers are located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section
10.14), any withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 3.01(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to
Section 3.01(a).



     “Existing Credit Agreement” means that certain Credit Agreement dated as of December
17, 2003 among the Borrowers, Bank of America, as agent, and a syndicate of lenders.



     “Existing Letters of Credit” means the letters of credit specified in Schedule
1.01(e).



     “Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided that (a) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined
by the Administrative Agent.



     “Fee Letter” means the letter agreement, dated as of January 31, 2006, among Imation,
the Administrative Agent and the Arranger.



     “First-Tier Foreign Subsidiary” means any Foreign Subsidiary that is a direct
Subsidiary of one or more Domestic Subsidiaries.



     “Foreign Lender” means, in respect of any Borrower, any Lender that is organized under
the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For
purposes of this definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.



     “Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.



10









 





     “FRB” means the Board of Governors of the Federal Reserve System of the United States.



     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.



     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.



     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.



     “Granting Lender” has the meaning set forth in Section 10.06(h).



     “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.



     “Guarantors” means, collectively, each Subsidiary of Imation (i) whose name appears on
the signature page of the Guaranty, or (ii) that has executed a Joinder Agreement pursuant to
Section 6.12.



11









 





     “Guaranty” means the Guaranty made by the Guarantors in favor of the Administrative
Agent and the Lenders, substantially in the form of Exhibit E.



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Imation” has the meaning specified in the introductory paragraph hereto.



     “Inactive Subsidiary” means, as of any time of determination, a Subsidiary that (a) is
either (i) the Imation Club of the U.S., Inc., or (ii) a Foreign Subsidiary, (b) has at such time
less than $100,000 in assets, and (c) is not at such time engaged in any ongoing business.



     “Increase Effective Date” has the meaning set forth in Section 2.13(d).



     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:



     (a) all obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes, loan agreements or other similar instruments;



     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments;



     (c) net obligations of such Person under any Swap Contract;



     (d) all obligations of such Person to pay the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), including the Memorex
Earnout Obligation;



     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;



     (f) capital leases and Synthetic Lease Obligations;



     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any equity interest in such Person or any other Person, valued, in the case
of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends (“Equity Payment Obligations”); and



     (h) all Guarantees of such Person in respect of any of the foregoing.



12









 





     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitee” has the meaning set forth in Section 10.04(b).



     “Initial Investment” has the meaning set forth in the definition of “Permitted
Acquisitions.”



     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such Interest Period shall
also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.



     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by the Borrowers in a
Loan Notice; provided that:




     (i) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;




     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and




     (iii) no Interest Period shall extend beyond the Maturity Date.



     “Internal Control Event” means a material weakness in the design or operation of
Imation’s internal controls over financial reporting which is reasonably likely to adversely affect
Imation’s ability to record, process, summarize and report financial information, or fraud that
involves management or other employees who have a significant role in, Imation’s internal controls
over financial reporting, in each case as described in the Securities Laws.



13









 





     “Investment” means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the amount of any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.



     “IP Rights” has the meaning set forth in Section 5.17.



     “IRS” means the United States Internal Revenue Service.



     “ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance of such Letter of Credit).



     “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
any Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of
Credit.



     “Joinder Agreement” means an agreement in substantially the form of Exhibit G.



     “Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.



     “L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.



     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.



     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.



     “L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.



     “L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.07. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may still be drawn
thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.



14









 





     “L/C Rate” means (i) in respect of any day on which the Default Rate is in effect
pursuant to Section 2.07(b), the Applicable Rate in respect of Letters of Credit plus 2%
per annum, and (ii) in respect of any other day, the Applicable Rate in respect of Letters of
Credit.



     “Lender” has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer.



     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrowers and the Administrative Agent.



     “Letter of Credit” means any standby letter of credit issued hereunder and shall
include the Existing Letters of Credit.



     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.



     “Letter of Credit Expiration Date” means the day that is 30 days prior to the Maturity
Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).



     “Letter of Credit Sublimit” means an amount equal to $50,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.



     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing), and any contingent or other
agreement to provide any of the foregoing.



     “Loan” has the meaning specified in Section 2.01.



     “Loan Documents” means this Agreement, each Note, the Guaranty, the Collateral
Documents (if any), the Fee Letter, and any certificate executed by or on behalf of any Loan Party
hereunder.



     “Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one
Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.



     “Loan Parties” means, collectively, the Borrowers and each Guarantor.



15









 





     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of the Borrowers and their Subsidiaries taken as a
whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under
any Loan Document to which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan Document to which it
is a party.



     “Maturity Date” means March 29, 2011.



     “Memorex Acquisition” means the acquisition of all or substantially all of the assets
of Memorex International Inc. pursuant to the Memorex Acquisition Agreement, such Acquisition to be
consummated on or before June 30, 2006.



     “Memorex Acquisition Agreement” means that Acquisition Agreement dated as of January
19, 2006 between Imation and Memorex International Inc.



     “Memorex Earnout Obligation” means the obligation of Imation to pay the “Earnout
Amount” under and as such term is defined in the Memorex Acquisition Agreement.



     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which Imation or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.



     “Note” means a promissory note made by the Borrowers in favor of a Lender evidencing
Loans made by such Lender, substantially in the form of Exhibit B.



     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan
or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such proceeding.



     “Organization Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.



16









 





     “Other Taxes” means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.



     “Outstanding Amount” means (i) with respect to Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and prepayments or
repayments of Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the
L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount available for drawing
under Letters of Credit taking effect on such date.



     “Participant” has the meaning specified in Section 10.06(d).



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by Imation or any ERISA Affiliate or to which Imation or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.



     “Permitted Acquisitions” means (i) Acquisitions by Imation or any of its wholly-owned
Domestic Subsidiaries of any Person (other than Memorex International Inc. and its Subsidiaries),
provided that (a) Imation shall have notified the Administrative Agent and the Lenders of
any contemplated Acquisition at least 10 Business Days in advance of the consummation thereof, (b)
if the aggregate consideration paid or accrued (including cash, capital stock, indebtedness and
other) directly or indirectly by Imation or its Domestic Subsidiaries (“Initial
Investment”) exceeds $25,000,000 as to such transaction, such acquired Person shall not, after
giving effect to such transaction, constitute a Foreign Subsidiary or give rise to an Investment in
a Person organized under the laws of any country other than the U.S., unless such Person, if a
First-Tier Foreign Subsidiary, becomes a Pledged Foreign Subsidiary, or if such a Person is a
Foreign Subsidiary that is not a First-Tier Foreign Subsidiary, all First-Tier Foreign Subsidiaries
owning directly or indirectly any interest in such Person become Pledged Foreign Subsidiaries, and
(c) in the event that the Acquisition shall be of capital stock, and the acquired Person shall
remain a Domestic Subsidiary, Imation shall cause such Subsidiary to deliver to the Administrative
Agent the documents and materials described in Section 6.12, and (ii) the Memorex
Acquisition.



     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by Imation or, with respect to any such plan that is subject to Section 412 of
the Code or Title IV of ERISA, any ERISA Affiliate.



     “Platform” has the meaning specified in Section 6.02.



17









 





     “Pledged Foreign Subsidiary” means a Foreign Subsidiary as to which not less than the
lesser of (i) 65% of the total Voting Stock thereof or (ii) the aggregate of all Voting Stock
thereof owned or held by the Borrower and its Domestic Subsidiaries, has been pledged as collateral
for the Obligations to the Administrative Agent pursuant to documentation in form and substance
satisfactory to the Administrative Agent, together with such ancillary documents and opinions of
counsel as the Administrative Agent may request.



     “Pro Forma Basis” shall mean, in connection with any calculation of the Consolidated
Leverage Ratio, and Consolidated Fixed Charge Coverage Ratio, the calculation thereof after giving
effect on a pro forma basis to (w) the sale or disposition of any assets constituting a business,
division or product line of Imation or any of its Subsidiaries (together, “Divestiture”) as
if such Divestiture had occurred on the first day of the relevant Subject Period, (x) the
incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent the same is
incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after
the first day of the relevant Subject Period as if such Indebtedness had been incurred (and the
proceeds thereof applied) on the first day of the relevant Subject Period, (y) the permanent
repayment of any Indebtedness (other than revolving Indebtedness except to the extent accompanied
by a corresponding permanent commitment reduction) after the first day of the relevant Subject
Period as if such Indebtedness had been retired or redeemed on the first day of the relevant
Subject Period and/or (z) the Permitted Acquisition, if any, then being consummated as well as any
other Permitted Acquisition consummated after the first day of the relevant Subject Period and on
or prior to the date of the respective Permitted Acquisition then being effected as if such
Permitted Acquisition had occurred on the first day of the relevant Subject Period, as the case may
be, with the following rules to apply in connection therewith:




     (i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same
is incurred to refinance other outstanding Indebtedness or to finance a Permitted
Acquisition) incurred or issued after the first day of the relevant Subject Period (whether
incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall
be deemed to have been incurred or issued (and the proceeds thereof applied) on the first
day of the respective Subject Period and remain outstanding through the date of
determination and (y) (other than revolving Indebtedness except to the extent accompanied by
a corresponding permanent commitment reduction) permanently retired or redeemed after the
first day of the relevant Subject Period shall be deemed to have been retired or redeemed on
the first day of the respective Subject Period and remain retired through the date of
determination;




     (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall
be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed
rate indebtedness, or (y) at the rate which would have been applicable thereto on the last
day of the respective Subject Period, in the case of floating rate Indebtedness (although
interest expense with respect to any Indebtedness for periods while same was actually
outstanding during the respective period shall be calculated using the actual rates
applicable thereto while same was actually outstanding); and



18









 






     (iii) in making any determination of Consolidated EBITDA for the purposes specified
above in this definition, pro forma effect shall be given to any Permitted Acquisition or
Divestiture consummated during the periods described above, with such Consolidated EBITDA to
be determined as if such Permitted Acquisition or Divestiture was consummated on the first
day of the relevant Subject Period, but without taking into account (in the case of any
Permitted Acquisition) any pro forma cost savings and expenses.



     “Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of
the Commitment of such Lender at such time and the denominator of which is the amount of the
Aggregate Commitments at such time; provided that if the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be determined based
on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect
to any subsequent assignments made pursuant to the terms hereof. The initial Pro Rata Share of
each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.



     “Register” has the meaning set forth in Section 10.06(c).



     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.



     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30-day notice period has been waived.



     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Loans, a Loan Notice, and (b) with respect to an L/C Credit Extension, a Letter of
Credit Application.



     “Required Lenders” means, as of any date of determination, Lenders having more than
50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Lenders holding in the aggregate more than 50% of the Total Outstandings
(with the aggregate amount of each Lender’s risk participation and funded participation in L/C
Obligations being deemed “held” by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.



     “Responsible Officer” means the chief executive officer, chief financial officer,
treasurer, assistant treasurer or corporate controller of a Loan Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other action on the part of
such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.



19









 





     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity interest of the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other equity interest, or on
account of any return of capital to the Borrower’s stockholders, partners or members (or the
equivalent Person thereof).



     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.



     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.



     “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the Public Company Accounting
Oversight Board, as each of the foregoing may be amended and in effect on any applicable date
hereunder.



     “Solvent” means, when used with respect to any Person, that at the time of
determination:




     (i) the assets of such Person, at a fair valuation, are in excess of the total amount
of its debts (including, without limitation, contingent liabilities); and




     (ii) the present fair saleable value of its assets is greater than its probable
liability on its existing debts as such debts become absolute and matured; and




     (iii) it is then able and expects to be able to pay its debts (including, without
limitation, contingent debts and other commitments) as they mature; and




     (iv) it has capital sufficient to carry on its business as conducted and as proposed to
be conducted.


For purposes of determining whether a Person is Solvent, (x) the amount of any contingent liability
shall be computed as the amount that, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual or matured
liability, and (y) the value of rights of contribution from other Solvent entities shall be
included.




     “SPC” has the meaning set forth in Section 10.06(h).



     “Subject Period” means, as of any date of determination for any Person, the period of
four consecutive fiscal quarters of such Person ending on such date.



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of Imation.



20









 





     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.



     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).



     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).



     “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.



     “Threshold Amount” means $50,000,000.



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C
Obligations.



     “Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.



21









 





     “UCC” means the Uniform Commercial Code of any applicable jurisdiction.



     “UFCA” has the meaning set forth in Section 10.21.



     “UFTA” has the meaning set forth in Section 10.21.



     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.



     “United States” and “U.S.” mean the United States of America.



     “Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).



     “Voting Stock” means securities, ownership interests or membership interests of any
class or classes of a business entity, the holders of which are ordinarily, in the absence of
contingencies, (a) entitled to elect a majority of the corporate directors (or Persons performing
similar functions), if such entity is a corporation, (b) entitled to cast a majority of the votes
on the general business matters of such entity, or (c) entitled to act as the sole general partner
or sole manager, or entitled to elect the manager or managing partner of such entity.



     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:



     (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements or modifications
set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending, replacing or interpreting
such law and any reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time, and (vi) the words
“asset” and “property” shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.



22









 





     (b) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding;” and the word “through” means “to and
including.”



     (c) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.



     1.03 Accounting Terms.



     (a) All accounting terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity
with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except as
otherwise specifically prescribed herein.



     (b) If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall
so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrowers shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement or as reasonably
requested hereunder (such request to be made no later than the later of 6 months after the date of
the applicable financial statement or the end of the fiscal year pertaining to such financial
statement) setting forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.



     1.04 Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to
this Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).



     1.05 References to Agreements and Laws. Unless otherwise expressly provided herein, (a)
references to Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are not prohibited by any
Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.



     1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Pacific Time (daylight or standard, as applicable).



23









 





     1.07 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all such increases,
whether or not such maximum stated amount is in effect at such time.



ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS




     2.01 Loans. Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a “Loan”) to the Borrowers from time to time, on any
Business Day during the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender’s Commitment; provided, however, that after
giving effect to any Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any Lender, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, shall not exceed
such Lender’s Commitment. Within the limits of each Lender’s Commitment, and subject to the other
terms and conditions hereof, the Borrowers may borrow under this Section 2.01, prepay under
Section 2.04, and reborrow under this Section 2.01. Loans may be Base Rate Loans
or Eurodollar Rate Loans, as further provided herein.



     2.02 Borrowings, Conversions and Continuations of Loans.



     (a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation
of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative
Agent, which may be given by telephone. Each such notice must be received by the Administrative
Agent not later than 8:00 a.m. (i) three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Section 2.03(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall
specify (A) the applicable Borrower or Borrowers, (B) whether the Borrower is requesting a
Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate
Loans, (C) the requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (D) the principal amount of Loans to be borrowed, converted or
continued, (E) the Type of Loans to be borrowed or to which existing Loans are to be converted, and
(F) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails
to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate
Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.



24









 





     (b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each
Lender of the amount of its Pro Rata Share of the applicable Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each
Lender of the details of any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to
the Administrative Agent in immediately available funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing
is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of Bank of America with the amount
of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing is given by the
Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing shall be
applied, first, to the payment in full of any L/C Borrowings, and second, to the Borrower as
provided above.



     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of
a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders.



     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of
such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s
prime rate used in determining the Base Rate promptly following the public announcement of such
change.



     (e) After giving effect to all Borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more than five Interest
Periods in effect with respect to Loans.



25









 





     2.03 Letters of Credit.



     (a) The Letter of Credit Commitment.




     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Section 2.03,
(1) from time to time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of the
Borrowers, and to amend or renew Letters of Credit previously issued by it, in accordance
with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the account of the
Borrowers; provided that the L/C Issuer shall not be obligated to make any L/C
Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to
participate in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Total Outstandings would exceed the Aggregate Commitments, (y) the aggregate Outstanding
Amount of the Loans of any Lender, plus such Lender’s Pro Rata Share of the
Outstanding Amount of all L/C Obligations, would exceed such Lender’s Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit.
Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’
ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers
may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.




     (ii) The L/C Issuer shall not issue any Letter of Credit, if:




     (A) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance or
last extension, unless the Required Lenders have approved such expiry date; or




     (B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such expiry
date.




     (iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit
if:




     (A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems material
to it;



26









 






     (B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;




     (C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial stated amount less than $500,000;




     (D) such Letter of Credit is to be denominated in a currency other than
Dollars;




     (E) such Letter of Credit contains any provisions for automatic reinstatement
of the stated amount after any drawing thereunder; or




     (F) a default of any Lender’s obligations to fund under Section 2.03(c)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrower or such Lender
to eliminate the L/C Issuer’s risk with respect to such Lender.




     (iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.




     (v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.




     (vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer shall have
all of the benefits and immunities (A) provided to the Administrative Agent in Article
IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used
in Article IX included the L/C Issuer with respect to such acts or omissions, and
(B) as additionally provided herein with respect to the L/C Issuer.



27









 





     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of
Credit.




     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrowers delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed and signed by
a Responsible Officer of the Borrowers. Such Letter of Credit Application must be received
by the L/C Issuer and the Administrative Agent not later than 8:00 a.m. at least two
Business Days (or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or date of amendment,
as the case may be. In the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of
any drawing thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer
may require. In the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory to the L/C
Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof
(which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such
other matters as the L/C Issuer may require.




     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from the Borrowers and, if
not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the
L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in Article
IV shall not then be satisfied, then, subject to the terms and conditions hereof, the
L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the
Borrowers or enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices. Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation
in such Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share
times the amount of such Letter of Credit.




     (iii) If the Borrowers so request in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”);
provided that any such Auto-Renewal Letter of Credit must permit the L/C Issuer to
prevent any such renewal at least once in each twelve-month period (commencing with the date
of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Nonrenewal Notice Date”) in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by
the L/C Issuer, the Borrowers shall not be required to make a specific request to the L/C
Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit
the renewal of such Letter of Credit at any time to an expiry date not later than the Letter
of Credit Expiration Date; provided, however, that the L/C Issuer shall not
permit any such renewal if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form under the terms
hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it
has received notice (which may be by telephone or in writing) on or before the day that is
five Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that
the Required Lenders have elected not to permit such renewal or (2) from the Administrative
Agent, any Lender or the Borrowers that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied.



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     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to the Borrowers and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.



     (c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrowers and the
Administrative Agent thereof. Not later than 8:00 a.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrowers
shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrowers fail to so reimburse the L/C Issuer by such time,
the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of
the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Pro Rata Share thereof. In such event, the Borrowers shall be deemed to have
requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02(a) for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Aggregate Commitments and the conditions set forth
in Section 4.02 (other than the delivery of a Loan Notice). Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be
given by telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or binding effect of such
notice.




     (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice
pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for
the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its
Pro Rata Share of the Unreimbursed Amount not later than 10:00 a.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer.




     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot
be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation obligation
under this Section 2.03.




29









 








     (iv) Until each Lender funds its Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter
of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall
be solely for the account of the L/C Issuer.




     (v) Each Lender’s obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated
by this Section 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the L/C Issuer, the
Borrowers or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition, whether
or not similar to any of the foregoing; provided, however, that each Lender’s
obligation to make Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrowers of a
Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair
the obligation of the Borrowers to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together with interest
as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time specified
in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the date
on which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by the
L/C Issuer in accordance with banking industry rules on interbank compensation. A
certificate of the L/C Issuer submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.




(d) Repayment of Participations.




     (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent receives for the account of the
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from the Borrowers or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will distribute to
such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.



30









 






     (ii) If any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.06 (including pursuant to any settlement
entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon from the date of such demand to the date
such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.



     (e) Obligations Absolute. The obligation of the Borrowers to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:




     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;




     (ii) the existence of any claim, counterclaim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;




     (iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;




     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law; or




     (v) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.



     The Borrowers shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrowers’
instructions or other irregularity, the Borrowers will immediately notify the L/C
Issuer. The Borrowers shall be conclusively deemed to have waived any such claim against the
L/C Issuer and its correspondents unless such notice is given as aforesaid.



31









 





     (f) Role of L/C Issuer. Each Lender and the Borrowers agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the L/C Issuer, the
Administrative Agent or any of their Related Parties, nor any of the respective correspondents,
participants or assignees of the L/C Issuer, shall be liable to any Lender for (i) any action taken
or omitted in connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or Letter of Credit
Application. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however, that
this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and
remedies as they may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, the Administrative Agent or any of their Related Parties, nor
any of the respective correspondents, participants or assignees of the L/C Issuer, shall be liable
or responsible for any of the matters described in clauses (i) through (v) of Section
2.03(e); provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused
by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear
on their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity
or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.



     (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, (ii) if, as of the Letter of Credit Expiration Date, any Letter
of Credit may for any reason remain outstanding and partially or wholly undrawn, or (iii) if any
demand for Cash Collateralization has been made under Section 8.02(c), the Borrowers shall
immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of
Credit Expiration Date, as the case may be). Sections 2.04 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For purposes of this
Section 2.03, Section 2.04 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in



32









 




form and substance satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Borrowers hereby grant to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances
therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America.




     (h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer
and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance shall apply to each
commercial Letter of Credit.



     (i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee for each Letter
of Credit equal to the L/C Rate times the daily maximum amount available to be drawn under
such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of
Credit). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the first Business Day after the end of each
March, June, September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. If there is any change in the L/C Rate during any quarter, the daily maximum amount of
each Letter of Credit shall be computed and multiplied by the L/C Rate separately for each period
during such quarter that such L/C Rate was in effect.



     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrowers shall pay directly to the L/C Issuer for their own account a fronting fee with respect to
each Letter of Credit equal to 1/8 of 1% per annum times the daily maximum amount available
to be drawn under such Letter of Credit. Such fronting fee shall be computed on a quarterly basis
in arrears. Such fee shall be due and payable on the first Business Day after the end of each
March, June, September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. In addition, the Borrowers shall pay directly to the L/C Issuer for their own account the
customary issuance, presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable on demand and are nonrefundable.



     (k) Conflict with Letter of Credit Application. In the event of any conflict between
the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.



33









 





     2.04 Prepayments.



     (a) The Borrowers may, upon notice to the Administrative Agent, at any time or from time to
time voluntarily prepay Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than 8:00 a.m. (A)
three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the
date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment. If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein. Any prepayment of
a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall be
applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares.



     (b) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments then
in effect, the Borrowers shall immediately prepay Loans and/or Cash Collateralize the L/C
Obligations in an aggregate amount equal to such excess; provided, however, that
the Borrowers shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.04(b) unless after the prepayment in full of the Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.



     2.05 Termination or Reduction of Commitments. The Borrowers may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce
the Aggregate Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 8:00 a.m. five Business Days prior to the date of termination
or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate or reduce
the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving
effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit exceeds the
amount of the Aggregate Commitments, such Letter of Credit Sublimit shall be automatically reduced
by the amount of such excess. The amount of any such Aggregate Commitment reduction shall not be
applied to the Letter of Credit Sublimit unless otherwise specified by the Borrowers. The
Administrative Agent will promptly notify the Lenders of any such notice of termination or
reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be
applied to the Commitment of each Lender according to its Pro Rata Share. All facility and
utilization fees accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.



     2.06 Repayment of Loans. The Borrowers shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Loans outstanding on such date.



34









 





     2.07 Interest.



     (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.



     (b) If any amount payable by the Borrowers under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
Furthermore, upon the request of the Required Lenders and after notice thereof to the Borrowers,
while any Event of Default exists, the interest shall accrue on the principal amount of all
outstanding Obligations at a fluctuating interest rate per annum at all times equal to the Default
Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon demand.



     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.



     2.08 Fees. In addition to certain fees described in subsections (i) and (j) of Section
2.03:



     (a) Facility Fee. The Borrowers shall pay to the Administrative Agent for the account
of each Lender in accordance with its Pro Rata Share, a facility fee equal to the Applicable Rate
times the actual daily amount of the Aggregate Commitments (or, if the Aggregate
Commitments have terminated, on the Outstanding Amount of all Loans and L/C Obligations),
regardless of usage. The facility fee shall accrue at all times during the Availability Period
(and thereafter so long as any Loans or L/C Obligations remain outstanding), including at any time
during which one or more of the conditions in Article IV is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the Maturity Date (and,
if applicable, thereafter on demand). The facility fee shall be calculated quarterly in arrears,
and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.



     (b) Other Fees.




     (i) The Borrowers shall pay to the Arranger and the Administrative Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee Letter. Such
fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.



35









 






     (ii) The Borrowers shall pay to the Lenders such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.



     2.09 Computation of Interest and Fees. All computations of interest for Base Rate Loans when
the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year
of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees
and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a
Loan, or any portion thereof, for the day on which the Loan or such portion is paid,
provided that any Loan that is repaid on the same day on which it is made shall, subject to
Section 2.11(a), bear interest for one day.



     2.10 Evidence of Debt.



     (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Administrative Agent in the ordinary course of
business. The accounts or records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the Administrative Agent,
the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may
attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.



     (b) In addition to the accounts and records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice accounts or records
evidencing the purchases and sales by such Lender of participations in Letters of Credit. In the
event of any conflict between the accounts and records maintained by the Administrative Agent and
the accounts and records of any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.



     2.11 Payments Generally.



     (a) All payments to be made by the Borrowers shall be made without condition or deduction for
any counterclaim, defense, recoupment or set-off. Except as otherwise expressly provided herein,
all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 11:00 a.m. on the date specified herein.
The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office. All payments received by
the Administrative Agent after 1:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.



36









 





     (b) If any payment to be made by the Borrowers shall come due on a day other than a Business
Day, payment shall be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.



     (c) Unless the Borrowers or any Lender has notified the Administrative Agent, prior to the
date any payment is required to be made by it to the Administrative Agent hereunder, that the
Borrowers or such Lender, as the case may be, will not make such payment, the Administrative Agent
may assume that the Borrowers or such Lender, as the case may be, have or has timely made such
payment and may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that such payment was
not in fact made to the Administrative Agent in immediately available funds, then:




     (i) if the Borrowers failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the Administrative
Agent in immediately available funds at the Federal Funds Rate from time to time in effect;
and




     (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand
pay to the Administrative Agent the amount thereof in immediately available funds, together
with interest thereon for the period from the date such amount was made available by the
Administrative Agent to the Borrowers to the date such amount is recovered by the
Administrative Agent (the “Compensation Period”) at a rate per annum equal to the
Federal Funds Rate from time to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor
upon the Borrowers, and the Borrowers shall pay such amount to the Administrative Agent,
together with interest thereon for the Compensation Period at a rate per annum equal to the
rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights
which the Administrative Agent or the Borrowers may have against any Lender as a result of
any default by such Lender hereunder.



     A notice of the Administrative Agent to any Lender or the Borrowers with respect to any amount
owing under this subsection (c) shall be conclusive, absent manifest error.



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     (d) If any Lender makes available to the Administrative Agent funds for any Loan to be made by
such Lender as provided in the foregoing provisions of this Article II, and such funds are
not made available to the Borrower by the Administrative Agent because the conditions to the
applicable Credit Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds
as received from such Lender) to such Lender, without interest.



     (e) The obligations of the Lenders hereunder to make Loans and to fund participations in
Letters of Credit are several and not joint. The failure of any Lender to make any Loan or to fund
any such participation on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be responsible for the failure
of any other Lender to so make its Loan or purchase its participation.



     (f) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in
any particular place or manner or to constitute a representation by any Lender that it has obtained
or will obtain the funds for any Loan in any particular place or manner.



     2.12 Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender
shall obtain on account of the Loans made by it, or the participations in L/C Obligations held by
it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such
Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from
the other Lenders such participations in the Loans made by them and/or such subparticipations in
the participations in L/C Obligations held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price
paid therefor, together with an amount equal to such paying Lender’s ratable share (according to
the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered, without further interest
thereon. The Borrowers agree that any Lender so purchasing a participation from another Lender
may, to the fullest extent permitted by law, exercise all its rights of payment (including the
right of set-off, but subject to Section 10.08) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrowers in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the purchasing Lender were the
original owner of the Obligations purchased.



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     2.13 Increase in Commitments.



     (a) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrowers may, on no more than
three occasions, request an increase in the Aggregate Commitments by an amount not exceeding
$50,000,000 in the aggregate for all such occurrences together; provided that any such
request for an increase shall be in a minimum amount of $5,000,000. At the time of sending such
notice, the Borrowers (in consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be less than ten Business
Days from the date of delivery of such notice to the Lenders).



     (b) Lender Elections to Increase. Each Lender shall notify the Administrative Agent
within such time period whether or not it agrees to increase its Commitment and, if so, whether by
an amount equal to, greater than, or less than its Pro Rata Share of such requested increase. Any
Lender not responding within such time period shall be deemed to have declined to increase its
Commitment.



     (c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrowers and each Lender of the Lenders’ responses to each request made
hereunder. To achieve the full amount of a requested increase and subject to the approval of the
Administrative Agent and the L/C Issuer (which approvals shall not be unreasonably withheld), the
Borrowers may also invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to the Administrative Agent and its counsel.



     (d) Effective Date and Allocations. If the Aggregate Commitments are increased in
accordance with this Section, the Administrative Agent and the Borrowers shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such increase.
The Administrative Agent shall promptly notify the Borrowers and the Lenders of the final
allocation of such increase and the Increase Effective Date.



     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrowers shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a
Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such
Loan Party approving or consenting to such increase, and (ii) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and correct on and
as of the Increase Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Section 2.13, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
and (B) no Default exists. The Borrowers shall prepay any Loans outstanding on the Increase
Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the
extent necessary to keep the outstanding Loans ratable with any revised Pro Rata Shares arising
from any nonratable increase in the Commitments under this Section.



39









 





     (f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.12 or 10.01 to the contrary.



ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.



     (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
the Borrowers shall be required by applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.



     (b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.



     (c) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 10 days after demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to
the Borrowers by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive absent manifest error.



     (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.



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     (e) Status of Lenders.




     (i) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information reporting
requirements.




     (ii) Without limiting the generality of the foregoing, in the event that a Borrower is
resident for tax purposes in the United States, any Foreign Lender shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do so),
whichever of the following is applicable:




     (A) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,




     (B) duly completed copies of Internal Revenue Service Form W-8ECI,




     (C) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect
that such Foreign Lender is not (1) a “bank” within the meaning of section
881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the
meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed
copies of Internal Revenue Service Form W-8BEN, or




     (D) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made.



41









 





     (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the L/C
Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other
Taxes as to which it has been indemnified by a Borrower or with respect to which the Borrower has
paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to
such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C Issuer, as
the case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower, upon
the request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrowers or any other Person.



     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrowers through the
Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrowers that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of
such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or
converted.



     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in
connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank Eurodollar market
for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Base Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan , or (c) the Eurodollar Base Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrowers and each Lender. Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.



     3.04 Increased Costs.



     (a) Increased Costs Generally. If any Change in Law shall:



42









 






     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the Eurodollar Rate) or the L/C Issuer;




     (ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or
any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such
Lender or the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the L/C Issuer); or




     (iii) impose on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender or any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or
to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or
the L/C Issuer, the Borrowers will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.




     (b) Capital Requirements. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on
the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below
that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C
Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with
respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or
the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction
suffered.



     (c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its
holding company, as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay such
Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.



43









 





     (d) Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided
that the Borrowers shall not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more
than six months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies
the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect thereof).



     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative
Agent) from time to time, the Borrowers shall promptly compensate such Lender for and hold such
Lender harmless from any loss, cost or expense incurred by it as a result of:



     (a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate
Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);



     (b) any failure by the Borrowers (for a reason other than the failure of such Lender to make a
Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in
the amount notified by the Borrowers; or



     (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Borrowers pursuant to Section 10.14;


including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrowers shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.



For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank Eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.




     3.06 Mitigation Obligations; Replacement of Lenders.



     (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall
use reasonable efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable,
and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.



44









 





     (b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, the
Borrowers may replace such Lender in accordance with Section 10.14.



     3.07 Survival. All of the Borrowers’ obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations hereunder.



ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 Conditions of Initial Credit Extension. The obligation of each Lender to make its
initial Credit Extension hereunder is subject to satisfaction of the following conditions
precedent:



     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:




     (i) executed counterparts of this Agreement and the Guaranty, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrowers;




     (ii) a Note executed by the Borrowers in favor of each Lender requesting a Note;




     (iii) written advice relating to such Lien searches as the Administrative Agent shall
have requested, and such termination statements or other documents as may be necessary to
confirm that the personal property of the Borrowers is subject to no other Liens in favor of
any Persons (other than Liens permitted under Section 7.01);




     (iv) such certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the Administrative Agent
may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;




     (v) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;



45









 






     (vi) an opinion of general counsel of the Borrowers, and an opinion of Dorsey & Whitney
LLP, special counsel to the Borrowers, each addressed to the Administrative Agent and each
Lender, as to the matters set forth in Exhibit F and such other matters concerning
the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;




     (vii) a certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such Loan Party of the
Loan Documents to which it is a party, and such consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents, licenses or approvals are so
required;




     (viii) a certificate signed by a Responsible Officer of the Borrowers certifying (A)
that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that there has been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect; and (C) a calculation of the
Consolidated Leverage Ratio and Consolidated Fixed Charge Coverage Ratio as of the last day
of the fiscal quarter of Imation most recently ended prior to the Closing Date;




     (ix) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect;




     (x) evidence that the Existing Credit Agreement has been or concurrently with the
Closing Date is being terminated, with all amounts owing or outstanding thereunder repaid,
and all Liens securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released; and




     (xi) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuer or the Required Lenders reasonably may require.



     (b) Any fees required to be paid on or before the Closing Date shall have been paid.



     (c) Unless waived by the Administrative Agent, the Borrowers shall have paid all Attorney
Costs of the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that such estimate shall
not thereafter preclude a final settling of accounts between the Borrowers and the Administrative
Agent).



     (d) The Closing Date shall have occurred on or about March 31, 2006.



     Without limiting the generality of the provisions of Section 9.04, for purposes of
determining compliance with the conditions specified in this Section 4.01, each Lender that
has signed this Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying its objection
thereto.



46









 





     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other
Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:



     (a) The representations and warranties of the Borrowers and each other Loan Party contained in
Article V or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and correct on and as of the
date of such Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01.



     (b) No Default shall exist, or would result from such proposed Credit Extension.



     (c) The Administrative Agent and, if applicable, the L/C Issuer shall have received a Request
for Credit Extension in accordance with the requirements hereof.



     Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of
Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrowers
shall be deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit
Extension.



ARTICLE V.

REPRESENTATIONS AND WARRANTIES




     The Borrowers represent and warrant to the Administrative Agent and the Lenders that:



     5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party (a) is a
corporation, partnership or limited liability company duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b)
has all requisite power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified
and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such qualification or license,
and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or
(d), to the extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.



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     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan
Party of each Loan Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, (i) any Contractual
Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its property is subject; or
(c) violate any Law.



     5.03 Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required in connection with the execution, delivery or performance by,
or enforcement against, any Loan Party of this Agreement or any other Loan Document.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
This Agreement constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or
by equitable principles relating to enforceability.



     5.05 Financial Statements; No Material Adverse Effect; Solvency.



     (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii)
fairly present the financial condition of Imation and its Subsidiaries as of the date thereof and
their results of operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or contingent, of Imation and
its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and
Indebtedness.



     (b) The unaudited consolidated balance sheet of Imation and its Subsidiaries dated September
30, 2005, and the related consolidated statements of income or operations, shareholders’ equity and
cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of Imation and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby, subject, in the case
of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.
Schedule 5.05 sets forth all material indebtedness and other liabilities, direct or
contingent, of Imation and its consolidated Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and Indebtedness.



     (c) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.



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     (d) The Borrowers and each of other Loan Parties are Solvent, prior to and after giving effect
to the making of any Loans hereunder, and the issuance of any Letters of Credit hereunder.



     5.06 Litigation. Except as specifically disclosed in Schedule 5.06, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrowers after
due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrowers or any of their Subsidiaries or
against any of their properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.



     5.07 No Default. Neither the Borrowers nor any Subsidiary is in default under or with respect
to any Contractual Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement or any other Loan
Document.



     5.08 Ownership of Property. Each of the Borrowers and each Subsidiary has good record and
marketable title in fee simple to, or valid leasehold interests in, all real property necessary or
used in the ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrowers and their Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.



     5.09 Environmental Compliance. The Borrowers and their Subsidiaries conduct in the ordinary
course of business a review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Borrowers have reasonably
concluded that, except as specifically disclosed in Schedule 5.09, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.



     5.10 Insurance. The properties of the Borrowers and their Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the Borrowers, in such
amounts (after giving effect to any self-insurance compatible with the following standards), with
such deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Borrowers or the applicable
Subsidiary operates, provided that the Borrowers and their Subsidiaries may maintain self-insurance
in accordance with reasonably prudent industry practice through Captive Insurance Subsidiaries.



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     5.11 Taxes. The Borrowers and their Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment
against the Borrowers or any Subsidiary that would, if made, have a Material Adverse Effect.



     5.12 ERISA Compliance.



     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto,
provided that each Plan that is in the form of a prototype document has an opinion letter issued by
the IRS to the prototype plan sponsor, and no failure to satisfy a qualification requirement
applicable thereto could reasonably be expected to have a Material Adverse Effect. The Borrowers
and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412
of the Code, and no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.



     (b) There are no pending or, to the best knowledge of the Borrowers, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
be reasonably be expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect.



     (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability that, together with the aggregate amount of all Unfunded Pension
Liabilities for all Pension Plans, would exceed $25,000,000; (iii) neither the Borrowers nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Borrowers nor any ERISA Affiliate has engaged in a
transaction that could reasonably be expected to be subject to Sections 4069(a) or 4212(c) of
ERISA.



     5.13 Subsidiaries. With the exception of Inactive Subsidiaries, Imation has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13 and has no equity
investments in any other corporation or entity other than those specifically disclosed in Part (b)
of Schedule 5.13.



     5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.



     (a) The Borrowers are not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock.



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     (b) None of the Borrowers, any Person Controlling the Borrowers, or any Subsidiary (i) is a
“holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a
“holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the
Public Utility Holding Company Act of 2005, or (ii) is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.



     5.15 Disclosure. The Borrowers have disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries
is subject, and all other matters known to them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or omits
to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.



     5.16 Compliance with Laws. Each of the Borrowers and each Subsidiary is in compliance in all
material respects with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted or (b) the failure to comply therewith, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.



     5.17 Intellectual Property; Licenses, Etc. The Borrowers and their Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents,
patent rights, franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of the Borrowers, no
slogan or other advertising device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrowers or any Subsidiary infringes upon any
rights held by any other Person. Except as specifically disclosed in Schedule 5.17, no
claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the
Borrowers, threatened, which, either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.



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ARTICLE VI.

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
each of the Borrowers shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03, 6.11, and 6.12) cause each
Subsidiary to:



     6.01 Financial Statements. Deliver to the Administrative Agent and each Lender, in form and
detail satisfactory to the Administrative Agent and the Required Lenders:



     (a) as soon as available, but in any event within 90 days after the end of each fiscal year of
Imation, a consolidated balance sheet of Imation and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations, shareholders’ equity and
cash flows for such fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall
be prepared in accordance with generally accepted auditing standards and shall not be subject to
any “going concern” or like qualification or exception or any qualification or exception as to the
scope of such audit; and



     (b) as soon as available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of Imation, a consolidated balance sheet of Imation and
its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the
portion of Imation’s fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of Imation as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of Imation and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes.


As to any information contained in materials furnished pursuant to Section 6.02(c), the
Borrowers shall not be separately required to furnish such information under clause (a) or (b)
above, but the foregoing shall not be in derogation of the obligation of the Borrowers to furnish
the information and materials described in subsections (a) and (b) above at the times specified
therein.




     6.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in
form and detail satisfactory to the Administrative Agent and the Required Lenders:



     (a) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible
Officer of Imation;



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     (b) promptly after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Imation by independent
accountants in connection with the accounts or books of Imation or any Subsidiary, or any audit of
any of them;



     (c) promptly after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of Imation, and copies of all
annual, regular, periodic and special reports and registration statements which Imation may file or
be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Administrative Agent pursuant hereto; and



     (d) promptly, such additional information regarding the business, financial or corporate
affairs of the Borrowers or any Subsidiary, or compliance with the terms of the Loan Documents, as
the Administrative Agent or any Lender may from time to time reasonably request.



     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which Imation posts such documents, or provides a link thereto on
Imation’s website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on Imation’s behalf on IntraLinks/IntraAgency or another
relevant website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided
that: (i) Imation shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests Imation to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and (ii) Imation shall
notify (which may be by facsimile or electronic mail) the Administrative Agent and each Lender of
the posting of any such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained
herein, in every instance Imation shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent and each of the
Lenders. Except for such Compliance Certificates, the Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents referred to above, and in
any event shall have no responsibility to monitor compliance by Imation with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.



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     The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the Arranger will
make available to the Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to Imation or its securities) (each, a “Public
Lender”). The Borrowers hereby agree that (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to
have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat
such Borrower Materials as not containing any material non-public information with respect to
Imation or its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled
to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on
a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the
Borrowers shall be under no obligation to mark any Borrower Materials “PUBLIC.”



     6.03 Notices. Promptly upon any Responsible Officer having knowledge thereof, notify the
Administrative Agent and each Lender:



     (a) of the occurrence of any Default;



     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including (insofar as the same has resulted in or could reasonably be expected to
result in a Material Adverse Effect) (i) breach or non-performance of, or any default under, a
Contractual Obligation of any Borrower or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between any Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any litigation or
proceeding affecting any Borrower or any Subsidiary of a type or nature required to be disclosed on
Schedule 5.06, including pursuant to any applicable Environmental Laws;



     (c) of the occurrence of any ERISA Event;



     (d) of any material change in accounting policies or financial reporting practices by any
Borrower or any Subsidiary, or of the occurrence of any Internal Control Event;



     (e) that any Guarantor has ceased to be a Subsidiary of Imation; and



     (f) of the closing of the Memorex Acquisition.



     Each notice pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the Borrowers setting forth details of the occurrence referred to therein and stating
what action the Borrowers have taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any such Default, including
any and all provisions of this Agreement and any other Loan Document that have been breached.



     6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by Imation or such Subsidiary; (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property unless the same are otherwise permitted under Section 7.01(d); and (c) all Indebtedness, as and when due
and payable, but subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.



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     6.05 Preservation of Existence, Etc.



     (a) Preserve, renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization, except in a transaction permitted
by Section 7.04 or 7.05;



     (b) take all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse Effect; and



     (c) preserve or renew all of its registered patents, trademarks, trade names, service marks,
and other IP Rights the non-preservation of which could reasonably be expected to have a Material
Adverse Effect.



     6.06 Maintenance of Properties.



     (a) Maintain, preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear and tear excepted;



     (b) make all necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect; and



     (c) use the standard of care typical in the industry in the operation and maintenance of its
facilities.



     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance
companies not Affiliates of the Borrowers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days’ prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance. Such insurance may
be in the form of self-insurance provided by Captive Insurance Subsidiaries, provided that
(i) the terms of such self-insurance, including the risks covered by such self-insurance, are
customary for companies of similar size engaged in similar businesses and (ii) each Captive
Insurance Subsidiary maintains insurance reserves sufficient to satisfy all applicable regulatory
requirements; provided that if no regulatory requirements relating to reserves apply to a
Captive Insurance Subsidiary, such Captive Insurance Subsidiary shall maintain adequate insurance
reserves in accordance with prudent industry practice in connection with the risks covered by such
Captive Insurance Subsidiary.



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     6.08 Compliance with Laws. Comply in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings diligently
conducted; or (b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.



     6.09 Books and Records. Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrowers or such Subsidiary, as
the case may be.



     6.10 Inspection Rights. Permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and independent public
accountants, all upon reasonable prior notice and at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any such Lender may reasonably request;
provided, however, that the Borrowers shall not be required to pay any such costs
or expenses of the Administrative Agent or any Lenders in connection with any such inspections more
than once per calendar year (except for any such inspections in connection with any Default or
Event of Default).



     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general corporate
purposes not in contravention of any Law or of any Loan Document.



     6.12 Additional Guarantors. Notify the Administrative Agent (x) at the time that any Person
becomes a Domestic Subsidiary, or (y) in the case of Glyphics Media Inc., a New York corporation,
at the time such Subsidiary first has more than $20,000,000 in assets, and in either case (x) or
(y) promptly thereafter (and in any event within 30 days), cause such Person to (a) become a
Guarantor by executing and delivering to the Administrative Agent a Joinder Agreement, and (b)
deliver to the Administrative Agent documents of the types referred to in clauses (iv) and (v) of
Section 4.01(a) and, upon request of the Administrative Agent, favorable opinions of
counsel to such Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the Joinder Agreement), all in form, content and scope reasonably
satisfactory to the Administrative Agent.



ARTICLE VII.

NEGATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
neither Borrower shall, nor shall it permit any Subsidiary to, directly or indirectly:



     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the following:



     (a) Liens pursuant to any Loan Document;



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     (b) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that the property covered thereby is not increased and any
renewal or extension of the obligations secured or benefited thereby is permitted by Section
7.03(b);



     (c) Liens for taxes not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;



     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business (other than Liens on the Collateral) which are not
overdue for a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person;



     (e) pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation, other than any Lien
imposed by ERISA, and other than any such Lien on the Collateral;



     (f) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred in the ordinary
course of business (other than Liens on the Collateral);



     (g) easements, rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;



     (h) Liens (other than Liens on the Collateral) securing judgments, decrees or awards (i) in
respect of which the Borrowers or any of their Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review and in respect of which there shall have been secured a subsisting
stay of execution pending such appeal or proceedings, or (ii) in an aggregate amount equal to or
less than $10,000,000;



     (i) Liens (other than Liens on the Collateral) securing Indebtedness permitted under
Section 7.03(e); provided that (i) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;



     (j) Liens on property existing at the time of acquisition thereof by either Borrower or any
Subsidiary; provided that such Liens were in existence prior to such acquisition and were
not created in contemplation of such acquisition and any renewals or extensions thereof, provided
the property covered thereby is not increased and the amount secured thereby is not increased;



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     (k) Liens on property of a Person existing at the time such Person is acquired by either
Borrower or any Subsidiary (whether by stock purchase, merger or otherwise); provided
that such Liens were in existence prior to the contemplation of such acquisition and do not
extend to any assets other than those of the Person acquired; and



     (l) Liens not otherwise permitted herein securing Indebtedness not in favor of any Affiliate
of Imation and not exceeding in the aggregate at any time the principal amount of $25,000,000.



     7.02 Investments. Make any Investments, except:



     (a) Investments held by the Borrowers or such Subsidiary in the form of cash equivalents or
marketable debt securities;



     (b) advances to officers, directors and employees of the Borrowers and Subsidiaries in an
aggregate amount not to exceed $1,500,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;



     (c) Investments of the Borrowers in any wholly-owned Domestic Subsidiary or wholly-owned
Pledged Foreign Subsidiary (or any wholly-owned Foreign Subsidiary of any such Pledged Foreign
Subsidiary) and Investments of any wholly-owned Domestic Subsidiary or wholly-owned Pledged Foreign
Subsidiary (or any wholly-owned Foreign Subsidiary of any such Pledged Foreign Subsidiary) in the
Borrowers or in another wholly-owned Domestic Subsidiary or wholly-owned Pledged Foreign Subsidiary
(or any wholly-owned Foreign Subsidiary of any such Pledged Foreign Subsidiary);



     (d) Investments consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss;



     (e) Guarantees permitted by Section 7.03;



     (f) Investments (i) existing on the Closing Date in Foreign Subsidiaries, and Initial
Investments in Pledged Foreign Subsidiaries (or Foreign Subsidiaries of such Pledged Foreign
Subsidiaries) and such additional Investments therein as may arise in the ordinary course of
business (and not in connection with any Acquisition), (ii) in venture capital and investment
funds, and (iii) other Investments (not in connection with the consummation of any Acquisition) not
otherwise permitted hereby; not exceeding in the aggregate for all such existing and additional
Investments under clauses (ii) and (iii) together the amount of $35,000,000 incurred in any fiscal
year; and



     (g) Permitted Acquisitions.



     7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:



     (a) Indebtedness under the Loan Documents;



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     (b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder;



     (c) (i) Guarantees of the Borrowers or any Subsidiary in respect of Indebtedness otherwise
permitted hereunder of the Borrowers or any wholly-owned Domestic Subsidiary, and (ii) Guarantees
of the Borrowers or any Subsidiary in respect of obligations of any Foreign Subsidiary arising in
the ordinary course of business in an aggregate amount not exceeding at any time $25,000,000;



     (d) obligations (contingent or otherwise) of the Borrowers or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were) entered
into by such Person in the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such Person, and not
for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain
any provision exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;



     (e) Indebtedness in respect of capital leases, Synthetic Lease Obligations and purchase money
obligations for fixed or capital assets within the limitations set forth in Section
7.01(i); provided, however, that the aggregate amount of all such Indebtedness
at any one time outstanding together with all Indebtedness outstanding under Section
7.03(h) shall not exceed $25,000,000 in the aggregate;



     (f) other, unsecured Indebtedness, provided that at the time of incurrence thereof, both
before and after giving effect to such Indebtedness, (i) there exists no Default, (ii) each of the
Borrowers and their Subsidiaries is Solvent, and (iii) on a pro forma basis, as of the then-most
recently ended fiscal quarter, but after taking into account the effect of such Indebtedness,
Imation is in compliance with the covenants set forth in Section 7.11(a) and Section
7.11(b), and (iv) a Responsible Officer of the Borrowers has delivered to the Administrative
Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent
certifying the satisfaction of each of the foregoing conditions;



     (g) Indebtedness of a Person existing at the time such Person is acquired by the Borrower or
any Subsidiary (whether by stock purchase, merger or otherwise); provided that such Indebtedness
were in existence prior to the contemplation of such acquisition and do not extend to any assets
other than those of the Person acquired;



     (h) Indebtedness secured by fixed or capital assets and property acquired by the Borrowers or
any Subsidiary; provided that such Indebtedness (i) does not exceed the value of such
property or assets so acquired, (ii) was in existence prior to the contemplation of such
acquisition, and (iii) together with all Indebtedness outstanding under Section 7.03(e),
does not exceed $25,000,000 in the aggregate; and



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     (i) Indebtedness subordinated to the Obligations on terms satisfactory to, and otherwise
having material terms satisfactory to, the Required Lenders.



     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any
Person, except that, so long as no Default exists or would result therefrom:



     (a) any Subsidiary may merge with (i) a Borrower, provided that the Borrower shall be
the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided
that when any Guarantor is merging with another Subsidiary, the Guarantor shall be the continuing
or surviving Person;



     (b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to a Borrower or to another Subsidiary; provided that if the
transferor in such a transaction is a Guarantor, then the transferee must either be a Borrower or a
Guarantor; and



     (c) either Borrower or any Subsidiary may dissolve an Inactive Subsidiary.



     7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition,
except:



     (a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;



     (b) Dispositions of inventory in the ordinary course of business;



     (c) Dispositions of equipment or real property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase price of such
replacement property;



     (d) Dispositions of property by any Subsidiary to a Borrower or to a wholly-owned Domestic
Subsidiary or a wholly-owned Pledged Foreign Subsidiary (or a Foreign Subsidiary of such a Pledged
Foreign Subsidiary); provided that if the transferor of such property is a Guarantor, the
transferee thereof must either be a Borrower or a Guarantor;



     (e) Dispositions permitted by Section 7.04;



     (f) non-exclusive or exclusive (within defined fields of application) licenses of IP Rights in
the ordinary course of business and substantially consistent with past practice; provided
that such licenses are granted on an arm’s length basis and to Persons other than Affiliates of the
Borrowers;



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     (g) Dispositions by the Borrowers and their Subsidiaries not otherwise permitted under this
Section 7.05; provided that (i) at the time of such Disposition, no Default shall
exist or would result from such Disposition and (ii) the aggregate book value of all property Disposed
of in reliance on this clause (g) in any fiscal year shall not exceed $25,000,000; and



     (h) a Disposition pursuant to a sale-leaseback of Imation’s headquarters building and
appurtenant real estate, provided the lease resulting therefrom is an operating lease;


provided, however, that any Disposition pursuant to clauses (a) through (h) shall
be for fair market value.




     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that:



     (a) any Subsidiary may make Restricted Payments to a Borrower and to wholly-owned Subsidiaries
(and, in the case of a Restricted Payment by a non-wholly-owned Subsidiary, to the Borrower and any
Subsidiary and to each other owner of capital stock or other equity interests of such Subsidiary on
a pro rata basis based on their relative ownership interests);



     (b) the Borrowers and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common equity interests of such Person;



     (c) the Borrowers and each Subsidiary may purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire any such shares
with the proceeds received from the substantially concurrent issue of new shares of its common
stock or other common equity interests; and



     (d) the Borrowers may declare or pay cash dividends to their stockholders and Imation may
purchase, redeem or otherwise acquire shares of its capital stock or warrants, rights or options to
acquire any such shares for cash, provided that immediately after giving effect to such
proposed action, no Default would exist.



     7.07 Change in Nature of Business. Engage in any material line of business substantially
different from those lines of business conducted by Imation and its Subsidiaries on the date hereof
or any business substantially related or incidental thereto, provided that any business based
substantially on information storage technologies shall be deemed substantially related or
incidental thereto.



     7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate
of Imation, whether or not in the ordinary course of business, other than on fair and reasonable
terms substantially as favorable to the Borrowers or such Subsidiary as would be obtainable by the
Borrowers or such Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.



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     7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement
or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted
Payments to the Borrowers or any Guarantor or to otherwise transfer property to the Borrowers or
any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrowers or (iii) of
the Borrowers or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person; provided, however, that this clause (iii)
shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness
permitted under Section 7.03(e) solely to the extent any such negative pledge relates to
the property financed by or the subject of such Indebtedness; or (b) requires the grant of a Lien
to secure an obligation of such Person if a Lien is granted to secure another obligation of such
Person.



     7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.



     7.11 Financial Covenants.



     (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio, as of the
last day of any fiscal quarter, to be greater than 2.50:1.00.



     (b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge
Coverage Ratio, as of the last day of any fiscal quarter, to be less than 2.50:1.00.



ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




     8.01 Events of Default. Any of the following shall constitute an Event of Default:



     (a) Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when and as
required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii)
within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or
any facility, utilization or other fee due hereunder, or (iii) within five days after the same
becomes due, any other amount payable hereunder or under any other Loan Document; or



     (b) Specific Covenants. Any Borrower fails to perform or observe any term, covenant
or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11 or 6.12 or Article VII; or



     (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part
to be performed or observed and such failure continues for 30 days; or



     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of any Borrower or any other Loan Party
herein, in any other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or



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     (e) Cross-Default. (i) Any Borrower or any Subsidiary (A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder
and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which any Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected
Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such
Subsidiary as a result thereof is greater than the Threshold Amount; or



     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries (other
than an Inactive Subsidiary) institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents
to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged or unstayed for 45
calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all
or any material part of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 45 calendar days, or an order for relief is entered in any such
proceeding; or



     (g) Inability to Pay Debts; Attachment. (i) Any Borrower or any Subsidiary (other
than an Inactive Subsidiary) becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or



     (h) Judgments. There is entered against any Borrower or any Subsidiary (other than
solely against an Inactive Subsidiary) (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period of 10
consecutive days during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or



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     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the Borrowers
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of the Threshold Amount, or (ii) any Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment payment with respect to
its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or



     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution
and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full
of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other
Person contests in any manner the validity or enforceability of any Loan Document; or any Loan
Party denies that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or



     (k) Change of Control. There occurs any Change of Control with respect to Imation.



     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:



     (a) declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;



     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrowers;



     (c) require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to
the then Outstanding Amount thereof); and



     (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable law;


provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to a Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions to either Borrower shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act of the
Administrative Agent or any Lender.




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     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set forth in the proviso
to Section 8.02), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:



     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including Attorney Costs and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;



     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal and interest) payable to the Lenders (including Attorney
Costs and amounts payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;



     Third, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to them;



     Fourth, to payment of that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings, ratably among the Lenders in proportion to the respective amounts
described in this clause Fourth held by them;



     Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit; and



     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Borrowers or as otherwise required by Law.



     Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy
drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash
Collateral after all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Obligations, if any, in the order set forth above.



ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably
appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and
the L/C Issuer, and neither the Borrowers nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.



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     9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.



     9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:



     (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;



     (b) shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan
Documents that the Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and



     (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any information relating to
the Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.



     The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii)
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by a Borrower, a Lender or the L/C Issuer.



     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV
or elsewhere herein, other than to confirm receipt of items expressly required to be delivered
to the Administrative Agent.



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     9.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C
Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.



     9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or through any one or
more sub agents appointed by the Administrative Agent. The Administrative Agent and any such sub
agent may perform any and all of its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub
agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall
apply to their respective activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Administrative Agent.



     9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuer and the Borrowers. Upon receipt of any
such notice of resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrowers and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in accordance
with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the case of any collateral
security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by the Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the retiring Administrative Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and Section
10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub
agents and their respective Related Parties in respect of any actions taken or omitted to be taken
by any of them while the retiring Administrative Agent was acting as Administrative Agent.



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     Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also
constitute its resignation as L/C Issuer. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring L/C Issuer, (b) the retiring L/C Issuer
shall be discharged from all of their respective duties and obligations hereunder or under the
other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit having the
same terms (other than pricing not specified in Section 2.03(i)), including face amount as,
and, in substitution for, the Letters of Credit, if any, outstanding at the time of such succession
or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.



     9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer
acknowledges that it has, independently and without reliance upon the Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder.



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
Bookrunners, Arrangers, Syndication Agents or Documentation Agents listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.



     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered,
by intervention in such proceeding or otherwise:



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     (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in order to have the claims of
the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their respective agents and counsel and all other amounts due the Lenders,
the L/C Issuer and the Administrative Agent under Sections 2.03(i) and (j),
2.09 and 10.04) allowed in such judicial proceeding; and



     (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent
to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.




     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.



     9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize
the Administrative Agent, at its option and in its discretion,



     (a) to release any Lien on any property granted to or held by the Administrative Agent under
any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all
Obligations (other than contingent indemnification obligations) and the expiration or termination
of all Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if
approved, authorized or ratified in writing by the Required Lenders; and



     (b) to release any Guarantor from its obligations under the Guaranty if such Person ceases to
be a Subsidiary as a result of a transaction permitted hereunder.



     Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release its interest in particular types or items
of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10.




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ARTICLE X.

MISCELLANEOUS




     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by any Borrower or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders and the Borrowers or the
applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:



     (a) waive any condition set forth in Section 4.01(a) without the written consent of
each Lender;



     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;



     (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) by any Borrower
hereunder or under any other Loan Document without the written consent of each Lender directly
affected thereby;



     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees
or other amounts payable by any Borrower hereunder or under any other Loan Document, or change the
manner of computation of any financial ratio (including any change in any applicable defined term)
used in determining the Applicable Rate that would result in a reduction of any interest rate on
any Loan or any fee payable hereunder without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to
pay interest at the Default Rate;



     (e) change Section 2.12 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each Lender;



     (f) change any provision of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;



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     (g) release all or substantially all Guarantors from the Guaranty without the written consent
of each Lender;


and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Letter of Credit Application relating to
any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the Lenders required above,
affect the
rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and
(iii) Section 10.06(h) may not be amended, waived or otherwise modified without the consent
of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, waiver or other modification; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be
increased or extended without the consent of such Lender.




     10.02 Notices and Other Communications; Facsimile Copies.



     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b) below), all
notices and other communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:




     (i) if to the Borrower, the Administrative Agent or the L/C Issuer, to the address,
telecopier number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and




     (ii) if to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.


Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).




     (b) Electronic Communications. Notices and other communications to the Lenders and
the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e
mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited to
particular notices or communications.



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     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), provided that
if such notice or other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the opening of
business on the next business day for the recipient, and (ii) notices or communications posted to
an Internet or intranet website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address therefor.



     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the Borrowers,
any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of the Borrowers’ or the
Administrative Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined by a court of
competent jurisdiction by a final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Agent Party; provided, however, that in no
event shall any Agent Party have any liability to the Borrowers, any Lender, the L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).



     (d) Change of Address, Etc. Each of the Borrowers, the Administrative Agent and the
L/C Issuer may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other Lender may change its
address, telecopier or telephone number for notices and other communications hereunder by notice to
the Borrowers, the Administrative Agent and the L/C Issuer. In addition, each Lender agrees to
notify the Administrative Agent from time to time to ensure that the Administrative Agent has on
record (i) an effective address, contact name, telephone number, telecopier number and electronic
mail address to which notices and other communications may be sent and (ii) accurate wire
instructions for such Lender.



     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrowers even if (i) such
notices were not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by
the recipient, varied from any confirmation thereof. The Borrowers shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such Person
on each notice purportedly given by or on behalf of the Borrowers. All telephonic notices to
and other telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such recording.



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     10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or the
Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.



     10.04 Expenses; Indemnity; Damage Waiver.



     (a) Costs and Expenses. The Borrowers shall pay (i) all reasonable out of pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out of pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable out of pocket
expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C
Issuer), and shall pay all reasonable fees and time charges for attorneys who may be employees of
the Administrative Agent, any Lender or the L/C Issuer, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans made or Letters of
Credit issued hereunder, including all such out of pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.



     (b) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
or asserted against any Indemnitee by any third party or by the Borrowers or any other Loan Party
arising out of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case of the
Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration
of this Agreement and the other Loan Documents, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release of Hazardous Materials on or from any property owned or
operated by the Borrowers or any of their Subsidiaries, or any Environmental Liability related in
any way to the Borrowers or any of their Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the Borrowers or any
other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrowers or any
other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Borrowers or such Loan Party have obtained a
final and nonappealable judgment in its or their favor on such claim as determined by a court of
competent jurisdiction.



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     (c) Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Pro Rata Share
(determined as of the time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under
this subsection (c) are subject to the provisions of Section 2.11(d).



     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrowers shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.



     (e) Payments. All amounts due under this Section shall be payable not later than ten
Business Days after demand therefor.



     (f) Survival. The agreements in this Section shall survive the resignation of the
Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.



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     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Borrowers is
made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises
its right of set-off, and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent or such Lender in
its discretion) to be repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had not occurred, and
(b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect.



     10.06 Successors and Assigns.



     (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that neither Borrowers nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in
accordance with the provisions of subsection (h) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.



     (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations) at the time owing to it); provided that




     (i) except in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is continuing, the
Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed);
provided, however, that concurrent assignments to members of an Assignee
Group and concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has been met;



75









 






     (ii) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with respect to the
Loans or the Commitment assigned;




     (iii) any assignment of a Commitment must be approved by the Administrative Agent and
the L/C Issuer unless the Person that is the proposed assignee is itself a Lender (whether
or not the proposed assignee would otherwise qualify as an Eligible Assignee); and




     (iv) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with the Assignment Fee in the amount, if any,
required as set forth in Schedule 10.06, and the Eligible Assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.


Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c)
of this Section, from and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date of such assignment.
Upon request, the Borrowers (at their expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with subsection (d) of
this Section.




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     (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
the Borrowers, shall maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by each of the Borrowers and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice. In addition, at any time that
a request for a consent for a material or substantive change to the Loan Documents is pending, any
Lender may request and receive from the Administrative Agent a copy of the Register.



     (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural
person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement.


Any agreement or instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this Section,
the Borrowers agree that each Participant shall be entitled to the benefits of Sections
3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.13 as
though it were a Lender.




     (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Borrowers’ prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 3.01 unless the Borrowers are notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 3.01(e) as though it were a Lender.



     (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender
from any of
its obligations hereunder or substitute any such pledgee or assignee for such Lender as a
party hereto.



77









 





     (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.



     (h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrowers (an “SPC”) the option to provide all or any part of
any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of
such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof
or, if it fails to do so, to make such payment to the Administrative Agent as is required under
Section 2.12(b)(ii). Each party hereto hereby agrees that (A) neither the grant to any SPC
nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrowers under this Agreement (including its obligations
under Section 3.04), (B) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and (C) the Granting Lender
shall for all purposes, including the approval of any amendment, waiver or other modification of
any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by
an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding commercial paper or
other senior debt of any SPC, it will not institute against, or join any other Person in
instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (1) with notice to, but without prior
consent of the Borrowers and the Administrative Agent and with the payment of a processing fee in
the amount of $2,500, assign all or any portion of its right to receive payment with respect to any
Loan to the Granting Lender and (2) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any
surety or Guarantee or credit or liquidity enhancement to such SPC.



78









 





     (i) Resignation as L/C Issuer after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans
pursuant to subsection (b) above, Bank of America may, upon 45 days’ notice to the Borrowers and
the Lenders, resign as L/C Issuer. In the event of any such resignation as L/C
Issuer, the Borrowers shall be entitled to appoint from among the Lenders a successor L/C
Issuer hereunder; provided, however, that no failure by the Borrowers to appoint
any such successor shall affect the resignation of Bank of America as L/C Issuer, unless the
Borrowers, after the exercise of commercially reasonable efforts (which the Borrowers acknowledge
may entail the payment of fees and expenses to such successor L/C Issuer in amounts greater than
those then payable to Bank of America, provided that such fees shall be customary and reasonable
and not include a transition fee), shall have failed to procure a successor L/C Issuer, in which
event Bank of America shall remain L/C Issuer hereunder pending the accession of a successor L/C
Issuer. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding
as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). Upon the appointment
of a successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer, and (b) the successor L/C Issuer
shall issue letters of credit having the same terms (other than pricing not specified in
Section 2.03(i)), including face amount as, and, in substitution for, the Letters of
Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory
to Bank of America to effectively assume the obligations of Bank of America with respect to such
Letters of Credit.



     10.07 Treatment of Certain Information; Confidentiality.



     (a) Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (i)
to its Affiliates and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (ii) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (iii) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in
connection with the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially
the same as those of this Section, to (A) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any
actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrowers and their obligations, (vii) with the consent of the Borrowers or (viii) to the
extent such Information (x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than the Borrowers.



79









 





     (b) For purposes of this Section, “Information” means all information received from
any Borrower or any Subsidiary relating to any Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the Administrative
Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by any
Borrower or any Subsidiary, provided that, in the case of information received from
any Borrower or any Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.



     (c) Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (i) the
Information may include material non-public information concerning the Borrowers or a Subsidiary,
as the case may be, (ii) it has developed compliance procedures regarding the use of material
non-public information and (iii) it will handle such material non-public information in accordance
with applicable Law, including Federal and state securities Laws.



     10.08 Right of Set-off. If an Event of Default shall have occurred and be continuing, each
Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in whatever currency) at
any time held and other obligations (in whatever currency) at any time owing by such Lender, the
L/C Issuer or any such Affiliate to or for the credit or the account of the Borrowers or any other
Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or
hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C
Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have made any demand
under this Agreement or any other Loan Document and although such obligations of the Borrowers or
such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or
the L/C Issuer different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, the L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of set-off) that such
Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer
agrees to notify the Borrowers and the Administrative Agent promptly after any such set-off and
application, provided that the failure to give such notice shall not affect the validity of
such set-off and application.



     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If
the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations hereunder.



80









 





     10.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     10.11 Integration. This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In the event of any
conflict between the provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.



     10.12 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.



     10.13 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.



     10.14 Replacement of Lenders. If any Lender requests compensation under Section 3.04,
or if the Borrowers are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a
Defaulting Lender, or if any other circumstance exists hereunder that gives the Borrowers the right
to replace a Lender as a party hereto, then the Borrowers may, at their sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment), provided that:



     (a) the Borrowers shall have paid to the Administrative Agent the Assignment Fee;



81









 





     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued interest and fees) or
the Borrowers (in the case of all other amounts);



     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and



     (d) such assignment does not conflict with applicable Laws.



     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.



     10.15 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.



     (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK
CITY, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWERS, THE ADMINISTRATIVE AGENT
AND EACH LENDER WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.



     10.16 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL
BY JURY.



82









 





     10.17 Time of the Essence. Time is of the essence of the Loan Documents.



     10.18 Entire Agreement. This Agreement and the other Loan Documents represent the final
agreement among the parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. There are no unwritten oral agreements among the
parties.



     10.19 [Reserved]



     10.20 Joint and Several Liability.



     (a) The liability of the Borrowers for all amounts due to the Administrative Agent or any
Lender under this Agreement shall be joint and several regardless of which Borrower actually
receives Loans or other extensions of credit hereunder or the amount of such Loans received or the
manner in which the Administrative Agent or such Lender accounts for such Loans or other extensions
of credit on its books and records. Each Borrower’s Obligations with respect to Loans made to it,
and each Borrower’s Obligations arising as a result of the joint and several liability of the
Borrowers hereunder, with respect to Loans made to the other Borrower hereunder, shall be separate
and distinct obligations, but all such Obligations shall be primary obligations of each Borrower.



     (b) Each Borrower’s Obligations arising as a result of the joint and several liability of the
Borrowers hereunder with respect to Loans or other extensions of credit made to the other Borrower
hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of (1) the
validity or enforceability, avoidance or subordination of the Obligations of such other Borrower or
of any promissory note or other document evidencing all or any part of the Obligations of such
other Borrower, (2) the absence of any attempt to collect the Obligations from such other Borrower,
any other guarantor, or any other security therefor, or the absence of any other action to enforce
the same, (3) the waiver, consent, extension, forbearance or granting of any indulgence by the
Administrative Agent or any Lender with respect to any provision of any instrument evidencing the
Obligations of such other Borrower, or any part thereof, or any other agreement now or hereafter
executed by such other Borrower and delivered to the Administrative Agent or any Lender, (4) the
failure by the Administrative Agent or any Lender to take any steps to perfect and maintain its
security interest in, or to preserve its rights to, any security or collateral for the Obligations
of such other Borrower, (5) the Administrative Agent’s or any Lender’s election, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (6) any borrowing or grant of a security interest by such other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code, (7) the disallowance of all or any
portion of the Administrative Agent’s or any Lender’s claim(s) for the repayment of the Obligations
of such other Borrower under Section 502
of the Bankruptcy Code, or (8) any other circumstances which might constitute a legal or
equitable discharge or defense of a guarantor or of such other Borrower. With respect to each
Borrower’s Obligations arising as a result of the joint and several liability of the Borrowers
hereunder with respect to Loans or other extensions of credit made to any of the other Borrowers
hereunder, such Borrower waives, until the Obligations shall have been paid in full and the
Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy
which the Administrative Agent or any Lender now or may hereafter have against any Borrower, any
endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right
to participate in, any security or collateral given to the Administrative Agent or any Lender to
secure payment of the Obligations or any other liability of the Borrowers to the Administrative
Agent or any Lender.



83









 





     (c) Upon any Event of Default, the Administrative Agent may proceed directly and at once,
without notice, against either Borrower to collect and recover the full amount, or any portion of
the Obligations, without first proceeding against the other Borrower or any other Person, or
against any security or collateral for the Obligations. Each Borrower consents and agrees that the
Administrative Agent shall be under no obligation to marshal any assets in favor of such Borrower
or against or in payment of any or all of the Obligations.



     10.21 Contribution and Indemnification between the Borrowers. Each Borrower is obligated to
repay the Obligations as joint and several obligor under this Agreement. To the extent that a
Borrower shall, under this Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to the other Borrower hereunder or other Obligations incurred directly and
primarily by the other Borrower (an “Accommodation Payment”), then the Borrower making such
Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed
by, the other Borrower in an amount, for such other Borrower, equal to a fraction of such
Accommodation Payment, the numerator of which fraction is such other Borrower’s “Allocable Amount”
(as defined below) and the denominator of which is the sum of the Allocable Amounts of both of the
Borrowers. As of any date of determination, the “Allocable Amount” of each Borrower shall be equal
to the maximum amount of liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower “insolvent” within the meaning of Section
101(32) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (the
“UFTA”) or Section 271 of the New York Uniform Fraudulent Conveyance Act (the
“UFCA”), (b) leaving such Borrower with unreasonably small capital or assets, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Sections 274 and 275 of
the UFCA, or (c) leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 275 of the UFCA.
All rights and claims of contributions, indemnification and reimbursement under this section shall
be subordinate in right of payment to the prior payment in full of the Obligations. The provisions
of this section shall, to the extent expressly inconsistent with any provision in any Loan
Document, supersede such inconsistent provision.



     10.22 Agency of Imation for Enterprises. Enterprises hereby appoints Imation as its agent for
all purposes relevant to this Agreement and the other Loan Documents, including the giving and
receipt of notices and the execution and delivery of all documents, instruments and certificates
contemplated herein and all modifications hereto. Any acknowledgement, consent,
direction, certification or other action which might otherwise be valid or effective only if
given or taken by both of the Borrowers or by Enterprises, acting singly, shall be valid and
effective if given or taken only by Imation, whether or not Enterprises joins therein.



84









 





     10.23 USA Patriot Act Notice. Each Lender and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L 107-56 (signed into law on October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrowers, which information
includes the name and address of the Borrowers and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.



85









 





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



	 	 	 	 	 	 	 
	 	 	IMATION CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Paul R. Zeller
 

Paul R. Zeller
	 	 
	 

	 	Title:
	 	Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	IMATION ENTERPRISES CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Paul R. Zeller
 

Paul R. Zeller
	 	 
	 

	 	Title:
	 	Vice President and Chief Financial Officer	 	 






S-1









 





	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as	 	 
	 	 	Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Debra E. DelVecchio
 

Debra E. DelVecchio
	 	 
	 

	 	Title:
	 	Managing Director	 	 






S-2









 





	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA,
N.A., as a Lender and L/C Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Debra E. DelVecchio
 

Debra E. DelVecchio
	 	 
	 

	 	Title:
	 	Managing Director	 	 






S-3









 





	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Brian L. Grossman
 

Brian L. Grossman
	 	 
	 

	 	Title:
	 	Vice President	 	 






S-4









 





	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Louis D. Serio
 

Louis D. Serio
	 	 
	 

	 	Title:
	 	Vice President	 	 






S-5









 





	 	 	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI UFJ,	 	 
	 	 	LTD., CHICAGO BRANCH	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Tsuguyuki Umene
 

Tsuguyuki Umene
	 	 
	 

	 	Title:
	 	Deputy General Manager	 	 






S-6









 





	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Christine Dean
 

	 	 
	 

	 	Name:
	 	Christine Dean	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 






S-7









 





	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Patrick McCue
 

Patrick McCue
	 	 
	 

	 	Title:
	 	Vice President and Senior
Relationship Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Jennifer D. Barrett
 

Jennifer D. Barrett
	 	 
	 

	 	Title:
	 	Vice President and Loan Team Manager	 	 






S-8









 





	 	 	 	 	 	 	 
	 	 	CITIBANK NA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	John Judge
 

John Judge
	 	 
	 

	 	Title:
	 	Vice President	 	 






S-9









 





	 	 	 	 	 	 	 
	 	 	LA SALLE BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	Peter L. Eaton
 

Peter L. Eaton
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 






S-10









 





	 	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	David C. Melin
 

David C. Melin
	 	 
	 

	 	Title:
	 	Vice President	 	 






S-11









 





EXHIBIT A




FORM OF LOAN NOTICE




Date:                     , ___




To: Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of March 29, 2006 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Imation
Corporation, a Delaware corporation, Imation Enterprises Corp., a Delaware corporation (each, a
“Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and L/C Issuer.



	 	 	 	 	 	 	 
	 	 	The undersigned hereby request (select one):
	 

	 	 	 	 	 	 
	 	 	o A Borrowing of Loans       o A conversion or continuation of Loans
	 

	 	 	 	 	 	 
	 

	 	 	1.	 	 	By                     [specify Borrower].
	 

	 	 	 	 	 	 
	 

	 	 	2.	 	 	On                     (a Business Day).
	 

	 	 	 	 	 	 
	 

	 	 	3.	 	 	In the amount of $                    .
	 

	 	 	 	 	 	 
	 

	 	 	4.	 	 	Comprised of                     
	 

	 	 	 	 	 	[Type of Loan requested]
	 

	 	 	 	 	 	 
	 

	 	 	5.	 	 	For Eurodollar Rate Loans: with an Interest Period of ___months.






              [The Borrowing requested herein complies with the proviso to the first sentence of Section
2.01 of the Agreement.]



	 	 	 	 	 	 	 	 	 
	IMATION CORP.	 	 	 	IMATION ENTERPRISES CORP.
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 





A-1









 





EXHIBIT B




FORM OF NOTE




                                        




     FOR VALUE RECEIVED, the undersigned (each, a “Borrower”), hereby promise to pay to
                                         or registered assigns (the “Lender”), in accordance with the provisions of
the Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by
the Lender to the Borrower under that certain Credit Agreement, dated as of March 29, 2006 (as
amended, restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among the
undersigned, the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and L/C Issuer.



     The Borrower promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum rate set forth in
the Agreement.



     This Note is one of the Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. This Note is also entitled to the benefits of the Guaranty. Upon the occurrence and
continuation of one or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable
all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business. The Lender may
also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans
and payments with respect thereto.



     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.



	 	 	 	 	 	 	 	 	 	 	 
	IMATION CORP.	 	 	 	IMATION ENTERPRISES CORP.	 	 
	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 





B-1









 





LOANS AND PAYMENTS WITH RESPECT THERETO




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Amount of	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Principal	 	 	Outstanding	 	 	 	 
	 	 	 	 	 	 	Type of	 	 	Amount of	 	 	End of	 	 	or Interest	 	 	Principal	 	 	 	 
	 	 	 	 	 	 	Loan	 	 	Loan	 	 	Interest	 	 	Paid This	 	 	Balance	 	 	Notation	 
	Borrower	 	Date	 	 	Made	 	 	Made	 	 	Period	 	 	Date	 	 	This Date	 	 	Made By	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





B-2









 





EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                     ,




To: Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Credit Agreement, dated as of March 29, 2006 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), among Imation
Corporation (“Imation”), a Delaware Corporation, Imation Enterprises Corp., a Delaware
Corporation (collectively, the “Borrowers”), the Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent and L/C Issuer.



     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                                                            of Imation, and that, as such, he/she is authorized to execute
and deliver this Certificate to the Administrative Agent on the behalf of the Borrowers, and that:



     [Use following paragraph 1 for fiscal year-end financial statements]



     1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal year of the Borrowers ended as
of the above date, together with the report and opinion of an independent certified public
accountant required by such section.



     [Use following paragraph 1 for fiscal quarter-end financial statements]



     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of the Borrowers ended as of the
above date. Such financial statements fairly present the financial condition, results of
operations and cash flows of the Borrowers and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and the absence of
footnotes.



     2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Borrowers during the accounting period covered by the
attached financial statements.



     3. A review of the activities of the Borrowers during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrowers performed and observed all its Obligations under the Loan Documents, and



C-1









 





[select one:]




     [to the best knowledge of the undersigned during such fiscal period, the Borrowers performed
and observed each covenant and condition of the Loan Documents applicable to them.]



—or—




     [the following covenants or conditions have not been performed or observed and the following
is a list of each such Default and its nature and status:]



     4. The representations and warranties of the Borrowers contained in Article V of the
Agreement, or which are contained in any document furnished at any time under or in connection with
the Loan Documents, are true and correct on and as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except that for purposes of this Compliance
Certificate, the representations and warranties contained in subsections (a) and (b) of Section
5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant
to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the
statements in connection with which this Compliance Certificate is delivered.



     5. The financial covenant analyses and information set forth on Schedule 2 attached
hereto are true and accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of                     , ___.



C-2









 





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	 	 






C-3









 






	 	 	 	 	 	 	 	 	 	 	 
	II.	 	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.C. + II.D. + II.E.):	 	____to 1.00
	 	 	Minimum permitted: 2.50:1.00	 	 







C-4









 








EXHIBIT D




ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [the][each] Assignor identified
in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2 below
([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees] hereunder are several and not joint.] Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement identified below (the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and Assumption as if set forth
herein in full.



     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under
the Credit Agreement and any other documents or instruments delivered pursuant thereto to the
extent related to the amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the respective facilities
identified below (including, without limitation, the Letters of Credit included in such facilities
) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby or in any way
based on or related to any of the foregoing, including, but not limited to, contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in equity related to
the rights and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i)
and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such
sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in
this Assignment and Assumption, without representation or warranty by [the][any] Assignor.




	1.	 	Assignor[s]:                                                                                 
	 
	2.	 	Assignee[s]:                                                                                  [for each Assignee,
indicate [Affiliate][Approved Fund] of [identify
Lender]]
	 
	3.	 	Borrower(s):                                                                                 
	 
	4.	 	Administrative Agent: Bank of America, N.A., as the administrative agent under the
Credit Agreement




D-1









 












	5.	 	Credit Agreement: [Credit Agreement, dated as of [___, ___], among the
[___], the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent and L/C Issuer.
	 
	6.	 	Assigned Interest[s]:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	Percentage	 	 	 	 
	 	 	Commitment/Loan	 	 	Commitment/Loans	 	 	Assigned of	 	 	 	 
	Facility Assigned	 	for all Lenders*	 	 	Assigned*	 	 	Commitment/Loans	 	 	CUSIP	 
	 
	 	$	 	 	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	$	 	 	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	$	 	 	 	$	 	 	 	 	 	%	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 






	[7. Trade Date: ___]




Effective Date:                     , 20___[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]




     The terms set forth in this Assignment and Assumption are hereby agreed to:



	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 





 




			
	*	 	Amount to be adjusted by the
counterparties to take in account any payments or prepayments made between the
Trade Date and the Effective Date.






D-2









 





	 	 	 	 	 
	Consented to and Accepted:  
	 
	 	 	 	 
	BANK OF AMERICA, N.A., as
	Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Title:
	 	 
	 
	 	 	 	 
	Consented to:
	 
	 	 	 	 
	IMATION CORP.
	IMATION ENTERPRISES CORP.
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 






D-3









 






ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




[___________________]




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION




     1. Representations and Warranties.



     1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made in or in
connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Loan Document or (iv) the performance or observance by
the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.



     1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06(b)(iii),
(v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under
Section 10.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
is sophisticated with respect to decisions to acquire assets of the type represented by [the][such]
Assigned Interest and either it, or the Person exercising discretion in making its decision to
acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded the opportunity to
receive copies of the most recent financial statements delivered pursuant to Section ___thereof, as
applicable, and such other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to purchase [the][such]
Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and
without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are required to be performed
by it as a Lender.



D-4









 





     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of [the][each] Assigned Interest (including payments of principal,
interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to
but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued
from and after the Effective Date.



     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.



D-5









 





EXHIBIT E




FORM OF GUARANTY




     THIS GUARANTY (this “Guaranty”), dated as of [___], 2006, is made by each
Guarantor named in the signature pages hereof (each a “Guarantor” and, collectively, the
“Guarantors”), in favor of the Lenders party to the Credit Agreement referred to below and
Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) and L/C Issuer.



     Imation Corp., a Delaware corporation (“Imation”) and Imation Enterprises Corp., a
Delaware corporation (“Enterprises”) (each of Imation and Enterprises is referred to
individually herein as a “Borrower” and collectively as the “Borrowers”), the
Lenders from time to time party thereto (each a “Lender” and, collectively, the
“Lenders”), the L/C Issuer, and the Administrative Agent are parties to a Credit Agreement
dated as of March _, 2006 (as amended, modified, renewed or extended from time to time, the
“Credit Agreement”).



     It is a condition precedent to the Borrowings and issuances of Letters of Credit under the
Credit Agreement that each Guarantor guarantee the indebtedness and other obligations of the
Borrowers to the Guaranteed Parties under or in connection with the Credit Agreement as set forth
herein. Each Guarantor, as a Subsidiary of a Borrower, will derive substantial direct and indirect
benefits from the making of the Loans to, and issuances of Letters of Credit for the account of,
the Borrowers pursuant to the Credit Agreement (which benefits are hereby acknowledged by each
Guarantor).



     Accordingly, to induce the Administrative Agent, the L/C Issuer and the Lenders to enter into
the Credit Agreement, and in consideration thereof, each Guarantor hereby agrees as follows:



     SECTION 1 Definitions; Interpretation.



     (a) Terms Defined in Credit Agreement. All capitalized terms used in this Guaranty
(including in the recitals hereof) and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement.



     (b) Certain Defined Terms. As used in this Guaranty (including in the recitals
hereof), the following terms shall have the following meanings:



     “Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et
seq.).



     “Guaranteed Obligations” has the meaning set forth in Section 2.



     “Guaranteed Parties” means the Administrative Agent, the Lenders and the L/C Issuer.



     “Guarantor Documents” means this Guaranty and all other certificates, documents,
agreements and instruments delivered to any Guaranteed Party under or in connection with this
Guaranty and the Loan Documents.



E-1









 





     “Insolvency Proceeding” means, with respect to any Person, (a) any case, action or
proceeding with respect to such Person before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or
relief of debtors, or (b) any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; in either case undertaken under Debtor
Relief Laws.



     “Subordinated Debt” has the meaning set forth in Section 7.



     (b) Interpretation. The rules of interpretation set forth in Sections 1.02 to
1.05 of the Credit Agreement shall be applicable to this Guaranty and are incorporated
herein by this reference.



     SECTION 2 Guaranty.



     (a) Guaranty. Each Guarantor hereby unconditionally and irrevocably guarantees to the
Guaranteed Parties, and their respective successors, endorsees, transferees and assigns, the full
and prompt payment when due (whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise) and performance of the indebtedness, liabilities and other
obligations of the Borrowers to the Guaranteed Parties under or in connection with the Credit
Agreement, the Notes and the other Loan Documents, including all unpaid principal of the Loans, all
amounts owing in respect of the L/C Obligations, all interest accrued thereon, all fees due under
the Credit Agreement and all other amounts payable by the Borrowers to the Guaranteed Parties
thereunder or in connection therewith. The terms “indebtedness,” “liabilities” and “obligations”
are used herein in their most comprehensive sense and include any and all advances, debts,
obligations and liabilities, now existing or hereafter arising, whether voluntary or involuntary
and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such indebtedness, liabilities and obligations may be or
hereafter become unenforceable or shall be an allowed or disallowed claim under any Debtor Relief
Law, and including interest that accrues after the commencement by or against the Borrowers or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor
in such proceeding. The foregoing indebtedness, liabilities and other obligations of the
Borrowers, and all other indebtedness, liabilities and obligations to be paid or performed by the
Guarantors in connection with this Guaranty (including any and all amounts due under Section
15), shall hereinafter be collectively referred to as the “Guaranteed Obligations.”



     (b) Limitation of Guaranty. To the extent that any court of competent jurisdiction
shall impose by final judgment under applicable law (including the New York Uniform Fraudulent
Conveyance Act and §§544 and 548 of the Bankruptcy Code) any limitations on the amount of any
Guarantor’s liability with respect to the Guaranteed Obligations which any Guaranteed Party can
enforce under this Guaranty, the Guaranteed Parties by their acceptance hereof accept such
limitation on the amount of such Guarantor’s liability hereunder to the extent needed to make this
Guaranty and the Guarantor Documents fully enforceable and nonavoidable.



     SECTION 3 Liability of Guarantors. The liability of the Guarantors under this
Guaranty shall be irrevocable, absolute, independent and unconditional, and shall not be affected
by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible payment and performance in full of all Guaranteed Obligations. In furtherance of
the foregoing and without limiting the generality thereof, each Guarantor agrees as follows:



E-2









 





     (a) such Guarantor’s liability hereunder shall be the immediate, direct, and primary
obligation of such Guarantor and shall not be contingent upon any Guaranteed Party’s exercise or
enforcement of any remedy it may have against any Borrower or any other Person, or against any
Collateral;



     (b) this Guaranty is a guaranty of payment when due and not merely of collectibility;




     (c) the Guaranteed Parties may enforce this Guaranty upon the occurrence and during the
continuance of an Event of Default notwithstanding the existence of any dispute between any of the
Guaranteed Parties and any Borrower with respect to the existence of such Event of Default;



     (d) such Guarantor’s payment of a portion, but not all, of the Guaranteed Obligations shall in
no way limit, affect, modify or abridge such Guarantor’s liability for any portion of the
Guaranteed Obligations remaining unsatisfied; and



     (e) such Guarantor’s liability with respect to the Guaranteed Obligations shall remain in full
force and effect without regard to, and shall not be impaired or affected by, nor shall such
Guarantor be exonerated or discharged by, any of the following events:




     (i) any Insolvency Proceeding with respect to any Borrower, such Guarantor, any other
Loan Party or any other Person;




     (ii) any limitation, discharge (other than discharges in the Insolvency Proceeding of
such Guarantor), or cessation of the liability of any Borrower, such Guarantor, any other
Loan Party or any other Person for any Guaranteed Obligations due to any statute, regulation
or rule of law (other than cessation of liability to any Guarantor by virtue of statutes of
limitation applicable to actions against such Guarantor), or any invalidity or
unenforceability in whole or in part of any of the Guaranteed Obligations or the Loan
Documents;




     (iii) any merger, acquisition, consolidation or change in structure of any Borrower,
such Guarantor or any other Loan Party or Person, or any sale, lease, transfer or other
disposition of any or all of the assets or shares of any Borrower, such Guarantor, any other
Loan Party or other Person;




     (iv) any assignment or other transfer, in whole or in part, of any Guaranteed Party’s
interests in and rights under this Guaranty or the other Loan Documents, including any
Guaranteed Party’s right to receive payment of the Guaranteed Obligations, or any assignment
or other transfer, in whole or in part, of any Guaranteed Party’s interests in and to any of
the Collateral;




     (v) any claim, defense, counterclaim or set-off, other than that of prior performance,
that any Borrower, such Guarantor, any other Loan Party or other Person may have or assert,
including any defense of incapacity or lack of corporate or other authority to execute any
of the Loan Documents;



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     (vi) any Guaranteed Party’s amendment, modification, renewal, extension, cancellation
or surrender of any Loan Document, any Guaranteed Obligations, or any Collateral, or any
Guaranteed Party’s exchange, release, or waiver of any Collateral;




     (vii) any Guaranteed Party’s exercise or nonexercise of any power, right or remedy with
respect to any of the Collateral, including any Guaranteed Party’s compromise, release,
settlement or waiver with or of any Borrower, any other Loan Party or any other Person;




     (viii) any Guaranteed Party’s vote, claim, distribution, election, acceptance, action
or inaction in any Insolvency Proceeding related to the Guaranteed Obligations other than
the Insolvency Proceeding of the Guarantor with respect to which any of the foregoing
pertains;




     (ix) any impairment or invalidity of any of the Collateral or any other collateral
securing any of the Guaranteed Obligations or any failure to perfect any of the Liens of the
Guaranteed Parties thereon or therein; and




     (x) any other guaranty, whether by such Guarantor or any other Person, of all or any
part of the Guaranteed Obligations or any other indebtedness, obligations or liabilities of
any Borrower to any Guaranteed Party.



     SECTION 4 Consents of Guarantors. Each Guarantor hereby unconditionally consents and
agrees that, without notice to or further assent from such Guarantor:



     (a) the principal amount of the Guaranteed Obligations may be increased or decreased and
additional Obligations of the Loan Parties under the Loan Documents may be incurred, by one or more
amendments, modifications, renewals or extensions of any Loan Document or otherwise;



     (b) the time, manner, place or terms of any payment under any Loan Document may be extended or
changed, including by an increase or decrease in the interest rate on any Guaranteed Obligation or
any fee or other amount payable under such Loan Document, by an amendment, modification or renewal
of any Loan Document or otherwise;



     (c) the time for any Borrower’s (or any other Person’s) performance of or compliance with any
term, covenant or agreement on its part to be performed or observed under any Loan Document may be
extended, or such performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms as the Guaranteed
Parties may deem proper;



     (d) any Guaranteed Party may discharge or release, in whole or in part, any other Loan Party
or any other Person liable for the payment and performance of all or any part of the Guaranteed
Obligations, and may permit or consent to any such action or any result of such action, and shall
not be obligated to demand or enforce payment upon any of the Collateral or any other collateral,
nor shall any Guaranteed Party be liable to the Guarantors for any failure to collect or enforce
payment or performance of the Guaranteed Obligations from any Person or to realize on the
Collateral or other collateral therefor;



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     (e) in addition to the Collateral, the Guaranteed Parties may take and hold other security
(legal or equitable) of any kind, at any time, as collateral for the Guaranteed Obligations, and
may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate,
modify, waive, rescind, compromise or extend such security and may permit or consent to any such
action or the result of any such action, and may apply such security and direct the order or manner
of sale thereof;



     (f) the Guaranteed Parties may request and accept other guaranties of the Guaranteed
Obligations and any other indebtedness, obligations or liabilities of any Borrower to any
Guaranteed Party and may, from time to time, in whole or in part, surrender, release, subordinate,
modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any
such action or the result of any such action; and



     (g) the Guaranteed Parties may exercise, or waive or otherwise refrain from exercising, any
other right, remedy, power or privilege (including the right to accelerate the maturity of any Loan
and any power of sale) granted by any Loan Document or other security document or agreement, or
otherwise available to any Guaranteed Party, with respect to the Guaranteed Obligations or any of
the Collateral, even if the exercise of such right, remedy, power or privilege affects or
eliminates any right of subrogation or any other right of the Guarantors against the Borrowers;



all as the Guaranteed Parties may deem advisable, and all without impairing, abridging, releasing
or affecting this Guaranty.



     SECTION 5 Guarantor Waivers.



     (a) Certain Waivers. Each Guarantor waives and agrees not to assert:




     (i) any right to require any Guaranteed Party to marshal assets in favor of any
Borrower, such Guarantor, any other Loan Party or any other Person, to proceed against any
Borrower, any other Loan Party or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or private sale of
personal property security constituting the Collateral or other collateral for the
Guaranteed Obligations or comply with any other provisions of §9611 of the New York UCC (or
any equivalent provision of any other applicable law) or to pursue any other right, remedy,
power or privilege of any Guaranteed Party whatsoever;




     (ii) any defense arising by reason of any lack of corporate or other authority or any
other defense of any Borrower, such Guarantor or any other Person;




     (iii) any defense based upon any Guaranteed Party’s errors or omissions in the
administration of the Guaranteed Obligations;




     (iv) any rights to set-offs and counterclaims (other than that of prior performance);




     (v) any defense based upon an election of remedies (including, if available, an
election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation
rights of such Guarantor or the right of such Guarantor to proceed against any Borrower
or any other obligor of the Guaranteed Obligations for reimbursement; and



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     (vi) without limiting the generality of the foregoing, to the fullest extent permitted
by law, any defenses or benefits that may be derived from or afforded by applicable law
limiting the liability of or exonerating guarantors or sureties, or which may conflict with
the terms of this Guaranty.



     (b) Additional Waivers. Each Guarantor waives any and all notice of the acceptance of
this Guaranty, and any and all notice of the creation, renewal, modification, extension or accrual
of the Guaranteed Obligations, or the reliance by the Guaranteed Parties upon this Guaranty, or the
exercise of any right, power or privilege hereunder. The Guaranteed Obligations shall conclusively
be deemed to have been created, contracted, incurred and permitted to exist in reliance upon this
Guaranty. Each Guarantor waives promptness, diligence, presentment, protest, demand for payment,
notice of default, dishonor or nonpayment and all other notices to or upon any Borrower, such
Guarantor or any other Person with respect to the Guaranteed Obligations.



     (c) Independent Obligations. The obligations of each Guarantor hereunder are
independent of and separate from the obligations of the Borrowers and any other Loan Party and upon
the occurrence and during the continuance of any Event of Default, a separate action or actions may
be brought against such Guarantor, whether or not any Borrower or any such other Loan Party is
joined therein or a separate action or actions are brought against any Borrower or any such other
Loan Party.



     (d) Financial Condition of Borrowers. No Guarantor shall have any right to require
any Guaranteed Party to obtain or disclose any information with respect to: (i) the financial
condition or character of the Borrowers or the ability of the Borrowers to pay and perform the
Guaranteed Obligations; (ii) the Guaranteed Obligations; (iii) the Collateral; (iv) the existence
or nonexistence of any other guarantees of all or any part of the Guaranteed Obligations; (v) any
action or inaction on the part of any Guaranteed Party or any other Person; or (vi) any other
matter, fact or occurrence whatsoever.



     SECTION 6 Subrogation. Until the Guaranteed Obligations shall be satisfied in full
and the Commitments shall be terminated, no Guarantor shall have, and no Guarantor shall directly
or indirectly exercise, (a) any rights that it may acquire by way of subrogation under this
Guaranty, by any payment hereunder or otherwise, (b) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Guaranty or (c) any other right
which it might otherwise have or acquire (in any way whatsoever) which could entitle it at any time
to share or participate in any right, remedy or security of any Guaranteed Party as against the
Borrowers or other Loan Parties, whether in connection with this Guaranty, any of the other Loan
Documents or otherwise. If any amount shall be paid to any Guarantor on account of the foregoing
rights at any time when all the Guaranteed Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of the Guaranteed Parties and shall forthwith be paid
to the Administrative Agent to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured, in accordance with the terms of the Loan Documents.



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     SECTION 7 Subordination.



     (a) Subordination to Payment of Guaranteed Obligations. All payments on account of
all indebtedness, liabilities and other obligations (other than those arising out of intercompany
transactions in the ordinary course of business) of the Borrowers to each Guarantor, whether
created under, arising out of or in connection with any documents or instruments evidencing any
Credit Extensions to the Borrowers or otherwise, including all principal on any such Credit
Extensions, all interest accrued thereon, all fees and all other amounts payable by the Borrowers
to such Guarantor in connection therewith, whether now existing or hereafter arising, and whether
due or to become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined (the “Subordinated Debt”) shall be subject, subordinate and junior in right of
payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior
payment in full in cash or cash equivalents of the Guaranteed Obligations.



     (b) No Payments. As long as any of the Guaranteed Obligations shall remain
outstanding and unpaid, no Guarantor shall accept or receive any payment or distribution by or on
behalf of any Borrower, directly or indirectly, of assets of such Borrower of any kind or
character, whether in cash, property or securities, including on account of the purchase,
redemption or other acquisition of Subordinated Debt, as a result of any collection, sale or other
disposition of collateral, or by set-off, exchange or in any other manner, for or on account of the
Subordinated Debt (“Subordinated Debt Payments”), except that if no Event of Default
exists, a Guarantor shall be entitled to accept and receive regularly scheduled payments and other
payments in the ordinary course on the Subordinated Debt, in accordance with the terms of the
documents and instruments governing the Subordinated Debt and other Subordinated Debt Payments in
respect of Subordinated Debt not evidenced by documents or instruments, in each case to the extent
permitted under Article VII of the Credit Agreement. During the existence of an Event of
Default (or if any Event of Default would exist immediately after the making of a Subordinated Debt
Payment), and until such Event of Default is cured or waived, such Guarantor shall not make, accept
or receive any Subordinated Debt Payment. In the event that, notwithstanding the provisions of this
Section 7, any Subordinated Debt Payments shall be received in contravention of this
Section 7 by any Guarantor before all Guaranteed Obligations are paid in full in cash or
cash equivalents, such Subordinated Debt Payments shall be held in trust for the benefit of the
Guaranteed Parties and shall be paid over or delivered to the Administrative Agent for application
to the payment in full in cash or cash equivalents of all Guaranteed Obligations remaining unpaid
to the extent necessary to give effect to this Section 7, after giving effect to any
concurrent payments or distributions to any Guaranteed Party in respect of the Guaranteed
Obligations.



     (c) Subordination of Remedies. As long as any Guaranteed Obligations shall remain
outstanding and unpaid, no Guarantor shall, without the prior written consent of the Administrative
Agent:




     (i) accelerate, make demand or otherwise make due and payable prior to the original
stated maturity thereof any Subordinated Debt or bring suit or institute any other actions
or proceedings to enforce its rights or interests under or in respect of the Subordinated
Debt;





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     (ii) exercise any rights under or with respect to (A) any guaranties of the
Subordinated Debt, or (B) any collateral held by it, including causing or compelling the
pledge or delivery of any collateral, any attachment of, levy upon, execution against,
foreclosure upon or the taking of other action against or institution of other proceedings
with respect to any collateral held by it, notifying any account debtors of the Borrowers or
asserting any claim or interest in any insurance with respect to any collateral, or attempt
to do any of the foregoing;



     (iii) exercise any rights to set-offs and counterclaims in respect of any indebtedness,
liabilities or obligations of such Guarantor to the Borrowers against any of the
Subordinated Debt; or




     (iv) commence, or cause to be commenced, or join with any creditor other than any
Guaranteed Party in commencing, any Insolvency Proceeding.



     (d) Subordination Upon Any Distribution of Assets of the Borrowers. In the event of
any payment or distribution of assets of any Borrower of any kind or character, whether in cash,
property or securities, upon any Insolvency Proceeding with respect to or involving any Borrower,
(i) all amounts owing on account of the Guaranteed Obligations, including all interest accrued
thereon at the contract rate both before and after the initiation of any such proceeding, whether
or not an allowed claim in any such proceeding, shall first be paid in full in cash, or payment
provided for in cash or in cash equivalents, before any Subordinated Debt Payment is made; and (ii)
to the extent permitted by applicable law, any Subordinated Debt Payment to which such Guarantor
would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in
bankruptcy, receiver, assignee for the benefit of creditors or other liquidating agent making such
payment or distribution directly to the Administrative Agent (on behalf of the other Guaranteed
Parties) for application to the payment of the Guaranteed Obligations in accordance with clause
(i), after giving effect to any concurrent payment or distribution or provision therefor to any
Guaranteed Party in respect of such Guaranteed Obligations.



     (e) Authorization to Administrative Agent. If, while any Subordinated Debt is
outstanding, any Insolvency Proceeding is commenced by or against any Borrower or its property:




     (i) the Administrative Agent, when so instructed by the Required Lenders, is hereby
irrevocably authorized and empowered (in the name of the Guaranteed Parties or in the name
of any Guarantor or otherwise), but shall have no obligation, to demand, sue for, collect
and receive every payment or distribution in respect of the Subordinated Debt and give
acquittance therefor and to file claims and proofs of claim and take such other action
(including voting the Subordinated Debt) as it may deem necessary or advisable for the
exercise or enforcement of any of the rights or interests of the Guaranteed Parties; and




     (ii) each Guarantor shall promptly take such action as the Administrative Agent (on
instruction from the Required Lenders) may reasonably request (A) to collect the
Subordinated Debt for the account of the Guaranteed Parties and to file appropriate claims
or proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver to the
Administrative Agent, such powers of attorney, assignments and other instruments as it may
request to enable it to enforce any and all claims with respect to the
Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt
Payments.



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     SECTION 8 Continuing Guaranty.



     (a) This Guaranty is a continuing guaranty and agreement of subordination relating to any
Guaranteed Obligations, including Guaranteed Obligations which may exist continuously or which may
arise from time to time under successive transactions, and the Guarantors expressly acknowledge
that this Guaranty shall remain in full force and effect notwithstanding that there may be periods
in which no Guaranteed Obligations exist. This Guaranty shall continue in effect and be binding
upon the Guarantors until termination of the Commitments and payment and performance in full of the
Guaranteed Obligations.



     (b) Notwithstanding the provisions of subsection (a) above, if any Guarantor ceases to be a
Subsidiary of the Borrowers pursuant to a Disposition permitted under Section 7.05(g) of
the Credit Agreement, upon the consummation of such Disposition this Guaranty shall terminate and
be of no further force and effect solely in relation to such Guarantor.



     SECTION 9 Payments.



     (a) Each Guarantor hereby agrees, in furtherance of the foregoing provisions of this Guaranty
and not in limitation of any other right which any Guaranteed Party or any other Person may have
against such Guarantor by virtue hereof, upon the failure of any Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under §362(a) of the Bankruptcy Code), such
Guarantor shall forthwith pay, or cause to be paid, in cash, to the Administrative Agent an amount
equal to the amount of the Guaranteed Obligations then due as aforesaid (including interest which,
but for the filing of a petition in any Insolvency Proceeding with respect to any Borrower, would
have accrued on such Guaranteed Obligations, whether or not a claim is allowed against such
Borrower for such interest in any such Insolvency Proceeding). Each Guarantor shall make each
payment hereunder, unconditionally in full without set-off, counterclaim or other defense, on the
day when due in Dollars, in immediately available funds, to the Administrative Agent at such office
of the Administrative Agent and to such account as are specified in the Credit Agreement.



     (b) Any and all payments by any Guarantor to or for the account of any Guaranteed Party under
any Guarantor Documents shall be made free and clear of and without reduction or withholding for
any Indemnified Taxes or Other Taxes, provided that if any Guarantor shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then
(i) the sum payable shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section) each Guaranteed
Party receives an amount equal to the sum it would have received had no such deductions been made,
(ii) the Guarantors shall make such deductions and (iii) the Guarantors shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.



E-9









 





     (c) Without limiting the provisions of subsection (b) above, the Guarantors shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with applicable law.



     (d) The Guarantors shall indemnify the Guaranteed Parties, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid
by the Guaranteed Parties, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the Guaranteed Parties (with
a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf
of a Lender or the L/C Issuer, shall be conclusive absent manifest error.



     (e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any
Guarantors to a Governmental Authority, such Guarantor shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.



     (f) If any Guaranteed Party determines, in its sole discretion, that it has received a refund
of any Taxes or Other Taxes as to which it has been indemnified by a Guarantor or with respect to
which the Guarantor has paid additional amounts pursuant to this Section, it shall pay to the
Guarantor an amount equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Guarantor under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of a Guaranteed Party, as the
case may be, and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Guarantor, upon the request of a
Guaranteed Party, agrees to repay the amount paid over to the Guarantor (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to a Guaranteed Party in
the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund
to such Governmental Authority. This subsection shall not be construed to require a Guaranteed
Party to make available its tax returns (or any other information relating to its taxes that it
deems confidential) to the Guarantors or any other Person.



     (g) Status of Lenders.




     (i) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Guarantor is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Guarantor, on or prior to
the date on which a payment is made under the Guaranty, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if requested by
the Guarantor, shall deliver, on or prior to the date on which payment is made under the
Guaranty, such other documentation prescribed by applicable law or reasonably requested by
the Guarantor as will enable the Guarantor to determine whether
or not such Lender is subject to backup withholding or information reporting
requirements.



E-10









 






     (ii) Without limiting the generality of the foregoing, in the event that a Guarantor is
resident for tax purposes in the United States, any Foreign Lender shall deliver to the
Guarantor (in such number of copies as shall be requested by the recipient) on or prior to
the date on which a payment is made under the Guaranty (and from time to time thereafter
upon the request of the Guarantor, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:




     (A) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,




     (B) duly completed copies of Internal Revenue Service Form W-8ECI,




     (C) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect
that such Foreign Lender is not a “bank” within the meaning of section 881(c)(3)(A)
of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN,
or




     (D) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Guarantor to determine the withholding or deduction
required to be made.



     (h) Any payments by any Guarantor hereunder the application of which is not otherwise provided
for herein, shall be applied in the order specified in Section 8.03 of the Credit
Agreement.



     (i) The agreements in this Section 9 shall survive the payment of all Guaranteed
Obligations.



     SECTION 10 Representations and Warranties. Each Guarantor represents and warrants to
each Guaranteed Party that:



     (a) Organization and Powers. Each Guarantor is (i) duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (ii) has all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (A) own its assets and carry on its business and (B) to
execute, deliver, and perform its obligations under this Guaranty and the other Guarantor Documents
to which it is a party, (iii) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification or license, and (iv) is in compliance with all Laws, except in
each case referred to in clause (ii)(A), clause (iii) or clause (iv), to the extent that failure to
do so individually or in the aggregate could not reasonably be expected to have a Material Adverse
Effect.



E-11









 





     (b) Authorization; No Conflict. The execution, delivery and performance by each
Guarantor of this Guaranty and any other Guarantor Documents have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (i) contravene the
terms of any of such Guarantor’s Organization Documents; (ii) conflict with or result in any breach
or contravention of, or the creation of any Lien under, any Contractual Obligation to which such
Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority or
arbitral award to which such Guarantor or its property is subject; or (iii) violate any Law
applicable to such Guarantor.



     (c) Binding Obligation. This Guaranty has been, and the other Guarantor Documents,
when executed and delivered against each Guarantor that is party thereto, will have been, duly
executed and delivered by against each such Guarantor that is party thereto. This Guaranty
constitutes, and each other Guarantor Document when so executed and delivered will constitute, a
legal, valid and binding obligation of such Guarantor, enforceable against each Guarantor that is
party thereto in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or
by equitable principles relating to enforceability.



     (d) Governmental Consents. No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance by, or enforcement
against, any Guarantor of this Guaranty or any other Guarantor Documents.



     (e) No Prior Assignment. No Guarantor has previously assigned any interest in the
Subordinated Debt or any collateral relating thereto, no Person other than a Guarantor owns an
interest in any of the Subordinated Debt or any such collateral (whether as joint holders of the
Subordinated Debt, participants or otherwise), and the entire Subordinated Debt is owing only to
the Guarantors.



     (f) Solvency. Immediately prior to and after and giving effect to the incurrence of
each Guarantor’s obligations under this Guaranty such Guarantor is and will be Solvent.



     (g) Consideration. Each Guarantor has received substantial direct and indirect
benefits from the making of the Loans to, and the issuance of Letters of Credit for the account of,
the Borrowers pursuant to the Credit Agreement.



     (h) Independent Investigation. Each Guarantor hereby acknowledges that it has
undertaken its own independent investigation of the financial condition of the Borrowers and all
other matters pertaining to this Guaranty and further acknowledges that it is not relying in any
manner upon any representation or statement of any Guaranteed Party with respect thereto. Each
Guarantor represents and warrants that it has received and reviewed copies of the Loan Documents
and that it is in a position to obtain, and it hereby assumes full responsibility for obtaining,
any additional information concerning the financial condition of the Borrowers and any other
matters pertinent hereto that any Guarantor may desire. No Guarantor is relying upon or expecting
any Guaranteed Party to furnish to such Guarantor any information now or hereafter in any
Guaranteed Party’s possession concerning the financial condition of the Borrowers or any other
matter.



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     SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations shall remain
unsatisfied or any Lender shall have any Commitment, each Guarantor agrees that it shall furnish to
the Administrative Agent such information respecting the operations, properties, business or
condition (financial or otherwise) of such Guarantor or its Subsidiaries as the Administrative
Agent, at the request of any Guaranteed Party, may from time to time reasonably request.



     SECTION 12 Additional Affirmative Covenants. So long as any Guaranteed Obligations
shall remain unsatisfied or any Guaranteed Party shall have any Commitment, each Guarantor agrees
that:



     (a) Preservation of Existence, Etc. Each Guarantor shall (a) preserve, renew and
maintain in full force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization, except in a transaction permitted by Section 7.04 or
7.05 of the Credit Agreement; and (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.



     (b) Further Assurances and Additional Acts. Each Guarantor shall execute,
acknowledge, deliver, file, notarize and register at its own expense all such further agreements,
instruments, certificates, documents and assurances and perform such acts as the Administrative
Agent or the Required Lenders shall deem necessary or appropriate to effectuate the purposes of
this Guaranty and the other Guarantor Documents, and promptly provide the Administrative Agent with
evidence of the foregoing satisfactory in form and substance to the Administrative Agent and the
Required Lenders.



     (c) Credit Agreement Covenants. Each Guarantor shall observe, perform and comply with
all covenants applicable to such Guarantor set forth in Articles VI and VII of the
Credit Agreement, which by their terms the Borrowers are required to cause such Guarantor to
observe, perform and comply with, as if such covenants were set forth in full herein.



     (d) Governmental Consents. Each Guarantor shall maintain all authorizations,
consents, approvals, licenses, exemptions of, or filings or registrations with, any Governmental
Authority, or approvals or consents of any other Person, required in connection with this Guaranty
or any other Guarantor Documents.



     SECTION 13 Notices. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by facsimile transmission) and
mailed, faxed, emailed (subject to the provisions of the final sentence of this Section 13)
or delivered, in the case of any Guarantor, to the address or facsimile number or email address
specified on the signature page hereof, and in the case of any Guaranteed Party, to the address or
facsimile number or email address specified in the Credit Agreement, or to such other address,
facsimile number or email address as shall be designated by such party in a notice to the other
parties. All such notices and other communications shall be deemed to be given or made upon the
earlier to occur of (a) actual receipt by the intended recipient and (b) (i) if delivered by hand
or by courier, when signed for by the intended recipient; (ii) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (iii) if delivered by facsimile, when sent and
receipt has been confirmed by telephone, when delivered; and (iv) if delivered by electronic mail
(which form of delivery is subject to the provisions of the final sentence of this Section
13), when delivered. In no event shall a voicemail message be effective as a notice, communication
or confirmation hereunder. Electronic mail and Internet and intranet websites may be used only to
distribute routine communications, and to distribute documents for execution by the parties
thereto, and may not be used for any other purpose.



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     SECTION 14 No Waiver; Cumulative Remedies. No failure by any Guaranteed Party to
exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Guarantor Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein or therein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.



     SECTION 15 Costs and Expenses; Indemnification.



     (a) Costs and Expenses. Each Guarantor shall: (i) pay or reimburse the Administrative
Agent for all reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Guaranty and the other Guarantor Documents and any
amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or
not the transactions contemplated hereby or thereby are consummated), and the consummation and
administration of the transactions contemplated hereby and thereby, including all Attorney Costs
(including the allocated cost of internal legal services and all disbursements of internal
counsel); and (ii) pay or reimburse the Administrative Agent and each other Guaranteed Party for
all reasonable costs and expenses incurred in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Guaranty or the other Guarantor
Documents (including all such costs and expenses incurred during any “workout” or restructuring in
respect of the Guaranteed Obligations and during any legal proceeding, including any proceeding
under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost
of independent public accountants and other outside experts retained by any Guaranteed Party.



     (b) Indemnification. Each Guarantor shall indemnify the Guaranteed Parties, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees
and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by the Guarantor or any
other Loan Party arising out of, in connection with, or as a result of (i) the execution or
delivery of this Guaranty, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective obligations hereunder
or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the
administration of this Guaranty and the other Loan Documents, (ii) any Loan or Letter of Credit or
the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor
a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrowers or any of their
Subsidiaries, or any Environmental Liability related in any way to the Borrowers or any of their
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Guarantor or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by the Guarantor or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if
the Borrowers or such Loan Party have obtained a final and nonappealable judgment in its or their
favor on such claim as determined by a court of competent jurisdiction.



E-14









 





     (c) Interest. Any amounts payable to by any Guarantor under this Section 15
or otherwise under this Guaranty if not paid upon demand shall bear interest from the date of such
demand until paid in full, at a fluctuating interest rate per annum at all times equal to the
Default Rate applicable to Base Rate Loans to the fullest extent permitted by applicable Law. Any
such interest shall be due and payable upon demand and shall be calculated on the basis of a year
of 365 or 366 days, as the case may be, and the actual number of days elapsed.



     (d) Payment. All amounts due under this Section 15 shall be payable within
ten Business Days after demand therefor.



     (e) Survival. The agreements in this Section 15 shall survive the termination
of the Commitments and repayment of all Guaranteed Obligations.



     SECTION 16 Right of Set-Off. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of Default, each of
the Lenders is authorized at any time and from time to time, without prior notice to any Guarantor,
any such notice being waived by such Guarantor to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the
account of such Guarantor against any and all Obligations owing to such Lender, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender shall have made
demand under this Guaranty or any other Guarantor Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the applicable deposit
or indebtedness. Each of the Lenders agrees (by its acceptance hereof) promptly to notify such
Guarantor and the Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the validity of such
set-off and application.



     SECTION 17 Marshalling; Payments Set Aside. Neither the Administrative Agent nor any
Guaranteed Party shall be under any obligation to marshal any assets in favor of any Guarantor or
any other Person or against or in payment of any or all of the Guaranteed Obligations. To the
extent that any Guarantor makes a payment to any Guaranteed Party, or any Guaranteed Party
exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by any Guaranteed Party in
its discretion) to be repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b) each of the Lenders
severally agrees (by its acceptance hereof) to pay to the Administrative Agent upon demand its pro
rata share of any amount so recovered from or repaid by the Administrative Agent, plus interest
thereon from the date of such demand to the date such payment is made at a rate per annum equal to
the Federal Funds Rate from time to time in effect. The agreements in this Section 17
shall survive the termination of the Commitment and repayment of all Guaranteed Obligations.



E-15









 





     SECTION 18 Benefits of Guaranty. This Guaranty is entered into for the sole
protection and benefit of the Administrative Agent and each other Guaranteed Party and their
respective successors and assigns, and no other Person (other than any Indemnitee specified herein)
shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action
or claim in connection with, this Guaranty. The Guaranteed Parties, by their acceptance of this
Guaranty, shall not have any obligations under this Guaranty to any Person other than the
Guarantors, and such obligations shall be limited to those expressly stated herein.



     SECTION 19 Binding Effect; Assignment.



     (a) Binding Effect. This Guaranty shall be binding upon each Guarantor and its
successors and assigns, and inure to the benefit of and be enforceable by the Administrative Agent
and each other Guaranteed Party and their respective successors, endorsees, transferees and
assigns.



     (b) Assignment. Except to the extent otherwise provided in the Credit Agreement, no
Guarantor shall have the right to assign or transfer its rights and obligations hereunder or under
any other Guarantor Documents without the prior written consent of the Required Lenders. Each
Lender may, without notice to or consent by any Guarantor, sell, assign, transfer or grant
participations in all or any portion of such Lender’s rights and obligations hereunder and under
the other Guarantor Documents in connection with any sale, assignment, transfer or grant of a
participation by such Lender in accordance with Section 10.04 of the Credit Agreement of or
in its rights and obligations thereunder and under the other Loan Documents. In the event of any
grant of a participation, the participant (i) shall be deemed to have a right of set-off under
Section 16 in respect of its participation to the same extent as if it were such
“Guaranteed Party;” and (ii) shall also be entitled to the benefits of Section 15.



     SECTION 20 Governing Law and Jurisdiction.



     (a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED
THAT THE ADMINISTRATIVE AGENT AND EACH OTHER GUARANTEED PARTY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.



E-16









 





     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER GUARANTOR
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN,
NEW YORK CITY, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS GUARANTY OR ANY OTHER GUARANTOR DOCUMENT. EACH GUARANTOR WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.



     (c) Each Guarantor hereby irrevocably appoints Imation, with an office as listed in
Section 10.02 of the Credit Agreement, as its authorized agent (in such capacity, the
“Process Agent”) with all powers necessary to receive on its behalf service of copies of
the summons and complaint and any other process which may be served in any action or proceeding
arising out of or relating to this Guaranty and the other Guarantor Documents in any of the courts
in and of the State of California. Such service may be made by mailing or delivering a copy of
such process to each Guarantor in care of the Process Agent at the Process Agent’s address and such
Guarantor hereby irrevocably authorizes and directs the Process Agent to accept such service on its
behalf and agrees that the failure of the Process Agent to give any notice of any such service to
such Guarantor shall not impair or affect the validity of such service or of any judgment rendered
in any action or proceeding based thereon. As an alternative method of service, such Guarantor
also irrevocably consents to the service of any and all process in any such action or proceeding by
the mailing of copies of such process to such Guarantor at its address specified on the signature
page hereof. If for any reason Imation shall cease to act as Process Agent, such Guarantor shall
appoint forthwith, in the manner provided for herein, a successor Process Agent qualified to act as
an agent for service of process with respect to all courts in and of the State of California and
acceptable to the Administrative Agent.



     (d) Nothing in this Section 20 shall affect the right of the Guaranteed Parties to
serve legal process in any other manner permitted by law or limit the right of the Guaranteed
Parties to bring any action or proceeding against any Guarantor or its property in the courts of
other jurisdictions.



     SECTION 21 Waiver of Jury Trial. EACH GUARANTOR AND EACH GUARANTEED PARTY (BY ITS
ACCEPTANCE HEREOF) HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER THE GUARANTOR DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM WITH RESPECT TO THE GUARANTOR DOCUMENTS,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH GUARANTOR AND EACH GUARANTEED PARTY (BY ITS ACCEPTANCE HEREOF) HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.



E-17









 





     SECTION 22 Entire Agreement; Amendments and Waivers. This Guaranty together with the
other Guarantor Documents embodies the entire agreement of the Guarantors with respect to the
matters set forth herein and supersedes all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and thereof and shall not
be amended except by written agreement of the Guarantors, the Administrative Agent and the Required
Lenders. No waiver of any rights of the Guaranteed Parties under any provision of this Guaranty or
consent to any departure by any Guarantor therefrom shall be effective unless in writing and signed
by the Administrative Agent and the Required Lenders, or the Administrative Agent (with the
written consent of the Required Lenders). Any such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.



     SECTION 23 Severability. If any provision of this Guaranty or the other Guarantor
Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Guaranty and the other Guarantor Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations
to replace the illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.



     SECTION 24 [Reserved]




     SECTION 25 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Guarantor Document in one
currency into another currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase the first currency with such
other currency on the Business Day preceding that on which final judgment is given. The obligation
of any Guarantor in respect of any such sum due from it to any Guaranteed Party hereunder or under
the other Guarantor Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with the applicable
provisions of the Credit Agreement (the “Agreement Currency”), be discharged only to the
extent that on the Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of
the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent
from such Guarantor in the Agreement Currency, such Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the Person to whom such
obligation was owing against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Administrative Agent in such currency, the Administrative Agent (by its acceptance hereof) agrees to return the amount of any excess to
such Guarantor (or to any other Person who may be entitled thereto under applicable law). The
agreements in this Section 25 shall survive the termination of the Commitments and
repayment of all Guaranteed Obligations.



E-18









 





     SECTION 26 Future Guarantors. At such time following the date hereof as any
Subsidiary of any Borrower (an “Acceding Subsidiary”) is required to accede hereto pursuant
to the terms of Section 6.12 of the Credit Agreement, such Acceding Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement substantially in the form of
Exhibit G to the Credit Agreement, signifying its agreement to be bound by the provisions
of this Guaranty as a Guarantor to the same extent as if such Acceding Subsidiary had originally
executed this Guaranty as of the date hereof.



     SECTION 27 Counterparts. This Guaranty may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.



E-19









 





     IN WITNESS WHEREOF, each Guarantor has executed this Guaranty, as of the date first above
written.



	 	 	 	 	 	 	 
	 	 	IMATION FUNDING CORP.
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 

	 	c/o	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	Attn.:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Fax No.	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	IMATION LATIN AMERICA CORP.
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 	 	 	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 

	 	c/o	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	Attn.:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Fax No.	 	 
	 

	 	 	 	 	 	 






E-20









 








EXHIBIT F




OPINION MATTERS




     The matters contained in the following Sections of the Credit Agreement should be covered by
the legal opinion:




	 	•	 	Section 5.01(a), (b) and (c) 
	 
	 	•	 	Section 5.02 
	 
	 	•	 	Section 5.03 
	 
	 	•	 	Section 5.04 
	 
	 	•	 	Section 5.06 
	 
	 	•	 	Section 5.14(b) 





F-1









 





EXHIBIT G




FORM OF JOINDER AGREEMENT




     THIS JOINDER IN GUARANTY (this “Joinder”) is executed as of                     , 200___by
                                        , a                      [corporation/limited liability company/partnership]
(“Joining Party”), and delivered to BANK OF AMERICA, N.A., as administrative agent (in such
capacity, the “Administrative Agent”), for the benefit of the Lenders (as defined below).
Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.



     Imation Corp. a Delaware corporation (“Imation”) and Imation Enterprises Corp., a
Delaware corporation (“Enterprises”) (each of Imation and Enterprises is referred to
individually herein as a “Borrower” and collectively as the “Borrowers”), the
lenders from time to time party thereto (each a “Lender” and, collectively, the
“Lenders”), Bank of America, N.A. as issuer of letters of credit for the account of the
Borrowers (in such capacity, the “L/C Issuer”) and the Administrative Agent are parties to
a Credit Agreement, dated as of March 29, 2006 (as amended, modified or supplemented from time to
time, the “Credit Agreement”);



     The Joining Party is a direct or indirect Subsidiary of a Borrower and desires, or is required
pursuant to the provisions of the Credit Agreement, to become a Guarantor under the Guaranty; and



     The Joining Party will obtain benefits from the incurrence of Loans by, and the issuance of
Letters of Credit for the account of, the Borrowers, in each case pursuant to the Credit Agreement
and, accordingly, desires to execute this Joinder in order to (i) satisfy the requirements
described in the preceding paragraph; and (ii) induce the Lenders to continue to make Loans and the
Issuing Lender to issue Letters of Credit to the Borrowers;



     Accordingly, in consideration of the foregoing and other benefits accruing to the Joining
Party, the receipt and sufficiency of which are hereby acknowledged, the Joining Party hereby makes
the following representations and warranties to the L/C Issuer, each Lender and the Administrative
Agent and hereby covenants and agrees with the L/C Issuer, each Lender and the Administrative Agent
as follows:



     1. By this Joinder, the Joining Party becomes a Guarantor for all purposes under the Guaranty,
pursuant to Section 26 thereof.



     2. The Joining Party agrees that, upon its execution hereof, it will become a Guarantor under
the Guaranty with respect to all Guaranteed Obligations (as defined in the Guaranty), and will be
bound by all terms, conditions and duties applicable to a Guarantor under the Guaranty and the
other Loan Documents. Without limitation of the foregoing, and in furtherance thereof, the Joining
Party unconditionally and irrevocably, guarantees the due and punctual payment and performance of
all Guaranteed Obligations (on the same basis as the other Guarantors under the Guaranty).



G-1









 





     3. The Joining Party hereby makes and undertakes, as the case may be, each covenant,
representation and warranty made by, and as a Guarantor pursuant to the Guaranty, in each case as
of the date hereof (except to the extent any such representation or warranty relates solely to an
earlier date in which case such representation and warranty shall be true and correct as of such
earlier date), and agrees to be bound by all covenants, agreements and obligations of a Guarantor
pursuant to the Guaranty and all other Loan Documents to which it is or becomes a party.



     4. This Joinder shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns, provided, however, the Joining Party may not assign any of
its rights, obligations or interest hereunder or under any other Loan Document without the prior
written consent of the Lenders or as otherwise permitted by the Loan Documents. THIS JOINDER SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
This Joinder may be executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of this Joinder
shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the
other provisions of this Joinder, which shall remain binding on all parties hereto.



     5. From and after the execution and delivery hereof by the parties hereto, this Joinder shall
constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.



     6. The effective date of this Joinder is ___, 200_.



[Remainder of page intentionally left blank]




G-2









 








     IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly executed as of the
date first above written.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[NEW SUBSIDIARY]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	Accepted and Acknowledged by:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BANK OF AMERICA, N.A.,	 	 	 	 
	as Administrative Agent	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 







G-3