exv10w2






Exhibit 10.2




EXECUTION COPY




THIRD AMENDMENT TO CREDIT AGREEMENT




          This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 3, 2009,
among IMATION CORP., a Delaware corporation (“Imation”), IMATION ENTERPRISES CORP., a
Delaware corporation (“Enterprises”) (each of Imation and Enterprises being referred to
herein as a “Borrower” and together as the “Borrowers”), each lender from time to
time party to the Credit Agreement referred to below (each, a “Lender”, and collectively,
the “Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”) and L/C Issuer.




RECITALS




     A. The Borrowers, the Lenders, and the Administrative Agent are party to a Credit Agreement
dated as of March 29, 2006 (as amended, restated or otherwise modified from time to time, the
“Credit Agreement”), pursuant to which the Administrative Agent and the Lenders have
extended certain credit facilities to the Borrowers.



     B. The Borrowers have requested that the Administrative Agent and the Lenders agree to certain
amendments with respect to the Credit Agreement, and subject to the terms and conditions set forth
herein, the Administrative Agent and each of the Lenders have agreed to grant such requests of the
Borrowers.



     NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:



     1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein
(including, without limitation, in the introductory paragraph and the statement of purpose hereto)
shall have the meanings, if any, assigned to such terms in the Credit Agreement (as amended by this
Agreement). As used herein, (a) “Amendment Documents” means this Amendment, the Credit
Agreement (as amended by this Amendment), the Guarantor Consent and each certificate and other
document executed and delivered by the Borrowers or any Guarantor pursuant to Section 5
hereof, and (b) “Guarantor Consent” means a Guarantor Consent in substantially the form
attached hereto as Exhibit A.



     2. Interpretation. The rules of interpretation set forth in Sections 1.02,
1.03, 1.04, 1.05, 1.06 and 1.07 of the Credit Agreement
shall be applicable to this Amendment and are incorporated herein by this reference.



     3. Credit Agreement Amendments. The Credit Agreement is hereby amended to delete the
bold, stricken text (indicated textually in the same manner as the following example: stricken
text) and to add the bold, double-underlined text (indicated textually in the same manner as the
following example: double-underline text) as set forth in the pages of the Credit Agreement
attached hereto as Exhibit B.



     4. Credit Agreement Schedules and Exhibits. The Schedules and the Exhibits to the
Credit Agreement are hereby amended in their entirety to read as attached to the Credit Agreement,
as amended hereby.



 









 





     5. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Agreement shall be deemed to be effective (the date such conditions are satisfied,
the “Effective Date”):



     (a) the Administrative Agent shall have received counterparts of this Agreement (including all
Exhibits hereto) executed by the Administrative Agent, the Required Lenders and the Borrowers;



     (b) the Administrative Agent shall have received counterparts of the Guarantor Consent
executed by each Person that was a Guarantor immediately prior to the Third Amendment Closing Date;



     (c) the Administrative Agent shall have received a Joinder Agreement from IMN Data Storage
LLC;



     (d) the Administrative Agent shall have received acknowledgments of all filings or
recordations necessary to perfect its Liens in the Collateral (including, without limitation,
Intellectual Property), as well as UCC, Lien and Intellectual Property searches and other evidence
satisfactory to the Administrative Agent that such Liens are the only Liens upon the Collateral,
except Permitted Liens;



     (e) the Administrative Agent shall have received (i) a Mortgage for the Real Estate of Imation
comprising Imation’s corporate headquarters at 1 Imation Place, Oakdale, Minnesota and (ii) the
Related Real Estate Documents for such Real Estate;



     (f) the Administrative Agent shall have received Deposit Account Control Agreements executed
by each depositary institution and Loan Party, as applicable, in form and substances satisfactory
to the Administrative Agent;



     (g) the Administrative Agent shall have received a Notice of Grant of Security Interest in
Patents executed by each applicable Loan Party, in form and substance satisfactory to the
Administrative Agent;



     (h) the Administrative Agent shall have received a Notice of Grant of Security Interest in
Trademarks executed by each applicable Loan Party, in form and substance satisfactory to the
Administrative Agent;



     (i) the Administrative Agent shall have received a Notice of Grant of Security Interest in
Copyrights executed by each applicable Loan Party, in form and substance satisfactory to the
Administrative Agent;



     (j) the Administrative Agent shall have received the Security and Pledge Agreement, executed
by each applicable Loan Party;



     (k) the Administrative Agent shall have received satisfactory evidence that the Liens in favor
of the Administrative Agent on the equity interests of the First-Tier Foreign Subsidiaries required
to be pledged have been validly created, are enforceable and have been perfected under the laws of
each applicable jurisdiction;



2









 





     (l) the Administrative Agent shall have received certificates, in form and substance
satisfactory to it, from a Responsible Officer of each Borrower certifying that, after giving
effect to this Amendment and the transactions hereunder, (i) such Borrower is Solvent; (ii) no
Default or Event of Default exists; (iii) the representations and warranties set forth in
Article V of the Credit Agreement are true and correct; and (iv) such Borrower has complied
with all agreements and conditions to be satisfied by it under the Loan Documents;



     (m) the Administrative Agent shall have received a certificate of a Responsible Officer of
each Loan Party, certifying (i) that attached copies of such Loan Party’s Organization Documents
are true and complete, and in full force and effect, without amendment except as shown; (ii) that
an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true
and complete, and that such resolutions are in full force and effect, were duly adopted, have not
been amended, modified or revoked; and (iii) to the title, name and signature of each Person
authorized to sign the Loan Documents (the Administrative Agent may conclusively rely on this
certificate until it is otherwise notified by the applicable Loan Party in writing);



     (n) the Administrative Agent shall have received copies of the charter documents of each Loan
Party, certified by the Secretary of State or other appropriate official of such Loan Party’s
jurisdiction of organization;



     (o) the Administrative Agent shall have received good standing certificates for each Loan
Party, issued by the Secretary of State or other appropriate official of such Loan Party’s
jurisdiction of organization and each other jurisdiction reasonably requested by the Administrative
Agent where such Loan Party’s conduct of business or ownership of Property necessitates
qualification;



     (p) the Administrative Agent shall have received a written opinion of Dorsey & Whitney LLP and
Imation’s General Counsel, as well as any local counsel in respect of the Real Estate subject to a
Mortgage to the Borrowers, in form and substance satisfactory to the Administrative Agent;



     (q) the Administrative Agent shall have completed its business, financial and legal due
diligence of the Loan Parties, including such collateral reviews, field examinations, audits,
appraisals, assessments and other reviews by the Administrative Agent and/or third parties, as the
Administrative Agent deems appropriate;



     (r) the Administrative Agent shall have received all original stock certificates or other
certificates evidencing the equity interests pledged pursuant to the Collateral Documents, together
with an undated stock/membership power for each such certificate duly executed in blank by the
registered owner thereof;



     (s) the Administrative Agent shall have received executed agreements, documents, instruments,
financing statements, consents, landlord waivers, documents indicating compliance in all material
respects with all applicable federal and state environmental laws and regulations, evidences of
corporate authority, and such other documents to confirm and effectuate this Amendment and first
priority Liens in the Collateral, as may be reasonably required by the Administrative Agent and its
counsel;



3









 





     (t) no material adverse change shall have occurred, in the opinion of the Administrative Agent
or Banc of America Securities LLC (“BAS”), in the business, assets, properties,
liabilities, operations, condition or prospects of the Borrowers since December 31, 2008;



     (u) no action, suit, investigation, litigation or proceeding pending or threatened in any
court or before any arbitrator or governmental instrumentality that in the Administrative Agent’s
or BAS’ judgment could reasonably be expected to have a Material Adverse Effect;



     (v) the Administrative Agent and BAS shall have received, in form and substance satisfactory
to them, (i) monthly financial projections of the Borrowers through March 31, 2010, (ii) annual
financial projections of the Borrowers through the fiscal year ending December 31, 2012, and (iii)
interim financial statements for the Borrowers as of a date not more than 45 days prior to the
Third Amendment Closing Date;



     (w) the Administrative Agent shall have received Insurance Assignments and certificates of
insurance with respect to the Borrowers’ property and liability insurance, together with a loss
payable endorsement naming the Administrative Agent as loss payee, all in form and substance
satisfactory to the Administrative Agent;



     (x) the Administrative Agent shall have received satisfactory evidence that the Borrowers have
received all governmental and third party consents and approvals as may be appropriate in
connection with this Amendment and the transactions contemplated hereby;



     (y) the Administrative Agent shall be satisfied with all environmental aspects relating to
each Borrower and its Real Estate, including all environmental reports as may be required by the
Administrative Agent;



     (z) the Administrative Agent shall be satisfied with the Borrowers’ capital structure and
indebtedness, including the Administrative Agent’s receipt of satisfactory evidence that the
Borrowers are adequately capitalized, that the fair saleable value of the Borrowers’ assets will
exceed its liabilities on the Third Amendment Closing Date, and that the Borrowers will have
sufficient working capital to pay its debts as they become due;



     (aa) the Borrowers shall have paid all fees and expenses to be paid to the Administrative
Agent and the Lenders in connection with this Amendment, the Fee Letter dated as of April 8, 2009,
the Credit Agreement and the other Loan Documents; and



     (bb) the Administrative Agent shall have received a Borrowing Base Certificate prepared as of
the Third Amendment Closing Date and, upon giving effect to the initial funding of the Loans and
issuance of Letters of Credit to be made on the Third Amendment Closing Date, the payment by the
Borrowers of all fees and expenses incurred in connection herewith, as well as any payables
stretched beyond their customary payment practices, Availability shall be at least $100,000,000.



     6. Effect of the Agreement. Except as expressly provided herein, the Credit Agreement
and the other Loan Documents shall remain unmodified and in full force and effect. Except as
expressly set forth herein, this Agreement shall not be deemed (a) to be a waiver of, or



4









 







consent to, a modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any other right or rights which the
Administrative Agent or the Lenders may now have or may have in the future under or in connection
with the Credit Agreement or the other Loan Documents or any of the instruments or agreements
referred to therein, as the same may be amended, restated, supplemented or otherwise modified from
time to time, (c) to be a commitment or any other undertaking or expression of any willingness to
engage in any further discussion with the Borrowers or any other Person with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan Documents or any
rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them,
under or with respect to any such documents or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement by and among the
Borrowers, on the one hand, and the Administrative Agent or any other Lender, on the other hand.



     7. Representations and Warranties. Each Borrower hereby represents and warrants to
the Administrative Agent and the Lenders as follows:



     (a) After giving effect to this Amendment, no Default has occurred and is continuing.



     (b) The execution, delivery and performance by each Borrower of this Amendment and of each
Guarantor of the Guarantor Consent have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or approval of, or notice to
or action by, any Person (including any Governmental Authority) in order to be effective and
enforceable.



     (c) The Amendment Documents constitute the legal, valid and binding obligations of each
Borrower and each Guarantor, as applicable, and are enforceable against each such Person in
accordance with their respective terms, without defense, counterclaim or offset.



     (d) All representations and warranties of the Borrowers contained in Article V of the
Credit Agreement are true and correct on and as of the Effective Date, except to the extent that
any such representation and warranty specifically relates to an earlier date.



     (e) Each Borrower is entering into this Amendment on the basis of its own investigation and
for its own reasons, without reliance upon the Administrative Agent, the Lenders or any other
Person.



     8. Prospective Foreign Entity Amendment. Notwithstanding anything to the contrary
contained within the Credit Agreement, including without limitation, Sections 10.01 and
10.01A thereof, at the option and discretion of the Administrative Agent, with the consent
of the Required Lenders, the Administrative Agent may enter into such amendments to the Loan
Documents as the Administrative Agent deems reasonably necessary to include the Accounts of Imation
Europe B.V., a company organized under the Laws of the Netherlands (“Imation B.V.”), in the
Borrowing Base as eligible Borrowing Base assets; provided, that, (i) such Accounts of Imation B.V.
and, to the extent permitted by the Laws of the jurisdiction in which Imation B.V. is organized and
located (the “Relevant Jurisdiction”), all assets of Imation B.V., shall have been
collaterally assigned and pledged to the Administrative Agent in compliance



5









 







with the Laws of
the Relevant Jurisdiction and the Laws of each jurisdiction in which any applicable Account
Debtor is organized or where the Inventory is located, as applicable, including without limitation,
all applicable notice requirements, (ii) such Property shall be subject to a valid, first priority
security interest in favor of the Administrative Agent under the Laws of the Relevant Jurisdiction
and the Laws of any other applicable jurisdiction, including the U.S., subject only to Permitted
Liens, (iii) the Administrative Agent shall have received one or more opinions of legal counsel to
the Loan Parties regarding the Laws of the Relevant Jurisdiction and such other Laws as the
Administrative Agent may deem necessary or appropriate, in form and substance satisfactory to the
Administrative Agent, (iv) the eligibility criteria for the Accounts of Imation B.V. shall be
determined by the Administrative Agent in its Permitted Discretion in connection with the
Administrative Agent’s due diligence and, in any event, such criteria shall be no less restrictive
than the criteria set forth in the definition of Eligible Accounts as in effect on the Third
Amendment Closing Date and any such Accounts shall be subject to the Availability Reserves and any
additional reserves the Administrative Agent may implement in its Permitted Discretion, (v) the
advance rates for such foreign Eligible Accounts shall be no greater than the advance rates for the
corresponding domestic Eligible Accounts as set forth in the Borrowing Base on the Third Amendment
Closing Date, (vi) the Administrative Agent shall have conducted such audits and field exams of the
Accounts of Imation B.V. as it deems necessary to determine the eligibility of such assets to be
included in the Borrowing Base, (vii) the cash management operations and systems for collections
and management of deposit accounts of Imation B.V., including the Administrative Agent’s ability to
perfect its security interest in the Collateral owned by Imation B.V., shall be satisfactory to the
Administrative Agent, (viii) the Loan Parties shall have delivered to the Administrative Agent and
the Lenders appropriate projections of Imation B.V., the most recent financial statements of
Imation B.V., and such other financial information of Imation B.V. as the Lenders may reasonably
request, (ix) the Administrative Agent and the Lenders shall have received an updated Borrowing
Base Certificate reflecting the addition of such eligible foreign Accounts of Imation B.V., (x)
Imation B.V. shall have become a guarantor under the Guaranty, in accordance with Section
6.13 of the Credit Agreement (or, at the Administrative Agent’s request, shall have become a
Borrower under the Credit Agreement), (xi) if not previously received, the Administrative Agent
shall have received a pledge of 100% of the total outstanding capital stock of Imation B.V., (xii)
the reporting requirements with respect to Eligible Accounts may be amended in the Administrative
Agent’s discretion with respect to the Accounts of Imation B.V., including without limitation, the
modification of reporting frequency and the requirement of additional reporting elements, based
upon the outcome of the Administrative Agent’s field exam, audit and other due diligence, and
(xiii) the Loan Parties shall have delivered to the Administrative Agent such other documents,
instruments, and agreements as the Administrative Agent may require in its sole discretion to
effect the amendment described in this Section 8. The Administrative Agent shall provide the
Lenders with copies, promptly upon the execution thereof, of all Loan Documents executed in
connection with the amendment described in this Section 8.



     9. Miscellaneous.



     (a) This Amendment shall be binding upon and inure to the benefit of the parties hereto and
thereto and their respective successors and assigns. No third party beneficiaries are intended in
connection with this Amendment.



6









 





     (b) THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 10.16 AND 10.17 OF
THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, VENUE AND WAIVER OF RIGHT TO TRIAL BY JURY, THE
PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL.



     (c) This Amendment may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts together shall constitute but one and the same
instrument. Transmission of signatures of any party by facsimile shall for all purposes be deemed
the delivery of original, executed counterparts thereof and the Administrative Agent is hereby
authorized to make sufficient photocopies thereof to assemble complete counterparty documents.



     (d) This Amendment, together with the other Amendment Documents and the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference to the matters
discussed herein and therein. This Amendment supersedes all prior drafts and communications with
respect thereto. This Amendment may not be amended except in accordance with the provisions of
Section 10.01 of the Credit Agreement.



     (e) If any term or provision of this Amendment shall be deemed prohibited by or invalid under
any applicable law, such provision shall be invalidated without affecting the remaining provisions
of this Amendment or the Credit Agreement, respectively.



     (f) Each Borrower covenants to pay to or reimburse the Administrative Agent, upon demand, for
all reasonable out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation, execution and delivery of this Amendment.



     (g) This Amendment shall constitute a “Loan Document” under and as defined in the
Credit Agreement.



     10. Joinder of New Guarantors.



     (a) Each Subsidiary of the Borrowers party hereto that is not a Guarantor immediately prior to
the Effective Date hereby agrees that by execution of this Amendment such Subsidiary is a Guarantor
under the Guaranty as if a signatory thereof on the Closing Date, and such Subsidiary shall comply
with, and be subject to, and have the benefit of, all of the terms, conditions, covenants,
agreements and obligations set forth in the Guaranty.



     (b) Each party hereto hereby agrees that (i) each reference to a “Guarantor” or “Guarantors”
in the Credit Agreement and the other Loan Documents shall include each Subsidiary party hereto,
and (ii) each reference to the “Guaranty” as used in the Credit Agreement or the other Loan
Documents shall mean the Guaranty as supplemented by this Agreement.



[Signature Pages Follow]




7









 








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



	 	 	 	 	 
	 	IMATION CORP., as a Borrower

 	 
	 	By:  	/s/ Paul R. Zeller
 	 
	 	 	Name:  	Paul R. Zeller 	 
	 	 	Title:  	Senior Vice President and Chief

Financial Officer 	 
	 
	 	IMATION ENTERPRISES CORP., as a Borrower

 	 
	 	By:  	/s/ Paul R. Zeller
 	 
	 	 	Name:  	Paul R. Zeller 	 
	 	 	Title:  	Senior Vice President and Chief

Financial Officer 	 
	 



[Third Amendment — Imation]




 









 








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

 	 
	 	By:  	/s/ Jason Riley
 	 
	 	 	Name:  	Jason Riley 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BANK OF AMERICA, N.A., as L/C Issuer and as a Lender

 	 
	 	By:  	/s/ Jason Riley
 	 
	 	 	Name:  	Jason Riley 	 
	 	 	Title:  	Senior Vice President 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a Lender

 	 
	 	By:  	/s/ David A. Lehner
 	 
	 	 	Name:  	David A. Lehner 	 
	 	 	Title:  	Vice President 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender

 	 
	 	By:  	/s/ Victor Pierzchalski
 	 
	 	 	Name:  	Victor Pierzchalski 	 
	 	 	Title:  	Authorized Signatory 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	US BANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Gaylen J. Frazier
 	 
	 	 	Name:  	Gaylen J. Frazier 	 
	 	 	Title:  	Officer 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Brian Buck
 	 
	 	 	Name:  	Brian Buck 	 
	 	 	Title:  	Vice President 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By:  	/s/ Humberto M. Salomon
 	 
	 	 	Name:  	Humberto M. Salomon 	 
	 	 	Title:  	Vice President 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	FIFTH THIRD BANK, as a Lender

 	 
	 	By:  	/s/ Gary S. Losey
 	 
	 	 	Name:  	Gary S. Losey 	 
	 	 	Title:  	Vice President 	 
	 



[Third Amendment — Imation]




 









 








	 	 	 	 	 
	 	HSBC BANK USA, N.A., as a Lender

 	 
	 	By:  	/s/ Molly Brennan
 	 
	 	 	Name:  	Molly Brennan 	 
	 	 	Title:  	Vice President 	 
	 



[Third Amendment — Imation]




 









 








EXHIBIT A




 









 








Guarantor Consent





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



	 	 	 	 	 
	 	IMATION FUNDING CORP., as a Guarantor

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

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MEMOREX PRODUCTS, INC., as a Guarantor

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Guarantor Consent — Imation]




 









 








	 	 	 	 	 
	 	IMN DATA STORAGE LLC, as a Guarantor

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Guarantor Consent — Imation]




 









 








EXHIBIT B





 











 





 

 








CREDIT AGREEMENT




Dated as of March 29, 2006

(as amended by the Amendment to Credit Agreement dated as of July 24, 2007, the Second

Amendment to Credit Agreement dated as of April 25, 2008, and the Third Amendment to Credit

Agreement dated as of June 3, 2009) 




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
	 	 	2235	 
	     1.03

	 	Accounting Terms
	 	 	2336	 
	     1.04

	 	Rounding
	 	 	2436	 
	     1.05

	 	References to Agreements and Laws
	 	 	2436	 
	     1.06

	 	Times of Day
	 	 	2437	 
	     1.07

	 	Letter of Credit Amounts
	 	 	2437	 
	     1.08

	 	Uniform Commercial Code
	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE II.

	 	THE COMMITMENTS AND CREDIT EXTENSIONS
	 	 	2437	 
	     2.01

	 	Loans; Advances
	 	 	2437	 
	     2.02

	 	Borrowings, Conversions and Continuations of Loans
	 	 	2438	 
	     2.03

	 	Letters of Credit
	 	 	2640	 
	     2.04

	 	Prepayments
	 	 	3448	 
	     2.05

	 	Termination or Reduction of Commitments
	 	 	3448	 
	     2.06

	 	Repayment of Loans
	 	 	3549	 
	     2.07

	 	Interest
	 	 	3549	 
	     2.08

	 	Fees
	 	 	3549	 
	     2.09

	 	Computation of Interest and Fees
	 	 	3650	 
	     2.10

	 	Evidence of Debt
	 	 	3650	 
	     2.11

	 	Payments Generally
	 	 	3751	 
	     2.12

	 	Sharing of Payments
	 	 	3854	 
	     2.13

	 	Marshaling; Payments Set Aside
	 	 	54	 
	     2.14

	 	Increase in Commitments
	 	 	3955	 
	     2.15

	 	Effect of Termination; Survival
	 	 	56	 
	 
	 	 	 	 	 	 
	ARTICLE III.

	 	TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	4056	 
	     3.01

	 	Taxes
	 	 	4056	 
	     3.02

	 	Illegality
	 	 	4258	 
	     3.03

	 	Inability to Determine Rates
	 	 	4259	 
	     3.04

	 	Increased Costs
	 	 	4359	 
	     3.05

	 	Compensation for Losses
	 	 	4460	 
	     3.06

	 	Mitigation Obligations; Replacement of Lenders
	 	 	4561	 
	     3.07

	 	Survival
	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE IV.

	 	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
	 	 	4561	 
	     4.01

	 	Conditions of Initial Credit Extensionto Closing
	 	 	4561	 
	     4.02

	 	Conditions to all Credit Extensions
	 	 	4761	 
	 
	 	 	 	 	 	 
	ARTICLE V.

	 	REPRESENTATIONS AND WARRANTIES
	 	 	4862	 
	     5.01

	 	Existence, Qualification and Power; Compliance with Laws
	 	 	4862	 
	     5.02

	 	Authorization; No Contravention
	 	 	4862	 
	     5.03

	 	Governmental Authorization; Other Consents
	 	 	4863	 
	     5.04

	 	Binding Effect
	 	 	4863	 
	     5.05

	 	Financial Statements; No Material Adverse Effect; Solvency
	 	 	4863	 






i









 




TABLE
OF CONTENTS (Continued)





	 	 	 	 	 	 	 
	Section	 	Page
	 
	 	 	 	 	 	 
	     5.06

	 	Litigation
	 	 	4963	 
	     5.07

	 	No Default
	 	 	4964	 
	     5.08

	 	Ownership of Property
	 	 	4964	 
	     5.09

	 	Environmental Compliance
	 	 	4964	 
	     5.10

	 	Insurance
	 	 	5064	 
	     5.11

	 	Taxes
	 	 	5065	 
	     5.12

	 	ERISA Compliance
	 	 	5065	 
	     5.13

	 	Subsidiaries
	 	 	5166	 
	     5.14

	 	Margin Regulations; Investment Company Act; Public Utility
Holding Company Act
	 	 	5166	
	     5.15

	 	Disclosure
	 	 	5166	 
	     5.16

	 	Compliance with Laws
	 	 	5167	 
	     5.17

	 	Intellectual Property; Licenses, Etc.
	 	 	5267	 
	     5.18

	 	Accounts
	 	 	67	 
	     5.19

	 	Payable Practices
	 	 	68	 
	     5.20

	 	Labor Relations
	 	 	68	 
	     5.21

	 	Trade Relations
	 	 	68	 
	     5.22

	 	Surety Obligations
	 	 	68	 
	     5.23

	 	Bank Accounts
	 	 	69	 
	     5.24

	 	Validity and Priority of Security Interest
	 	 	69	 
	     5.25

	 	Material Agreements
	 	 	69	 
	     5.26

	 	Complete Disclosure
	 	 	69	 
	 
	 	 	 	 	 	 
	ARTICLE VI.

	 	AFFIRMATIVE COVENANTS
	 	 	5269	 
	     6.01

	 	Financial Statements
	 	 	5270	 
	     6.02

	 	Certificates; Other Information
	 	 	5370	 
	     6.03

	 	Notices
	 	 	5473	 
	     6.04

	 	Payment of Obligations
	 	 	5574	 
	     6.05

	 	Preservation of Existence, Etc.
	 	 	5574	 
	     6.06

	 	Maintenance of Properties
	 	 	5574	 
	     6.07

	 	Maintenance of Insurance 	 	 	5674	 
	     6.08

	 	Compliance with Laws
	 	 	5676	 
	     6.09

	 	Books and Records
	 	 	5676	 
	     6.10

	 	Inspection Rights; Appraisals
	 	 	5676	 
	     6.11

	 	Use of Proceeds
	 	 	5677	 
	     6.12

	 	Taxes
	 	 	77	 
	     6.13

	 	Additional Guarantors and Foreign Subsidiaries
	 	 	5677	 
	     6.14

	 	After-Acquired Collateral
	 	 	78	 
	     6.15

	 	Landlord and Storage Agreements
	 	 	79	 
	     6.16

	 	Licenses
	 	 	79	 
	     6.17

	 	Administration of Inventory
	 	 	79	 
	     6.18

	 	Administration of Equipment
	 	 	80	 
	     6.19

	 	Commercial Tort Claims
	 	 	80	 
	     6.20

	 	Further Assurances
	 	 	80	 
	 
	 	 	 	 	 	 
	ARTICLE VII.

	 	NEGATIVE COVENANTS
	 	 	5780	 






ii









 





TABLE
OF CONTENTS (Continued)





	 	 	 	 	 	 	 
	Section	 	Page
	 
	 	 	 	 	 	 
	     7.01

	 	Liens
	 	 	5781	 
	     7.02

	 	Investments
	 	 	5882	 
	     7.03

	 	Indebtedness
	 	 	5984	 
	     7.04

	 	Fundamental Changes
	 	 	6085	 
	     7.05

	 	Dispositions
	 	 	6085	 
	     7.06

	 	Restricted Payments
	 	 	6187	 
	     7.07

	 	Change in Nature of Business
	 	 	6287	 
	     7.08

	 	Transactions with Affiliates
	 	 	6287	 
	     7.09

	 	Burdensome Agreements
	 	 	6287	 
	     7.10

	 	Use of Proceeds
	 	 	6288	 
	     7.11

	 	Financial Covenants Covenant
	 		6288	
	     7.12

	 	Capital Expenditures
	 	 	88	 
	     7.13

	 	Subsidiaries
	 	 	88	 
	     7.14

	 	Organic Documents
	 	 	88	 
	     7.15

	 	Tax Consolidation
	 	 	88	 
	     7.16

	 	Accounting Changes
	 	 	88	 
	     7.17

	 	Restrictions on Payment of Borrowed Money
	 	 	88	 
	 
	 	 	 	 	 	 
	ARTICLE VIII.

	 	EVENTS OF DEFAULT AND REMEDIES
	 	 	6288	 
	     8.01

	 	Events of Default
	 	 	6288	 
	     8.02

	 	Remedies Upon Event of Default
	 	 	6491	 
	     8.03

	 	Application of Funds
	 	 	6591	 
	 
	 	 	 	 	 	 
	ARTICLE IX.

	 	ADMINISTRATIVE AGENT
	 	 	6692	 
	     9.01

	 	Appointment and Authority
	 	 	6692	 
	     9.02

	 	Rights as a Lender
	 	 	6692	 
	     9.03

	 	Exculpatory Provisions
	 	 	6693	 
	     9.04

	 	Reliance by Administrative Agent
	 	 	6794	 
	     9.05

	 	Delegation of Duties
	 	 	6794	 
	     9.06

	 	Resignation of Administrative Agent
	 	 	6894	 
	     9.07

	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	6895	 
	     9.08

	 	No Other Duties, Etc.
	 	 	6995	 
	     9.09

	 	Administrative Agent May File Proofs of Claim
	 	 	6995	 
	     9.10

	 	Collateral and Guaranty Matters
	 	 	7096	 
	 
	 	 	 	 	 	 
	ARTICLE X.

	 	MISCELLANEOUS
	 	 	7097	 
	     10.01

	 	Amendments, Etc.
	 	 	7097	 
	     10.02

	 	Notices and Other Communications; Facsimile Copies
	 	 	7198	 
	     10.03

	 	No Waiver; Cumulative Remedies
	 	 	73100	 
	     10.04

	 	Expenses; Indemnity; Damage Waiver
	 	 	73100	 
	     10.05

	 	Payments Set Aside
	 	 	75102	 
	     10.06

	 	Successors and Assigns
	 	 	75103	 
	     10.07

	 	Treatment of Certain Information; Confidentiality
	 	 	79107	 
	     10.08

	 	Right of Set-off
	 	 	80107	 
	     10.09

	 	Interest Rate Limitation
	 	 	81108	 
	     10.10

	 	Counterparts
	 	 	81108	 
	     10.11

	 	Integration
	 	 	81108	 






iii









 





TABLE
OF CONTENTS (Continued)





	 	 	 	 	 	 	 
	Section	 	Page
	 
	 	 	 	 	 	 
	     10.12

	 	Survival of Representations and Warranties
	 	 	81108	 
	     10.13

	 	Severability
	 	 	81109	 
	     10.14

	 	Replacement of Lenders
	 	 	82109	 
	     10.15

	 	[Reserved]
	 	 	109	 
	     10.16

	 	Governing Law
	 	 	82109	 
	     10.1610.17

	 	Waiver of Right to Trial by Jury
	 	 	83110	 
	     10.1710.18

	 	Time of the Essence
	 	 	83110	 
	     10.1810.19

	 	Entire Agreement
	 	 	83110	 
	     10.19

	 	[Reserved]
	 	 	83	 
	     10.20

	 	Joint and Several Liability
	 	 	83110	 
	     10.21

	 	Contribution and Indemnification between the Borrowers
	 	 	84111	 
	     10.22

	 	Agency of Imation for Enterprises
	 	 	85112	 
	     10.23

	 	USA Patriot Act Notice
	 	 	85112	 
	 
	 	 	 	 	 	 
	SIGNATURES

	 	 	 	 	S-1	 









iv









 






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
	5.12

	 	ERISA Matters
	5.13

	 	Subsidiaries and Other Equity Investments
	5.15

	 	Restrictive Agreements
	5.17

	 	Intellectual Property Matters
	5.20

	 	Labor Matters
	5.23

	 	Deposit Accounts
	5.25

	 	Material Agreements
	7.01

	 	Existing Liens
	7.02

	 	Existing Investments
	7.03

	 	Existing Indebtedness
	7.03(A)

	 	Other 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
	H

	 	Security and Pledge Agreement







v











 







CREDIT AGREEMENT



This CREDIT AGREEMENT (“Agreement”) is entered into as of March 29, 2006,
dated as of
March 29, 2006, as amended by that certain Amendment to the Credit Agreement dated as of July 24,
2007, by that Second Amendment to Credit Agreement dated as of April 25, 2008 and by that Third
Amendment to Credit Agreement dated as of June 3, 2009 (and as further amended, restated,
supplemented or otherwise modified from time to time, this “Credit Agreement” or “Agreement”),
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.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:


“Account” has the meaning specified in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.



“Account Debtor” means a Person who is obligated under an Account, Chattel Paper or General
Intangible.



“Accounts Formula Amount” means up to 85% of the Value of Eligible Accounts; provided, however,
that such percentage shall be reduced by 1.0% for each whole percentage point (or portion thereof)
that the Dilution Percent exceeds 5.0%.



“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).



“Act” means the USA Patriot Act (Title III of Pub. L 107-56 (signed into law on October 26,
2001)).














 







“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 sum of the Commitments of all the Lenders.




     “Agreement” means this Credit Agreement.


“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering, including the
Act.



“Applicable Rate” means the following percentages per annum, based upon the Consolidated
Leverage Ratioaverage daily Availability for the most recently ended fiscal quarter as set
forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(a):




APPLICABLE RATE




	 















 







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

	 	£0.50:13
               $150,000,000
        	 		0.1250.50	%	 		0.453.50	%	 		0.02.50	%
	2

	 	>0.50:1£

$150,000,000 but £ 1.00:1 3 $75,000,000
        	 		0.150.50	%	 		0.553.75	%	 		0.02.75	%
	3

	 	>1.00:1 but £1.50:1£
$75,000,000
	 		0.1750.50	%	 		0.654.00	%	 		0.03.00	%
	4

	 	>1.50:1 but £ 2.00
	 	 	0.20	%	 	 	0.75	%	 	 	0.25	%
	5

	 	>2.00:1
	 	 	0.25	%	 	 	0.95	%	 	 	0.50	%





Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratioaverage daily Availability for the immediately preceding fiscal quarter 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 53; 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 Third Amendment Closing Date through the date the
Compliance Certificate in respect of the fiscal quarter ending MarchDecember 31,
20062009 is delivered or required to be delivered shall be determined based upon Pricing
Level 1.



“Approved Consignee” means each of Office Max, Office Depot, Best Buy, Staples and any other
consignee approved in advance by the Administrative Agent to the extent that (a) such consignee has
delivered all of the Required Consignee Documentation to the Administrative Agent or (b) such
consignee maintains a rating of BB+ (or better) with S&P and Ba1 (or better) with Moody’s.



“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.



“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 forthspecified 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, 2005,2008, 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.



“Auto-Renewal Letter of Credit” has the meaning specified in Section 2.03(b)(iii).



“Availability” means the amount by which (a) the lesser of (i) the Borrowing Base and (ii) the
Aggregate Commitments exceeds (b) Total Outstandings.



“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.



“Availability Reserve” means the sum (without duplication) of (a) the Inventory Reserve; (b)
the Rent and Charges Reserve; (c) the Bank Product Reserve; (d) the Real Estate Value Reserve; (e)
the aggregate amount of liabilities secured by Liens upon Collateral that are senior to the
Administrative Agent’s Liens (but imposition of any such reserve shall not waive a Event of Default
arising therefrom); and (f) such additional reserves, in such amounts and with respect to such
matters, as the Administrative Agent in its Permitted Discretion may elect to impose from time to
time.



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














 







“Bank Product” means any of the following products, services or facilities extended to any Loan
Party by the Administrative Agent, any Lender or any of their respective Affiliates: (a) Cash
Management Services; (b) products under Swap Contracts; (c) commercial credit card and merchant
card services and E-Payables and comparable products; and (d) other banking products or services as
may be requested by any Loan Party, other than Letters of Credit; provided, however, that for any
of the foregoing to be included as an “Obligation”, the applicable Secured Party and Loan Party
must have previously provided written notice to the Administrative Agent of the existence of such
Bank Product (which notice shall be deemed given automatically upon the creation or incurrence of
any Bank Product provided by the Administrative Agent, Bank of America or any of their Affiliates).




“Bank Product Debt” means Indebtedness and other obligations of a Loan Party relating to Bank
Products. The amount of the Bank Product Debt may be changed from time to time upon written notice
to the Administrative Agent by the Secured Party and the Loan Party. No new Bank Product may be
established or existing Bank Product Debt voluntarily increased at any time that a Default exists,
or if a reserve against such amounts would cause an Overadvance.



“Bank Product Reserve” means the aggregate amount of reserves established by the Administrative
Agent from time to time in its Permitted Discretion in respect of Bank Product Debt.



“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
highest 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.” and (c) Eurodollar Rate for a 30 day Interest Period as determined
on such day, plus 1.0%. 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.



“Borrowed Money” 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) capital leases and Synthetic Lease Obligations; and


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



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



“Borrower Agent” has the meaning specified in Section 10.22.



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



“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.



“Borrowing Base” means on any date of determination, an amount equal to the sum of the Accounts
Formula Amount, plus the Inventory Formula Amount, plus the Real Estate Formula Amount minus the
Availability Reserve.



“Borrowing Base Certificate” means a certificate, in form and substance satisfactory to the
Administrative Agent, by which the Borrowers certify calculation of the Borrowing Base.



“Borrowing Base Collateral” means, collectively, (a) the Accounts and Inventory of the
Borrowing Base Loan Parties and (b) the Eligible Real Estate Assets.



“Borrowing Base Loan Party” means each Borrower and each other Loan Party whose assets are
included, from time to time in the discretion of the Administrative Agent, as Eligible Inventory or
Eligible Accounts.



“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: (ia) any
payment that is made during such period by a Person plus (iib) 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 propertyProperty 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).













 




“Cash Collateral” means cash, and any interest or other income earned thereon, that is
delivered to the Administrative Agent to Cash Collateralize any Obligations.



“Cash Collateralize” means the delivery of cash to the Administrative Agent, as security for
the payment of the Obligations, in an amount equal to (a) with respect to L/C Obligations, 105% of
the aggregate L/C Obligations, and (b) with respect to any inchoate, contingent or other
Obligations (including Obligations arising under Bank Products), the Administrative Agent’s good
faith estimate of the amount due or to become due, including all fees and other amounts relating to
such Obligations. “Cash Collateralization” has a correlative meaning.



“Cash Dominion Trigger Period” means the period (a) commencing (i) at any time that
Availability is less than $50,000,000 or (ii) at the option of the Administrative Agent, with the
consent of the Required Lenders, or at the direction of the Required Lenders, on the day that an
Event of Default occurs; and (b) continuing until, during the preceding 30 consecutive days, no
Event of Default has existed and Availability has been greater than $75,000,000 at all times.



“Cash Equivalents” means (a) marketable obligations issued or unconditionally guaranteed by,
and backed by the full faith and credit of, the United States government, maturing within 12 months
of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances
maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case
which are issued by a commercial bank organized under the laws of the United States or any state or
district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of
acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase
obligations with a term of not more than 30 days for underlying investments of the types described
in clauses (a) and (b) entered into with any bank meeting the qualifications specified in clause
(b); (d) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing
within nine months of the date of acquisition; and (e) shares of any money market fund that has
substantially all of its assets invested continuously in the types of investments referred to above
and has net assets of at least $500,000,000.



“Cash Management Services” means any services provided from time to time by any Lender or any
of its Affiliates to any Loan Party in connection with operating, collections, payroll, trust, or
other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic
funds transfer, wire transfer, controlled disbursement, overdraft, depository, information
reporting, lockbox and stop payment services.



“CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. § 9601 et seq.).



“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



     (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).


“Closing Date” means March 29, 2006.



“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 DocumentProperty
described in any Collateral Documents as security for any Obligations, and all other Property that
now or hereafter secures (or is intended to secure) any Obligations.



“Collateral Documents” means any agreementthe Security and Pledge Agreement, Guaranty,
Mortgages, Notice of Grant of Security Interest in Patents, Notice of Grant of Security Interests
in Copyrights, Notice of Grant of Security Interests in Trademarks, Insurance Assignments, Deposit
Account Control Agreements, pledge agreements and all other documents, instruments and agreements
now or hereafter securing (or given with the intent to secure) any Obligations or 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.



“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
courseOrdinary Course of businessBusiness), (B) asset impairments (including
intangible asset impairments), (C) severance, and (D) stock options, stock grants and similar
employment compensation arrangements, (E) restructuring expenses and (F) litigation related
accruals 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 businessOrdinary
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, lessminus unfinanced
Capital Expenditures made by Imation and its consolidated Subsidiaries during such period,
lessminus federal, state, local and foreign income taxes actually paid by Imation and its
consolidated Subsidiaries during such Subject Period minus any Restricted Payment made in cash
pursuant to Section 7.06(d) to (b) Consolidated Interest Charges for the Subject Period then
ending plus Scheduledscheduled principal and interest payments in respect of
Indebtedness made by Imation and its consolidated Subsidiaries during the Subject Period plus
the scheduled amortization of the Original Real Estate Base Amount 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, excluding, however, imputed interest in
respect of any judgments, claims, settlement payments or similar liabilities 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.




     “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 propertyProperty 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.



“Current Real Estate Amount” has the meaning specified in the definition of “Real Estate
Formula Amount”.



“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 proceedingan
Insolvency Proceeding.



“Deposit Account Control Agreement” means the Deposit Account control agreements to be executed
by each institution maintaining a Deposit Account for a Loan Party (other than in respect of
Deposit Accounts over which the Administrative Agent is not required to have control pursuant to
Section 5.23), in favor of the Administrative Agent, for the benefit of Secured Parties, as
security for the Obligations.



“Dilution Percent” means the percent, determined for the Borrowers’ most recent fiscal quarter,
equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit
memos and other dilutive items with respect to Accounts (excluding any of the foregoing items to
the extent specifically addressed in the Availability Reserve, applied to reduce the Value of an
Eligible Account, applied to cause an Account that would have 




 









 







otherwise constituted an Eligible Account to not be an Eligible Account or otherwise deemed
ineligible by the Administrative Agent) divided by (b) gross sales.



“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any
propertyProperty by any
Person, including any sale,
assignment, constituting a sale or transfer or other disposal,
with or without recourse, of any notes or accounts
receivableAccounts or any rights and
claims associated therewith; provided that “Disposition” and “Dispose” shall not include a sale
of Inventory in the Ordinary Course of Business.



“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.Laws of any political subdivision of the United
States.



“Dominion Account” means a special account established by Borrowers at Bank of America or
another bank acceptable to Administrative Agent, over which Administrative Agent has exclusive
control for withdrawal purposes.



“Eligible Account” means an Account owing to a Borrowing Base Loan Party that arises in the
Ordinary Course of Business from the sale of goods, is payable in Dollars or Canadian dollars and
is deemed by the Administrative Agent, in its Permitted Discretion, to be an Eligible Account.
Without limiting the foregoing, no Account shall be an Eligible Account if (a) it is unpaid for
more than 60 days after the original due date, or more than 120 days after the original invoice
date; (b) 25% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under
the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it
exceeds 20% of the aggregate Accounts (or such higher percentage as the Administrative Agent may,
with the consent of the Required Lenders, establish for the Account Debtor from time to time) of
all Borrowing Base Loan Parties; (d) it does not conform with a covenant or representation herein;
(e) it is owing by a creditor or supplier (but ineligibility shall be limited to the amount owing
by the Account Debtor in its capacity as creditor or supplier), or is otherwise subject to a
potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense,
chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an
Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor
has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its
affairs, or is not Solvent; or the Borrower is not able to bring suit or enforce remedies against
the Account Debtor through judicial process; (g) the Account Debtor is organized or has its
principal offices or assets outside the United States or Canada; (h) it is owing by a Government
Authority, unless the Account Debtor is the United States or any department, agency or
instrumentality thereof and the Account has been assigned to the Administrative Agent in compliance
with the Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien
in favor of the Administrative Agent, or is subject to any other Lien, other than a Permitted Lien
permitted pursuant to subsections (c) or (d) of Section 7.01; (j) the goods giving rise to it have
not been delivered to and accepted by the Account Debtor, the services giving rise to it have not
been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is
evidenced by 




 









 







Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment
has been extended, the Account Debtor has made a partial payment, or it arises from a sale on a
cash-on-delivery basis; (m) it arises from a sale to an Affiliate, from a sale on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment (other than Accounts arising from
sales of Inventory through an Approved Consignee), or other repurchase or return basis, or from a
sale to a Person for personal, family or household purposes; (n) it represents a progress billing
or retainage; or (o) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof. In calculating delinquent portions of Accounts under
clauses (a) and (b), credit balances more than 90 days old will be excluded.



“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.



“Eligible Inventory” means Inventory owned by a Borrowing Base Loan Party that the
Administrative Agent, in its Permitted Discretion, deems to be Eligible Inventory. Without
limiting the foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished goods or
raw materials, and not work-in-process, packaging or shipping materials, labels, samples, display
items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment (other
than with respect to an Approved Consignee, provided that the amount of all such consigned
Inventory with Approved Consignees that may be included as Eligible Inventory shall not exceed
$40,000,000 in the aggregate at any time) nor subject to any deposit or downpayment; (c) is in new
and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is
not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed goods;
(e) meets all standards imposed by any Governmental Authority, and does not constitute hazardous
materials under any Environmental Law; (f) conforms with the covenants and representations herein;
(g) is subject to the Administrative Agent’s duly perfected, first priority Lien, and no other
Lien, other than a Permitted Lien permitted pursuant to subsections (c) or (d) of Section 7.01; (h)
is within the continental United States or Canada, is not in transit except between locations of
the Borrowers, and is not consigned to any Person (except as permitted pursuant to clause (b)
immediately above); (i) is not subject to any warehouse receipt or negotiable Document; (j) is not
subject to any License or other arrangement that restricts such Borrower’s or the Administrative
Agent’s right to dispose of such Inventory, unless the Administrative Agent has received an
appropriate Lien Waiver; and (k) is not located on leased premises or in the possession of a
warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless
the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve
has been established in the Administrative Agent’s Permitted Discretion; and (l) is reflected in
the details of a current perpetual inventory report.



“Eligible Real Estate Assets” means the Real Estate located at 1 Imation Place, Oakdale,
Minnesota (a) which is owned in fee simple by one or more Loan Parties, (b) which is 




 









 







subject to a valid, enforceable and first priority Lien in favor of the Administrative Agent
(subject to Permitted Liens permitted pursuant to subsections (c), (d), (g) or (h) of Section
7.01), (c) with respect to which all items required by the Third Amendment to Credit Agreement
shall have been completed and delivered to the Administrative Agent, (d) for which an environmental
assessment has been prepared and approved in accordance with clause (f) of the definition of
Related Real Estate Documents, and (e) which otherwise conforms to the representations, warranties
and covenants contained herein and which at all times continues to be acceptable to the
Administrative Agent in its Permitted Discretion. 



“Enforcement Action” means any action to enforce any Obligations or Loan Documents or to
realize upon any Collateral (whether by judicial action, self-help, notification of Account
Debtors, exercise of setoff or recoupment, or otherwise).



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



“Environmental Agreement” means each agreement of the Loan Parties with respect to any Real
Estate subject to a Mortgage, pursuant to which the Loan Parties agree to indemnify and hold
harmless the Administrative Agent and the Lenders from liability under any Environmental Laws.



“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.



“Environmental Notice” means a written notice from any Governmental Authority or other Person
of any possible noncompliance with, investigation of a possible violation of, litigation relating
to, or potential fine or liability under any Environmental Law, or with respect to any
Environmental Release, environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation or otherwise.



“Environmental Release” a release as defined in CERCLA or under any other Environmental
Law.



“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.



“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 Rate =

	 	Eurodollar Base 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.



“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).



“Extraordinary Expenses” means, collectively, all advances and out-of-pocket costs and expenses
that the Administrative Agent may make or incur during an Event of Default, or during the pendency
of an Insolvency Proceeding of a Loan Party, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for
sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any
action, arbitration or other proceeding (whether instituted by or against the Administrative Agent,
any Lender, any Loan Party, any representative of creditors of a Loan Party or any other Person) in
any way relating to any Collateral (including the validity, perfection, priority or avoidability of
the Administrative Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit
or Obligations, including any lender liability or other claims; (c) the exercise, protection or
enforcement of any rights or remedies of the Administrative Agent in, or the monitoring of, 




 









 







any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with
respect to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of any
modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or
Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer fees,
Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees,
reasonable legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and
commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of
any Loan Party or independent contractors in liquidating any Collateral, and travel expenses.



“Facility Fee” means the fee payable pursuant to Section 2.08(a) herein.



“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 thethat certain letter agreement, dated as of January 31,
2006,April 8, 2009, among Imationthe Borrowers, the Administrative Agent and the
Arranger.



“Financial Covenant Trigger Period” means the period (a) commencing on the day that Liquidity
is less than the greater of (i) $50,000,000 or (ii) 150% of the Current Real Estate Amount, and (b)
continuing until, during the preceding 30 consecutive days, no Event of Default has existed and
Liquidity has been greater than $75,000,000 at all times.



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



“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 Plan” means any employee benefit plan or arrangement (a) maintained or contributed to
by any Loan Party or Subsidiary that is not subject to the laws of the United States; or (b)
mandated by a government other than the United States for employees of any Loan Party or
Subsidiary.



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



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




 









 







“Full Payment” means with respect to any Obligations, (a) the full and indefeasible cash
payment thereof (other than Bank Product Debt that is not yet due and owing), including any
interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed
in the proceeding); (b) if such Obligations are L/C Obligations, Bank Product Debt that is not yet
due and owing or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a
standby letter of credit acceptable to the Administrative Agent or the applicable Lender in its
discretion, in the amount of required Cash Collateral); and (c) a release of any claims of the Loan
Parties against the Administrative Agent, the Lenders, the L/C Issuer and their respective
representatives arising on or before the payment date, other than claims arising out of the fraud,
gross negligence or willful misconduct of such parties. No Loans shall be deemed to have been paid
in full until all Commitments related to such Loans have expired or been terminated.



“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, anyfederal, state,
municipal, foreign or other political subdivision thereof, anygovernmental department,
agency, authoritycommission, board, bureau, court, tribunal, instrumentality, regulatory
body, court, administrative tribunal, central bankpolitical subdivision, or other
entity or officer exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions offor or pertaining to any government or court, in
each case whether associated with the United States, a state, district or territory thereof, or a
foreign entity or 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 propertyProperty, 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 Domestic Subsidiary of Imation (i(other
than an Inactive Subsidiary) of either of the Borrowers (a) whose name appears on the signature
page of the Guaranty, or (iib) that has executed a Joinder Agreement pursuant to
Section 6.12.6.13.



“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 Imation Online Service Corp., 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
2.132.14(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) (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) (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) (c) net obligations of such Person under any Swap Contract;



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



 









 





     (e) (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
propertyProperty 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) (f) capital leases and Synthetic Lease Obligations;



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


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.”



“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any
state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order
for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment
law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other
custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for
the benefit of creditors.



“Insurance Assignment” means, collectively, each collateral assignment of insurance pursuant to
which a Loan Party assigns to the Administrative Agent, for the benefit of Secured Parties, such
Loan Party’s rights under key-man life, business interruption or other insurance policies as
Administrative Agent deems appropriate in its Permitted Discretion, as security for the
Obligations.



“Intellectual Property” means all intellectual and similar Property of a Person, including
inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets,
confidential or proprietary information, customer lists, know-how, software and databases; all
embodiments or fixations thereof and all related documentation, applications, registrations and
franchises; all licenses or other rights to use any of the foregoing; and all books and records
relating to the foregoing.




 









 







“Intellectual Property Claim” means any written claim or assertion that a Borrower’s or
Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment,
Intellectual Property or other Property violates another Person’s Intellectual Property and such
claim or assertion could reasonably be expected to have a Material Adverse Effect.



“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) (a) 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) (b) 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) (c) 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.



“Inventory” has the meaning set forth in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other materials and
supplies of any kind that are or could be used in connection with the manufacture, printing,
packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or
consumed in a Borrower’s business (but excluding Equipment).



“Inventory Formula Amount” means the lesser of (a) up to 65% of the Value of Eligible
Inventory; or (b) up to 85% of the NOLV Percentage of the Value of Eligible Inventory.



“Inventory Reserve” means reserves established by the Administrative Agent in its Permitted
Discretion to reflect factors that may negatively impact the Value of Inventory, including change
in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or
mix, markdowns and vendor chargebacks.




 









 







“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.



“Investment Property Control Agreement” shall mean an agreement in writing by and among the
Administrative Agent, any Loan Party (as the case may be) and any securities intermediary,
commodity intermediary or other person who has custody, control or possession of any Investment
Property of such Loan Party acknowledging that such securities intermediary, commodity intermediary
or other person has custody, control or possession of such Investment Property on behalf of the
Administrative Agent, that it will comply with entitlement orders originated by the Administrative
Agent with respect to such investment property, or other instructions of the Administrative Agent,
and has such other terms and conditions as the Administrative Agent may require.



“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 Documents” means all documents, instruments and agreements delivered by the Borrowers or
any other Person to the L/C Issuer or the Administrative Agent in connection with issuance,
amendment or renewal of, or payment under, any Letter of Credit.



“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.



“L/C Rate” means (ia) 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 (iib) in respect of any other day, the Applicable Rate in respect of Letters
of Credit.



“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.



“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 letter of credit issued hereunder and shall include the
Existing Letters of Credit. A Letter of Credit may be a commercial letter of credit or a standby
letter 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 $75,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.



“License” means any license or agreement under which a Loan Party is authorized to use
Intellectual Property in connection with any manufacture, marketing, distribution or disposition of
Collateral, any use of Property or any other conduct of its business.



“Licensor” means any Person from whom a Loan Party obtains the right to use any Intellectual
Property. 



“Lien” means any mortgage, pledge, hypothecation, assignment (excluding any assignment
constituting a sale), 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.



“Lien Waiver” means an agreement, in form and substance satisfactory to the Administrative
Agent, by which (a) for any Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit the Administrative Agent
to enter upon the premises and remove the Collateral or to use the premises to store or dispose of
the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper, customs broker
or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral,
agrees to hold any Documents in its possession relating to the Collateral as agent for the
Administrative Agent, and agrees to deliver the Collateral to the Administrative Agent upon
request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges
the Administrative Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to the Administrative Agent upon request; and (d) for any
Collateral subject to a Licensor’s Intellectual Property rights, the Licensor grants to the
Administrative Agent the right, vis-à-vis such Licensor, to enforce the Administrative Agent’s
Liens with respect to the Collateral, including the right to dispose of it with the benefit of the
Intellectual Property, whether or not a default exists under any applicable License.



“Liquidity” means the sum of (a) Availability plus (b) unrestricted cash and Cash Equivalents
currently held by the Borrowers or their respective Subsidiaries and made available to the
Borrowers; provided, however, that, subject to the second proviso below, for purposes of
determining whether the Borrowers have sufficient Liquidity for any purpose under this Agreement,
at least $40,000,000 of Liquidity must be derived from Availability and unrestricted cash and Cash
Equivalents held in the United States in one or more deposit accounts at Bank of America or another
U.S. financial institution acceptable to the Administrative Agent, subject to one or more Deposit
Account Control Agreements or Investment Property Control Agreements with the Administrative Agent
as the secured party thereto, each in form and substance satisfactory to the Administrative Agent
(collectively for all such accounts, the “Domestic Controlled Cash”); and provided, further, that
for purposes of determining whether the Borrowers have sufficient Liquidity to exit a 



 









 





Financial Covenant Trigger Period pursuant to clause (b) of the definition thereof, at least
$65,000,000 of Liquidity must be derived from Availability and Domestic Controlled Cash. 



“Loan” has the meaning specified in Section 2.01.



“Loan Account” means the loan account established by each Lender on its books pursuant to
Section 2.10(c).



“Loan Documents” means this Agreement, each Notethe Other Agreements, the Guaranty,
the Collateral Documents (if any), the Fee Letter, and any certificate, including, without
limitation, each Borrowing Base Certificate and Compliance
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.



“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.



“Material Collateral” means Collateral with an aggregate value of $1,000,000 or more for any
single location of a Loan Party. 



“Material Contracts” means the agreements and contracts to which any Loan Party or any of its
Subsidiaries is party (a) that is deemed to be a material contract under any securities law
applicable to such Loan Party or its applicable Subsidiary, including the Securities Act of 1933;
(b) for which breach, termination, nonperformance or failure to renew could reasonably be expected
to have a Material Adverse Effect on the business, operations, properties, prospects or condition
(financial or otherwise) of any Loan Party or its applicable Subsidiary, taken as a whole; or (c)
that relates to Indebtedness for borrowed money in an aggregate amount of $2,000,000 or more. 



“Material Environmental Liability” means any Environmental Liability that could reasonably be
expected to result in costs or expenses of $2,000,000 or more.



“Maturity Date” means March 29, 2012.



     
“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.



“Moody’s” means Moody’s Investors Service, Inc., and its successors.




“Mortgage” means each mortgage, deed of trust or deed to secure debt pursuant to which a Loan
Party grants to the Administrative Agent, for the benefit of Secured Parties, Liens upon the Real
Estate owned by such Loan Party, as security for the Obligations.



“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.



“Net Proceeds” means with respect to a Disposition, proceeds (including, when received, any
deferred or escrowed payments) received by a Loan Party in cash from such disposition, net of (a)
reasonable and customary costs and expenses actually incurred in connection therewith, including
legal fees and sales commissions; (b) amounts applied to repayment of Indebtedness secured by a
Permitted Lien senior to Administrative Agent’s Liens on Collateral sold; (c) transfer or similar
taxes; and (d) reserves for indemnities, until such reserves are no longer needed.



“NOLV Percentage” means the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period
of time, net of all liquidation expenses, as determined from the most recent appraisal of
Borrowers’ Inventory performed by an appraiser and on terms satisfactory to the Administrative
Agent.



“Non-Loan Party Subsidiary” means each Subsidiary of a Borrower that is not a Loan Party.




“Non-Material Intellectual Property” has the meaning set forth in the Security and Pledge
Agreement.



“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.



“Notice of Grant of Security Interests in Copyrights” means each notice of grant of security
interests in copyrights pursuant to which a Loan Party provides notice to the United States
Copyright Office that such Loan Party has assigned to the Administrative Agent, for the benefit of
Secured Parties, such Loan Party’s interests in its copyrights, as security for the
Obligations.



“Notice of Grant of Security Interests in Patents” means each notice of grant of security
interests in patents pursuant to which a Loan Party provides notice to the United States 



 









 





Patent and Trademark Office that such Loan Party has assigned to the Administrative Agent, for
the benefit of Secured Parties, such Loan Party’s interests in its patents, as security for the
Obligations.



 “Notice of Grant of Security Interests in Trademarks” means each notice of grant of
security interests in trademarks pursuant to which a Loan Party provides notice to the United
States Patent and Trademark Office that such Loan Party has assigned to the Administrative Agent,
for the benefit of Secured Parties, such Loan Party’s interests in its trademarks, as security for
the Obligations.



“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 or Bank Product Debt, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and (including Extraordinary Expenses) and 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.



“Ordinary Course of Business” means the ordinary course of business of any Borrower or
Subsidiary, consistent with past practices and undertaken in good faith.



“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.



“Original Real Estate Base Amount” has the meaning specified in the definition of “Real Estate
Formula Amount”. 



“Other Agreement” means each Note; L/C Document; Lien Waiver; Environmental Agreement; or other
instrument or agreement (other than this Agreement or a Collateral Document) now or hereafter
delivered by a Loan Party or other Person to the Administrative Agent or a Lender in connection
with any transactions relating hereto.



“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 (ia) 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 (iib) 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.



“Overadvance” has the meaning set forth in Section 2.01(b).




“Overadvance Loan” means a Base Rate Loan made when an Overadvance exists or is caused by the
funding thereof.



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



 “Payment Item” means each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.



“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, (ii) the Memorex Acquisition ,
and (iii) the TDK Acquisition, provided any Person that is or becomes a Domestic Subsidiary
acquired thereby delivers to the Administrative Agent the documents and materials described in
Section 6.12.



“Permitted Acquisitions” means the purchase or other acquisition of Property and assets or
businesses of any Person or of assets constituting a business unit, a line of business or 



 









 





division of such Person, or equity interests in a Person that, upon the consummation thereof,
will be a Subsidiary of Imation (including as a result of a merger or consolidation); provided
that, with respect to each such purchase or other acquisition:




     
(a) immediately before and immediately after giving pro forma effect to any
such purchase or other acquisition, no Default shall have occurred and be continuing;




     (b) a majority of all Property, assets and businesses acquired in such
purchase or other acquisition, if such acquisition is of a Person organized under the Laws
of any political subdivision of the United States or the assets are located in the United
States and acquired by a Loan Party, shall constitute Collateral and each applicable Loan
Party and any such newly created or acquired Domestic Subsidiary shall be a Guarantor and
shall have complied with the requirements of Section 6.13, within the times specified
therein;




     (c) the acquired Property, assets, business or Person is in the same or
substantially the same line of business as Imation and its Subsidiaries, taken as a whole
(or a business that is reasonably related or ancillary thereto);




     (d) the board of directors (or similar governing body) of the Person to be
so purchased or acquired shall not have indicated publicly its opposition to the
consummation of such purchase or acquisition (which opposition has not been publicly
withdrawn);




     (e) the total cash and noncash consideration paid by or on behalf of any
Loan Party for any such acquisition, when aggregated with the total cash and noncash
consideration paid by or on behalf of the Loan Parties for all other Permitted Acquisitions
during such fiscal year (including all transaction costs, and all Indebtedness (including
earn-out payments and similar obligations) incurred or assumed in connection with such
acquisition and all such other Permitted Acquisitions or otherwise reflected in the balance
sheet of Imation and its Subsidiaries on a consolidated basis) shall not exceed (i)
$2,000,000 so long as none of clauses (ii), (iii) or (iv) below are applicable, (ii)
$5,000,000 so long as, in the case of this clause (ii), pro forma Availability for each day
of the 30-day period immediately preceding such acquisition, and on the date of such
acquisition after giving effect thereto, is at least $30,000,000, (iii) an amount equal to
fifty percent (50%) of the lowest daily pro forma Availability for the 30-day period
immediately preceding such acquisition so long as, in the case of this clause (iii), (A) the
pro forma Consolidated Fixed Charge Coverage Ratio for the most recent Fiscal Quarter ended
immediately prior to such acquisition shall, after giving effect to such acquisition, be at
least 1.20 to 1.00, (B) pro forma Availability for each day of the 30-day period immediately
preceding such acquisition, and on the date of such acquisition after giving effect thereto,
is at least $30,000,000 and (C) clause (iv) below is not applicable, and (iv) an unlimited
amount so long as, in the case of this clause (iv), pro forma Liquidity for each day of the
30-day period immediately 



 









 







preceding such acquisition, and on the date of such acquisition after giving effect
thereto, is at least $100,000,000;




     (f) if the Inventory and Accounts acquired in connection with such
acquisition are proposed to be included in the determination of any Borrowing Base and the
Administrative Agent elects in its Permitted Discretion, the Administrative Agent shall have
conducted an audit and field examination with respect to such Accounts and an appraisal with
respect to such Inventory, in each case, to its satisfaction; and




     (g) as soon as available, but not less than fifteen (15) Business Days
prior to the closing of such acquisition, the Loan Parties shall submit to the
Administrative Agent notice of such acquisition and a certificate of the Chief Financial
Officer or other financial officer of the Borrower Agent, in form and substance reasonably
satisfactory to the Administrative Agent, (i) attaching copies of all business and financial
information reasonably requested by the Administrative Agent, (ii) certifying that all of
the requirements set forth in this definition, as applicable, have been satisfied or will be
satisfied on or prior to the consummation of such purchase or other acquisition and (iii) if
applicable (A) attaching pro forma financial statements demonstrating compliance with clause
(e)(ii) of this definition, (B) certifying that such pro forma financial statements present
fairly in all material respects the financial condition of Imation and its Subsidiaries on a
consolidated basis as of the date thereof after giving effect to such acquisition and
setting forth reasonably detailed calculations demonstrating compliance with the minimum
Consolidated Fixed Charge Coverage Ratio set forth in clause (e)(ii)(A) of this definition,
and (C) setting forth reasonably detailed calculations demonstrating compliance with the
Liquidity requirement set forth in clause (e)(ii)(B) of this definition.



“Permitted Discretion” means a determination made in good faith and in the exercise of
commercially reasonably business judgment. 



“Permitted Liens” has the meaning specified in Section 7.01.




“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.



“Pledged Foreign Subsidiary” means a First-Tier Foreign Subsidiary that is a
wholly-owned Subsidiary, is not an Inactive Subsidiary and as to which not less than the lesser
of (ia) 65% of the total Voting Stock thereof or (iib) the aggregate of all Voting
Stock thereof owned or held by the Borrower and its Domestic Subsidiariesa Loan Party, 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 (wa) 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, (xb) 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, (yc) 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 (zd) 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) (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)  (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





     (iii)
(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.



“Property” means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.



“Protective Advances” has the meaning specified in Section 2.01(c).




“Real Estate” means all right, title and interest (whether as owner, lessor or lessee) in any
real Property or any buildings, structures, parking areas or other improvements thereon.



“Real Estate Appraisal” shall mean that certain Appraisal of Real Property dated as of April
21, 2009 and prepared by Cushman & Wakefield of Minnesota, Inc., Valuation Services, Capital
Markets Group, for the real property located at 1 Imation Place, Oakdale, Minnesota.



“Real Estate Formula Amount” means the lesser of (a) 60% of the fair market value of the
Eligible Real Estate Assets determined pursuant to the Real Estate Appraisal (the “Original Real
Estate Base Amount”), provided, however, that the Original Real Estate Base Amount shall be
automatically reduced at the beginning of each month, commencing June 1, 2009, by an amount equal
to 1/84th of the Original Real Estate Base Amount (such amount as so reduced being
referred to in this Agreement as the “Current Real Estate Amount”) and (b) $40,000,000.



“Real Estate Value Reserve” means reserves established by the Administrative Agent in its
Permitted Discretion to reflect that sixty percent (60%) of the fair market value of the Eligible
Real Estate Assets as set forth in the most recent acceptable appraisal received by the
Administrative Agent with respect thereto has declined by more than the monthly amortization of the
Original Real Estate Base Amount.



“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.




 











 




“Related Real Estate Documents” means with respect to any Real Estate subject to a Mortgage,
the following, in form and substance satisfactory to the Administrative Agent: (a) a mortgagee
title policy (or binder therefor) covering the Administrative Agent’s interest under the Mortgage,
in a form and amount and by an insurer acceptable to the Administrative Agent, which must be fully
paid on such effective date; (b) such assignments of leases, estoppel letters, attornment
agreements, consents, waivers and releases as the Administrative Agent may require with respect to
other Persons having an interest in the Real Estate; (c) a current, as-built survey of the Real
Estate containing a property description certified by a licensed surveyor, acceptable to the
Administrative Agent; (d) a flood plain certification and flood insurance in an amount, with
endorsements and by an insurer acceptable to the Administrative Agent, if the Real Estate is within
a flood plain; (e) a current appraisal of the Real Estate, prepared by an appraiser acceptable to
the Administrative Agent, and in form and substance satisfactory to the Administrative Agent; (f)
an environmental assessment, prepared by environmental engineers acceptable to the Administrative
Agent, and accompanied by such reports, certificates, studies or data as the Administrative Agent
may reasonably require, which shall all be in form and substance satisfactory to the Administrative
Agent; and (g) an Environmental Agreement and such other documents, instruments or agreements as
the Administrative Agent may reasonably require with respect to any environmental risks regarding
the Real Estate.



“Rent and Charges Reserve” means a reserve equal to the aggregate of (a) all past due rent and
other amounts owing by a Loan Party to any landlord, warehouseman, processor, repairman, mechanic,
shipper, freight forwarder, broker or other Person who possesses any Collateral or could by
contract or applicable Law assert a Lien on any Collateral; and (b) the aggregate of at least three
months rent and other charges that could be payable to any such Person, unless it has executed a
Lien Waiver.



“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 Consignee Documentation” means, with respect to any consignee, (a) a fully-executed
copy of the current consignment agreement between the applicable Loan Party and such consignee, (b)
a fully-executed consignment UCC filing authorization agreement in form and substance satisfactory
to the Administrative Agent by and between the applicable Loan Party and such consignee, (c)
satisfactory evidence that a UCC-1 financing statement naming such consignee as debtor, the
applicable Loan Party as secured party, and the Inventory subject to the respective consignment as
the collateral, and in all respects satisfactory to the Administrative Agent in its discretion, has
been filed in the proper filing office, (d) evidence that a UCC-3 financing statement amendment has
been filed with respect to the financing statement described in clause (c) above, assigning the
rights of the applicable Loan Party, as secured party, to the Administrative Agent, (e) notice of
the applicable Loan Party’s interest, and the Administrative Agent’s security interest, in the
consigned Inventory shall have been delivered to each Person with a perfected Lien in the 


 









 






Inventory of such consignee and (f) all other documents, instruments, certificates and
agreements as the Administrative Agent may reasonably require with regard to such consignee. 



“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,
president, vice president, 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.



“Restricted Payment” means any dividend or other distribution (whether in cash, securities
or other property
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
propertyProperty), 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).



“Restrictive Agreement” means an agreement (other than a Loan Document) that conditions or
restricts the right of any Borrower, Subsidiary or other Loan Party to incur or repay borrowed
money, to grant Liens on any assets, to declare or make distributions, to modify, extend or renew
any agreement evidencing borrowed money, or to repay any intercompany Indebtedness.



“Royalties” means all royalties, fees, expense reimbursement and other amounts payable by a
Borrower under a License.



“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.



“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.



“Secured Parties” means the Administrative Agent, the L/C Issuer, the Lenders and the providers
of Bank Products.




 









 







“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.



“Security and Pledge Agreement” means the Security and Pledge Agreement executed by the Loan
Parties in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit
H.



“Significant Inventory Locations” has the meaning set forth in Section 6.14.



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





     (i) (a) 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) (b) 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) (c) 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) (d) 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
consecutivetrailing twelve fiscal quartersmonth period 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 Imationa Borrower.




 









 







“Super-Majority Lenders” means, as of any date of determination, Lenders having more than 66
2/3% 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 66 2/3%
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
Super-Majority Lenders.



“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 propertyProperty 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.



“TDK Acquisition” means the acquisition by Imation of all or substantially all of the
assets (including stock of relevant Subsidiaries) relating to the recording media business of TDK
Marketing Corporation and its Affiliates, provided (i) the aggregate consideration


 









 






paid or incurred (including cash, capital stock, indebtedness and other) directly or indirectly by
Imation or its Subsidiaries does not exceed $340,000,000 (net of cash acquired), and (ii) such
transaction is consummated no later than November 30, 2007.



“Third Amendment to Credit Agreement” means that certain Third Amendment to Credit Agreement
dated as of the Third Amendment Closing Date by and among the Administrative Agent, the Lenders
party thereto and the Borrowers.



“Third Amendment Closing Date” means June 3, 2009.



“Threshold Amount” means $50,000,000.25,000,000.



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



“Trademark Security Agreement” means each trademark security agreement pursuant to which a Loan
Party grants to the Administrative Agent, for the benefit of Secured Parties, a Lien on such Loan
Party’s interests in trademarks, as security for the Obligations.



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



“UCC” means the Uniform Commercial Code of any applicableas in effect in the State of
New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such 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).



“Value” means (a) for Inventory, its value determined on the basis of the lower of cost or
market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable
to intercompany profit among the Borrowers and their Affiliates; and (b) for an Account, its face
amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits,
allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by
the Account Debtor or any other Person.



“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 “propertyProperty” 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.



     (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) All calculations of Value, fundings of Loans, issuances of Letters of Credit
and payments of Obligations shall be in Dollars and, unless the context otherwise requires, all
determinations (including calculations of Borrowing Base and financial covenants) made from time to
time under the Loan Documents shall be made in light of the circumstances existing at such time.
Borrowing Base calculations shall be consistent with historical methods of valuation and
calculation, and otherwise satisfactory to the Administrative Agent in its Permitted Discretion
(and not necessarily calculated in accordance with GAAP). 



     (d)  (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 and using the same
inventory valuation method as used in such 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).



     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.



     1.08 Uniform Commercial Code. As used herein, the following terms are defined in
accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper,”
“Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangibles,”
“Goods,” “Instrument,” “Investment Property,” “Letter-of-Credit Right” and “Supporting
Obligation.”



ARTICLE II.ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS




     2.01 Loans; Advances.



     (a)  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
lesser of (A) the Aggregate Commitments and (B) the Borrowing Base, 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. In no
event shall Lenders have any obligation to honor a request for a Loan if the unpaid balance of
Loans and L/C Obligations outstanding at such time (including the requested Loan) would exceed
Availability. 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.



     (b) Overadvances. If the Total Outstandings exceed the Borrowing Base (an
“Overadvance”) or if the Total Outstandings exceed the Aggregate Commitments at any time, in each
case the excess amount shall be payable by the Borrowers on demand to the Administrative Agent, but
the excess amount of the Total Outstandings shall nevertheless constitute Obligations secured by
the Collateral and entitled to all benefits of the Loan Documents. Unless its authority has been
revoked in writing by Required Lenders, the Administrative Agent may require the Lenders to honor
requests for Overadvance Loans and to forbear from requiring the Borrowers to cure an Overadvance,
(i) when no other Event of Default is known to the Administrative Agent, as long as (A) the
Overadvance does not continue for more than 30 consecutive days (and no Overadvance may exist for
at least five consecutive days thereafter before further Overadvance Loans are required), and (B)
the Overadvance is not known by the Administrative Agent to exceed 10% of the Borrowing Base; and
(ii) regardless of whether an Event of Default exists, if the Administrative Agent discovers an
Overadvance not previously known by it to exist, as long as from the date of such discovery the
Overadvance (A) is not increased by more than $5,000,000, and (B) does not continue for more than
30 consecutive days. Notwithstanding the foregoing, in no event shall Overadvance Loans be
requested that would cause the 



 









 







Total Outstandings to exceed the Aggregate Commitments. Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by the Administrative Agent or the
Lenders of the Event of Default caused thereby. In no event shall any Borrower or other Loan Party
be deemed a beneficiary of this Section nor authorized to enforce any of its terms. 



     (c) Protective Advances. The Administrative Agent shall be authorized, in its
discretion, at any time that any conditions in Section 4.02 are not satisfied, to make Base Rate
Loans (“Protective Advances”) (i) up to an aggregate amount of $10,000,000 outstanding at any time,
if the Administrative Agent deems such Loans necessary or desirable to preserve or protect
Collateral, or to enhance the collectibility or repayment of Obligations; or (ii) to pay any other
amounts chargeable to the Loan Parties under any Loan Documents, including costs, fees and
expenses. Each Lender shall participate in each Protective Advance in accordance with its Pro Rata
Share; provided, that, to the extent that any Lender has not participated in any Protective
Advance, the Administrative Agent shall be entitled to reimbursement of such outstanding amounts as
an expense item. Notwithstanding the foregoing, in no event shall the Administrative Agent be
authorized to make any Protective Advance if, after giving effect to each Lender’s participation in
such Protective Advance, the Total Outstandings will exceed the Aggregate Commitments. The
Required Lenders may at any time revoke the Administrative Agent’s authority to make further
Protective Advances by written notice to the Administrative Agent. Absent such revocation, the
Administrative Agent’s determination that funding of a Protective Advance is appropriate shall be
conclusive.



     2.02 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 Agent’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 Agent 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 Agent.
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 Agent 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.



     (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 Agent, 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 BorrowerBorrowers in like funds as
received by the Administrative Agent either by (i) crediting the account of the
BorrowerBorrowers 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 Agent; provided,
however, that if, on the date the Loan Notice with respect to such Borrowing is given by the
Borrower Agent, 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
BorrowerBorrowers 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 Agent 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.



     (f) Unless payment is otherwise timely made by Borrowers, the becoming due of any
Obligations (whether principal, interest, fees or other charges, including Extraordinary Expenses,
L/C Obligations, Cash Collateral and Bank Product Debt) shall be deemed to be a request for Base
Rate Loans on the due date, in the amount of such 



 









 







Obligations. The proceeds of such Loans shall be disbursed as direct payment of the relevant
Obligation. In addition, during any Cash Dominion Trigger Period, Administrative Agent may, at its
option, charge such Obligations against any operating, investment or other account of a Borrower
maintained with Administrative Agent or any of its Affiliates.



     (g) If Borrowers establish a controlled disbursement account with Administrative
Agent or any Affiliate of Administrative Agent, then the presentation for payment of any check or
other item of payment drawn on such account at a time when there are insufficient funds to cover it
shall be deemed to be a request for Base Rate Loans on the date of such presentation, in the amount
of the check and items presented for payment. The proceeds of such Loans may be disbursed directly
to the controlled disbursement account or other appropriate account.



     2.03 
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,
after giving effect thereto (x) the Total Outstandings would exceed the lesser
of (1) the Borrowing Base and (2) 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 Third
Amendment 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;




     (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 $100,000, in the case
of a commercial Letter of Credit, or $500,000, in the case of a standby Letter of
Credit;




     (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; 




     (F) the purpose is not consistent with Section 6.11 or the form of
the proposed Letter of Credit is not satisfactory to Administrative Agent and L/C
Issuer in their respective discretion; or




     (G)  (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.



     (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 BorrowersBorrower Agent. 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
BorrowersBorrower Agent 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,
theThe Lenders shall be deemed to have authorized (but may not require) the L/C
Issuer to permit the renewal of suchany Existing Letter of Credit that has automatic
renewal provisions (each, an “Auto-Renewal 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 Datenon-renewal notice date set forth in such Auto-Renewal
Letter of Credit or, if not designated, the annual anniversary of the issuance thereof,
that (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.



     (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 BorrowersBorrower Agent 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 BorrowersBorrower
Agent 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.




     (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.




     (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
BorrowersBorrower Agent 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.




     (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(iii)
if Availability is less than zero after giving effect to the prepayment of outstanding Loans
pursuant to Section 2.04(b), or (iv) 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 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 accountsDeposit Accounts and all balances
therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked,
non-interest bearing deposit accountsDeposit 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
quarterlymonthly basis in arrears. Such letter of credit fees shall be due and payable on
(i) the first Business Day after the end of each March, June, September and
Decembercalendar month,
commencing with the first such date to occur after the issuance of
such Letter of Credit,Third Amendment Closing Date, (ii) on the Letter of Credit Expiration
Date and (iii) thereafter on demand. If there is any change in the L/C Rate during any
quartermonth, 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 quartermonth 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
quarterlymonthly basis in arrears. Such fee shall be due and payable on (i) the
first Business Day after the end of each March, June, September and Decembercalendar month,
commencing with the first such date to occurcalendar month ending after the issuance of
such Letter of Credit,
(ii) on the Letter of Credit Expiration Date and (iii)
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.



     2.04
2.04 Prepayments.



     (a) The Borrowers may, upon notice to the Administrative Agent by the Borrower 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 BorrowersBorrower Agent, 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 prepayany Disposition includes the disposition of
Borrowing Base Collateral, then the Net Proceeds of such Borrowing Base Collateral shall be applied
to the Loans. Notwithstanding anything herein to the contrary, if an Overadvance exists, Borrowers
shall, on the sooner of Administrative Agent’s demand or the first Business Day after any Borrower
has knowledge thereof repay the outstanding Loans and/or Cash Collateralize
theoutstanding
L/C Obligations, in an aggregate amount equal to such
excessamount such that after giving effect to such repayment of Loans or Cash Collateralization
of L/C Obligations, Total Outstandings do not exceed the lesser of (A) the Borrowing Base and (B)
the Aggregate Commitments; provided, however, that the Borrowers shall not be
required to Cash Collateralize the outstanding L/C Obligations  pursuant to this Section
2.04(b)
unless,
after the prepayment in full of the
Loans, the Total
Outstandings continue to exceed the lesser of the Borrowing Base and the Aggregate
Commitmentsthen in effect.



     2.05 2.05 Termination or Reduction of Commitments. The Borrowers may, upon notice to
the Administrative Agent by the Borrower 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 BorrowersBorrower Agent. 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 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.



     2.07 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 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 feeFacility 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 feeFacility 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 quarterlymonthly in arrears on the last Business Day of each
March, June, September and Decembermonth, 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 feeFacility Fee shall be calculated
 quarterlymonthly in arrears, and if
there is any change in the Applicable Rate during any quartermonth, the actual daily amount
shall be computed and multiplied by the Applicable Rate separately for each period during such
quartermonth 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.




     (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 2.09Computation 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 2.10 Evidence of Debt.



     
(a) Agent Record; Notes. 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) 
Lender Records. 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.



     
(c)
Loan Account. The Administrative Agent shall maintain in accordance with its
usual and customary practices an account or accounts (“Loan Account”) evidencing the Indebtedness
of the Borrowers resulting from each Loan or issuance of a Letter of Credit from time to time. Any
failure of the Administrative Agent to record anything in the Loan Account, or any error in doing
so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing
hereunder. The Administrative Agent may maintain a single Loan Account in the name of Imation, and
each Borrower confirms that such arrangement shall have no effect on the joint and several
character of its liability for the Obligations.



     
(d) Entries Binding. Entries made in the Loan Account shall constitute
presumptive evidence of the information contained therein. If any information contained in the
Loan Account is provided to or inspected by any Person, then such information shall 



 









 




be conclusive and binding on such Person for all purposes absent manifest error, except to
the extent such Person notifies the Administrative Agent in writing within 30 days after receipt or
inspection that specific information is subject to dispute.




     2.11 2.11 Payments Generally.




(a) Payments.




     
(i)  (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.




     
(ii) The ledger balance in the main Dominion Account as of the end of a
Business Day shall be applied to the Obligations at the beginning of the next Business Day,
during any Cash Dominion Trigger Period. If, as a result of such application, a credit
balance exists, the balance shall not accrue interest in favor of Borrowers and shall be
made available to Borrowers as long as no Default exists. At any time Section 8.03 applies,
each Borrower irrevocably waives the right to direct the application of any payments or
Collateral proceeds, and agrees that the Administrative Agent shall have the continuing,
exclusive right to apply and reapply same against the Obligations then due and owing, in
accordance with the terms of this Agreement.




     (iii)
 To facilitate administration of the Loans, the Lenders and the
Administrative Agent agree (which agreement is solely among them, and not for the benefit of
or enforceable by any Borrower) that settlement among them with respect to Loans may take
place on a date determined from time to time by the Administrative Agent, which shall occur
at least once each week. On each settlement date, settlement shall be made with each Lender
in accordance with the settlement report delivered by the Administrative Agent to the
Lenders. Each Lender’s obligation to make settlements with the Administrative Agent is
absolute and unconditional, without offset, counterclaim or other defense, and whether or
not the Commitments have terminated, an Overadvance exists or the conditions in Section 4.02
are satisfied. 




     
(iv) The Administrative Agent may (but shall not be required to), in its
discretion, retain any payments or other funds received by the Administrative Agent that are
to be provided to a Defaulting Lender hereunder, and may apply such funds to such Lender’s
defaulted obligations or readvance the funds to Borrowers in 



 









 




accordance with this Agreement. The failure of any Lender to fund a Loan, to make
any payment in respect of L/C Obligations or to otherwise perform its obligations hereunder
shall not relieve any other Lender of its obligations, and no Lender shall be responsible
for default by another Lender. The Lenders and the Administrative Agent agree (which
agreement is solely among them, and not for the benefit of or enforceable by any Borrower)
that, solely for purposes of determining a Defaulting Lender’s right to vote on matters
relating to the Loan Documents and to share in payments, fees and Collateral proceeds
thereunder, a Defaulting Lender shall not be deemed to be a “Lender” until all its defaulted
obligations have been cured.




     (v) The Loans, L/C Obligations and other Obligations shall constitute one
general obligation of Borrowers and (unless otherwise expressly provided in any Loan
Document) shall be secured by the Administrative Agent’s Lien upon all Collateral; provided,
however, that the Administrative Agent and each Lender shall be deemed to be a creditor of,
and the holder of a separate claim against, each Borrower to the extent of any Obligations
jointly or severally owed by such Borrower.




     (b) Payment after Business Day. 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) 
Failure to Make Payment. Unless the BorrowersBorrower Agent 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.




     (d) Return of Funds. 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)  Obligations of Lenders. 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) Manner of Obtaining Loans. 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
 2.12Sharing 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.



     2.13Marshaling; Payments Set Aside. None of the Administrative Agent or Lenders
shall be under any obligation to marshal any assets in favor of any Loan Party or against any
Obligations. If any payment by or on behalf of Borrowers is made to the Administrative Agent, L/C
Issuer or any Lender, or the Administrative Agent, L/C Issuer or any Lender exercises a right of
setoff, and such payment or the proceeds of such setoff 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, L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other Person, then to the extent of such
recovery, the Obligation originally intended to be satisfied, and all Liens, rights and remedies
relating thereto, shall be revived and continued in full force and effect as if such payment had
not been made or such setoff had not occurred.



     2.14 2.13Increase 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
$100,000,00050,000,000 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 BorrowersBorrower Agent (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 BorrowersBorrower Agent 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 BorrowersBorrower Agent
shall determine the effective date (the “Increase Effective Date”) and the final allocation
of such increase. The Administrative Agent shall promptly notify the BorrowersBorrower
Agent 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 BorrowersBorrower Agent 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
2.13,2.14, 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.



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



     2.15 Effect of Termination; Survival. On the effective date of any termination of
the entire Commitments, all Obligations (other than Bank Product Debt) shall be immediately due and
payable, and any Lender may terminate its and its Affiliates’ Bank Products if expressly permitted
to do so in the agreements relating to such Bank Products. All undertakings of the Borrowers
contained in the Loan Documents shall survive any termination, and the Administrative Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents
until Full Payment of the Obligations. Notwithstanding Full Payment of the Obligations, the
Administrative Agent shall not be required to terminate its Liens in any Collateral unless, with
respect to any damages the Administrative Agent may incur as a result of the dishonor or return of
Payment Items applied to Obligations, the Administrative Agent receives (a) a written agreement,
executed by the Borrowers and any Person whose advances are used in whole or in part to satisfy the
Obligations, indemnifying the Administrative Agent and the Lenders from any such damages; or (b)
such Cash Collateral as the Administrative Agent, in its discretion, deems necessary to protect
against any such damages. Sections 2.03, 2.14, 3.01, 3.03, 3.04, 3.05 



 









 





and 10.04, this Section, Articles III and IX, and the obligation of each Loan Party and
Lender with respect to each indemnity given by it in any Loan Document, shall, in each case,
survive termination of the Aggregate Commitments, Full Payment of the Obligations and any release
relating to this credit facility.



ARTICLE III.ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 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  lawLaw 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
 lawLaw.


     (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  lawLaw.



     (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 BorrowersBorrower
Agent 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.



     (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
lawLaw or reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation prescribed by
applicable lawLaw 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 lawLaw 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
lawLaw 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
lawLaw to permit the Borrower to determine the
withholding or deduction required to be made.



     (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 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 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 3.04 Increased Costs.



 









 





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




     (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.



     (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 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 BorrowersBorrower Agent; 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 BorrowersBorrower
Agent 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 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.



     (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.ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 4.01 Conditions of Initial Credit Extension.
Theto Closing. This Agreement shall become effective upon, and the
obligation of each Lender to make itsthe initial Credit
Extension hereunderExtensions on the Third Amendment Closing Date is
subject to, the satisfaction of the following conditions
precedent÷ in the Third Amendment to Credit Agreement.



     (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;




     (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.



     4.02 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 in all
material respects 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; provided, however, that any
representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct (after giving effect to any qualification therein) in
all respects, 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) All conditions precedent in any other Loan Document shall be
satisfied.



     (d) (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
BorrowersBorrower Agent 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.ARTICLE V.

REPRESENTATIONS AND WARRANTIES



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




     5.01 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.



     5.02 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
propertyProperty is subject; or (c) violate any Law.



     5.03 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 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 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,March 31, 2009, 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 material liabilities, direct or contingent,
of Imation and its consolidated Subsidiaries as of the date of such financial statements
(and to the extent not set forth in 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.



     (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 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



     5.07 No Default. No event or circumstance has occurred or exists
that constitutes a Default. No Borrower or Subsidiary is in default, and no event or circumstance
has occurred or exists that with the passage of time or giving of notice would constitute a
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 5.08 Ownership of Property. Each of the
BorrowersBorrower 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,) all of its Real Estate, and good and marketable title to all of its
personal Property, including all Property reflected in any financial statements delivered to
Administrative Agent or Lenders. Each Borrower and Subsidiary has paid and discharged all lawful
claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens and, with
respect to Non-Loan Party Subsidiaries, could not 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.



     5.09 Environmental Compliance. Except as disclosed on Schedule
5.09, no Loan Party or Pledged Foreign Subsidiary or any such Person’s present or, to any such
Person’s knowledge, past operations, Real Estate or other Properties are subject to any federal,
state or local investigation to determine whether any remedial action is needed to address any
environmental pollution, hazardous material or environmental clean-up that is an unresolved
Material Environmental Liability and, from and after the Third Amendment Closing Date, that could
reasonably be expected to have a Material Adverse Effect. Except as disclosed on Schedule 5.09, as
of the Third Amendment Closing Date, no Non-Loan Party Subsidiary (excluding any Pledged Foreign
Subsidiary) or such Non-Loan Party Subsidiary’s operations, Real Estate or other Properties are
subject to any federal, state or local investigation or requirements, to determine whether any
remedial action is needed to address any environmental pollution, hazardous material or
environmental clean-up that could reasonably be expected to result in a Material Environmental
Liability. No Loan Party or Pledged Foreign Subsidiary has received any Environmental Notice or
has any contingent liability with respect to any Environmental Release, environmental pollution or
hazardous material on any Real Estate now or previously owned, leased or operated by it that (a) as
of the Third Amendment Closing Date could reasonably be expected to result in a Material
Environmental Liability and (b) after the Third Amendment Closing Date that could reasonably be
expected to have a Material Adverse Effect. The representations and warranties contained in the
Environmental Agreement are true and correct on the Third Amendment Closing Date.



     5.10 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.



     5.11 5.11 Taxes. The Borrowers and their Subsidiaries have
filed all Federal, material state and other material tax returns and reports
required to be filed, and have paid all Federal, material 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 5.12 ERISA Compliance.



     (a) EachExcept as could not reasonably be expected to have a Material
Adverse Effect, 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) NoExcept as disclosed on Schedule 5.12, 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);
(iviii) 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 (viv) 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.



 









 





     (d) With respect to any Foreign Plan, (i) all employer and
employee contributions required by law or by the terms of the Foreign Plan have been made, or,
if applicable, accrued, in accordance with normal accounting practices except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect; (ii) the fair market
value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan
funded through insurance, or the book reserve established for any Foreign Plan, together with any
accrued contributions, is sufficient to procure or provide for the accrued benefit obligations with
respect to all current and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles; and (iii) it has been registered as required
and has been maintained in good standing with applicable regulatory authorities except where
failure to do so could not reasonably be expected to have a Material Adverse Effect.



     5.13 5.13 Subsidiaries. With the exception of Inactive
Subsidiaries, Imation has no Subsidiaries Part (a) of Schedule 5.13 shows, for
each Borrower and Subsidiary, its name, its jurisdiction of organization, and the holders of its
equity interests, and, for each of the Loan Parties and the Pledged Foreign Subsidiaries, its
authorized and issued equity interests. Except as disclosed on Part (a) of Schedule 5.13, in the
five years preceding the Third Amendment Closing Date, no Loan Party has acquired any substantial
assets from any other Person nor been the surviving entity in a merger or combination. Each Loan
Party has good title to its equity interests in its Subsidiaries, subject only to the
Administrative Agent’s Lien (in the case of equity interests in the Loan Parties and the Pledged
Foreign Subsidiaries), and all such equity interests are duly issued, fully paid and
non-assessable. There are no outstanding purchase options, warrants, subscription rights,
agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating
to equity interests of any Borrower or Subsidiary other than those specifically disclosed
in Part (a) of Schedule 5.13 and has no equity investments in any other corporation or
entity other thanb) of Schedule 5.13. Other than Inactive Subsidiaries and the
Subsidiaries listed in Part (a) of Schedule 5.13, no Borrower has any equity investments (a)
directly in any public corporation or similar public entity or (b) in any private corporation or
similar private entity representing greater than a five percent ownership interest therein other
than, in each case, those specifically disclosed in Part
(bc) of Schedule 5.13.



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



     (a) The Borrowers are notNo Borrower or Subsidiary is
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 any
margin stock.



     (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 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. Except as disclosed on Schedule 5.15, no Loan Party or Pledged Foreign
Subsidiary is party or subject to any Restrictive Agreement and no Non-Loan Party (excluding any
Pledged Foreign Subsidiary) is party or subject to any Restrictive Agreement that restricts its
ability to pay dividends or distributions to its parent company or that could otherwise reasonably
be expected to have a Material Adverse Effect. No such Restrictive Agreement prohibits the
execution, delivery or performance of any Loan Document by a Loan Party or Pledged Foreign
Subsidiary. 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 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
(other than with respect to any failure to comply with Anti-Terrorism Laws) 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 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,
licensesLicenses 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 except as
disclosed on Schedule 5.17, except where the failure to own or possess such IP Rights could not
reasonably be expected to have a Material Adverse Effect. 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 in a manner that could reasonably be
expected to have a Material Adverse Effect. Except as specifically disclosed in
Schedule 5.17, no claim or litigation regarding any of the foregoing
isthere is no pending, or, to the
bestany Borrower’s knowledge of the Borrowers, threatened, which,
either individually or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, threatened



 









 








Intellectual Property Claim with respect to any Borrower, any
Subsidiary or any of their Property (including any Intellectual Property).



     5.18 Accounts. The Administrative Agent may rely, in determining
which Accounts are Eligible Accounts, on all statements and representations made by the Borrowers
with respect thereto. The Borrowers warrant, with respect to each Account at the time it is shown
as an Eligible Account in a Borrowing Base Certificate, that:



     (a) it is genuine and in all material respects what it purports to
be, and is not evidenced by a judgment;



     (b) it arises out of a completed, bona fide sale and delivery of
goods in the Ordinary Course of Business (provided, that an aggregate of up to $10,000,000 shall be
permitted for FOB destination Accounts), and substantially in accordance with any purchase order,
contract or other document relating thereto;



     (c) it is for a sum certain, maturing as stated in the invoice
covering such sale, a copy of which has been furnished or is available to the Administrative Agent
on request;



     (d) it is not subject to any offset under contract or applicable
Law, Lien (other than the Administrative Agent’s Lien or a Permitted Lien permitted pursuant to
subsections (c) or (d) of Section 7.01), deduction, defense, dispute, counterclaim or other adverse
condition except as arising in the Ordinary Course of Business and disclosed to the Administrative
Agent; and it is absolutely owing by the Account Debtor, without contingency in any
respect;



     (e) no purchase order, agreement, document or applicable Law
restricts assignment of the Account to the Administrative Agent (regardless of whether, under the
UCC, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance
party shown on the invoice;



     (f) no extension, compromise, settlement, modification, credit,
deduction or return has been authorized with respect to the Account, except discount, allowances or
other adjustments granted in the Ordinary Course of Business for prompt payment that are immaterial
or are reflected in the reports submitted to the Administrative Agent hereunder; and



     (g) to the best of the Borrowers’ knowledge, (i) there are no
facts or circumstances that are reasonably likely to impair the enforceability or collectibility of
such Account; (ii) the Account Debtor had the capacity to contract when the Account arose,
continues to meet the applicable Borrower’s customary credit standards, is Solvent, is not
contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased
doing business; and (iii) there are no proceedings or actions threatened or pending against any
Account Debtor that could reasonably be expected to have a material adverse effect on the Account
Debtor’s financial condition.




 











 





     5.19 Payable Practices. No Borrower or Subsidiary has made any change in its
historical accounts payable practices from those in effect on the Third Amendment Closing Date
which change could reasonably be expected have a Material Adverse Effect.



     5.20 Labor Relations. Except as described on Schedule 5.20, no Borrower or
Subsidiary is party to or bound by any collective bargaining agreement or similar agreement with
any union, labor organization or other bargaining agent. There are no grievances, disputes or
controversies with any union or other organization of any Borrower’s or Subsidiary’s employees, or,
to any Borrower’s knowledge, any asserted or threatened strikes, work stoppages or demands for
collective bargaining which could reasonably be expected to have a Material Adverse Effect.



     5.21 Trade Relations. There exists no actual or threatened termination,
limitation or modification of any business relationship between any Borrower or Subsidiary and any
customer or supplier, or any group of customers or suppliers, who individually or in the aggregate
are material to the business of the Borrowers and their Subsidiaries, taken as a whole. There
exists no condition or circumstance that could reasonably be expected to impair the ability of the
Borrowers and their Subsidiaries, taken as a whole, to conduct their business at any time hereafter
in substantially the same manner as conducted on the Third Amendment Closing Date.



     5.22 Surety Obligations. No Borrower or Subsidiary is obligated as surety or
indemnitor under any bond or other contract that assures payment or performance of any obligation
of any Person, except as otherwise permitted hereunder.



     5.23 Bank Accounts. Schedule 5.23 contains a complete and accurate list of all
Deposit Accounts, including all Dominion Accounts, maintained by each Loan Party with any bank or
other financial institution. Each Borrower shall take all actions necessary to establish the
Administrative Agent’s control of each such Deposit Account (other than (a) an account exclusively
used for payroll, payroll taxes or employee benefits, or (b) an account containing not more than
$100,000 at any time, provided, that all such accounts described in this subclause (b) shall not
have more than $250,000 in the aggregate on deposit therein at any time). Each Borrower shall be
the sole account holder of each Deposit Account and shall not allow any other Person (other than
the Administrative Agent) to have control over a Deposit Account or any Property deposited therein.
Each Borrower shall promptly notify the Administrative Agent of any opening or closing of a
Deposit Account and, with the consent of the Administrative Agent, will amend Schedule 5.23 to
reflect same.



     5.24 Validity and Priority of Security Interest. The provisions of this
Agreement, the Security and Pledge Agreement, the Mortgages and/or the other Loan Documents create
legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit
of the Administrative Agent and the Lenders, and such Liens constitute (or will, upon the
Administrative Agent’s duly filing or recording any required financing statements or Mortgages, as
applicable, and taking possession or control (including possession of any certificate of title) of
Collateral that may be perfected only by possession or control) perfected and continuing Liens on
the Collateral, securing the Obligations, 



 









 




enforceable against the applicable Loan Party and all third parties, and having priority
over all other Liens on the Collateral except (i) in the case of Liens described in clauses (c),
(d) and (g) of Section 7.01 solely to the extent any such Liens would have priority over the
Administrative Agent’s Liens pursuant to any applicable Law and (ii) Liens granted in the Pledged
Foreign Subsidiaries.




     5.25 Material Agreements. As of the Third Amendment Closing Date, Schedule 5.25
sets forth all Material Contracts (other than the Loan Documents) of the Loan Parties.



     5.26 Complete Disclosure. No representation or warranty of a Loan Party in any
Loan Document as of the date made or deemed to be made contains any untrue statement of a material
fact, nor, when considered as a whole, fails to disclose any material fact necessary to make the
statements contained therein not materially misleading. There is no fact or circumstance, to the
knowledge of any Responsible Officer of a Loan Party, that such Loan Party has failed to disclose
to the Administrative Agent in writing that has had or would have a Material Adverse Effect.



ARTICLE VI.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 6.126.13) cause each Subsidiary to:




     6.01 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;




     (c) as soon as available, and in any event within 30 days after the end of each
month (but within 45 days after the last month in a fiscal year), unaudited balance sheets as of
the end of such month and the related statements of income and cash flow for such month and for the
portion of the fiscal year then elapsed, on a consolidated basis for Borrowers and Subsidiaries,
setting forth in comparative form corresponding figures for the preceding fiscal year and certified
by a Responsible Officer of Imation as prepared in accordance with GAAP and fairly presenting the
financial position and results of operations for such month and period, subject to normal year-end
adjustments and the absence of footnotes; and



     (d) not later than 30 days after the beginning of each fiscal year, projections of
Borrowers’ consolidated balance sheets, results of operations, cash flow and Availability for such
fiscal year, month by month.


As to any information contained in materials furnished pursuant to Section
6.02(ce), 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 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), and (c), a duly completed Compliance Certificate
signed by a Responsible Officer of Imation which Compliance Certificate shall include a
calculation of the Consolidated Fixed Charge Coverage Ratio calculated as of the end of the most
recently ended fiscal month within the reporting period;



     (b) concurrently with delivery of financial statements under Section 6.01(a)
above, copies of all management letters and other material reports submitted to Borrowers by their
accountants in connection with such financial statements;



     (c) at Administrative Agent’s request, a listing of each Borrower’s trade
payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in
form satisfactory to Administrative Agent;



     (d) (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;



 









 





     (e) (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;



     (f) by the 20th day of each month, the Borrower Agent shall deliver to the
Administrative Agent (and Administrative Agent shall promptly deliver same to Lenders) a Borrowing
Base Certificate prepared as of the close of business of the previous month, and at such other
times as the Administrative Agent may request. All calculations of Availability in any Borrowing
Base Certificate shall originally be made by Borrowers and certified by a Responsible Officer,
provided that the Administrative Agent may from time to time review and adjust any such calculation
(i) to reflect its reasonable estimate of declines in value of any Collateral, due to collections
received in the Dominion Account, or otherwise; (ii) to adjust advance rates in its Permitted
Discretion to reflect changes in dilution, quality, mix and other factors affecting Collateral; and
(iii) to the extent the calculation is not made in accordance with this Agreement or does not
accurately reflect the Availability Reserve;



     (g) the Borrower Agent shall provide to the Administrative Agent, on or before the
20th day of each month, (i) a detailed aged trial balance of all Accounts as of the end of the
preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date
and due date, showing any discount, allowance, credit, authorized return or dispute, and including
such proof of delivery, copies of invoices and invoice registers, copies of related documents,
repayment histories, and status reports, (ii) inventory reports by location of the Loan Parties,
and (iii) such other reports and information as the Administrative Agent may reasonably request, in
each case, in form satisfactory to the Administrative Agent. If Accounts in an aggregate face
amount of $5,000,000 or more cease to be Eligible Accounts, the Borrower Agent shall notify the
Administrative Agent of such occurrence promptly after any Borrower has knowledge thereof.



     (h) promptly after the sending or filing thereof, copies of any annual report to
be filed in connection with each Plan or Foreign Plan; and



     (i) (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,other reports and information (financial or otherwise) as the Administrative
Agent or any Lender may reasonably request from time to time reasonably requestin
connection with any Collateral or any Borrower’s, Subsidiary’s or other Loan Party’s financial
condition, corporate affairs or business.


Documents
required to be delivered pursuant to Section 6.01(a) or , (b) or
(c) or Section 6.02(ce) (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.



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 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, including any violation or asserted violation of any applicable
Law; (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 Lawsor that could
reasonably be expected to result in a Material Environmental Liability; or (iv) the assertion of
any Intellectual Property Claim;




     (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 Imationa Loan Party;



     (f) of any judgment in an amount exceeding $5,000,000;



     (g) the discharge of or any withdrawal or resignation by Borrowers’ independent
accountants; 



     (h) any opening of a new office or place of business of a Loan Party, within a
reasonable period of time prior to such opening;



     (i) of any pending or threatened labor dispute, strike or walkout, or the
expiration of any material labor contract that, in each case, could reasonably be expected to have
a Material Adverse Affect; and



     (f) of the closing of the Memorex Acquisition.



     (j) of any Environmental Release by a Loan Party or on any Real Estate owned,
leased or occupied by a Loan Party, or receipt by a Loan Party of any Environmental Notice that, if
determined adversely to such Loan Party, could reasonably be expected to result in a Material
Environmental Liability.


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 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 propertyProperty 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.




     6.05 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 6.06 Maintenance of Properties.



     (a) Maintain, preserve and protect all of its material propertiesProperties and
equipmentEquipment 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.



     (a) Maintain, and shall cause each Loan Party to maintain, with endorsements and
with insurers (with a Best Rating of at least A7, unless otherwise approved by the Administrative
Agent) satisfactory to the Administrative Agent, insurance (i) with respect to the Collateral,
Properties and business of the Loan Parties covering casualty, hazard, larceny, embezzlement, theft
or other criminal misappropriation, malicious mischief, product liability, workers’ compensation,
flood and other risks, in amounts satisfactory to the Administrative Agent, and (ii) covering
business interruption with policy limits, coverage amounts and deductibles determined from time to
time by the Loan Parties in their commercially reasonable business judgment and not otherwise
materially inconsistent with the past policies of such Loan Party regarding policy limits, coverage
amounts and deductibles, and subject to an Insurance Assignment satisfactory to the Administrative
Agent. All proceeds under each policy shall be payable to the Administrative Agent. From time to
time upon request, the Borrower Agent shall deliver to the Administrative Agent the originals or
certified copies of the Loan Parties’ insurance policies and updated flood plain searches. Unless
the Administrative Agent shall agree otherwise, each policy shall include satisfactory endorsements
(i) showing the Administrative Agent as loss payee; (ii) 



 









 




requiring 30 days prior written notice to the Administrative Agent in the event of
cancellation of the policy for any reason whatsoever; and (iii) specifying that the interest of the
Administrative Agent shall not be impaired or invalidated by any act or neglect of any Borrower,
any Subsidiary or the owner of the Property, nor by the occupation of the premises for purposes
more hazardous than are permitted by the policy. If any Borrower fails to provide and pay (or
cause its respective Subsidiaries that are Loan Parties to provide and pay) for any insurance
required by this Section 6.07(a), the Administrative Agent may, at its option, but shall not be
required to, procure the insurance and charge the Borrowers therefor. Each Borrower agrees to
deliver to the Administrative Agent, promptly as rendered, copies of all reports made to insurance
companies in respect of the Loan Parties. While no Event of Default exists, the Borrowers may
settle, adjust or compromise any insurance claim, as long as the proceeds are delivered to the
Administrative Agent to the extent required pursuant to Section 6.07(b). If an Event of Default
exists, only the Administrative Agent shall be authorized to settle, adjust and compromise such
claims.




     (b) Any proceeds of insurance (other than proceeds from workers’ compensation or
D&O insurance) and any awards arising from condemnation (i) of any Collateral during a Cash
Dominion Trigger Period, shall be paid to the Administrative Agent and shall be applied in
accordance with Section 8.03 and (ii) of any Collateral in an amount in excess of $500,000, subject
to clause (c) below and during any time other than a Cash Dominion Trigger Period, shall be paid to
the Administrative Agent and shall be applied to the payment of the Loans, and then to any other
Obligations then due and owing. 



     (c) During any period other than a Cash Dominion Trigger Period, if requested by
the Borrower Agent in writing within 15 days after the Administrative Agent’s receipt of any
insurance proceeds or condemnation awards relating to any loss or destruction of Equipment of the
Loan Parties, the Borrowers may use such proceeds or awards to repair or replace such Equipment
(and until so used, the proceeds shall be held by the Administrative Agent as Cash Collateral) as
long as (i) no Default exists; (ii) such repair or replacement is promptly undertaken and
concluded, in accordance with plans reasonably satisfactory to the Administrative Agent; (iii) the
repaired or replaced Property is free of Liens, other than Permitted Liens that are not purchase
money liens; (iv) the Borrowers comply with disbursement procedures for such repair or replacement
as the Administrative Agent may reasonably require; and (v) the aggregate amount of such proceeds
or awards from any single casualty or condemnation does not exceed $10,000,000.



     (d) 6.07 Maintenance of Insurance. MaintainWith respect to each Non-Loan Party
Subsidiary, maintain with financially sound and reputable insurance companies not Affiliates of
the Borrowers, insurance with respect to its propertiesProperties 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.




     6.08 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, exceptProperty, except (other than with respect to any failure to comply with
Anti-Terrorism Laws) 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. Without limiting the generality of the foregoing, if any
Environmental Release occurs at or on any Properties of any Loan Party or Pledged Foreign
Subsidiary, or if any Environmental Release that could reasonably be expected to have a Material
Adverse Effect occurs at or on any Properties of any Non-Loan Party (other than a Pledged Foreign
Subsidiary), the respective Loan Party, Pledged Foreign Subsidiary or Non-Loan Party Subsidiary (i)
shall act promptly and diligently to investigate, (ii) if the Environmental Release can reasonably
be expected to result in (A) a Material Environmental Liability with respect to a Loan Party or
Pledged Foreign Subsidiary only, or (B) a Material Adverse Effect, report to the Administrative
Agent and (iii) report to all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, as required by applicable Law
or as directed to do so by any Governmental Authority.



     6.09 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
6.10 Inspection Rights;
Appraisals.



     (a) Permit representatives and independent contractors of the Administrative Agent and
each Lender to visit and inspect any of its propertiesProperties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, business, assets, prospects, results of operations, finances and accounts with its
directors, officers, and independent public accountants, all (except when a Default exists)
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).



     (b) Whether or not a Default exists, the Administrative Agent shall have the right
at any time, in the name of the Administrative Agent, any designee of the Administrative Agent or
any Borrower, to verify the validity, amount or any other matter 



 









 




relating to any Accounts of the Borrowers by mail, telephone or otherwise. The Borrowers
shall cooperate fully with the Administrative Agent in an effort to facilitate and promptly
conclude any such verification process.




     (c) Reimburse the Administrative Agent for all reasonable out-of-pocket charges,
costs and expenses of Administrative Agent in connection with (i) examinations of any Borrower’s or
any Subsidiary’s books and records or any other financial or Collateral matters as the
Administrative Agent deems appropriate, up to three times per fiscal year; (ii) appraisals of
Inventory up to two times per Loan Year; and (iii) appraisals of Real Estate up to one time during
the period beginning on the Third Amendment Closing Date and ending on the Maturity Date; provided,
however, that if an examination or appraisal is initiated during a Default, all charges, costs and
expenses therefor shall be reimbursed by Borrowers without regard to such limits. Subject to and
without limiting the foregoing, Borrowers specifically agree to pay the Administrative Agent’s, or
its third-party designee, then standard charges for each day that an employee of the Administrative
Agent or its Affiliates or its third-party designee is engaged in any examination activities, and
shall pay the standard charges of the Administrative Agent’s internal appraisal group or its
third-party designee, which as of the Third Amendment Closing Date is $1,000 per diem, per
examiner. This Section shall not be construed to limit the Administrative Agent’s right to conduct
examinations or to obtain appraisals at any time in its discretion, nor to use third parties for
such purposes.



     6.11 6.11 Use of Proceeds. Use the proceeds of the Credit Extensions forLoans (i)
to pay fees, commissions and expenses in connection with the Third Amendment to Credit Agreement
and (ii) for ongoing working capital requirements, capital expenditures and other general
corporate purposes not in contravention of any Law or of any Loan Documentof the Borrowers.



     6.12 Taxes. Pay and discharge all Federal, state, and material taxes prior to the
date on which they become delinquent or penalties attach, 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. If an Account of any Borrower includes a charge for any
taxes, the Administrative Agent is authorized, in its discretion, to pay the amount thereof to the
proper taxing authority for the account of such Borrower and to charge Borrowers therefor;
provided, however, that neither the Administrative Agent nor Lenders shall be liable for any Taxes
that may be due from Borrowers or with respect to any Collateral.



     6.13 Additional Guarantors and Foreign Subsidiaries.



     (a) 6.12 Additional Guarantors. Notify the Administrative Agent (xi)
atof the time that any Person becomes acreation or acquisition of any Domestic
Subsidiary, or (yii) 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 (xi) or
(yii) promptly thereafter (and
in any event within
thirty
(30) days), cause
such Person to
(aA) become a Guarantor by executing and delivering to the Administrative
Agent a duly executed Joinder Agreement, and (b or such other document as the
Administrative Agent shall deem appropriate for such purpose, (B) 



 









 




grant a security interest in all Collateral owned by such Subsidiary by delivering to the
Administrative Agent a duly executed supplement to each Collateral Document or such other document
as the Administrative Agent shall deem appropriate for such purpose and comply with the terms of
each Collateral Document, (C) deliver to the Administrative
Agent such documents of the
types referred to in clauses (iv) and (v) of Section 4.01(a) and, upon request of the
Administrative Agent,, instruments, and agreements, including a favorable
opinionsopinion of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the Joinder Agreement), allin each
case, in form, content and scope reasonably satisfactory to the Administrative Agent and
take such other actions as may be reasonably requested by the Administrative Agent, (D) deliver to
the Administrative Agent such original capital stock or other certificates and stock or other
transfer powers evidencing the capital stock of such Person, and (E) deliver to the Administrative
Agent such updated Schedules to the Loan Documents as requested by the Administrative Agent with
respect to such Person. Notwithstanding the foregoing, the Borrower shall be under no
obligation under this Section 6.12 in respect of (i) Imation Data Storage LLC, a Delaware
corporation, provided and so long as such Person holds no material assets other than a 1% direct or
indirect equity interest in Imation Data Storage Holdings CV, or (ii)6.13 in respect of
Imation Online Service Corp., a New York corporation, provided and so long as such Person does not
have assets in excess of $100,000, and conducts no business activities.




     (b) Notify the Administrative Agent at the time that any Person becomes a
First-Tier Foreign Subsidiary of any Loan Party, and at the request of the Administrative Agent,
promptly thereafter (and in any event within forty-five (45) days after such request), cause (i)
the applicable Loan Party to deliver to the Administrative Agent Collateral Documents pledging one
hundred percent (100%) of the total outstanding non-voting capital stock of such new Foreign
Subsidiary and sixty-five percent (65%) of the total outstanding voting capital stock of such new
Foreign Subsidiary and a consent thereto executed by such new Foreign Subsidiary (including,
without limitation, if applicable, original stock certificates (or the equivalent thereof pursuant
to the applicable Laws and practices of any relevant foreign jurisdiction) evidencing the capital
stock of such new Foreign Subsidiary, together with an appropriate undated stock power for each
certificate duly executed in blank by the registered owner thereof), (ii) such Person to deliver to
the Administrative Agent such documents and certificates as may be reasonably requested by the
Administrative Agent, (iii) the applicable Loan Party to deliver to the Administrative Agent such
updated Schedules to the Loan Documents as reasonably requested by the Administrative Agent with
regard to such Person and (iv) such Person to deliver to the Administrative Agent such other
documents as may be reasonably requested by the Administrative Agent, all in form, content and
scope satisfactory to the Administrative Agent. 



     6.14 After-Acquired Collateral. Promptly (a) notify the Administrative Agent in
writing if, after the Third Amendment Closing Date any Loan Party obtains any interest in any
Collateral (i) consisting of Deposit Accounts, Chattel Paper, Documents, Instruments, Material
Intellectual Property, or Letter-of-Credit Rights and (ii) Collateral consisting of Investment
Property that does not, upon such acquisition, become subject to the Administrative Agent’s
perfected first priority Lien and (b) upon the Administrative Agent’s request, take such actions as
the Administrative Agent deems appropriate to effect 



 









 




the Administrative Agent’s duly perfected, first priority Lien upon such Collateral,
including obtaining any appropriate possession, control agreement or Lien Waiver; provided, that
the Administrative Agent shall be permitted to request Lien Waivers for locations only where there
is Material Collateral, except that for any two or more locations where the aggregate value of the
Collateral is $2,500,000 or more (such locations being “Significant Inventory Locations”), the
Administrative Agent may request, and the Loan Parties shall obtain, a Lien Waiver for as many of
the Significant Inventory Locations as is necessary so that the aggregate value of Collateral at
any two or more locations for which Lien Waivers shall have not been obtained is less than
$2,500,000 and, provided further, the Loan Parties shall use commercially reasonable best efforts
to obtain all such Lien Waivers requested pursuant to this Section 6.14. If any Material
Collateral is in the possession of a third party, at the Administrative Agent’s request, the Loan
Parties shall use commercially reasonable efforts to obtain an acknowledgment that such third party
holds the Collateral for the benefit of the Administrative Agent.




     6.15 Landlord and Storage Agreements. Upon request, provide the Administrative
Agent with copies of all existing agreements, and promptly after execution thereof provide the
Administrative Agent with copies of all future agreements, between a Loan Party and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any location at which any
Material Collateral is kept or that is a Significant Inventory Location for which the Agent is
entitled to request a Lien Waiver pursuant to Section 6.14, or that otherwise possesses or handles
any Material Collateral.



     6.16 Licenses. Keep each material License affecting any Collateral (including the
manufacture, distribution or disposition of Inventory) or any other material Property of the
Borrowers and the Subsidiaries, taken as a whole, in full force and effect; promptly notify the
Administrative Agent of any proposed material modification to any such material License, or entry
into any new material License; pay all Royalties when due (unless being contested in good faith by
appropriate proceedings); and notify the Administrative Agent of any default or breach asserted by
any Person to have occurred under any material License affecting any Collateral or any other
material Property of the Borrowers and Subsidiaries, taken as a whole.



     6.17 Administration of Inventory.



     (a) Records and Reports of Inventory. Keep accurate and complete records of each
Borrowing Base Loan Party’s Inventory, including costs and daily withdrawals and additions. Each
Borrowing Base Loan Party shall conduct a physical inventory at least once per calendar year (and
on a more frequent basis if requested by the Administrative Agent when an Event of Default exists)
and periodic cycle counts consistent with historical practices, and shall provide to the
Administrative Agent a report based on each such inventory and count promptly upon completion
thereof, together with such supporting information as the Administrative Agent may reasonably
request. The Administrative Agent may participate (at its expense if no Event of Default exists)
in and observe each physical count.




 











 





     (b) Returns of Inventory. Not return any Inventory of a Borrowing Base Party to
a supplier, vendor or other Person, whether for cash, credit or otherwise, unless (a) such return
is in the Ordinary Course of Business; (b) no Default or Overadvance exists or would result
therefrom; and (c) the Administrative Agent is promptly notified if the aggregate Value of all
Inventory returned in any month by the Borrowing Base Loan Parties exceeds $7,500,000.



     (c) Acquisition, Sale and Maintenance. Not acquire or accept any Inventory on
approval except pursuant to a consignment arrangement, and shall take all commercially reasonable
steps to assure that all Inventory is produced in accordance with applicable Law, including the
Fair Labor Standards Act. No Borrowing Base Loan Party shall sell any Inventory on approval,
except pursuant to a consignment arrangement, or on any other basis under which the customer may
return or require the applicable Borrowing Base Loan Party to repurchase such Inventory. Each
Borrowing Base Loan Party shall use, store and maintain all Inventory with reasonable care and
caution, in accordance with applicable standards of any insurance and in conformity in all material
respects with all applicable Law, and shall make current rent payments (within applicable grace
periods provided for in leases and unless being contested in good faith by appropriate proceedings)
at all locations where any Material Collateral is located.



     6.18 Administration of Equipment.



     (a) Records and Schedules of Equipment. Keep accurate and complete records in all
material respects of the Loan Parties’ and the Pledged Foreign Subsidiaries’ respective Equipment,
including kind, quality, quantity, cost, acquisitions and dispositions thereof, and shall submit to
the Administrative Agent, on such periodic basis as the Administrative Agent may reasonably
request, a current schedule thereof, in form satisfactory to the Administrative Agent. Promptly
upon request, the Loan Parties shall deliver to the Administrative Agent evidence of the Loan
Parties’ and the Pledged Foreign Subsidiaries’ ownership or interests in any Equipment.



     (b) Dispositions of Equipment. Not sell, lease or otherwise dispose of any
Equipment, without the prior written consent of the Administrative Agent, other than (a) an asset
disposition otherwise permitted under this Agreement; (b) replacement of Equipment that is worn,
damaged or obsolete with Equipment of like function and value, if the replacement Equipment is
acquired substantially contemporaneously with such disposition and is free of Liens; and (c) a
disposition in the Ordinary Course of Business.



     (c) Condition of Equipment. Ensure that the Equipment is in good operating
condition and repair, and all necessary replacements and repairs have been made so that the value
and operating efficiency of the Equipment is preserved at all times, reasonable wear and tear
excepted. Each Loan Party and each Pledged Foreign Subsidiary shall ensure that the Equipment is
mechanically and structurally sound, and capable of performing the functions for which it was
designed, in accordance with manufacturer specifications, in each case in all material respects,
reasonable wear and tear excepted. 



 









 





     6.19 Commercial Tort Claims. Promptly notify the Administrative Agent in writing
if any Loan Party has a Commercial Tort Claim (other than, as long as no Default exists, a
Commercial Tort Claim for less than $1,000,000) and, upon the Administrative Agent’s request,
promptly take such actions as the Administrative Agent deems appropriate to confer upon the
Administrative Agent (for the benefit of Secured Parties) a duly perfected, first priority Lien
upon such claim.



     6.20 Further Assurances. Execute and deliver, or cause to be executed and
delivered, to the Administrative Agent and/or the Lenders such documents and agreements,
instruments, assignments, title certificates, or other documents or agreements, and take or cause
to be taken such actions, as the Administrative Agent or any Lender may, from time to time,
reasonably request to carry out the terms and conditions of this Agreement and the other Loan
Documents.



ARTICLE VII.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 7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
propertyProperty, assets or revenues, whether now owned or hereafter acquired, other than
the following (collectively “Permitted Liens”):



     (a) Liens pursuant to any Loan Document;



     (b) Liens existing on the date hereofThird Amendment Closing Date and listed on
Schedule 7.01 and any renewals or extensions thereof, provided that the
propertyProperty 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)Ordinary Course
of Business 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 courseOrdinary Course of
businessBusiness 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
theBorrowing Base 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
Ordinary Course of businessBusiness (other than Liens on theBorrowing
Base Collateral);



     (g) Liens encumbering any Real Estate subject to a Mortgage that are described on
a mortgagee title policy covering the Administrative Agent and approved by the Administrative
Agent, and which Liens do not in any case materially detract from the value of Real Estate subject
thereto or materially interfere with the ordinary conduct of the business of the applicable
Person;



     (h) (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 propertyProperty subject thereto or
materially interfere with the ordinary conduct of the business of the applicable Person;



     (i) (h) Liens (other than Liens on theBorrowing Base 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 $10,000,0005,000,000;



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



     (k) Liens on property of a Personany Property (other than Borrowing Base Collateral) (i)
of any Subsidiary which are in existence at the time that such Subsidiary is acquired pursuant to a
Permitted Acquisition and (ii) of the Borrower or any of its Subsidiaries 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
Property (other than Borrowing Base Collateral) is purchased or otherwise acquired by the
Borrower or such Subsidiary thereof pursuant to a transaction permitted pursuant to this Agreement;
provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens (1) are
not incurred in connection with, or in anticipation of, such Permitted Acquisition, purchase or
other acquisition, (2) are applicable only to specific Property (other than Borrowing Base 



 









 




Collateral), (3) are not “blanket” or all-asset Liens and (4) do not attach to any other
property or assets of the Borrower or any of its Subsidiaries and (B) the Indebtedness secured by
such Liens is permitted under Section 7.03(g);




     (l) normal and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of collection;



     (m) Liens on assets of any Non-Loan Party Subsidiary to secure Indebtedness
permitted under Section 7.03(f); 



     (n) Liens granted by a Non-Loan Party Subsidiary in favor of a Loan Party in
respect of Indebtedness and by such Subsidiary;



     (o) any interest or title of a lessor, sublessor, licensee or licensor under any
lease or license agreement not prohibited by this Agreement; and



     (p) (l) Liens (other than Liens on Borrowing Base Collateral) 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 $25,000,000.2,500,000.



     7.02 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;Cash Equivalents, provided that Cash Equivalents of any Loan Party
shall be subject to the Administrative Agent’s Lien and control, pursuant to documentation in form
and substance satisfactory to the Administrative Agent;



     (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;Investments existing or specifically
contemplated on the Third Amendment Closing Date, in each case, as set forth on Schedule 7.02;



     (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);(i) any Loan
Party in any other Loan Party, (ii) any Non-Loan Party Subsidiary in any Loan Party or any other
Non Loan-Party Subsidiary and (iii) any Loan Party in any Non-Loan Party Subsidiary after the Third
Amendment Closing Date so long as (A) both before and after giving effect thereto, no Default has
occurred and is continuing, and (B) the amount of such Investments, when combined with Investments
made pursuant to Section 7.02(k) shall not exceed (1) $5,000,000 in the aggregate during any fiscal
year if, after giving effect to any such Investment under this subclause (1), pro forma
Availability for each day of the 30-day 



 









 




period immediately preceding such Investment and on the date of such Investment after
giving effect thereto is less than $50,000,000, (2) $10,000,000 in the aggregate during any fiscal
year if, after giving effect to any such Investment under this subclause (2), pro forma
Availability for each day of the 30-day period immediately preceding such Investment and on the
date of such Investment after giving effect thereto is less than or equal to $100,000,000 and
greater than or equal to $50,000,000 and (3) $20,000,000 in the aggregate during any fiscal year
if, after giving effect to any such Investment under this subclause (3), pro forma Liquidity for
each day of the 30-day period immediately preceding such Investment and on the date of such
Investment after giving effect thereto is greater than $100,000,000; provided, that for the
avoidance of doubt, in each of the foregoing clauses (1), (2) and (3), Investments consisting of
loans in any fiscal year shall be measured only on the basis of the amount of such loan outstanding
at any time during such fiscal year;




     (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 courseOrdinary
Course of businessBusiness, 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(c);



     (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; andSwap Contracts permitted by Section 7.03(d); 



     (g) Permitted
Acquisitions.; 



     (h) loans or other advances of money (i) to officers, directors and employees of
the Borrowers and Subsidiaries in an amount not to exceed $1,500,000 in the aggregate at any time
outstanding and (ii) for travel, entertainment, relocation and similar items in the Ordinary Course
of Business; 



     (i) advances of money for prepaid expenses and extensions of trade credit made in
the Ordinary Course of Business; 



     (j) deposits with financial institutions permitted hereunder; and



     (k) Investments not otherwise permitted herein so long as (i) both before and
after giving effect thereto, no Default has occurred and is continuing, and (ii) the amount of such
Investments, when combined with Investments made pursuant to Section 7.02(c)(iii) shall not exceed
(1) $5,000,000 in the aggregate during any fiscal year if, after giving effect to any such
Investment under this subclause (1), pro forma Availability for each day of the



 









 




30-day period immediately preceding such Investment and on the date of such Investment
after giving effect thereto, is less than $50,000,000, (2) $10,000,000 in the aggregate during any
fiscal year if, after giving effect to any such Investment under this subclause (2), pro forma
Availability for each day of the 30-day period immediately preceding such Investment and on the
date of such Investment after giving effect thereto, is less than or equal to $100,000,000 and
greater than or equal to $50,000,000 and (3) $20,000,000 in the aggregate during any fiscal year
if, after giving effect to any such Investment under this subclause (3), pro forma Liquidity for
each day of the 30-day period immediately preceding such Investment and on the date of such
Investment after giving effect thereto, is greater than $100,000,000; provided, that for the
avoidance of doubt, in each of the foregoing clauses (1), (2) and (3), Investments consisting of
loans in any fiscal year shall be measured only on the basis of the amount of such loan outstanding
at any time during such fiscal year.



Notwithstanding the foregoing, neither Borrower shall, nor shall it permit any Subsidiary to,
directly or indirectly, make any Investment (other than non-cash capital contributions) in Memorex
Products Europe Ltd.




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



     (a) Indebtedness under the Loan Documents;



     (b) Indebtedness outstanding on the date hereofThird Amendment Closing Date 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, anda Loan
Party, (ii) Guarantees of any Non-Loan Party Subsidiary in respect of Indebtedness
otherwise permitted hereunder of any Non-Loan Party Subsidiary, (iii) unsecured Guarantees of
the Borrowers or any Subsidiary in respect of obligations of any
Foreign Subsidiary arising in
the ordinary course of businessOrdinary Course of Business in an aggregate amount for
all such Guaranties under this clause (iii) not exceeding at any time
$75,000,000$50,000,000 in the aggregate at any time, and (iv) Indebtedness consisting of surety
or indemnitor obligations under any bond or other contract for the benefit of any Borrower or
Subsidiary to the extent incurred in the Ordinary Course of Business;



     (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 and other Bank Product Debt;



     (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(ij); 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;Indebtedness of Non-Loan Party
Subsidiaries, provided, however, that the principal amount of all such Indebtedness, together with
all Dispositions made pursuant to Section 7.05(j), shall not exceed $75,000,000 in the aggregate at
any time outstanding; 



     (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
werewas in existence prior to the contemplation of such acquisition and do not extend to
any assets other than those of the Person acquired and the amount of such Indebtedness does not
exceed $5,000,000 in the aggregate at any time outstanding;



     (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



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



     (j) Indebtedness complying with the requirements set forth on Schedule 7.03(A) so
long as immediately before and after giving effect to such Indebtedness, Availability shall be at
least $30,000,000; and



     (k) other unsecured Indebtedness that does not exceed $10,000,000 in the aggregate
at any time outstanding.



     7.04 7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, change its name or conduct business under any fictitious name, change its tax,
charter or other organizational identification number, change its form or state of organization,
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
wholly-owned 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
wholly-owned Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person;



     (b) any wholly-owned Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to a Borrower or to another wholly-owned
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 anany Inactive Subsidiary.



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



     (a) Dispositions of obsolete or worn out propertyProperty, whether now owned or
hereafter acquired, in the ordinary course of businessOrdinary Course of Business;



     (b) Dispositions of inventoryInventory in the ordinary course of businessOrdinary
Course of Business;



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



     (d) Dispositions of propertyProperty by a Borrower or 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)Subsidiary;
 provided that
if the transferor of such property isProperty is a Borrower or 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 courseOrdinary Course of businessBusiness 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;



     (g) Dispositions of IP Rights that are Non-Material Intellectual Property;
provided that at the time of such Disposition, no Event of Default shall exist or would result from
such Disposition;



     (h) Dispositions of Real Estate (other than the Eligible Real Estate Assets and
appurtenant real estate) owned by any Borrower or Subsidiary that is no longer used in the 



 









 




Ordinary Course of Business; provided that at the time of such Disposition, no Default
shall exist or would result from such Disposition; 




     (i) a Disposition pursuant to a sale-leaseback of any Equipment or Real Estate
(including buildings or other fixtures thereon) of the Borrowers or any Subsidiary (other than the
Eligible Real Estate Assets and appurtenant real estate thereto); provided that at the time of such
Disposition, no Default shall exist or would result from such Disposition; 



     (j) sales of Accounts of Non-Loan Party Subsidiaries in connection with one or
more foreign securitization programs; provided, however, that the aggregate face amount of the
Accounts sold (less the applicable discount), together with all Indebtedness outstanding under
Section 7.03(f), shall not exceed $75,000,000 in the aggregate at any time outstanding; and 



     (k) (g) Dispositions by the Borrowers and their Subsidiaries not otherwise permitted
under this Section 7.057.05, other than Dispositions of Borrowing Base Collateral;
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 propertyProperty
Disposed of in reliance on this clause (gj) in any fiscal year shall not exceed
$25,000,000; and (iii) at least 75% of the consideration for Property disposed of pursuant to
this clause (j) with a fair market value in excess of $5,000,000 shall consist of cash or Cash
Equivalents; 



     (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 (x) any Disposition pursuant to clauses (a) through
(hk) shall be for fair market value, (y) with respect to clauses (a) through (i), at
least 75% of the consideration therefor shall consist of cash or Cash Equivalents and (z) with
respect to clause (j), one hundred percent (100%) of the consideration therefor shall consist of
cash or Cash Equivalents.



     7.06 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)or another Loan Party;



     (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 and, provided further, that for the avoidance of doubt,
if after giving effect to any such Restricted Payment, a Financial Covenant Trigger Period would
exist, the Borrowers shall have a Consolidated Fixed Charge Coverage Ratio of not less than 1.20 to
1.00, calculated on a pro forma basis.



     7.07 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 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 businessOrdinary 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.



     7.09 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
propertyProperty 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 propertyProperty 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 propertyProperty 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 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.



 









 





     7.11 Financial Covenant. At any time during a Financial Covenant Trigger Period,
permit the Consolidated Fixed Charge Coverage Ratio, calculated as of the end of each fiscal month,
for each Subject Period ending during or immediately before such Financial Covenant Trigger Period,
to be less than 1.20 to 1.00.



     7.12 Capital Expenditures. Make Capital Expenditures in excess of $25,000,000 in
the aggregate during any fiscal year; provided that up to 100% of any amount permitted but not
expended in any fiscal year may be carried over for expenditure in the next succeeding fiscal year
only (it being understood that no portion of such carried over amount for any fiscal year may be
used until the entire initial amount of permitted Capital Expenditures for the current fiscal year
has been used for Capital Expenditures).



     7.13 Subsidiaries. Form or acquire any Subsidiary after the Third Amendment
Closing Date, except in accordance with Sections 7.02 and 6.13; or permit any existing Subsidiary
to issue any additional equity interests except director’s qualifying shares.



     7.14 Organic Documents. Amend, modify or otherwise change any of its Organization
Documents as in effect on the Third Amendment Closing Date in any manner that would have an adverse
effect on the Lenders.



     7.15 Tax Consolidation. File or consent to the filing of any consolidated income
tax return with any Person other than Borrowers and their respective Subsidiaries.



     7.16 Accounting Changes. Make any material change in accounting treatment or
reporting practices, except as required by GAAP and in accordance with Section 1.03; or change its
fiscal year.



     7.17 Restrictions on Payment of Borrowed Money. Make any payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with
respect to any Borrowed Money in excess of the Threshold Amount (other than the Obligations) prior
to its scheduled due date under the agreements evidencing such Indebtedness as in effect on the
Closing Date (or as amended thereafter with the consent of the Administrative Agent).



ARTICLE VIII.ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




     8.01 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, 6.11or 6.11, and 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 (i) incorrect or misleading when made or deemed made, in the case of
any representation, warranty, certificate or statement of fact that is qualified as to
“materiality”, “Material Adverse Effect” or similar language or (ii) materially incorrect or
materially misleading when made or deemed made, in the case of any other representation, warranty,
certification or statement of fact; or



     (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 propertyProperty; 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 propertyProperty 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
propertyProperty 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), unless (A) a stay of
enforcement of such judgment or order is in effect, by reason of a pending appeal or otherwise, or
(B) such judgment has been paid as and when due and Availability after giving effect to such
payment is at least $30,000,000, 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 for which enforcement proceedings have been commenced, by
reason of a pending appeal or otherwise, is not in effect; or



     (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 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 BorrowersLoan Parties to Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereofL/C Obligations, Bank Product Debt
and other Obligations that are contingent or not yet due and payable, and, if the Loan Parties fail
promptly to deposit such Cash Collateral, the Administrative Agent may (and shall upon the
direction of the Required Lenders) advance the required Cash Collateral as Loans (whether or not an
Overadvance exists or is created thereby, or the conditions in Section 4 are satisfied); 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 lawLaw;



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.



     8.03 8.03 Application of Funds. AfterDuring a Cash Dominion Trigger Period or
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, but excluding amounts relating to Bank
Products), 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 (excluding amounts relating to Bank
Products), 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



Sixth, to payment of all other Obligations, other than Bank Product Debt;



Seventh, to payment of Bank Product Debt; 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. Amounts distributed
with respect to any Bank Product Debt shall be the actual amount of Bank Product Debt most recently
reported in writing to the Administrative Agent. 




ARTICLE IX.ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01 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 (in
particular, to act as a pledge administrator for the purposes of any security governed under US Law
or any other jurisdiction). 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.



     9.02 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
PersonEach of Bank of America and its
Affiliates may accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, provide Bank Products to,
act as thetrustee under indentures of, serve as financial or other advisor or
in any other advisory capacity forto, 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, the Loan Parties and their Affiliates, as if Bank of America were any
other bank, without any duty to account therefor to the Lenders(including any fees or other



 









 




consideration received in connection therewith) to the other Lenders. In their individual
capacity, Bank of America and its Affiliates may receive information regarding the Loan Parties,
their Affiliates and their Account Debtors (including information subject to confidentiality
obligations), and each Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to the Lenders, if acquired in such individual capacity and
not as Administrative Agent hereunder.




     9.03 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
lawLaw; 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.




 









 








     9.04 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 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 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.


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 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 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 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:



     (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 propertyProperty 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 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 propertyProperty 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,
transferred or to be transferred or otherwise disposed of as part of or in connection with any
saleDisposition 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.



Notwithstanding the foregoing, the Administrative Agent is not authorized to release Collateral
with a book value greater than $10,000,000 during any calendar year, except as currently
contemplated by the Loan Documents, without the prior written consent of all Lenders (except any
Defaulting Lender). 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 propertyProperty, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10.



ARTICLE X.
ARTICLE X.

MISCELLANEOUS




     10.01 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;



     (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.




     10.01A Additional Amendments. No amendment, waiver or consent shall, without the prior
written consent of the Super-Majority Lenders (a) amend the definition of Borrowing Base (or the
defined terms used in such definition) in a manner which would have the effect of increasing
Availability or (b) amend the Dollar amounts set forth in clauses (a)(i) and (b) of the definition
of “Cash Dominion Trigger Period”. Notwithstanding the foregoing or any other provision contained
in this Agreement, the Lenders irrevocably authorize the Administrative Agent at its option and in
its discretion, with the consent of the Required Lenders, to enter into such amendments to the Loan
Documents as it deems reasonably necessary to effectuate the amendments contemplated by Section 8
of the Third Amendment to Credit Agreement.



     10.02 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.


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.



     10.03 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 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 Extraordinary
Expenses, (iii) 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 , (iv) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates in the
administration of and actions relating to any Collateral contemplated in the Loan Documents and
transactions contemplated thereby, including any actions taken to perfect or maintain priority of
Administrative Agent’s Liens on any Collateral, to maintain any insurance required hereunder or to
verify Collateral; (v) subject to the limits of Section 6.10(c), all reasonable 



 









 




costs and expenses incurred by the Administrative Agent and its Affiliates for each
inspection, audit or appraisal with respect to any Loan Party or Collateral, whether prepared by
Administrative Agent’s personnel or a third party, and (vi) 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. All legal, accounting and consulting fees shall be charged to the Borrowers by the
Administrative Agent’s professionals at their full hourly rates, regardless of any reduced or
alternative fee billing arrangements that the Administrative Agent, any Lender or any of their
Affiliates may have with such professionals with respect to this or any other transaction that are
paid directly by the Administrative Agent, any Lender or any of their Affiliates. If, for any
reason (including inaccurate reporting on financial statements or a Compliance Certificate), it is
determined that a higher Applicable Rate should have applied to a period than was actually applied,
then the proper margin shall be applied retroactively and Borrowers shall immediately pay to
Administrative Agent, for the Pro Rata benefit of Lenders, an amount equal to the difference
between the amount of interest and fees that would have accrued using the proper margin and the
amount actually paid. All amounts payable by Borrowers under this Section shall be due on
demand.




     (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 propertyProperty 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.



     (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 lawLaw, 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.



     10.05 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 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;




     (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.




     (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, the Lenders 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
2.132.14 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.



     (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 lawLaw, 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.



     (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 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
lawsLaws 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 obligationsBank Product, (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.



     (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 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 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 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.



     10.10 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 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,



1









 







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 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 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 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 Lender fails to give its consent to any amendment,
waiver or action for which consent of all Lenders was required and Required Lenders consented,
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;



     (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 [Reserved].



     10.16 10.15 Governing Law. (a) 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) (b) 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.



     10.17 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.



     10.18 10.17 Time of the Essence. Time is of the essence of the Loan Documents.



     10.19 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 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.



     (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 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.



     10.22 Agency of Imation for Enterprises. Enterprises hereby designates Imation
(“Borrower Agent”) as its representative and agent for all purposes under the Loan Documents,
including requests for Loans and Letters of Credit, designation of interest rates, delivery or
receipt of communications, preparation and delivery of Borrowing Base and financial reports,
receipt and payment of Obligations, requests for waivers, amendments or other accommodations,
actions under the Loan Documents (including in respect of compliance with covenants), and all other
dealings with the Administrative Agent, L/C Issuer or any Lender. Borrower Agent hereby accepts
such appointment. The Administrative Agent and the Lenders shall be entitled to rely upon, and
shall be fully protected in relying upon, any notice or communication (including any notice of
borrowing) delivered by Borrower Agent on behalf of either Borrower. The Administrative Agent and
the Lenders may give any notice or communication with a Borrower hereunder to Borrower Agent on
behalf of such Borrower. Each of the Administrative Agent, L/C Issuer and the Lenders shall have
the right, in its discretion, to deal exclusively with Borrower Agent for any or all purposes under
the Loan Documents. Each Borrower agrees that any notice, election, communication, representation,
agreement or undertaking made on its behalf by Borrower Agent shall be binding upon and enforceable
against it.



     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”)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.10.24 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:  	 	 
	 	 	Title:  	 	 
	 
	 	IMATION ENTERPRISES CORP.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




6











 





SCHEDULE 1.01(e)




EXISTING LETTERS OF CREDIT




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Outstanding	 	 	 	 	 	 	 	 
	Fronted By:	 	L/C Number	 	Amount	 	Beneficiary	 	Expiration	 	Evergreen	 	Notes
	Bank of America
	 	 	*	*	 	$	580,000	 	 	Sentry Insurance A Mutual 
Company	 	 	09/30/09	 	 	Yes	 	 	 	 
	Bank of America
	 	 	*	*	 	$	786,800	 	 	Liberty Mutual Insurance 
Company	 	 	08/31/09	 	 	Yes	 	 	 	 
	Bank of America
	 	 	*	*	 	$	590,000	 	 	St. Paul Fire and Marine 
Insurance Co.	 	 	07/31/09	 	 	Yes	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Outstanding Trade
LC Balance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Bank of America
	 	 	*	*	 	$	2,156,591	 	 	 Orion Electric Co. Ltd.	 	 	06/26/09	 	 	No	 	 	 	 
	Bank of America
	 	 	*	*	 	$	3,430,250	 	 	Orion Electric Co. Ltd.	 	 	07/21/09	 	 	No	 	 	 	 









 




			
	**	 	The appearance of a double asterisk denotes confidential information that has been omitted from
the exhibit and filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange Act of
1934.




 









 










SCHEDULE 2.01




COMMITMENTS AND PRO RATA SHARES




	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Pro Rata Share
	 
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	36,923,076.92307690	 	 	 	18.4615384615	%
	Wells Fargo Bank, National Association
	 	$	30,769,230.76923080	 	 	 	15.3846153846	%
	The Bank of Tokyo-Mitsubishi UFJ,
Ltd., Chicago Branch
	 	$	30,769,230.76923080	 	 	 	15.3846153846	%
	Fifth Third Bank
	 	$	30,769,230.76923080	 	 	 	15.3846153846	%
	JPMorgan Chase Bank, N.A.
	 	$	24,615,384.61538460	 	 	 	12.3076923076	%
	U.S. Bank National Association
	 	$	24,615,384.61538460	 	 	 	12.3076923076	%
	Citibank, N.A.
	 	$	10,769,230.76923080	 	 	 	5.3846153846	%
	HSBC Bank USA, N.A.
	 	$	10,769,230.76923080	 	 	 	5.3846153846	%
	 
	Total
	 	$	200,000,000.00000000	 	 	 	100	%






 









 






SCHEDULE 5.05




SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS




Material Indebtedness




None.




Other Material Liabilities




None.




 









 





SCHEDULE 5.06




LITIGATION




Philips Litigation




     Imation filed a Declaratory Judgment Action on October 27, 2006, in Federal District Court in
St. Paul, Minnesota requesting that the court resolve an ongoing dispute with Philips Electronics
N.V., U.S. Philips Corporation and North American Philips Corporation (collectively, Philips).
Philips has asserted that (1) the patent cross-license between 3M Company and Philips was not
validly assigned to Imation in connection with the spin-off of Imation from 3M Company in 1996; (2)
Imation’s 51 percent owned subsidiary, Global Data Media (GDM), is not a “subsidiary” as defined in
the cross-license; (3) the coverage of the cross-license does not apply to Imation’s acquisition of
Memorex; (4) the cross-license does not apply to DVD discs; (5) certain Philips patents that are
not covered by the cross-license are infringed by Imation; and (6) as a result, Imation owes
Philips royalties for the prior and future sales of CD and DVD discs. We believe that these
allegations are without merit and filed a Declaratory Judgment Action to have a court reaffirm
Imation’s rights under the cross-license. On February 26, 2007, the parties signed a Standstill
Agreement and the litigation was voluntarily dismissed without prejudice. Imation and Philips held
settlement negotiations but were unable to come to an agreement. Imation re-filed its Declaratory
Judgment Action on August 10, 2007. Philips filed its Answer and Counterclaims against Imation and
Moser Baer India Ltd. (MBI), Imation’s partner in GDM. Philips alleged that (1) the cross-license
does not apply to companies that Imation purchased or created after March 1, 2000; (2) GDM is not a
legitimate subsidiary of Imation; (3) Imation’s formation of GDM is a breach of the cross-license
resulting in termination of the cross-license at that time; (4) Imation (including Memorex and GDM)
infringes various patents that would otherwise be licensed under the cross-license; and (5) Imation
(including Memorex and GDM) infringes one or more patents that are not covered by the
cross-license. Philips originally claimed damages of $655 million plus interest and costs, as well
as a claim requesting a trebling of that amount. Imation was aware of these claims prior to filing
its Declaratory Judgment Action.



     On October 30, 2007, Imation filed its answers to Philips’ counterclaims and a Motion for
Partial Summary Judgment on the issue of whether the patent cross-license was validly assigned by
3M Company to Imation. Philips did not contest Imation’s Motion and on November 26, 2007, the
parties filed a stipulation affirming that the cross-license was validly assigned to Imation.



     On April 7, 2008, Philips amended its counterclaims to (1) add claims that DVD discs sold by
Imation infringe its patents, and (2) withdraw its specific claim of $655 million in damages in
favor of the more general “damages in an amount to be proved at trial.”



     On May 27, 2008, Philips filed a Motion for Judgment on the Pleadings that the cross-license
does not apply to subsidiaries acquired or formed by Imation after March 1, 2000. Under this
interpretation, the license would not apply to GDM or Memorex Products, Inc. Imation disagrees with
this interpretation.



 









 





     The parties held court ordered settlement discussions from June through September 2008,
however, no agreement was reached.



     On October 1, 2008, Imation filed a Motion for Leave to Amend its Complaint. On November 18,
2008, the Magistrate Judge denied Imation’s motion. Imation filed its objection to the Magistrate
Judge’s Order and on February 2, 2009, the Court affirmed the Magistrate Judge’s decision.



     On November 26, 2008, the Court issued a decision granting Philips’ Motion for Judgment on the
pleadings relating to subsidiaries formed after March 1, 2000. Following this ruling, Imation and
MBI filed a motion for the Court to certify the ruling on this issue as final under FRCP 54(b)
allowing for an interlocutory appeal to the Court of Appeals for the Federal Circuit. The Court
granted this motion on January 21, 2009 and on January 23, 2009, Imation filed its Notice of Appeal
with the Court of Appeals for the Federal Circuit. Oral argument before the Court of Appeals has
been scheduled for June 2, 2009.



     On December 1, 2008, MBI filed two patent-related Summary Judgment Motions. A hearing on these
motions was held on January 16, 2009. These motions were denied in February and March 2009



     A hearing (known as a “Markman Hearing”) took place May 4 and May 5, 2009 during which the
Court considered evidence from the parties on the appropriate meanings of relevant words used in
the patent claims. A decision is expected in sixty to ninety days.



     Although all litigation carries risk, we continue to aggressively dispute Philips’ claims.
Given the present status of the proceedings, there currently is no probable or estimable liability.
Discovery is ongoing and trial of the matter is currently scheduled to be trial ready by April 1,
2010. Settlement discussions among Imation, MBI, and Philips are ongoing but no agreement has been
reached.



Philips II Litigation




     Although the Company is not a party to this lawsuit, on August 15, 2007, Philips initiated a
lawsuit against MBI in The Hague, Netherlands, based on MBI’s optical license agreements with
Philips. MBI has made a claim for indemnification of its legal expenses and potential liabilities
for damages that may be incurred with respect to this claim as well as the US litigation described
above. Imation has made payments to MBI and accrued liabilities in connection with a portion of
MBI’s legal fees incurred with respect to the Philips litigation. We continue to review MBI’s
claims for reimbursement to determine the extent of our obligations under the relevant agreements
with MBI.



SanDisk Litigation




     On October 24, 2007, SanDisk Corporation filed a patent infringement action in U.S. District
Court, Western District of Wisconsin, against Imation and its subsidiaries, Imation Enterprises
Corp. and Memorex Products, Inc. The lawsuit also names over twenty other companies as defendants.
This action alleges that we have infringed five patents held by SanDisk: US Patent 6,426,893;
6,763,424; 5,719,808; 6,947,332 and 7,137,011. SanDisk alleges that our sale of various flash
memory products, such as USB flash drives and certain flash card formats, infringes these patents
and is seeking damages for prior sales, and an injunction and/or



5









 




royalties on future sales. This action has been stayed pending resolution of the related case
described below.




     Also on October 24, 2007, SanDisk filed a complaint with the United States International Trade
Commission (ITC) against the same Imation entities listed above, as well as over twenty other
companies. This action involves the same patents and the same products as described above and
SanDisk is seeking an order from the ITC blocking the defendants’ importation of these products
into the United States.



     The ITC hearing was held October 27, 2008 through November 4, 2008. Prior to the hearing,
SanDisk affirmatively withdrew three of the five patents (US Nos. 6,426,893; 5,719,808; and
6,947,332) from the case. On April 10, 2009, the Administrative Law Judge issued his Initial
Determination that the asserted patent claim of U.S. Patent No. 7,137,011 was invalid and not
infringed and also finding that U.S. Patent No. 6,673,424 was not infringed. SanDisk filed a
Petition for Review on May 4, 2009 to ask the ITC to review the Initial Determination.



     Some of our suppliers are already licensed by SanDisk. We are also generally indemnified by
our suppliers against claims for patent infringement. Additionally, our suppliers have indicated
that they will be providing us with USB flash drives with different controllers, which SanDisk has
stipulated are not covered by U.S. Patent No. 6,763,424. Therefore, at this time we do not believe
that either of the SanDisk actions will have a material adverse impact on our financial statements.



6









 





SCHEDULE 5.09




ENVIRONMENTAL MATTERS




None.














 








SCHEDULE 5.12




ERISA MATTERS



There was an ERISA Event, a Reportable Event, in 2009 due to the reduction of the number of active
participants in the Borrowers’ Pension Plan. As a result of the reduction of the number of active
participants, the Borrowers have already vested the accounts of all, or almost all, the affected
Pension Plan participants. The Reportable Event is only an informational filing with the PBGC and
this ERISA Event has not resulted in, and is not reasonably expected to result in, liability of the
Borrowers under Title IV of ERISA to the Pension Plan or the PBGC in an aggregate amount in excess
of the Threshold Amount.















 








SCHEDULE 5.13




SUBSIDIARIES AND OTHER EQUITY INVESTMENTS




Part A — Borrowers, Subsidiaries and Acquisitions




	 	 	 	 	 
	 	 	Jurisdiction	 	Holder(s)
	 	 	of	 	of
	Name	 	Organization	 	Equity Interests
	Imation Corp.

	 	Delaware
	 	Widely Held
	 
	 	 	 	 
	Imation Enterprises Corp.

	 	Delaware
	 	Imation Corp.
	 
	 	 	 	 
	Imation Mercosur Trading S.A.

	 	Uruguay
	 	Imation Latin America Corp.
	 
	 	 	 	 
	Imation Electronics Mexico S.A. de C.V.

	 	Mexico
	 	Imation Corp. 

Imation Enterprises Corp.
	 
	 	 	 	 
	Imation Latin America Corp.

	 	Delaware
	 	Imation Enterprises Corp.
	 
	 	 	 	 
	Imation Latin America Marketing S.A.

	 	Panama
	 	Imation Latin America Corp.
	 
	 	 	 	 
	Imation do Brasil Ltda.

	 	Brazil
	 	Imation Latin America Corp.
Imation Latin America Marketing S.A.
	 
	 	 	 	 
	Imation Chile S.A.

	 	Chile
	 	Imation Latin America Corp.
	 
	 	 	 	 
	Imation Mexico S.A. de C.V.

	 	Mexico
	 	Imation Latin America Corp. and 

Imation Latin America Marketing,
S.A.
	 
	 	 	 	 
	Imation Funding Corp.

	 	Delaware
	 	Imation Corp.
	 
	 	 	 	 
	IMN Data Storage LLC

	 	Delaware
	 	Imation Corp.
	 
	 	 	 	 
	IMN Data Storage Holdings CV

	 	Netherlands
	 	Imation Corp.

IMN Data Storage LLC
	 
	 	 	 	 
	Imation Argentina S.A.

	 	Argentina
	 	Imation Corp.
	 
	 	 	 	 
	Imation Colombia S.A.

	 	Colombia
	 	Imation Corp. 

Imation Enterprises Corp. 

Imation Funding Corp
	 
	 	 	 	 
	Imation Canada Inc.

	 	Canada
	 	Imation Corp.
	 
	 	 	 	 
	Imation (Thailand) Ltd.

	 	Thailand
	 	Imation Corp., Imation Enterprises 

Corp., Imation Funding Corp., Mr. 

Thomas Joseph Lally, Mr. Peter Aaron 

Koehn, Mr. John L. Sullivan, and 

Imation Asia Pacific Pte. Ltd.
	 
	 	 	 	 
	Imation Holdings Pte Ltd.

	 	Singapore
	 	Imation Corp.
	 
	 	 	 	 
	Imation Asia Pacific Pte Ltd.

	 	Singapore
	 	Imation Holdings Pte Ltd.
	 
	 	 	 	 
	Imation ANZ Pty Ltd.

	 	Australia
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation (Shanghai) Co. Ltd.

	 	China
	 	Imation Asia Pacific Pte Ltd.
















 






	 	 	 	 	 
	 	 	Jurisdiction	 	Holder(s)
	 	 	of	 	of
	Name	 	Organization	 	Equity Interests
	Imation (Guangzhou) International Co. Ltd.

	 	China
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation (Tianjin) International Co. Ltd.

	 	China
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Information Technology (Beijing) Ltd.

	 	China
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Hong Kong Ltd.

	 	Hong Kong
	 	Imation Asia Pacific Pte Ltd.
	 

	 	 	 	
	Imation Recording Media (Hong Kong) Co. Ltd.

	 	Hong Kong
	 	Imation Asia Pacific Pte Ltd.
Imation Corp.
	 
	 	 	 	 
	Imation India Private Ltd.

	 	India
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Corporation Japan

	 	Japan
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Korea, Inc.

	 	Korea
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation (Malaysia) SDN.BHD.

	 	Malaysia
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Singapore Pte. Ltd.

	 	Singapore
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Taiwan Ltd.

	 	Taiwan
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Memorex Products (Taiwan) Inc.

	 	Taiwan
	 	Imation Asia Pacific Pte Ltd.
	 
	 	 	 	 
	Imation Europe B.V.

	 	Netherlands
	 	Imation Corp.
	 
	 	 	 	 
	Imation France S.A.

	 	France
	 	Imation Europe B.V. 

Imation Enterprises Corp. 

Luc Janssen, Joe Gote and Brian 

Plummer
	 
	 	 	 	 
	Imation Deutschland GmbH

	 	Germany
	 	Imation Europe B.V.
	 
	 	 	 	 
	Imation S.r.I

	 	Italy
	 	Imation Europe B.V.
TME GmbH
	 
	 	 	 	 
	Imation Iberia, S.A.

	 	Spain
	 	Imation Europe B.V.
	 
	 	 	 	 
	Imation Middle East FZE

	 	U.A.E.
	 	Imation Europe B.V.
	 
	 	 	 	 
	Imation U.K. Limited

	 	United Kingdom
	 	Imation Europe B.V.
	 
	 	 	 	 
	TME GmbH

	 	Germany
	 	Imation Europe B.V.
	 
	 	 	 	 
	Imation Polska Sp z.o.o.

	 	Poland
	 	Imation Corp.
	 
	 	 	 	 
	Imation Ireland Limited

	 	Ireland
	 	Imation Corp.
	 
	 	 	 	 
	Global Data Media FZ-LLC

	 	U.A.E.
	 	Imation Corp. 

Moser Baer India, Ltd.
	 
	 	 	 	 
	Glyphics Media, Inc.

	 	New York
	 	Global Data Media FZ
	 
	 	 	 	 
	MBI International FZ-LLC

	 	U.A.E.
	 	Global Data Media FZ
	 
	 	 	 	 
	MBI International Services Private Ltd.

	 	India
	 	MBI International FZ-LLC
	 
	 	 	 	 
	MBII India Marketing Private Ltd.

	 	India
	 	MBI International FZ-LLC






10









 






	 	 	 	 	 
	 	 	Jurisdiction	 	Holder(s)
	 	 	of	 	of
	Name	 	Organization	 	Equity Interests
	Memorex Products, Inc.

	 	California
	 	Imation Corp.
	 
	 	 	 	 
	Memorex Products Europe Ltd.

	 	United Kingdom
	 	Imation Corp.
	 
	 	 	 	 
	Hanny Magnetics Europe Limited

	 	United Kingdom
	 	Imation Corp.
	 
	 	 	 	 
	Memorex GmbH

	 	Germany
	 	Imation Corp.






Authorized and Issued Equity Interests




	 	 	 	 	 	 	 	 	 
	Loan Party/Pledged Foreign Subsidiary	 	Authorized	 	Issued
	Imation Corp.
	 	 	125,000,000	*	 	 	37,882,705	*
	Imation Enterprises Corp.
	 	 	1,000	 	 	 	1,000	 
	Imation Funding Corp.
	 	 	1,000	 	 	 	100	 
	Imation Latin America Corp.
	 	 	100	 	 	 	100	 
	Memorex Products, Inc.
	 	 	10,000	 	 	 	200	 
	IMN Data Storage LLC
	 	 	N/A	 	 	 	N/A	 
	Imation Electronics México, S.A. de C.V.
	 	 	296,325	 	 	 	296,325	 
	Imation Canada Inc.
	 	Unlimited	 	 	316,476.513	 
	Imation Holdings Pte Ltd.
	 	 	34,400,048	 	 	 	34,400,048	 
	Imation Ireland Limited
	 	 	1,000,002	 	 	 	250,000	 
	Imation México, S.A. de C.V.
	 	 	5,913,628	 	 	 	5,913,628	 
	IMN Data Storage Holdings CV
	 	 	1,000	 	 	 	205	 
	Imation Europe B.V.
	 	 	N/A	 	 	 	N/A	 
	Imation do Brasil Ltda.
	 	 	N/A	 	 	 	N/A	 
	Imation Polska Sp z.o.o.
	 	 	1,500,000	 	 	 	13,748	 








 




			
	*	 	As of May 1, 2009




11









 










     Acquisitions



On June 30, 2008, Imation Corp. acquired substantially all of the assets of Xtreme Accessories, LLC
(XtremeMac), a Florida-based product design and marketing firm focused on consumer electronic
products and accessories.



On July 31, 2007, Imation Corp. completed the acquisition of substantially all of the assets
relating to the marketing, distribution, sales, customer service and support of removable recording
media products, accessory products and ancillary products under the TDK Life on Record brand name
(TDK Recording Media), from TDK Corporation, a Japanese corporation (TDK), pursuant to an
acquisition agreement dated April 19, 2007, between Imation and TDK (the TDK Acquisition
Agreement). As provided in the TDK Acquisition Agreement, Imation Corp. acquired substantially all
of the assets of the TDK Recording Media operations, including the assets or capital stock of
certain of TDK’s operating subsidiaries engaged in the TDK Recording Media operations, and use of
the TDK Life on Record brand name for current and future recording media products including
magnetic tape, optical media, flash media and accessories.



On July 9, 2007, Imation Corp. completed the acquisition of certain assets of Memcorp, Inc., a
Florida corporation, and Memcorp Asia Limited, a corporation organized under the laws of Hong Kong
(together Memcorp, subsidiaries of Hopper Radio of Florida, Inc., a Florida corporation), pursuant
to an asset purchase agreement dated as of May 7, 2007 (the Memcorp Purchase Agreement). As
provided in the Memcorp Purchase Agreement, we acquired the assets of Memcorp used in or relating
to the sourcing and sale of consumer electronic products, principally sold under the Memorex brand
name, including inventories, equipment and other tangible personal property and intellectual
property. The acquisition also included existing brand licensing agreements, including Memcorp’s
agreement with MTV Networks, a division of Viacom International, to design and distribute consumer
electronics under certain Nickelodeon character-based properties and the NPower brand.



On April 28, 2006, Imation Corp. closed on the acquisition of substantially all of the assets of
Memorex International Inc., including the capital stock of its operating subsidiaries engaged in
the business of the design, development, sourcing, marketing, distribution and sale of hardware,
media and accessories used for the storage of electronic data under the Memorex brand name.




Part B — Rights Agreements



— Rights Agreement between Imation and The Bank of New York, as Rights Agent, dated as of June 21,
2006, as amended by the First Amendment to Rights Agreement, dated as of July 30, 2007.





12











 





Part C — Other Equity Interests of Borrowers




	 	 	 	 	 	 	 
	Loan Party	 	Equity Investment	 	Percentage Interest
	Imation Corp.
	 	O-Mass (Subsidiary of Tandberg Storage ASA), Norway	 	 <	10.0	%
	Imation Corp.
	 	Inphase Technologies, Inc., Delaware	 	 <	10.0	%
	Imation Corp.
	 	Exabyte Corporation, Delaware	 	 	11.1	%
	Imation Corp.
	 	21VC Fund II, LP, Delaware	 	 	5	%
	Imation Corp.
	 	Hummer Winblad Venture Partners II, LP, Delaware	 	 	5	%






13









 






SCHEDULE 5.15




RESTRICTIVE AGREEMENTS



None.





14









 








SCHEDULE 5.17




INTELLECTUAL PROPERTY




Intellectual Property Rights




None.



Intellectual Property Claims




See “Philips Litigation” and “SanDisk Litigation” listed Schedule 5.06.




 









 








SCHEDULE 5.20




LABOR MATTERS





	1.	 	Mexico has labor unions pursuant to legal requirements.
	 
	2.	 	Certain employees in Europe belong to labor unions and there may be collective bargaining
agreements (negotiated industry wide) that apply in Europe. In addition, the company is
required to have works councils in certain locations in Europe which must be consulted
regarding various actions by the business.






 









 








SCHEDULE 5.23



DEPOSIT
ACCOUNTS



	 	 	 	 	 
	Name and Address of Bank	 	Account No.	 	Purpose
	Bank of America

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	**

Imation Enterprises Corp.
	 	Collection Account
	 
	 	 	 	 
	Bank of America

Bank of America Plaza

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Enterprises Corp.
	 	Collection Account
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza

901 Main St., 7th Floor

Dallas, TX 75202

	 	**

Imation Enterprises Corp.
	 	Collection Account — Lockbox
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Enterprises Corp.
	 	Collection Account — Lockbox
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Enterprises Corp.
	 	Collection Account — Lockbox
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	**

Imation Corp.
	 	Collection Account
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Corp.
	 	Transfer — Tax payments
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Enterprises Corp.
	 	Disbursement Account
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Enterprises Corp.
	 	Disbursement Account
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

Imation Corp.
	 	Disbursement Account








 




			
	**	 	The appearance of a double asterisk denotes confidential information that
has been omitted from the exhibit and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934.






 









 







	 	 	 	 	 
	Name and Address of Bank	 	Account No.	 	Purpose
	Bank of America 

Bank of America Plaza 

901 Main St., 7th Floor

Dallas, TX 75202

	 	** 

IMN Data Storage LLC
	 	Collection Account
	 
	 	 	 	 
	Bank of America 

Bank of America Plaza

901 Main St.,
7th Floor


Dallas, TX 75202

	 	** 

Imation Latin America
Corp.
	 	Collection Account
	 
	 	 	 	 
	Bank of America

200 Front Street West 

Toronto, ON M5V 3L2

Canada

	 	** 

Imation Enterprises Corp.
	 	CAD Collection Account
	 
	 	 	 	 
	Bank of America 

200 Front Street West 

Toronto, ON M5V 3L2

Canada

	 	** 

Memorex Products, Inc.
	 	CAD Collection Account
	 
	 	 	 	 
	Bank of America

5 Canada Square 

London E14 5AQ

United Kingdom

	 	** 

Imation Enterprises Corp.
	 	CAD Collection Account
	 
	 	 	 	 
	JPMorgan Chase 

300 S. Riverside Plaza, 10th Floor

Chicago, IL 60606

	 	** 

Imation Corp.
	 	Disbursement Account
	 
	 	 	 	 
	JPMorgan Chase 

300 S. Riverside Plaza, 10th Floor

Chicago, IL 60606

	 	**

Imation Corp.
	 	Disbursement Account
	 
	 	 	 	 
	JPMorgan Chase

300 S. Riverside Plaza, 10th Floor

Chicago, IL 60606`

	 	**

Imation Enterprises Corp.
	 	Disbursement Account
	 
	 	 	 	 
	Citibank

233 S. Wacker Drive, 86th Floor

Chicago, IL 60606

	 	**

Imation Enterprises Corp.


	 	Transfer — Trade


	 
	Harris Bank

111 Monroe Street, 9 West

Chicago, IL 60603

	 	**

Imation Enterprises Corp.
	 	Disbursement Account
	 
	 	 	 	 
	HSBC Bank

1 HSBC Center, 14th Floor

Buffalo, NY 14203

	 	**

Imation Enterprises Corp.
	 	Collection Account
	 
	 	 	 	 
	US Bank

800 Nicollet Mall

Minneapolis, MN 55402

	 	**

Imation Corp.
	 	Transfer — Payroll







 




			
	**	 	The appearance of a double asterisk denotes confidential information that
has been omitted from the exhibit and filed separately, accompanied by a confidential
treatment request, with the Securities and Exchange Commission pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934.




 









 








SCHEDULE 5.25




MATERIAL CONTRACTS





	1.	 	Asset Purchase Agreement, dated May 7, 2007, among Hopper Radio of Florida, Inc.,
Memcorp, Inc., Memcorp Asia Limited and Imation Corp.
	 
	2.	 	Acquisition Agreement, dated April 19, 2007, by and between Imation Corp. and TDK
Corporation.
	 
	3.	 	Acquisition Agreement, dated January 19, 2006, by and between Imation Corp. and
Memorex International Inc.
	 
	4.	 	Inducement Agreement, dated January 19, 2006, among Hanny Holding Limited, Hanny
Magnetics (B.V.I.) Limited, Investor Capital Management Asia Limited, Investor Capital
Partners — Asia Fund L.P, Global Media Limited, Memorex Holdings Limited and Imation
Corp.
	 
	5.	 	Restated Certificate of Incorporation of Imation.
	 
	6.	 	Amended and Restated Bylaws of Imation.
	 
	7.	 	Rights Agreement between Imation and The Bank of New York, as Rights Agent, dated
as of June 21, 2006.
	 
	8.	 	First Amendment to Rights Agreement, dated as of July 30, 2007.
	 
	9.	 	Amended and Restated Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock.
	 
	10.	 	Shareholders Agreement in relation to Global Data Media FZ-LLC.
	 
	11.	 	Amendment Agreement to Shareholders Agreement in relation to Global Data Media
FZ-LLC.
	 
	12.	 	Trademark License Agreement, dated July 31, 2007, by and between Imation Corp. and
TDK Corporation.
	 
	13.	 	IMN Trademark License Agreement, dated July 31, 2007, by and between IMN Data
Storage Holdings C.V. and TDK Corporation.










 









 












	14.	 	Supply Agreement, dated July 31, 2007, by and between Imation Corp. and TDK
Corporation.
	 
	15.	 	Investor Rights Agreement, dated July 31, 2007, by and between Imation Corp. and
TDK Corporation.
	 
	16.	 	Indemnity Agreements between Imation and each of its directors.
	 
	17.	 	Employment Closure Agreement between Imation Corp. and Bruce Henderson.
	 
	18.	 	Amendment to Bruce Henderson’s Performance Option Agreement.
	 
	19.	 	Amendment to Employment Agreement between Imation and Bruce Henderson.
	 
	20.	 	Imation 1996 Employee Stock Incentive Program.
	 
	21.	 	1996 Directors Stock Compensation Program, as amended May 8, 2002.
	 
	22.	 	Imation 2000 Stock Incentive Plan, as amended.
	 
	23.	 	Restricted Stock Award Agreement between Imation and Frank Russomanno
	 
	24.	 	Compensatory arrangement between Imation and Frank Russomanno.
	 
	25.	 	2000 Stock Incentive Plan Restricted Stock Award Agreements — Executive Officers.
	 
	26.	 	Amendment to 2000 Stock Incentive Plan Restricted Stock Award Agreements —
Executive Officers.
	 
	27.	 	Amendment to 2000 Employee Stock Incentive Plan Restricted Stock Award Agreements
 — Executive Officers.
	 
	28.	 	2000 Stock Incentive Plan Stock Option Agreements — Executive Officers.
	 
	29.	 	2000 Stock Incentive Plan Stock Option Agreements — Employees.
	 
	30.	 	Restricted Stock Award Agreements — Employees 2004.
	 
	31.	 	Restricted Stock Award Agreements — Executive Officers 2004.










 









 












	32.	 	Stock Option Agreements — Employees 2004.
	 
	33.	 	Stock Option Agreements — Executive Officers 2004.
	 
	34.	 	Imation 2005 Stock Incentive Plan, as amended November 9, 2005.
	 
	35.	 	Imation 2005 Stock Incentive Plan Stock Option Agreement — Employees.
	 
	36.	 	Imation 2005 Stock Incentive Plan Stock Option Agreement — Executive Officers.
	 
	37.	 	Amendment to 2005 Stock Incentive Plan Option Agreement — Executive Officers.
	 
	38.	 	Imation 2005 Stock Incentive Plan Stock Option Agreement — Directors.
	 
	39.	 	Amendment to 2005 Stock Incentive Plan Stock Option Agreement — Directors.
	 
	40.	 	Imation 2005 Stock Incentive Plan Restricted Stock Award Agreement — Employees.
	 
	41.	 	Imation 2005 Stock Incentive Plan Restricted Stock Award Agreement — Executive
Officers.
	 
	42.	 	Amendment to 2005 Stock Incentive Plan Restricted Stock Award Agreement —
Executive Officers.
	 
	43.	 	Imation 2005 Stock Incentive Plan Restricted Stock Award Agreement — Directors.
	 
	44.	 	Amendment to 2005 Stock Incentive Plan Restricted Stock Award Agreement —
Directors.
	 
	45.	 	Amendment to 2004 and 2005 Executive Officer Option Agreements under the 2000
Employee Stock Incentive Plan.
	 
	46.	 	Amendment to 2005 Stock Option Agreement — Non-Employee Directors.
	 
	47.	 	Non-Employee Director Option Agreement.
	 
	48.	 	Amendment to 2005 Restricted Stock Award Agreement — Non-Employee Directors.
	 
	49.	 	Non-Qualified Stock Option Agreement for Executive Officers under the Imation Corp.
2005 Stock Incentive Plan










 









 












	50.	 	Non-Employee Director Restricted Stock Award Agreement.
	 
	51.	 	Executive Officer Option Agreement.
	 
	52.	 	Executive Officer Restricted Stock Award Agreement.
	 
	53.	 	Non-Employee Director Restricted Stock Award Agreement.
	 
	54.	 	Executive Officer Option Agreement.
	 
	55.	 	Executive Officer Restricted Stock Award Agreement.
	 
	56.	 	Imation Corp. 2008 Stock Incentive Plan.
	 
	57.	 	Non-Qualified Stock Option Agreement for Executive Officers under the Imation Corp.
2008 Stock Incentive Plan.
	 
	58.	 	Non-Qualified Stock Option Agreement for Directors under the Imation Corp. 2008
Stock Incentive Plan.
	 
	59.	 	Restricted Stock Agreement for Executive Officers under the Imation Corp. 2008
Stock Incentive Plan.
	 
	60.	 	Restricted Stock Agreement for Directors under the Imation Corp. 2008 Stock
Incentive Plan.
	 
	61.	 	Description of 2008 Annual Bonus Plan Target Approval.
	 
	62.	 	Description of 2009 Annual Bonus Plan Target Approval.
	 
	63.	 	Amended and Restated Severance Agreement with Executive Officers.
	 
	64.	 	Directors Compensation Program, as amended.
	 
	65.	 	Imation Excess Benefit Plan.
	 
	66.	 	Employment Offer Letter from Imation Corp. to Mark E. Lucas.
	 
	67.	 	Guaranty by Imation Corp. in favor of Citigroup Inc. dated as of September 24,
2003.






 









 





SCHEDULE 7.01




EXISTING LIENS




	 	 	 	 	 	 	 	 	 
	Jurisdiction	 	Debtor	 	Secured Party	 	Filing Information	 	Collateral
	Delaware

Secretary of State

	 	Imation Corp.
	 	Cisco Systems

Capital
	 	File No. 30288376

Filed: 1/16/2003

Lapse Date: 1/16/2013

	 	[Specific leased

equipment.]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Continuation

File No. 20073000832

Filed: 8/7/2007	 	 
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	De Lage Landen

Financial

Services, Inc.
	 	File No. 43082072

Filed: 11/2/2004

Lapse Date: 11/2/2009
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Debtor Amendment

File No. 43573534

Filed: 12/17/2007
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Collateral Amendment

File No. 43681444

Filed: 12/30/2004	 	 
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	The CIT 

Group/Equipment

Financing, Inc.
	 	File No. 50645128

Filed: 3/1/2005

Lapse Date: 3/1/2010
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State


	 	Imation Corp.
	 	Wells Fargo

Equipment

Finance, Inc.
	 	File No. 52546241

Filed: 8/16/2005

Lapse Date: 8/16/2010
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Assignment

File No. 20080521193

Filed: 2/12/2008	 	 
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Toyota Motor

Credit

Corporation
	 	File No. 20073738811

Filed: 10/3/2007

Lapse Date: 10/3/2012
	 	[Specific leased

equipment.]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp
	 	US Bancorp
	 	File No. 20073860763

Filed: 10/15/2007

Lapse Date:

10/15/2012
	 	[Specific leased

equipment.]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State


	 	Imation Corp.
	 	Banc of America

Leasing & 

Capital, LLC
	 	File No. 20074799010

Filed: 12/19/2007

Lapse Date:

12/19/2012
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware 
Secretary
of 
State

	 	Imation Corp.
	 	Banc of America

Leasing & 

Capital, LLC
	 	File No. 20080030708 

Filed: 1/3/2008

Lapse Date: 1/3/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware 
Secretary
of 
State

	 	Imation Corp.
	 	Toyota Motor

Credit

Corporation
	 	File No. 20080844967

Filed: 3/10/2008

Lapse Date: 3/10/2013
	 	[Specific equipment]






 









 






	 	 	 	 	 	 	 	 	 
	Jurisdiction	 	Debtor	 	Secured Party	 	Filing Information	 	Collateral
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Banc of America

Leasing &

Capital, LLC
	 	File No. 20081533650

Filed: 5/2/2008

Lapse Date: 5/2/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State 


	 	Imation Corp.
	 	Toyota Motor

Credit

Corporation
	 	File No. 20081559564

Filed: 5/6/2008

Lapse Date: 5/6/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Collateral Amendment

File No. 20081618360

Filed: 5/9/2008	 	 
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Toyota Motor

Credit

Corporation
	 	File No. 20081650447

Filed: 5/13/2008

Lapse Date: 5/13/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Toyota Motor

Credit

Corporation
	 	File No. 20082302840

Filed: 7/7/2008

Lapse Date: 7/7/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Toyota Motor

Credit 

Corporation
	 	File No. 20082543674

Filed: 7/24/2008

Lapse Date: 7/24/2013
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Banc of America

Leasing &

Capital, LLC
	 	File No. 20084190466

Filed: 12/17/2008

Lapse Date:
	 	[Specific equipment]
	 

	 	 	 	 	 	12/17/2013	 	 
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Corp.
	 	Banc of America

Leasing &

Capital, LLC
	 	File No. 20090384922

Filed: 2/4/2009

Lapse Date: 2/4/2014
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Enterprises

Corp.
	 	Hewlett-Packard

Financial

Services

Company
	 	File No. 42192476

Filed: 8/4/2004

Lapse Date: 8/4/2009
	 	[Leased equipment.]
	 
	 	 	 	 	 	 	 	 
	Delaware

Secretary of

State

	 	Imation Enterprises

Corp.
	 	Wells Fargo

Equipment

Finance, Inc.
	 	File No. 51655613

Filed: 5/31/2005

Lapse Date: 5/31/2010
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Assignment

File No. 20080521185

Filed: 2/12/2008	 	 
	 
	 	 	 	 	 	 	 	 
	California

Secretary of

State

	 	Memorex Products

Inc.
	 	NMHG Financial

Services Inc.
	 	File No. 0230160702

Filed: 10/28/2002

Lapse Date:
	 	[Leased equipment]
	 

	 	 	 	 	 	10/28/2012
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Continuation

File No. 0771137382

Filed: 05/14/2007	 	 






 









 






	 	 	 	 	 	 	 	 	 
	Jurisdiction	 	Debtor	 	Secured Party	 	Filing Information	 	Collateral
	California

Secretary of

State

	 	Memorex Products,
Inc.
	 	NMHG Financial

Services, Inc.
	 	File No. 0327960876

Filed: 10/3/2003

Lapse Date: 10/3/2013
	 	[Leased equipment]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Continuation

File No. 0871669013

Filed: 7/29/2008	 	 
	 
	 	 	 	 	 	 	 	 
	California

Secretary of

State

	 	Memorex Products,
Inc.
	 	Toyota Motor

Credit

Corporation
	 	File No. 057036692462

Filed: 8/2/2005

Lapse Date: 8/2/2010
	 	[Specific equipment]
	 
	 	 	 	 	 	 	 	 
	California

Secretary of

State

	 	Memorex Products Inc
	 	Wells Fargo

Financial

Leasing, Inc.
	 	File No. 067092402343

Filed: 11/17/2006

Lapse Date:
	 	[Specific leased

equipment]
	 

	 	 	 	 	 	11/17/2011	 	 





Liens in favor of Bank of America in cash and Cash Equivalents to secure the following letters
of credit issued by Bank of America, N.A. (as referenced in, and pursuant to, that certain Letter
Agreement dated as of the Closing Date by and among Bank of America, Imation and Enterprises):




	 	 	 	 	 	 	 
	Beneficiary	 	L/C Number	 	Amount and Currency	 	Expiry Date
	National Westminster
	 	00000003052899
	 	E 1,776,000.00 EUR
	 	09/18/09
	ANZ Banking Group
	 	00000068026088
	 	1,174,861.35 AUD
	 	03/30/12






 










 





SCHEDULE 7.02




INVESTMENTS




Other Equity Interests of Borrowers




	 	 	 	 	 	 	 
	Loan Party	 	Equity Investment	 	Percentage Interest
	Imation Corp.

	 	O-Mass (Subsidiary of Tandberg Storage ASA),
Norway
	 	< 10.0%

	Imation Corp.

	 	Inphase Technologies, Inc., Delaware
	 	< 10.0%

	Imation Corp.

	 	Exabyte Corporation, Delaware
	 	 	11.1	%
	Imation Corp.

	 	21VC Fund II, LP, Delaware
	 	 	5	%
	Imation Corp.

	 	Hummer Winblad Venture Partners II, LP, Delaware
	 	 	5	%






 









 






Other Investments




A. Intercompany Investments




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contributing Loan Party2	 	Recipient Subsidiary	 	Currency	 	Contribution	 	Exchange Rate	 	US$ Equiv
	Imation Corp.
	 	Imation (Thailand)	 	USD	 	$	39,000	 	 	 	1.00	 	 	$	39,000	 
	Imation Corp.
	 	Imation Holdings Pte.	 	USD	 	$	22,472,000	 	 	 	1.00	 	 	$	22,472,000	 
	Imation Corp.
	 	Imation Corp. Japan	 	USD	 	$	14,103,000	 	 	 	1.00	 	 	$	14,103,000	 
	Imation Corp.
	 	IMN Data Storage Holdings CV	 	USD	 	$	27,292,000	 	 	 	1.00	 	 	$	27,292,000	 
	Imation Corp.
	 	Imation Electronics Mexico	 	USD	 	$	245,000	 	 	 	1.00	 	 	$	245,000	 
	Imation Corp.
	 	Imation Argentina	 	USD	 	$	23,331,000	 	 	 	1.00	 	 	$	23,331,000	 
	Imation Corp.
	 	Imation Colombia	 	USD	 	$	1,225,000	 	 	 	1.00	 	 	$	1,225,000	 
	Imation Corp.
	 	Imation Venezuela	 	USD	 	$	1,350,000	 	 	 	1.00	 	 	$	1,350,000	 
	Imation Corp.
	 	Imation Latin America Marketing	 	USD	 	$	2,513,000	 	 	 	1.00	 	 	$	2,513,000	 
	Imation Corp.
	 	Imation Costa Rica	 	USD	 	$	1,220,000	 	 	 	1.00	 	 	$	1,220,000	 
	Imation Corp.
	 	Imation El Salvador	 	USD	 	$	522,000	 	 	 	1.00	 	 	$	522,000	 
	Imation Corp.
	 	Imation Europe BV	 	USD	 	$	99,759,000	 	 	 	1.00	 	 	$	99,759,000	 
	Imation Corp.
	 	Imation Ireland	 	USD	 	$	3,030,000	 	 	 	1.00	 	 	$	3,030,000	 
	Imation Funding Corp.
	 	Imation Europe BV	 	USD	 	$	113,938,000	 	 	 	1.00	 	 	$	113,938,000	 
	Imation Corp.
	 	Imation Canada	 	USD	 	$	2,325,000	 	 	 	1.00	 	 	$	2,325,000	 
	Imation Corp.
	 	Global Data Media	 	USD	 	$	2,039,000	 	 	 	1.00	 	 	$	2,039,000	 
	Imation Latin America Corp.
	 	Imation Mexico	 	USD	 	$	1,054,000	 	 	 	1.00	 	 	$	1,054,000	 
	Imation Latin America Corp.
	 	Imation Brazil	 	USD	 	$	11,090,000	 	 	 	1.00	 	 	$	11,090,000	 
	Imation Latin America Corp.
	 	Imation Chile	 	USD	 	$	2,281,000	 	 	 	1.00	 	 	$	2,281,000	 
	Imation Corp.
	 	Imation Caribe	 	USD	 	$	832,000	 	 	 	1.00	 	 	$	832,000	 
	Imation Corp.
	 	Imation Polska	 	USD	 	$	5,565,000	 	 	 	1.00	 	 	$	5,565,000	 









 




			
	2	 	The Contributing Loan Party is the entity that records and tracks the capital
contribution on its books, however it is not necessarily the parent of the subsidiary being
capitalized.




 









 










B. Scheduled Intercompany Investments




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contributing Loan Party3	 	Recipient Subsidiary	 	Currency	 	Contribution	 	Exchange Rate	 	US$ Equiv
	Memorex Products Inc.
	 	Memorex Products Europe Ltd. *	 	USD	 	$	6,121,396	 	 	 	1.00	 	 	$	6,121,396	 
	Imation Corp.
	 	Imation Data Storage CV *	 	USD	 	$	10,000,000	 	 	 	1.00	 	 	$	10,000,000	 
	Imation Latin America Corp.
	 	Imation Mexico	 	MXN	 	 	50,000,000	 	 	 	13.20	 	 	$	3,787,879	 






C. Intercompany Loans




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lender	 	Borrower	 	Currency	 	Principal Amount	 	Exchange Rate	 	US$ Equiv
	Imation Corp.
	 	Memorex Products Europe Ltd.	 	 USD	 	$	2,000,000	 	 	 	1.00	 	 	$	2,000,000	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	1,819,736	 	 	 	0.7962	 	 	$	1,448,783	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	3,058,104	 	 	 	0.7962	 	 	$	2,434,709	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	476,260	 	 	 	0.7962	 	 	$	379,174	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	1,552,795	 	 	 	0.7962	 	 	$	1,236,258	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	1,100,209	 	 	 	0.7962	 	 	$	875,931	 
	Imation Corp.
	 	Imation ANZ Pty Ltd	 	AUD	 	 	1,870,504	 	 	 	0.7962	 	 	$	1,489,201	 
	Imation Corp.
	 	Imation Shanghai	 	CNY	 	 	1,317,528	 	 	 	6.8281	 	 	$	192,957	 
	Imation Corp.
	 	IMN Data Storage CV	 	USD	 	$	23,617,755	 	 	 	1.00	 	 	$	23,617,755	 
	Imation Corp.
	 	Imation Europe BV	 	EUR	 	 	3,000,000	 	 	 	1.4090	 	 	$	4,227,000	 
	Imation Corp.
	 	Imation Europe BV	 	EUR	 	 	14,400,000	 	 	 	1.4090	 	 	$	20,289,600	 
	Memorex Products Inc.
	 	Memorex Products Europe Ltd.	 	 USD	 	$	6,121,396	 	 	 	1.00	 	 	$	6,121,396	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	64,312,765	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








 




			
	3	 	The Contributing Loan Party is the entity that records and tracks the capital
contribution on its books, however it is not necessarily the parent of the subsidiary being
capitalized.
	 
	•	 	Capitalization will be in the form of forgiveness of intercompany loan listed above.
	 
	•	 	Imation Corp. is currently contemplating a loan to Imation Data Storage CV for
$10,000,000 to repay a loan from Imation Europe BV to Imation Data Storage CV.




 









 










SCHEDULE 7.03




EXISTING INDEBTEDNESS




Material Indebtedness as of March 31, 2009




	 	 	 	 	 	 	 	 	 
	 	 	 	 	Aggregate Committed	 	 	 	 
	Name of Obligor	 	Name of Creditor	 	Principal Amount	 	Nature of Debt	 	Maturity Date
	Imation Corp.
	 	Citibank N.A.	 	PLN 2,000,000	 	Letter of Credit	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	USD 50,000 PSLE/USD	 	 	 	 
	 
	 	 	 	1,000,000 SR	 	Foreign Exchange	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	USD 150,000	 	Omnibus Line	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	USD 10,000,000	 	Bills of Exchange	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	CHF 13,800	 	Bank Guarantee	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	EUR 46,000	 	Bank Guarantee	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	USD 10,000,000	 	Bills of Exchange	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	USD 400,000	 	Bank Guarantee/Letter	 	Variable
	 
	 	 	 	 	 	of Credit	 	 
	Imation Corp.
	 	Citibank N.A.	 	USD 50,000	 	Checks Purchased	 	Variable
	Imation Corp.
	 	Citibank N.A.	 	HKD 200,000	 	Corporate Card	 	Variable
	Imation Corp.
	 	National Westminster	 	EUR 1,776,000	 	Letter of Credit	 	09/18/09
	Imation Corp.
	 	ANZ Banking Group	 	AUD 1,833,000	 	Letter of Credit	 	9/9/13






Other Material Indebtedness



None.




 









 





SCHEDULE 7.03(A)

OTHER INDEBTEDNESS



Indebtedness in an amount not to exceed $35,000,000 arising from a settlement of the Phillips
dispute described on Schedule 5.06(a).






 











 










SCHEDULE 10.02




ADMINISTRATIVE AGENT’S OFFICE, CERTAIN ADDRESSES FOR NOTICES




IMATION CORP.

IMATION ENTERPRISES CORP.:




1 Imation Place

Oakdale, MN 55128




	 	 	 
	Attention:

	 	Matthew Skluzacek
	Telephone:

	 	(651) 704-4311
	Facsimile:

	 	(651) 704-4415
	Electronic Mail:

	 	mskluzacek@imation.com
	Website Address:

	 	www.imation.com






ADMINISTRATIVE AGENT:





Administrative Agent’s Office

(for payments and Requests for Credit Extensions):




Bank of America, N.A.

135 South LaSalle Street, Fourth Floor

Chicago, Illinois 60603




	 	 	 
	Attention:

	 	Division President
	Telephone:

	 	(312) 904-6394
	Facsimile:

	 	(312) 992-1501






with a copy to:




Bank of America, N.A.

20975 Swenson Drive, Suite 200

Mail Code WI3-500-02-01

Waukesha, Wisconsin 53186




	 	 	 
	Attention:

	 	Robert Lund
	Telephone:

	 	(262) 207-3285
	Facsimile:

	 	(312) 453-3438






 









 






L/C ISSUER:




Bank of America, N.A.

135 South LaSalle Street, Fourth Floor

Chicago, Illinois 60603




	 	 	 
	Attention:

	 	Division President
	Telephone:

	 	(312) 904-6394
	Facsimile:

	 	(312) 992-1501






with a copy to:




Bank of America, N.A.

20975 Swenson Drive, Suite 200

Mail Code WI3-500-02-01

Waukesha, Wisconsin 53186




	 	 	 
	Attention:

	 	Robert Lund
	Telephone:

	 	(262) 207-3285
	Facsimile:

	 	(312) 453-3438






LENDERS:




BANK OF AMERICA, N.A., as a Lender




For Requests for Credit Extensions:




Bank of America, N.A.

135 South LaSalle Street, Fourth Floor

Chicago, Illinois 60603




	 	 	 
	Attention:

	 	Division President
	Telephone:

	 	(312) 904-6394
	Facsimile:

	 	(312) 992-1501






with a copy to:




Bank of America, N.A.

20975 Swenson Drive, Suite 200

Mail Code WI3-500-02-01

Waukesha, Wisconsin 53186




	 	 	 
	Attention:

	 	Robert Lund
	Telephone:

	 	(262) 207-3285
	Facsimile:

	 	(312) 453-3438






 









 






THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.




For Requests for Credit Extensions:




The Bank of Tokyo-Mitsubishi UFJ, Ltd.

601 Carlson Parkway, Suite 370

Minnetonka, MN 55305




	 	 	 
	Attention:

	 	Scott Ackerman
	Telephone:

	 	(952) 473-7894
	Facsimile:

	 	(952) 473-5152
	Electronic Mail:

	 	sackerman@us.mufg.jp






Notices (other than Requests for Credit Extensions):




BTM Operations Office for the Americas

C/O The Bank of Tokyo-Mitsubishi UFJ, Ltd., NY Branch

1251 Avenue of the Americas, 12th Floor

New York, NY 10020-1104




	 	 	 
	Attention:

	 	Rolando Uy
	Telephone:

	 	(201) 413-8570
	Facsimile:

	 	(201) 521-2304
	Electronic Mail:

	 	N/A






 









 






JPMORGAN CHASE BANK, N.A.




For Requests for Credit Extensions:




JPMorgan Chase Bank

10 South Dearborn

Chicago, IL 60603-3403




	 	 	 
	Attention:

	 	Daisy Eades
	Telephone:

	 	(312) 732-7569
	Facsimile:

	 	(312) 377-1108
	Electronic Mail:

	 	daisy.m.eades@chase.com






Notices (other than Requests for Credit Extensions):




JPMorgan Chase Bank

10 South Dearborn

Chicago, IL 60603-3403




	 	 	 
	Attention:

	 	Fe Naviamos
	Telephone:

	 	(312) 732-7519
	Facsimile:

	 	(312) 377-1108
	Electronic Mail:

	 	fe.c.naviamos@chase.com






U.S. BANK NATIONAL ASSOCIATION




For Requests for Credit Extensions:




U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402




	 	 	 
	Attention:

	 	John Frazier
	Telephone:

	 	(612) 303-3720
	Facsimile:

	 	(612) 303-2265
	Electronic Mail:

	 	gaylen.frazier@usbank.com






Notices (other than Requests for Credit Extensions):




U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402




	 	 	 
	Attention:

	 	Barbara Campbell
	Telephone:

	 	(920) 237-7951
	Facsimile:

	 	(920) 237-7993
	Electronic Mail:

	 	complex_credits_oshkosh@usbank.com






 









 






WELLS FARGO BANK, NATIONAL ASSOCIATION




For Requests for Credit Extensions:




Wells Fargo Bank, National Association

90 S. 7th Street

Mail Code: N9305-077

Minneapolis, MN 55402




	 	 	 
	Attention:

	 	Brian Buck
	Telephone:

	 	(612) 667-3857
	Facsimile:

	 	(612) 667-2276
	Electronic Mail:

	 	brian.r.buck@wellsfargo.com






Notices (other than Requests for Credit Extensions):




Wells Fargo Bank, National Association

90 S. 7th Street

Mail Code: N9305-077

Minneapolis, MN 55402




	 	 	 
	Attention:

	 	Greg Strauss
	Telephone:

	 	(612) 667-7775
	Facsimile:

	 	(612) 667-2276
	Electronic Mail:

	 	gregory.j.strauss@wellsfargo.com






CITIBANK NA




For Requests for Credit Extensions:




Citibank NA

1615 Brett Road Ops III

New Castle, DE 19720




	 	 	 
	Attention:

	 	Lakeisha Sullivan
	Telephone:

	 	(302) 894-6118
	Facsimile:

	 	(212) 994-0849
	Electronic Mail:

	 	lakeisha.sullivan@citi.com@citi.com






Notices (other than Requests for Credit Extensions):




Citibank NA

1615 Brett Road Ops III

New Castle, DE 19720




	 	 	 
	Attention:

	 	Lakeisha Sullivan
	Telephone:

	 	(302) 894-6118
	Facsimile:

	 	(212) 994-0849
	Electronic Mail:

	 	lakeisha.sullivan@citi.com@citi.com






 









 






FIFTH THIRD BANK




For Requests for Credit Extensions:




Fifth Third Bank

38 Fountain Square Plaza

Mail Drop 109046

Cincinnati, OH 45202




	 	 	 
	Attention:

	 	Gary Losey
	Telephone:

	 	(513) 534-7757
	Facsimile:

	 	(513) 534-5947
	Electronic Mail:

	 	gary.losey@53.com






Notices (other than Requests for Credit Extensions):




Fifth Third Bank

38 Fountain Square Plaza

Mail Drop 109046

Cincinnati, OH 45202




	 	 	 
	Attention:

	 	Pam Willinger
	Telephone:

	 	(513) 534-6724
	Facsimile:

	 	(513) 534-5947
	Electronic Mail:

	 	pam.willinger@53.com






Fifth Third Bank

38 Fountain Square Plaza

Mail Drop 109046

Cincinnati, OH 45202




	 	 	 
	Attention:

	 	Christin Bell
	Telephone:

	 	(513) 358-2633
	Facsimile:

	 	(513) 534-5947
	Electronic Mail:

	 	christin.bell@53.com






 









 






HSBC BANK USA, N.A.




For Requests for Credit Extensions:




HSBC Bank USA, N.A.

71 S Wacker

Suite 2700

Chicago, IL 60606




	 	 	 
	Attention:

	 	Molly Drennan
	Telephone:

	 	(312) 357-3994
	Facsimile:

	 	(312) 357-3999
	Electronic Mail:

	 	molly.j.drennan@us.hsbc.com






Notices (other than Requests for Credit Extensions):




HSBC Bank USA, N.A.

1 HSBC Center

26th Floor

Buffalo, NY 14203




	 	 	 
	Attention:

	 	Donna Riley
	Telephone:

	 	(716) 841-4178
	Facsimile:

	 	(716) 841-0269
	Electronic Mail:

	 	donna.l.riley@us.hsbc.com






 









 






SCHEDULE 10.06




PROCESSING AND RECORDATION FEES




     The Administrative Agent will charge a processing and recordation fee (an “Assignment
Fee”) in the amount of $3,500 for each assignment; provided, however, that
in the event of two or more concurrent assignments to members of the same Assignee Group (which may
be effected by a suballocation of an assigned amount among members of such Assignee Group) or two
or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee
(or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $3,500
plus the amount set forth below:



	 	 	 	 	 
	Transaction:	 	Assignment Fee:
	 
	 	 	 	 
	First four concurrent assignments or
suballocations to members of an Assignee Group
(or from members of an Assignee Group, as
applicable)
	 	 	-0-	 
	 
	 	 	 	 
	Each additional concurrent assignment or suballocation to
a member of such Assignee Group (or from a member of such
Assignee Group, as applicable)
	 	$	500	 







 











 





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 requirements of Section 2.01(a) of
the Agreement.]



	 	 	 	 	 
	IMATION CORP., as Borrower Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	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.



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



     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(c) of the Agreement for the calendar month 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.



C-1









 





     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



[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.



     [Use following paragraph 5 for Compliance Certificates delivered during a Financial Covenant
Trigger Period as determined in accordance with Section 1 of Schedule 2]



     5. The financial covenant analysis and information set forth on Schedule 2 attached hereto are
true and accurate on and as of the date of this Certificate and reflect a Consolidated Fixed Charge
Coverage Ratio for the fiscal month ending                 of            to 1.00 which [is]/[is not] in
compliance with Section 7.11 of the Credit Agreement.



     [Use following paragraph 5 for Compliance Certificates delivered during any time other than a
Financial Covenant Trigger Period as determined in accordance with Section 1 of Schedule 2]



     5. The calculation of Consolidated Fixed Charge Coverage Ratio set forth on Schedule 2
attached hereto is true and accurate on and as of the date of this Certificate and reflects a
Consolidated Fixed Charge Coverage Ratio for the fiscal month ending                 of            to 1.00.



     [Use following paragraph 6 for Compliance Certificates delivered at the end of each fiscal
year and fiscal quarter]



     [6. The average daily amount of Availability applicable to the immediately preceding fiscal
quarter was $[                    ]. Attached hereto as Schedule 3 are calculations that support
such statement of average daily Availability.]



C-2









 





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



C-3









 





For the Quarter/Year ended                                (“Statement Date”)




SCHEDULE 2

to the Compliance Certificate

($ in 000’s)




	 	 	 	 	 	 	 	 	 	 	 
	I.	 	Liquidity	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	A.	 	Availability	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	1.	 	Borrowing Base:
	 	$	                    	 
	 	 	 	 	2.	 	Aggregate Commitments:
	 	$	                    	 
	 	 	 	 	3.	 	Total Outstandings:
	 	$	                    	 
	 	 	 	 	4.	 	Availability (the amount by which (a) the
lesser of Line I.A.1 and Line I.A.2 exceeds (b)
Line I.A.3):
	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	B.	 	Unrestricted cash and Cash Equivalents:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	C.	 	Liquidity (Line I.A.4 + I.B)1:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	D.	 	150% of the Current Real Estate Amount	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	E.	 	The greater of Line I.D. and $50,000,000	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	F.	 	Has either an Event of Default occurred or
is Line I.C. less than Line I.E.?	 	 	[Yes]/[No]
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	If Yes, a Financial Covenant Trigger Period is in effect.	 	 	 	 








 




			
	1	 	If less than $40,000,000 of the amount of Liquidity from Line I.C. is derived from Availability and
unrestricted cash and Cash Equivalents held in the United States in one or more accounts at Bank of
America or another U.S. financial institution, subject to one or more Deposit Account Control Agreements or
Investment Property Control Agreements with the Administrative Agent, then insert $0 in the corresponding
blank.





C-4









 





	 	 	 	 	 	 	 	 	 	 	 
	II.	 	Section 7.11(a) — Consolidated Fixed Charge Coverage 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,
employment compensation arrangements,
restructuring expenses and litigation accruals
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 II.A.1 + 2 + 3 + 4 +
5 + 6- 7):
	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
		 	B.
	 	Unfinanced Capital Expenditures:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
		 	C. 	 	Consolidated Interest Charges:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	D.	 	Income taxes actually paid during

Subject Period:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	E.	 	Restricted Payments made in cash pursuant to
Section 7.06(d):	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	F.	 	Scheduled principal payments for Indebtedness for

such Subject Period:	 	$	                    	 






C-5









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	G.	 	Scheduled amortization of the Original Real Estate
Base Amount for such
Subject Period:	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	H.	 	Minimum Consolidated Fixed Charge Ratio:

((Line II.A. – II.B. – II.D. – II.E.) ÷ (II.C. + II.F. +
II.G.):	 	$	                    	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	[Minimum permitted: 1.20:1.00	 	           to 1.00]2








 




			
	2	 	Applicable during a Financial Covenant Trigger Period.






C-6











 





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.	 	Borrowers: Imation Corp. and Imation Enterprises Corp.




D-1









 








	4.	 	Administrative Agent: Bank of America, N.A., as the administrative agent under the
Credit Agreement






	5.	 	Credit Agreement: Credit Agreement, dated as of March 29, 2006 (as amended, modified
or supplemented from time to time), among Imation Corp. and Imation Enterprises Corp., as
Borrowers, 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 6.01 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,



D-4









 




[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.




     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.



E-1









 





     “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.



     “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



E-2









 







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:



     (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,



E-3









 







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;




     (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;



E-4









 





     (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;



     (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;



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     (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




     (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



E-6









 







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.



     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.




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     (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;




     (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



E-8









 







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.



     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.



E-9









 





     (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.



     (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.



E-10









 





     (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.




     (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.



E-11









 





     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.



     (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.



E-12









 





     (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.



     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.



E-13









 





     (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.



     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



E-14









 







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.



     (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.



E-15









 





     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.



     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.



E-16









 





     (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.



     (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



E-17









 







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.



     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.



E-18









 





     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.



     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 6.13 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
                    ,
20___.




[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









 






	 	 	 	 	 



EXHIBIT H




FORM OF SECURITY AND PLEDGE AGREEMENT





H-1











 





EXECUTION COPY




 

 








SECURITY AND PLEDGE AGREEMENT




dated as of June 3, 2009




by and among




IMATION CORP.,




IMATION ENTERPRISES CORP.,

and certain of their respective Subsidiaries,




as Grantors,




in favor of




BANK OF AMERICA, N.A.,




as Administrative Agent,




 

 






 









 












Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I DEFINED TERMS	 	 	1	 
	SECTION 1.1

	 	Terms Defined in the Uniform Commercial Code
	 	 	1	 
	SECTION 1.2

	 	Definitions
	 	 	2	 
	SECTION 1.3

	 	Other Interpretive Provisions
	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE II SECURITY INTEREST	 	 	6	 
	SECTION 2.1

	 	Grant of Security Interest
	 	 	6	 
	SECTION 2.2

	 	Partnership/LLC Interests
	 	 	8	 
	SECTION 2.3

	 	Grantors Remain Liable
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES	 	 	9	 
	SECTION 3.1

	 	Organization; Power; Qualification
	 	 	9	 
	SECTION 3.2

	 	Authorization of Agreement; Compliance with Laws; Non Contravention
	 	 	10	 
	SECTION 3.3

	 	Governmental Approvals
	 	 	10	 
	SECTION 3.4

	 	Perfected First Priority Liens
	 	 	10	 
	SECTION 3.5

	 	Title, No Other Liens
	 	 	11	 
	SECTION 3.6

	 	State of Organization; Location of Inventory, Equipment and Fixtures; other
Information
	 	 	11	 
	SECTION 3.7

	 	Accounts
	 	 	11	 
	SECTION 3.8

	 	Chattel Paper
	 	 	12	 
	SECTION 3.9

	 	Commercial Tort Claims
	 	 	12	 
	SECTION 3.10

	 	Deposit Accounts and Securities Accounts
	 	 	12	 
	SECTION 3.11

	 	Intellectual Property
	 	 	12	 
	SECTION 3.12

	 	Inventory
	 	 	13	 
	SECTION 3.13

	 	Investment Property; Partnership/LLC Interests
	 	 	13	 
	SECTION 3.14

	 	Instruments
	 	 	13	 
	SECTION 3.15

	 	Government Contracts
	 	 	13	 
	SECTION 3.16

	 	Aircraft
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE IV COVENANTS	 	 	14	 
	SECTION 4.1

	 	Maintenance of Perfected Security Interest; Further Information
	 	 	14	 
	SECTION 4.2

	 	Maintenance of Insurance
	 	 	14	 
	SECTION 4.3

	 	Changes in Locations; Changes in Name or Structure
	 	 	14	 
	SECTION 4.4

	 	Required Notifications
	 	 	15	 
	SECTION 4.5

	 	Delivery Covenants
	 	 	15	 
	SECTION 4.6

	 	Control Covenants
	 	 	15	 
	SECTION 4.7

	 	Filing Covenants
	 	 	17	 
	SECTION 4.8

	 	Accounts
	 	 	17	 
	SECTION 4.9

	 	Intellectual Property
	 	 	18	 
	SECTION 4.10

	 	Investment Property; Partnership/LLC Interests
	 	 	19	 
	SECTION 4.11

	 	Equipment
	 	 	20	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 4.12

	 	Vehicles
	 	 	20	 
	SECTION 4.13

	 	Government Contracts
	 	 	20	 
	SECTION 4.14

	 	Real Estate Collateral
	 	 	20	 
	SECTION 4.15

	 	Trademark Licenses
	 	 	20	 
	SECTION 4.16

	 	Further Assurances
	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE V REMEDIAL PROVISIONS	 	 	21	 
	SECTION 5.1

	 	General Remedies
	 	 	21	 
	SECTION 5.2

	 	Specific Remedies
	 	 	22	 
	SECTION 5.3

	 	Waiver of Certain Claims
	 	 	24	 
	SECTION 5.4

	 	Application of Proceeds
	 	 	25	 
	SECTION 5.5

	 	Waiver, Deficiency
	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE VI THE ADMINISTRATIVE AGENT	 	 	26	 
	SECTION 6.1

	 	Appointment of Administrative Agent as Attorney-In-Fact
	 	 	26	 
	SECTION 6.2

	 	Duty of Administrative Agent
	 	 	28	 
	SECTION 6.3

	 	Authority of Administrative Agent
	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE VII MISCELLANEOUS	 	 	28	 
	SECTION 7.1

	 	Notices
	 	 	28	 
	SECTION 7.2

	 	Amendments, Waivers and Consents
	 	 	28	 
	SECTION 7.3

	 	Expenses, Indemnification, Waiver of Consequential Damages, etc.
	 	 	28	 
	SECTION 7.4

	 	Right of Set Off
	 	 	30	 
	SECTION 7.5

	 	Governing Law; Jurisdiction; Venue; Service of Process
	 	 	30	 
	SECTION 7.6

	 	Waiver of Jury Trial
	 	 	31	 
	SECTION 7.7

	 	Injunctive Relief
	 	 	31	 
	SECTION 7.8

	 	No Waiver By Course of Conduct; Cumulative Remedies
	 	 	31	 
	SECTION 7.9

	 	Successors and Assigns
	 	 	32	 
	SECTION 7.10

	 	Survival of Indemnities
	 	 	32	 
	SECTION 7.11

	 	Titles and Captions
	 	 	32	 
	SECTION 7.12

	 	Severability of Provisions
	 	 	32	 
	SECTION 7.13

	 	Counterparts
	 	 	32	 
	SECTION 7.14

	 	Integration
	 	 	33	 
	SECTION 7.15

	 	Advice of Counsel; No Strict Construction
	 	 	33	 
	SECTION 7.16

	 	Acknowledgements
	 	 	33	 
	SECTION 7.17

	 	Releases
	 	 	33	 
	SECTION 7.18

	 	Additional Grantors
	 	 	34	 
	SECTION 7.19

	 	All Powers Coupled With Interest
	 	 	34	 






ii









 






SCHEDULES:




	 	 	 
	Schedule 3.6

	 	Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Registered Organization Number; Mailing Address;
Chief Executive Office and other Locations
	Schedule 3.9

	 	Commercial Tort Claims
	Schedule 3.10

	 	Deposit Accounts
	Schedule 3.11

	 	Intellectual Property
	Schedule 3.12

	 	Inventory Subject to Licensing Limitations
	Schedule 3.13

	 	Investment Property and Partnership/LLC Interests







iii











 





     This SECURITY AND PLEDGE AGREEMENT (this “Agreement”), is dated as of June 3, 2009, by
and among IMATION CORP., a Delaware corporation (“Imation”), IMATION ENTERPRISES CORP., a
Delaware corporation (together with Imation, each a “Borrower” and, collectively, the
“Borrowers”), certain of each Borrower’s Subsidiaries as identified on the signature pages
hereto and any Additional Grantor (as defined below) who may become party to this Agreement (such
Subsidiaries and Additional Grantors, collectively, with the Borrowers, the “Grantors”), in
favor of BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) for the ratable benefit of the Secured Parties (as defined below).



STATEMENT OF PURPOSE




     Pursuant to the Third Amendment to Credit Agreement of even date herewith by and among the
Borrowers, the Lenders party thereto and the Administrative Agent (the “Third Amendment”),
the Lenders have agreed to amend certain provisions of that certain Credit Agreement by and among
the Borrowers, the Lenders from time to time party thereto and the Administrative Agent dated as of
March 29, 2006 (as amended, restated, supplemented or otherwise modified from time to time,
including as amended by the Third Amendment, the “Credit Agreement”). Terms defined in the
Credit Agreement and not otherwise defined herein shall have the meaning assigned thereto in the
Credit Agreement.



     Pursuant to the terms of the Guaranty and the Joinder Agreements executed in connection with
the Credit Agreement, certain Subsidiaries of each Borrower have guaranteed the payment and
performance of the Obligations.



     It is a condition precedent to the obligation of the Lenders to enter into the Third Amendment
that the Grantors shall have executed and delivered this Agreement to the Administrative Agent, for
the ratable benefit of the Secured Parties.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, and to induce the Administrative Agent and the Lenders
to enter into the Third Amendment, each Grantor hereby agrees with the Administrative Agent, for
the ratable benefit of the Secured Parties, as follows:



ARTICLE I




DEFINED TERMS




     SECTION 1.1 Terms Defined in the Uniform Commercial Code.



     (a) The following terms when used in this Agreement shall have the meanings assigned to them
in the UCC (as defined in the Credit Agreement) as in effect from time to time:
“Accession”, “Account”, “Account Debtor”, “Authenticate”,
“Certificated Security”, “Chattel Paper”; “Commercial Tort Claim”,
“Deposit Account”, “Documents”, “Electronic Chattel Paper”,
“Equipment”, “Farm Products” “Fixture”, “General Intangible”,
“Goods”, “Instrument”, “Inventory”, “Investment Company Security”,
“Investment Property”, “Letter of Credit Rights”, “Proceeds”,
“Record”, “Registered Organization”, “Securities Account”, “Securities
Entitlement”, “Securities Intermediary”, “Security”, “Supporting
Obligation”, “Tangible Chattel Paper”, and “Uncertificated Security”.



 









 





     (b) Terms defined in the UCC and not otherwise defined herein or in the Credit Agreement shall
have the meaning assigned in the UCC as in effect from time to time.



     SECTION 1.2 Definitions. The following terms when used in this Agreement shall have
the meanings assigned to them below:



     “Additional Grantor” means each Subsidiary of a Borrower which hereafter becomes a
Grantor pursuant to Section 7.18, (as required pursuant to Section 6.13 of the
Credit Agreement).



     “Agreement” means this Security and Pledge Agreement, as amended, restated,
supplemented or otherwise modified from time to time.



     “Assignment of Claims Act” means the Assignment of Claims Act of 1940 (41 U.S.C.
Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727), including all amendments thereto
and regulations promulgated thereunder.



     “Capital Stock” has the meaning assigned thereto in Section 2.1.



     “Collateral” has the meaning assigned thereto in Section 2.1.



     “Control” means the manner in which “control” is achieved under the UCC with respect
to any Collateral for which the UCC specifies a method of achieving “control”.



     “Controlled Depository” has the meaning assigned thereto in Section 4.6.



     “Controlled Intermediary” has the meaning assigned thereto in Section 4.6.



     “Copyrights” means, collectively, all of the following of any Grantor: (a) all
copyrights, rights and interests in copyrights, works protectable by copyright, copyright
registrations and copyright applications anywhere in the world, including, without limitation,
those listed on Schedule 3.11 hereto, (b) all reissues, extensions, continuations (in whole
or in part) and renewals of any of the foregoing, (c) all income, royalties, damages and payments
now or hereafter due and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past, present or future
infringements of any of the foregoing, (d) the right to sue for past, present or future
infringements of any of the foregoing and (e) all rights corresponding to any of the foregoing
throughout the world.



     “Copyright Licenses” means any agreement now or hereafter in existence naming any
Grantor as licensor or licensee, including, without limitation, those listed in Schedule
3.11, granting any right under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived from any Copyright.



     “Effective Endorsement and Assignment” means, with respect to any specific type of
Collateral, all such endorsements, assignments and other instruments of transfer reasonably
requested by the Administrative Agent with respect to the Security Interest granted in such
Collateral, and in each case, in form and substance reasonably satisfactory to the Administrative
Agent.



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     “Excluded Capital Stock” means any Investment Property, Partnership/LLC Interests, or
other Capital Stock owned or held by a Grantor in (a) any Inactive Subsidiary or (b) any Foreign
Subsidiary that is not a Pledged Foreign Subsidiary, including without limitation (x) all
registrations, certificates, articles or agreements governing or representing any such interests
and (y) all options and other rights, contractual or otherwise, at any time existing with respect
to such interests.



     “Excluded Deposit Account” means, collectively, (a) Deposit Accounts established
solely for the purpose of funding payroll, payroll taxes and other compensation and benefits to
employees and (b) an account containing not more than $100,000 at any time, provided, that all such
accounts described in this subclause (b) shall not have more than $250,000 in the aggregate on
deposit therein at any time.



     “Excluded Investment Property” means, collectively, Securities Accounts established
solely for the purpose of funding payroll, payroll taxes and other compensation and benefits to
employees.



     “Government Contract” means a contract between any Grantor and an agency, department
or instrumentality of the United States or any other jurisdiction or any state, municipal or local
Governmental Authority located in the United States or any other jurisdiction or all obligations of
any such Governmental Authority arising under any Account now or hereafter owing by any such
Governmental Authority, as account debtor, to any Grantor.



     “Grantors” has the meaning set forth in the Preamble of this Agreement.



     “Intellectual Property” means, collectively, all of the following of any Grantor: (a)
all systems software, applications software and internet rights, including, without limitation,
screen displays and formats, internet domain names, web sites (including web links), program
structures, sequence and organization, all documentation for such software, including, without
limitation, user manuals, flowcharts, programmer’s notes, functional specifications, operations
manuals, all formulas, processes, ideas and know-how embodied in any of the foregoing, and all
program materials, flowcharts, notes and outlines created in connection with any of the foregoing,
whether or not patentable or copyrightable, (b) concepts, discoveries, inventions, improvements and
ideas, (c) any useful information relating to the items described in clause (a) or (b), including
know-how, technology, engineering drawings, reports, design information, trade secrets, practices,
laboratory notebooks, specifications, test procedures, maintenance manuals, research, development,
manufacturing, marketing, merchandising, selling, purchasing and accounting, (d) Patents and Patent
Licenses, Copyrights and Copyright Licenses, Trademarks and Trademark Licenses, and (e) other
licenses to use any of the items described in the foregoing clauses (a), (b), (c) and (d) or any
other similar items of such Grantor necessary for the conduct of its business.



     “Issuer” means any issuer of any Investment Property or Partnership/LLC Interests
(including, without limitation, any Issuer as defined in the UCC).



     “Material Intellectual Property” means Intellectual Property of a Grantor that is or
that becomes material to the operations of the business of the Grantor that owns or licenses such



3









 




Intellectual Property. Material Intellectual Property includes the Intellectual Property
specifically designated as material on Schedule 3.11 hereto, as such Schedule may be
updated from time to time pursuant to Section 4.9.




     “Non-Material Intellectual Property” means any Intellectual Property of a Grantor that
is not material to the operations of the business of such Grantor and that is not otherwise
Material Intellectual Property.



     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.



     “Partnership/LLC Interests” means, with respect to any Grantor, the entire
partnership, membership interest or limited liability company interest, as applicable, of such
Grantor in each partnership, limited partnership or limited liability company owned thereby,
including, without limitation, such Grantor’s capital account, its interest as a partner or member,
as applicable, in the net cash flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of any such partnership, limited partnership or limited liability company, as
applicable, such Grantor’s interest in all distributions made or to be made by any such
partnership, limited partnership or limited liability company, as applicable, to such Grantor and
all of the other economic rights, titles and interests of such Grantor as a partner or member, as
applicable, of any such partnership, limited partnership or limited liability company, as
applicable, whether set forth in the partnership agreement or membership agreement, as applicable,
of such partnership, limited partnership or limited liability company, as applicable, by separate
agreement or otherwise.



     “Patents” means collectively, all of the following of any Grantor: (a) all patents,
all rights and interests in patents, patent disclosures, patentable inventions and patent
applications anywhere in the world, including, without limitation, those listed on Schedule
3.11 hereto, (b) all improvements thereto, reissues, continuations (in whole or in part),
divisionals, reexaminations and renewals and extensions of any of the foregoing, (c) all income,
royalties, damages or payments now or hereafter due and/or payable under any of the foregoing or
with respect to any of the foregoing, including, without limitation, damages or payments for past,
present or future infringements of any of the foregoing, (d) the right to sue for past, present and
future infringements of any of the foregoing and (e) all rights corresponding to any of the
foregoing throughout the world.



     “Patent License” means all agreements now or hereafter in existence, whether written,
implied or oral, providing for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including, without limitation, any of
the foregoing referred to in Schedule 3.11 hereto.



     “Pledged Capital Stock” means all Investment Property, Partnership/LLC Interests, or
other Capital Stock owned or held by a Grantor in (a) any other Grantor (other than Imation) or (b)
a Pledged Foreign Subsidiary, including without limitation (x) all registrations, certificates,
articles or agreements governing or representing any such interests, (y) all options and other
rights, contractual or otherwise, at any time existing with respect to such interests and (z) all
distributions, cash, instruments and other property now or hereafter received, receivable or
otherwise distributed in respect of or in exchange for any or all of such interests.



4









 





     “Pledged Partnership/LLC Agreement” has the meaning assigned thereto in Section
2.2(a).



     “Sanctioned Person” means a person named on the list of Specially Designated Nationals
or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time
to time.



     “Secured Obligations” means, with respect to each Borrower, the “Obligations”, and
with respect to each Guarantor, the obligations of such Guarantor under the Guaranty Agreement and
with respect to all Grantors, all liabilities and obligations of the Grantors hereunder and all
liabilities and obligations of the Grantors with respect to overdrafts, chargebacks, returned items
and related liabilities and all indemnification obligations under the Loan Documents now or
hereafter owing by any Grantor to Bank of America, N.A., any Affiliate thereof or the
Administrative Agent arising from or in connection with treasury, depositary or cash management
services or in connection with any automated clearinghouse transfer of funds for the benefit of
such Grantor.



     “Secured Parties” has the meaning set forth in the Credit Agreement.



     “Securities Act” has the meaning assigned thereto in Section 5.3.



     “Security Interests” means the security interests granted pursuant to Article
II, as well as all other security interests created or assigned as additional security for any
of the Secured Obligations pursuant to the provisions of any Loan Document.



     “Trademarks” means, collectively, all of the following of any Grantor: (a) all
trademarks, rights and interests in trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, service marks, logos, other
business identifiers, together with translations, adaptations, derivations and combinations
thereof, prints and labels on which any of the foregoing have appeared or appear, whether
registered or unregistered, all registrations and recordings thereof, and all applications in
connection therewith (other than each application to register any trademark or service mark prior
to the filing under applicable Law of a verified statement of use for such trademark or service
mark) anywhere in the world, including, without limitation, those listed on Schedule 3.11
hereto, (b) all reissues, extensions, continuations (in whole or in part) and renewals of any of
the foregoing, (c) all income, royalties, damages and payments now or hereafter due and/or payable
under any of the foregoing or with respect to any of the foregoing, including, without limitation,
damages or payments for past, present or future infringements of any of the foregoing, (d) the
right to sue for past, present or future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing (including the goodwill) throughout the world.



     “Trademark License” means any agreement now or hereafter in existence, whether written
or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in Schedule 3.11.



5









 





     “Vehicles” means all cars, trucks, trailers, construction and earth moving equipment
and other vehicles covered by a certificate of title under the laws of any state, all tires and all
other appurtenances to any of the foregoing.



     SECTION 1.3 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, (b) whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to
have the same meaning and effect as the word “shall”, (e) any definition of or reference to any
agreement, instrument or other document herein 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),
(f) any reference herein to any Person shall be construed to include such Person’s permitted
successors and assigns, (g) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (i)
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, (j) the term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form, (k) 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”, (l)
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 and (m)
where the context requires, terms relating to the Collateral or any part thereof, when used in
relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.



ARTICLE II




SECURITY INTEREST




     SECTION 2.1 Grant of Security Interest. Each Grantor hereby grants, pledges and
collaterally assigns to the Administrative Agent, for the ratable benefit of the Administrative
Agent and the Secured Parties, a security interest in, all of such Grantor’s right, title and
interest in the following property, now owned or at any time hereafter acquired by such Grantor or
in which such Grantor now has or at any time in the future may acquire any right, title or
interest, and wherever located or deemed located (collectively, the “Collateral”), as
collateral security for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Secured Obligations:



     (a) all Accounts;



6









 





     (b) all cash and currency;



     (c) all Chattel Paper;



     (d) all Commercial Tort Claims identified on Schedule 3.9;



     (e) all Deposit Accounts;



     (f) all Documents;



     (g) all Equipment;



     (h) all Fixtures;



     (i) all General Intangibles;



     (j) all Instruments;



     (k) all Intellectual Property;



     (l) all Inventory;



     (m) all Investment Property;



     (n) all Letter of Credit Rights;



     (o) all licenses and permits;



     (p) all Vehicles



     (q) all Goods and all other personal property not otherwise described above;



     (r) all books and records pertaining to the Collateral; and



     (s) to the extent not otherwise included, all Proceeds and products of any and all of the
foregoing, all Accessions to any of the foregoing and all collateral security and Supporting
Obligations (as now or hereafter defined in the UCC) given by any Person with respect to any of the
foregoing;



provided, that (i) any Security Interest on any capital stock, limited liability company
interests, membership interests, partnership interests, other equity interests or other ownership
interests (collectively, “Capital Stock”) issued by any Foreign Subsidiary shall be limited
to sixty-five percent (65%) of all issued and outstanding shares or units or other similar
interests (collectively “Shares”) of all classes of voting Capital Stock of each Foreign
Subsidiary and one hundred percent (100%) of all issued and outstanding Shares of all classes of
non-voting Capital Stock of such Foreign Subsidiary, (ii) the Security Interests granted herein
shall not extend to, and the term “Collateral” shall not include any Excluded Capital Stock, and
(iii) the Security Interests granted herein shall not extend to, and the term “Collateral” shall
not include, (A) any obligation or property of any kind due from, owed by or belonging to any
Sanctioned Person or (B) any



7









 




rights under any lease, instrument, contract or agreement of any Grantor to the extent that the
granting of a security interest therein would, under the express terms of such lease, instrument,
contract or agreement, (I) be prohibited or restricted or (II) result in a breach of the terms of,
constitute a default under or result in a termination of any such lease, instrument, contract or
agreement governing such right, unless (x) such prohibition or restriction is not enforceable or is
otherwise ineffective under applicable Law or (y) consent to such security interest has been
obtained from any applicable third party. Notwithstanding any of the foregoing, such proviso shall
not affect, limit, restrict or impair the grant by any Grantor of a Security Interest in any
Account or any money or other amounts due and payable to any Grantor or to become due and payable
to any Grantor under any such lease, instrument, contract or agreement unless such security
interest in such Account, money or other amount due and payable is also specifically prohibited or
restricted by the terms of such lease, instrument, contract or other agreement or such security
interest in such Account, money or other amount due and payable would expressly constitute a
default under or would expressly grant a party a termination right under any such lease,
instrument, contract or agreement governing such right unless, in each case, (X) such prohibition
is not enforceable or is otherwise ineffective under applicable Law or (Y) consent to such security
interest has been obtained from any applicable third party; provided further, that
upon the sale, transfer, assignment or abandonment of any Non-Material Intellectual Property by a
Grantor, the Lien and Security Interest on such Non-Material Intellectual Property shall be
automatically released without any further action required by the Administrative Agent or any
Lender, and the definition of “Collateral” shall be deemed to no longer include any such
Non-Material Intellectual Property; provided further, however that notwithstanding
anything to the contrary contained in the foregoing proviso, the Security Interests granted herein
shall immediately and automatically attach to and the term “Collateral” shall immediately and
automatically include the rights under any such lease, instrument, contract or agreement and in
such Account, money, or other amounts due and payable to any Grantor at such time as such
prohibition, restriction, event of default or termination right terminates or is waived or consent
to such security interest has been obtained from any applicable third party.




     Notwithstanding the foregoing, the payment and performance of the Obligations shall not be
secured by any Swap Contract between any Grantor and any Secured Party.



     SECTION 2.2 Partnership/LLC Interests.



     (a) Subject to Section 7.17, each limited liability agreement, operating agreement,
membership agreement, partnership agreement or similar agreement to which a Grantor is a party and
relating to any Partnership/LLC Interests that are Pledged Capital Stock (as amended, restated,
supplemented or otherwise modified from time to time, a “Pledged Partnership/LLC Agreement”) is
amended by this Section 2.2 to permit each member, manager and partner that is a Grantor to
pledge all of the Partnership/LLC Interests that are Pledged Capital Stock in which such Grantor
has rights to and grant and collaterally assign to the Secured Parties a lien and security interest
in its Partnership/LLC Interests that are Pledged Capital Stock in which such Grantor has rights
without any further consent, approval or action by any other party, including, without limitation,
any other party to any Pledged Partnership/LLC Agreement or otherwise.



     (b) Upon the occurrence and during the continuance of an Event of Default, the Administrative
Agent or its designees shall have the right (but not the obligation) to be



8









 







substituted for the applicable Grantor as a member, manager or partner under the applicable
Pledged Partnership/LLC Agreement and the Administrative Agent shall have all rights, powers and
benefits of such Grantor as a member, manager or partner, as applicable, under such Pledged
Partnership/LLC Agreement. For avoidance of doubt, such rights, powers and benefits of a
substituted member shall include all voting and other rights and not merely the rights of an
economic interest holder. So long as this Agreement remains in effect, no further consent, approval
or action by any other party including, without limitation, any other party to the Pledged
Partnership/LLC Agreement or otherwise shall be necessary to permit the Administrative Agent to be
substituted as a member, manager or partner pursuant to this paragraph. The rights, powers and
benefits granted pursuant to this paragraph shall inure to the benefit of the Administrative Agent,
on its own behalf and on behalf of the other Secured Parties, and each of their respective
successors, assigns and designated agents, as intended third party beneficiaries.



     (c) Each applicable Grantor and each applicable Issuer agrees that so long as this Agreement
remains in effect, no Pledged Partnership/LLC Agreement shall be amended to modify the provisions
of this Section 2.2 without the prior written consent of the Administrative Agent.



     SECTION 2.3 Grantors Remain Liable. Anything herein to the contrary notwithstanding:
(a) each Grantor shall remain liable to perform all of its duties and obligations under the leases,
instruments, contracts and agreements included in the Collateral to the same extent as if this
Agreement had not been executed, (b) the exercise by the Administrative Agent or any other Secured
Party of any of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, (c) neither the
Administrative Agent nor any other Secured Party shall have any obligation or liability under the
leases, instruments, contracts and agreements included in the Collateral by reason of this
Agreement, nor shall the Administrative Agent or any other Secured Party be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder, and (d) neither the Administrative Agent nor any
other Secured Party shall have any liability in contract or tort for any Grantor’s acts or
omissions.



ARTICLE III




REPRESENTATIONS AND WARRANTIES




     To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Credit Extensions to the Borrowers thereunder, each
Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party
that:



     SECTION 3.1 Organization; Power; Qualification. Each Grantor is duly organized or
formed, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the power and authority to own, lease and operate its properties
and to carry on its business as now being and hereafter proposed to be conducted and is duly
qualified and authorized to do business in each jurisdiction in which the character of its



9









 




properties or the nature of its business requires such qualification and authorization except
in jurisdictions where the failure to be so qualified or in good standing could not reasonably be
expected to have a Material Adverse Effect.




     SECTION 3.2 Authorization of Agreement; Compliance with Laws; Non Contravention.
Each Grantor has the right, power and authority and has taken all necessary corporate and other
organizational action to authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by the duly authorized officers of each Grantor and
this Agreement constitutes the legal, valid and binding obligation of such Grantor, enforceable in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors rights generally or the availability of equitable
remedies. The execution, delivery and performance by the Grantors of this Agreement does not and
will not, by the passage of time, the giving of notice or otherwise, (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.



     SECTION 3.3 Governmental Approvals. No approval, consent, exemption, authorization
or other action by, 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 Grantor or any Issuer of this Agreement, except (a) as may be required by laws
affecting the offering and sale of securities generally, (b) filings with the United States
Copyright Office and/or the United States Patent and Trademark Office, (c) filings under the UCC
and/or the Assignment of Claims Act, (d) as may be required with respect to Vehicles represented by
a certificate of title and (e) as may be required with respect to the pledge of any Pledged Capital
Stock in a Foreign Subsidiary by a Grantor, which requirements shall be satisfied in all material
respects.



     SECTION 3.4 Perfected First Priority Liens. Each financing statement naming any
Grantor as a debtor is in appropriate form for filing in the appropriate offices of the states
specified on Schedule 3.6. The Security Interests in the Collateral granted pursuant to
this Agreement constitute valid and enforceable security interests in all of the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Secured Parties, as collateral
security for the Secured Obligations, and upon the Administrative Agent duly filing or recording
any required financing statements, taking possession or control (including possession of any
certificate of title) of Collateral that may be perfected only by possession or control and making
all applicable registrations with the U.S. Copyright Office with respect to any Copyrights, such
Security Interests shall constitute a first priority perfected security interest (subject only to
Permitted Liens) in all Collateral except (a) for Collateral consisting of any Intellectual
Property registered, filed, recorded or otherwise located in any country outside of the United
States and (b) with respect to any Pledged Capital Stock in a Pledged Foreign Subsidiary, solely to
the extent that the perfection thereof is governed by foreign Laws and subject to any additional
requirements, provided, that the applicable Grantor and Issuer shall take all actions reasonably
requested by the Administrative Agent to satisfy such additional requirements and ensure that



10









 




such Security Interests shall constitute a first priority perfected security interest (subject
only to Permitted Liens) under applicable foreign Law to the extent a first priority security
interest can be granted and maintained under such applicable foreign Law.




     SECTION 3.5 Title, No Other Liens. Except for the Security Interests, each Grantor
owns each item of the Collateral free and clear of any and all Liens or claims other than Permitted
Liens. No Grantor has authenticated any agreement authorizing any secured party thereunder to file
a financing statement, except to perfect Permitted Liens.



     SECTION 3.6 State of Organization; Location of Inventory, Equipment and Fixtures; other
Information.



     (a) The exact legal name of each Grantor is set forth on Schedule 3.6 (as such
schedule may be updated from time to time pursuant to Section 4.3).



     (b) Each Grantor is a Registered Organization organized under the laws of the state identified
on Schedule 3.6 under such Grantor’s name (as such schedule may be updated from time to
time pursuant to Section 4.3). The taxpayer identification number and, to the extent
applicable, Registered Organization number of each Grantor is set forth on Schedule 3.6
under such Grantor’s name (as such schedule may be updated from time to time pursuant to
Section 4.3).



     (c) All Collateral of the Grantors consisting of Inventory, Equipment and Fixtures (whether
now owned or hereafter acquired) is (or will be) located at the locations specified on Schedule
3.6, except as otherwise permitted hereunder.



     (d) The mailing address, chief place of business, chief executive office and office where each
Grantor keeps its books and records relating to the Accounts, Documents, General Intangibles,
Instruments and Investment Property in which it has any interest is located at the locations
specified on Schedule 3.6 under such Grantor’s name or as otherwise specified from time to
time in writing by such Grantor in accordance with the terms of this Agreement. No Grantor has any
other places of business except those separately set forth on Schedule 3.6 under such
Grantor’s name or as otherwise specified from time to time in writing by such Grantor in accordance
with the terms of this Agreement. No Grantor does business nor has done business during the past
five years under any trade name or fictitious business name except as disclosed on Schedule
3.6 or as otherwise specified from time to time in writing by such Grantor in accordance with
the terms of this Agreement. Except as disclosed on Schedule 3.6 under such Grantor’s
name, no Grantor has acquired assets from any Person, other than assets acquired in the ordinary
course of such Grantor’s business from a Person engaged in the business of selling goods of such
kind, during the past five years.



     SECTION 3.7 Accounts. To the knowledge of the Grantors, no Account Debtor has any
defense, set-off, claim or counterclaim against any Grantor that can be asserted against the
Administrative Agent, whether in any proceeding to enforce the Administrative Agent’s rights in the
Collateral or otherwise except defenses, setoffs, claims or counterclaims that are not, in the
aggregate, material to the value of the Accounts. None of the Accounts is, nor will any hereafter



11









 




arising Account be, evidenced by a promissory note or other Instrument (other than a check)
that has not been pledged to the Administrative Agent in accordance with the terms hereof.




     SECTION 3.8 Chattel Paper. As of the date hereof, no Grantor holds any Chattel Paper
in the ordinary course of its business.



     SECTION 3.9 Commercial Tort Claims. As of the date hereof, all Commercial Tort
Claims owned by any Grantor are listed on Schedule 3.9.



     SECTION 3.10 Deposit Accounts and Securities Accounts. As of the date hereof, all
Deposit Accounts (including, without limitation, cash management accounts that are Deposit Accounts
and all Excluded Deposit Accounts), Securities Accounts (including, without limitation, cash
management accounts that are Securities Accounts and all Excluded Securities Accounts) and
lockboxes (including the (a) owner of the account, (b) name and address of the financial
institution or securities broker where such accounts are located, (c) account numbers and (d)
purpose or use of such account) are listed on Schedule 3.10.



     SECTION 3.11 Intellectual Property.



     (a) As of the date hereof, all Copyright registrations, Copyright applications, issued
Patents, Patent applications, Trademark registrations and Trademark applications owned by any
Grantor in its own name are listed on Schedule 3.11 (as such schedule may be updated from
time to time pursuant to Section 4.9).



     (b) Except as set forth in Schedule 3.11 on the date hereof (as such schedule may be
updated from time to time pursuant to Section 4.9), none of the Material Intellectual
Property owned by any Grantor is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.



     (c) Each Grantor owns, or possesses the right to use, all of its Material Intellectual
Property rights that are required for the operation of their respective businesses, without
conflict with the rights of any other Person except for such conflicts that are de minimus and are
immaterial to the operation of the Grantor’s business as a whole. All applications, registrations
and grants for all Patents, Trademarks and Copyrights of each Grantor that are included as Material
Intellectual Property and to the knowledge of each Grantor, all applications, registrations and
grants for any licensed Intellectual Property that are included as Material Intellectual Property
are valid, subsisting and enforceable, are in good standing, all required filings with any relevant
governmental intellectual property office have been made and all required filing, registration,
maintenance and other fees have been paid. To the best knowledge of each Grantor, no slogan or
other advertising device, product, process, method, substance, part or other material now employed,
or now contemplated to be employed, by any Grantor infringes upon any rights held by any other
Person other than as specifically disclosed in Schedule 5.17 of the Credit Agreement or
which could not reasonably be expected to have a Material Adverse Effect. Except as specifically
disclosed in Schedule 5.17 of the Credit Agreement, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of each Grantor, threatened, which, either
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.



12









 





     SECTION 3.12 Inventory. Collateral consisting of Inventory is of good and
merchantable quality, free from any material defects. To the knowledge of each Grantor, none of
such Inventory is subject to any licensing, Patent, Trademark, trade name or Copyright with any
Person that restricts any Grantor’s ability to manufacture and/or sell such Inventory other than as
set forth on Schedule 3.12 and which could not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 3.12, the completion of the manufacturing
process of such Inventory by a Person other than the applicable Grantor would be permitted under
any contract to which such Grantor is a party or to which the Inventory is subject.



     SECTION 3.13 Investment Property; Partnership/LLC Interests.



     (a) As of the date hereof, all Investment Property included as Collateral (including, without
limitation, Securities Accounts and cash management accounts that are Investment Property) and all
Partnership/LLC Interests that constitute Pledged Capital Stock are listed on Schedule 3.13
(as such schedule may be updated from time to time pursuant to Section 4.3).



     (b) All Investment Property and all Partnership/LLC Interests issued by any Issuer and issued
to any Grantor and, in each case, included in the Collateral (i) have been duly and validly issued
and, if applicable, are fully paid and nonassessable, (ii) are beneficially owned as of record by
such Grantor and (ii) constitute all the issued and outstanding shares of all classes of the
capital stock or Partnership/LLC Interests of such Issuer issued to such Grantor.



     (c) None of the Partnership/LLC Interests that are Pledged Capital Stock by their terms
expressly provide that they are securities governed by Article 8 of the UCC. Except to the extent
prohibited by applicable Law, if certificates representing any Partnership/LLC Interests that are
Pledged Capital Stock have been issued, such certificates have been provided to the Administrative
Agent with respect to such Partnership/LLC Interests. None of the Partnership/LLC Interests that
are Pledged Capital Stock (i) are dealt in or traded on a Securities exchange or in Securities
markets, (ii) are Investment Company Securities or (iii) are held in a Securities Account.



     SECTION 3.14 Instruments. As of the date hereof, no Grantor holds any Instruments or
is named a payee of any promissory note or other evidence of indebtedness.



     SECTION 3.15 Government Contracts. As of the date hereof, no Grantor is party to any
contract with a Governmental Authority under which such Governmental Authority, as account debtor,
owes a monetary obligation to any Grantor under any account under which the Grantor is owed an
amount in excess of $1,000,000 individually or $2,500,000 in the aggregate.



     SECTION 3.16 Aircraft. None of the Collateral constitutes, or is the proceeds of,
(a) an aircraft, airframe, aircraft engine or related property, (b) an aircraft lease or (c) any
other interest in or to any of the foregoing.



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ARTICLE IV




COVENANTS




     Until the Obligations (other than (a) contingent or indemnification obligations not yet due
and (b) the Bank Product Debt) shall have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 7.2, each Grantor covenants
and agrees that:



     SECTION 4.1 Maintenance of Perfected Security Interest; Further Information.



     (a) Such Grantor shall maintain the Security Interest created by this Agreement as a first
priority perfected Security Interest, subject to the provisions of Section 3.4 above, and
shall defend such Security Interest against the claims and demands of all Persons whomsoever.



     (b) Such Grantor will from time to time furnish to the Administrative Agent upon the
Administrative Agent’s or any Lender’s reasonable request statements and schedules further
identifying and describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent or such Lender may reasonably request, all in
reasonable detail.



     SECTION 4.2 Maintenance of Insurance. Each Grantor shall maintain insurance covering
the Collateral in accordance with the provisions of Section 6.07 of the Credit Agreement.



     SECTION 4.3 Changes in Locations; Changes in Name or Structure. Grantor will not,
except upon thirty (30) days’ prior written notice to the Administrative Agent (which time period
may be reduced by the Administrative Agent in its sole discretion by written notice to such
Grantor) and delivery to the Administrative Agent of (a) all additional financing statements
(executed if necessary for any particular filing jurisdiction) and other instruments and documents
reasonably requested by the Administrative Agent to maintain the validity, perfection and priority
of the Security Interests and (b) if applicable, a written supplement to the Schedules of
this Agreement:



     (i) permit any Deposit Account (other than Excluded Deposit Accounts) described on
Schedule 3.10 to be closed or maintained with any other depositary bank;



     (ii) permit any Investment Property (other than (A) Certificated Securities delivered to the
Administrative Agent pursuant to Section 4.5 or (B) Excluded Investment Property) to be
held by a Securities Intermediary other than (x) the Securities Intermediary that held such
Investment Property as of the date hereof as set forth on Schedule 3.13 or (y) a Securities
Intermediary that holds such Investment Property in a Securities Account over which the
Administrative Agent has been granted Control;



     (iii) change its jurisdiction of organization or the location of its chief executive office
(or the location where any Grantor maintains its books and records relating to Accounts, Documents,
General Intangibles, Instruments and Investment Property in which it has any interest) from that
identified on Schedule 3.6; or



14









 





     (iv) change its name, identity or corporate or organizational structure to such an extent that
any financing statement filed by the Administrative Agent in connection with this Agreement would
become seriously misleading under the UCC.



     SECTION 4.4 Required Notifications. Each Grantor shall promptly notify the
Administrative Agent, in writing, of: (a) any Lien (other than Permitted Liens) on any of the
Collateral which would adversely affect the ability of the Administrative Agent to exercise any of
its remedies hereunder, (b) the occurrence of any other event which could reasonably be expected to
adversely effect the aggregate value of the Collateral or on the Security Interests, (c) any
Collateral which, to the knowledge of such Grantor, constitutes a Government Contract with an
individual value in excess of $1,000,000 or to the extent the aggregate value of all Government
Contracts is in excess of $2,500,000, and (d) the acquisition or ownership by such Grantor of any
(i) Commercial Tort Claim (other than, as long as no Default exists, a Commercial Tort Claim for
less than $1,000,000), (ii) Deposit Account (other than Excluded Deposit Accounts), or (iii)
Investment Property (other than Excluded Investment Property) after the date hereof.



     SECTION 4.5 Delivery Covenants. Such Grantor will deliver and pledge to the
Administrative Agent, for the ratable benefit of the Secured Parties, all Certificated Securities
representing any Pledged Capital Stock or other Investment Property that is included as Collateral
(other than those Certificated Securities evidencing Excluded Investment Property), or that are
otherwise evidenced by a certificate, negotiable Documents, Instruments, and Tangible Chattel Paper
owned or held by such Grantor, in each case, together with an Effective Endorsement and Assignment
and all Supporting Obligations, as applicable, unless such delivery and pledge has been waived in
writing by the Administrative Agent.



     SECTION 4.6 Control Covenants.



     (a) To further secure the prompt payment and performance of all Secured Obligations, such
Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, a
continuing security interest in and Lien upon all amounts credited to any Deposit Account and upon
all Investment Property credited to any Securities Account of such Grantor, including any sums in
any blocked or lockbox accounts or in any accounts into which such sums are swept. Such Grantor
shall instruct (and otherwise use its commercially reasonable efforts to cause) (i) each depositary
bank (other than the Administrative Agent) holding a Deposit Account (other than Excluded Deposit
Accounts) owned by such Grantor and (ii) each Securities Intermediary holding any Investment
Property (other than Excluded Investment Property) owned by such Grantor, to execute and deliver a
control agreement, sufficient to provide the Administrative Agent with Control of such Deposit
Account or Investment Property and otherwise in form and substance reasonably satisfactory to the
Administrative Agent (any such depositary bank executing and delivering any such control agreement,
a “Controlled Depositary”, and any such Securities Intermediary executing and delivering
any such control agreement, a “Controlled Intermediary”). In the event any such depositary
bank or Securities Intermediary refuses to execute and deliver such control agreement, the
Administrative Agent, in its sole discretion, may require the applicable Deposit Account and
Investment Property to be transferred to the Administrative Agent or a Controlled Depositary or
Controlled Intermediary, as applicable. After the date hereof, all Deposit Accounts (other than
Excluded Deposit



15









 




Accounts) and all Investment Property (other than Excluded Investment Property) will be
maintained with the Administrative Agent or with a Controlled Depository or a Controlled
Intermediary, as applicable.




     (b) The Grantors shall maintain a Dominion Account pursuant to lockbox or other arrangements
acceptable to the Administrative Agent. The Grantors shall obtain an agreement (in form and
substance satisfactory to the Administrative Agent) from each lockbox servicer and Dominion Account
bank, establishing the Administrative Agent’s control over and Lien in the lockbox or Dominion
Account, which may be exercised by Agent during any Cash Dominion Trigger Period, requiring
immediate deposit of all remittances received in the lockbox to a Dominion Account, and waiving
offset rights of such servicer or bank, except for customary administrative charges and returned
items. If a Dominion Account is not maintained with Bank of America, the Administrative Agent may,
during any Cash Dominion Trigger Period, require immediate transfer of all funds in such account to
a Dominion Account maintained with Bank of America. The Administrative Agent and the other Secured
Parties assume no responsibility to such Grantor for any lockbox arrangement or Dominion Account,
including any claim of accord and satisfaction or release with respect to any Payment Items
accepted by any bank.



     (c) Any Cash Collateral may be invested, at the Administrative Agent’s discretion, in Cash
Equivalents, but the Administrative Agent shall have no duty to do so, regardless of any agreement
or course of dealing with such Grantor, and shall have no responsibility for any investment or
loss. Such Grantor hereby grants to the Administrative Agent, for the benefit of Secured Parties,
a security interest in all Cash Collateral held from time to time and all proceeds thereof, as
security for the Secured Obligations, whether such Cash Collateral is held in a Cash Collateral
account or elsewhere. The Administrative Agent may apply Cash Collateral to the payment of any
Secured Obligations, in accordance with the terms of the Credit Agreement, as they become due and
payable. Each Cash Collateral account and all Cash Collateral shall be under the sole dominion and
control of the Administrative Agent. Neither such Grantor nor any other Person claiming through or
on behalf of such Grantor shall have any right to any Cash Collateral, until Full Payment of all
Secured Obligations.



     (d) Such Grantor will take such actions and deliver all such agreements as are requested by
the Administrative Agent to provide the Administrative Agent with Control of all Letter of Credit
Rights and Electronic Chattel Paper owned or held by such Grantor, including, without limitation,
with respect to any such Electronic Chattel Paper, by having the Administrative Agent identified as
the assignee of the Record(s) pertaining to the single authoritative copy thereof.



     (e) If any Collateral (other than Collateral specifically subject to the provisions of
Sections 4.6(a) and 4.6(b)) exceeding in value $1,000,000 in the aggregate (such
Collateral exceeding such amount, the “Stored Collateral”) is at any time in the possession
or control of any single consignee, warehouseman, bailee (other than a carrier transporting
Inventory to a purchaser in the ordinary course of business), processor, or any other third party
(other than an Approved Consignee with a credit rating of BB+ (or better) with S&P and Ba1 (or
better) with Moody’s), such Grantor shall notify such Person in writing of the Security Interests
created hereby, shall use its commercially reasonable efforts to obtain such Person’s written
acknowledgment to hold all such Collateral for the benefit of the Administrative Agent subject to



16









 







the Administrative Agent’s instructions, and if requested by the Administrative Agent shall
use commercially reasonable efforts to cause such Person to issue and deliver to the Grantor, who
shall promptly delver to the Administrative Agent, warehouse receipts, bills of lading or any
similar documents relating to such Collateral, together with an Effective Endorsement and
Assignment. Further, within ninety (90) days of the date hereof, each Grantor shall use
commercially reasonable efforts to perfect and protect such Grantor’s ownership interests in all
Inventory stored with a consignee that has an aggregate book value in excess of $5,000,000 against
creditors of the consignee by filing and maintaining financing statements against the consignee
reflecting the consignment arrangement filed in all appropriate filing offices, providing any
written notices required by the UCC to notify any prior creditors of the consignee of the
consignment arrangement, and taking such other actions as may be appropriate to perfect and protect
such Grantor’s interests in such inventory under Section 2-326, Section 9-103, Section 9-324 and
Section 9-505 of the UCC or otherwise. All such financing statements filed pursuant to this
Section 4.6(c) shall be assigned, on the face thereof, to the Administrative Agent, for the
ratable benefit of the Secured Parties.



     SECTION 4.7 Filing Covenants. Pursuant to Section 9-509 of the UCC and any other
applicable Law, such Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the Administrative Agent
determines appropriate to perfect the Security Interests of the Administrative Agent under this
Agreement. Such financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of Collateral that describes such property in
any other manner as the Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the Security Interest in the Collateral granted
herein, including, without limitation, describing such property as “all assets” or “all personal
property.” Further, a photographic or other reproduction of this Agreement shall be sufficient as
a financing statement or other filing or recording document or instrument for filing or recording
in any jurisdiction. Such Grantor hereby authorizes, ratifies and confirms all financing
statements and other filing or recording documents or instruments filed by the Administrative Agent
prior to the date of this Agreement.



     SECTION 4.8 Accounts.



     (a) Other than in the Ordinary Course of Business, such Grantor will not (i) grant any
extension of the time of payment of any Account, (ii) compromise or settle any Account for less
than the full amount thereof, (iii) release, wholly or partially, any Account Debtor, (iv) allow
any credit or discount whatsoever on any Account or (v) amend, supplement or modify any Account in
any manner that could reasonably be likely to adversely affect the value thereof.



     (b) The Administrative Agent shall have the right to make test verifications of the Accounts
in any manner and through any medium that it reasonably considers advisable, and such Grantor shall
furnish all such assistance and information as the Administrative Agent may reasonably require in
connection with such test verifications. At any time and from time to time, upon the
Administrative Agent’s request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Administrative Agent to



17









 




furnish to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts as and to the extent provided in the Credit
Agreement.




     (c) Each Grantor shall keep accurate and complete records of its Accounts, including all
payments and collections thereon, and shall submit to the Administrative Agent sale, collection
reconciliation and other reports in form satisfactory to the Administrative Agent on such periodic
basis as the Administrative Agent may reasonably request.



     (d) Each Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the validity or enforceability
of any material Account.



     SECTION 4.9 Intellectual Property.



     (a) Except as could not reasonably be expected to have a Material Adverse Effect, such Grantor
(either itself or through licensees) (i) will use each registered Trademark (owned by such Grantor)
and Trademark for which an application (owned by such Grantor) is pending, in each case, that is
included as Material Intellectual Property, to the extent reasonably necessary to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii) will maintain products
and services offered under such Trademark at a level substantially consistent with the quality of
such products and services as of the date hereof for so long as such Trademark continues to be
included as Material Intellectual Property, (iii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark could
reasonably be expected to become invalidated or impaired in any way, (iv) will not (and will not
permit any licensee or sublicense thereof to) do any act, or knowingly omit to do any act, whereby
any Patent owned by such Grantor would reasonably be expected to become forfeited, abandoned or
dedicated to the public, (v) will not (and will not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby any registered Copyright owned by such Grantor
or Copyright for which an application is pending (owned by such Grantor) could reasonably be
expected to become invalidated or otherwise impaired and (vi) will not (either itself or through
licensees) do any act whereby any material portion of such Copyrights may fall into the public
domain.



     (b) Such Grantor will notify the Administrative Agent and the other Secured Parties promptly
if it knows, or has reason to know, that any application or registration relating to any Material
Intellectual Property owned or licensed by such Grantor may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor’s or its licensor’s ownership of, or the validity
of, any Material Intellectual Property owned or licensed by such Grantor or such Grantor’s right to
register the same or to license, or own and maintain the same.



     (c) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Material Intellectual Property with
the United States Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, such Grantor



18









 




shall report such filing to the Administrative Agent within thirty (30) Business Days (which
time period may extended by the Administrative Agent in its sole discretion by written notice to
such Grantor) after the last day of the fiscal quarter in which such filing occurs and such Grantor
shall designate such Intellectual Property as Material Intellectual Property for the purpose of
updating Schedule 3.11. Upon request of the Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the security interest of the Secured
Parties in any Material Intellectual Property that is a Copyright, Patent or Trademark and the
goodwill and General Intangibles of such Grantor relating thereto or represented thereby.




     (d) Such Grantor will take all reasonable and necessary steps, at such Grantor’s sole cost and
expense, including, without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the Material Intellectual
Property, including, without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.



     (e) In the event that any Material Intellectual Property owned or licensed by such Grantor is
infringed, misappropriated, diluted or otherwise violated by a third party, such Grantor shall (i)
at such Grantor’s sole cost and expense, take such actions as such Grantor shall reasonably deem
appropriate under the circumstances to protect its rights in such Material Intellectual Property
and (ii) if such infringement, misappropriation, dilution or violation could reasonably be expected
to have a material and adverse impact on such Material Intellectual Property, promptly notify the
Administrative Agent after it learns of such infringement, misappropriation, dilution or violation.



     SECTION 4.10 Investment Property; Partnership/LLC Interests



     (a) Without the prior written consent of the Administrative Agent, such Grantor will not (i)
vote to enable, or take any other action to permit, any applicable Issuer that is a Grantor (other
than Imation) or a Pledged Foreign Subsidiary to issue any Investment Property or Partnership/LLC
Interests, except for such additional Investment Property or Partnership/LLC Interests that will be
subject to the Security Interest granted herein in favor of the Secured Parties, or (ii) enter into
any agreement or undertaking restricting the right or ability of such Grantor or the Administrative
Agent to sell, assign or transfer any Investment Property or Partnership/LLC Interests or Proceeds
thereof. Such Grantors will defend the right, title and interest of the Administrative Agent in
and to any Investment Property and Partnership/LLC Interests that constitutes Pledged Capital Stock
against the claims and demands of all Persons whomsoever.



     (b) If such Grantor shall become entitled to receive or shall receive (i) any Certificated
Securities (including, without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in respect of the
ownership interests of any Issuer that is a Grantor (other than Imation) or a Pledged Foreign
Subsidiary, whether in addition to, in substitution of, as a conversion of, or in exchange for, any



19









 




Investment Property, or otherwise in respect thereof, or (ii) any sums paid upon or in respect
of any Investment Property upon the liquidation or dissolution of any Issuer during a Cash Dominion
Trigger Period, such Grantor shall accept the same as the agent of the Secured Parties, hold the
same in trust for the Secured Parties, segregated from other funds of such Grantor, and promptly
deliver the same to the Administrative Agent, on behalf of the Secured Parties, in accordance with
the terms hereof.




     SECTION 4.11 Equipment. Such Grantor will maintain its Equipment in good working
order and condition (reasonable wear and tear and obsolescence excepted).



     SECTION 4.12 Vehicles. Upon the occurrence and during the continuance of an Event of
Default, at the request of the Administrative Agent, all applications for certificates of title or
ownership indicating the Administrative Agent’s first priority Lien on the Vehicle (subject to any
Permitted Liens) covered by such certificate, and any other necessary documentation, shall be filed
in each office in each jurisdiction which the Administrative Agent shall deem reasonably advisable
to perfect its Liens on the Vehicles; provided, that prior thereto, each certificate of title or
ownership relating to each Vehicle of such Grantor shall be maintained by such Grantor in
accordance with applicable Law to reflect the ownership interest of such Grantor.



     SECTION 4.13 Government Contracts. Such Grantor shall promptly notify the
Administrative Agent, in writing, if it enters into any contract with a Governmental Authority
under which such Governmental Authority, as account debtor, owes a monetary obligation in excess of
$1,000,000 annually to such Grantor under any Account.



     SECTION 4.14 Real Estate Collateral.



     (a) The Obligations shall also be secured by Mortgages (the “Oakdale Mortgage”) upon
the Real Estate owned by Grantors location at 1 Imation Place, Oakdale, Minnesota (the “Oakdale
Property”). The Oakdale Mortgage shall be duly recorded, at the Grantors’ expense, in the
office where such recording is required to constitute a fully perfected first-priority Lien on the
Oakdale Property covered thereby.



     (b) To further secure the prompt payment and performance of all Secured Obligations, each
Grantor hereby transfers and assigns to the Administrative Agent, for the benefit of Secured
Parties, all of such Grantor’s right, title and interest in, to and under all now or hereafter
existing leases of Real Estate to which such Grantor is a party, whether as lessor or lessee, and
all extensions, renewals, modifications and proceeds thereof; provided however, that with respect
to the leases set forth on Schedule 4.14(b), Grantors shall not be required to maintain any
such leases or take any action with respect to such leases or the transfer and assignment of rights
granted to the Administrative Agent under this Section 4.14(b).



     SECTION 4.15 Trademark Licenses. In connection with any Trademark Licenses that
constitute Material Intellectual Property, each Grantor shall produce the goods subject to the
respective Trademarks in accordance with the quality control procedures contained in the
respective Trademark License. Each Grantor shall promptly notify the Administrative Agent if
any licensor notifies such Grantor in writing of any failure by such Grantor to comply with
the



20









 




quality control provisions contained in any such Trademark License which could result in the
termination of such Trademark License.




     SECTION 4.16 Further Assurances. Upon the request of the Administrative Agent and at
the sole expense of the Grantors, each Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including, without
limitation, (a) the assignment of any Material Contract, (b) with respect to Government Contracts
under which the Grantor is owed a monetary obligation in excess of $1,000,000 individually or
$2,500,000 in the aggregate, assignment agreements and notices of assignment, in form and substance
satisfactory to the Administrative Agent, duly executed by any Grantors party to such Government
Contract in compliance with the Assignment of Claims Act (and/or analogous state or other
applicable Law), and (c) all applications, certificates, instruments, registration statements, and
all other documents and papers the Administrative Agent may reasonably request and as may be
required by law in connection with the obtaining of any consent, approval, registration,
qualification, or authorization of any Person deemed necessary or appropriate for the effective
exercise of any rights under this Agreement.



ARTICLE V




REMEDIAL PROVISIONS




     SECTION 5.1 General Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to them under applicable Law in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the UCC or any other applicable Law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any notice required by
law referred to below) to or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker’s board or office of the
Administrative Agent or any other Secured Party or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent may disclaim any
warranties in connection with any sale or other disposition of the Collateral, including, without
limitation, any warranties of title, possession, quiet enjoyment and the like. The Administrative
Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative Agent at places
which the Administrative Agent shall reasonably select, whether



21









 




at such Grantor’s premises or elsewhere. To the fullest extent permitted by applicable Law,
each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent
or any other Secured Party arising out of the exercise by them of any rights hereunder except to
the extent any such claims, damages, or demands result solely from the gross negligence or willful
misconduct of the Administrative Agent or any other Secured Party, in each case against whom such
claim is asserted. If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition.




     SECTION 5.2 Specific Remedies.



     (a) During any period other than a Cash Dominion Trigger Period and subject to the terms of
the Credit Agreement, the Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Accounts in the Ordinary Course of Business.



     (b) During a Cash Dominion Trigger Period:




     (i) upon the request of the Administrative Agent, each Grantor shall notify (such
notice to be in form and substance satisfactory to the Administrative Agent) its Account
Debtors and parties to the Material Contracts subject to a Security Interest that such
Accounts and the Material Contracts have been assigned to the Administrative Agent, for the
ratable benefit of the Secured Parties;




     (ii) upon the request of the Administrative Agent, each Grantor shall forward to the
Administrative Agent, on the last Business Day of each week, deposit slips related to all
cash, money, checks or any other similar items of payment received by the Grantor during
such week, and copies of such checks or any other similar items of payment, together with a
statement showing the application of all payments on the Collateral during such week and a
collection report with regard thereto, in form and substance satisfactory to the
Administrative Agent;




     (iii) the Administrative Agent may deliver such notices and instructions in accordance
with control agreements covering Deposit Accounts (other than Excluded Accounts) and/or
Securities Accounts. In addition, whenever any Grantor shall receive any cash, money, checks
or any other similar items of payment relating to any Collateral (including any Proceeds of
any Collateral), subject to the terms of any Permitted Liens, such Grantor agrees that it
will, within one (1) Business Day of such receipt, deposit all such items of payment into
the Dominion Account, and until such Grantor shall deposit such cash, money, checks or any
other similar items of payment in the Dominion Account, such Grantor shall hold such cash,
money, checks or any other similar items of payment in trust for the Secured Parties and as
property of the Secured Parties, separate from the other funds of such Grantor, and the
Administrative Agent shall have the right to transfer or direct the transfer of the balance
of each Deposit Account (other than an Excluded Deposit Account) to the Dominion Account.
All such Collateral and Proceeds of Collateral received by the Administrative Agent
hereunder shall be held by the Administrative Agent in the Dominion Account as collateral
security for all the Secured
Obligations and shall not constitute payment thereof until applied as provided in
Section 5.4;



22









 





     (c) After the occurrence and during the continuance of an Event of Default:




     (i) the Administrative Agent shall have the right to receive any and all cash
dividends, payments or distributions made in respect of any Investment Property, any
Partnership/LLC Interests or any other Proceeds paid in respect of any Investment Property
or any Partnership/LLC Interests, and any or all of any Investment Property that is included
as Collateral or any Partnership/LLC Interests that are Pledged Capital Stock may, at the
option of the Administrative Agent and the Secured Parties, be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee may
thereafter exercise (A) all voting, corporate and other rights pertaining to such Investment
Property, or such Partnership/LLC Interests at any meeting of shareholders, partners or
members of the relevant Issuers or otherwise and (B) any and all rights of conversion,
exchange and subscription and any other rights, privileges or options pertaining to such
Investment Property or such Partnership/LLC Interests as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion any and all
Investment Property or any and all Partnership/LLC Interests issued upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in the
corporate, partnership or limited liability company structure of any Issuer that is a
Grantor (other than Imation) or a Pledged Foreign Subsidiary or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining to such
Investment Property or such Partnership/LLC Interests, and in connection therewith, the
right to deposit and deliver any and all of such Investment Property or any and all of such
Partnership/LLC Interests with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Administrative Agent may determine),
all without liability except to account for property actually received by it; but the
Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and the Administrative Agent and the other Secured Parties shall not be
responsible for any failure to do so or delay in so doing. In furtherance thereof, each
Grantor hereby authorizes and instructs each Issuer (i) that is a Grantor (other than
Imation) or a Pledged Foreign Subsidiary with respect to any Collateral consisting of
Investment Property and Partnership/LLC Interests of such Issuer to comply with any
instruction received by it from the Administrative Agent in writing that (A) states that an
Event of Default has occurred and is continuing and (B) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from such Grantor, and
each Grantor agrees that each Issuer shall be fully protected in so complying following
receipt of such notice and prior to notice that such Event of Default is no longer
continuing, and (ii) except as otherwise expressly permitted hereby and solely during a Cash
Dominion Trigger Period, to pay any cash dividends, distributions or other payments with
respect to any Investment Property, or Partnership/LLC Interests issued by such Issuer
directly to the Dominion Account or such other Controlled Depositary as the Administrative
Agent may direct; and



     (ii) the Administrative Agent shall be entitled to (but shall not be required to): (A)
proceed to perform any and all obligations of the applicable Grantor under any



23









 







Material Contract and exercise all rights of such Grantor thereunder as fully as such
Grantor itself could, (B) do all other acts which the Administrative Agent may deem
necessary or proper to protect its Security Interest granted hereunder, provided such acts
are not inconsistent with or in violation of the terms of any of the Credit Agreement, of
the other Loan Documents or applicable Law, and (C) sell, assign or otherwise transfer any
Material Contract in accordance with the Credit Agreement, the other Loan Documents and
applicable Law, subject, however, to the prior approval of each other party to such Material
Contract, to the extent required under the Material Contract.




     (iii) The Administrative Agent is hereby granted an irrevocable, non-exclusive license
or other right to use, license or sub-license (without payment of royalty or other
compensation to any Person) of any or all Intellectual Property of each Grantor, computer
hardware and software, trade secrets, brochures, customer lists, promotional and advertising
materials, labels, packaging materials and other Property, in advertising for sale,
marketing, selling, collecting, completing manufacture of, or otherwise exercising any
rights or remedies with respect to, any Collateral; provided that the Administrative
Agent shall not be entitled to exercise its rights under any such license, sub-license or
right to use until such time as the Administrative Agent shall have received consent or
direction from the Required Lenders pursuant to Section 8.02(d) of the Credit
Agreement.



     (d) Unless an Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Grantor of the Administrative Agent’s intent to
exercise its corresponding rights pursuant to Section 5.2(b), each Grantor shall be
permitted to receive all cash dividends, payments or other distributions made in respect of any
Investment Property and any Partnership/LLC Interests, in each case paid in the Ordinary Course of
Business to the extent permitted in the Credit Agreement, and to exercise all voting and other
corporate, company and partnership rights with respect to any Investment Property and
Partnership/LLC Interests; provided that, no vote shall be cast or other corporate, company
and partnership right exercised or other action taken which, in the Administrative Agent’s
reasonable judgment, would impair the Collateral in any material respect or which would result in a
Default or Event of Default under any provision of the Credit Agreement, this Agreement or any
other Loan Document.



     SECTION 5.3 Waiver of Certain Claims.



     (a) The Grantors acknowledge that because of present or future circumstances, a question may
arise under the Securities Act of 1933, as from time to time amended (the “Securities
Act”), with respect to any disposition of any Investment Property and any Partnership/LLC
Interests included as Collateral and as permitted hereunder. The Grantors understand that
compliance with the Securities Act may very strictly limit the course of conduct of the
Administrative Agent if the Administrative Agent attempts to dispose of all or any portion of any
Investment Property or any Partnership/LLC Interests included as Collateral and may also limit the
extent to which or the manner in which any subsequent transferee of such Investment Property or
Partnership/LLC Interests or any portion thereof may dispose of the same. There may be other legal
restrictions or limitations affecting the Administrative Agent or the Secured Parties in any
attempt to dispose of all or any portion of such Investment Property or Partnership/LLC Interests
under the applicable “Blue Sky” or other securities laws or similar



24









 




laws analogous in purpose or effect. The Administrative Agent may be compelled to resort to
one or more private sales to a restricted group of purchasers which will be obliged to agree, among
other things, to acquire such Investment Property or Partnership/LLC Interests for their own
account for investment only and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices and other terms
less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially reasonable manner.
The Grantors agree that the Administrative Agent shall not incur any liability, and any liability
of the Grantors for any deficiency shall not be impaired, as a result of the sale of such
Investment Property or Partnership/LLC Interests or any portion thereof at any such private sale in
a manner that the Administrative Agent reasonably believes is commercially reasonable. The
Grantors hereby waive any claims against the Administrative Agent arising by reason of the fact
that the price at which of such Investment Property or Partnership/LLC Interests may have been sold
at such sale was less than the price that might have been obtained at a public sale or was less
than the aggregate amount of the Secured Obligations, even if the Administrative Agent shall accept
the first offer received and does not offer any portion of such Investment Property or
Partnership/LLC Interests to more than one possible purchaser, so long as such sale was
commercially reasonable. The Grantors further agree that the Administrative Agent has no
obligation to delay sale of any of such Investment Property or Partnership/LLC Interests for the
period of time necessary to permit the issuer of such Investment Property or Partnership/LLC
Interests to qualify or register such Investment Property or Partnership/LLC Interests for public
sale under the Securities Act, applicable Blue Sky laws and other applicable state and federal
securities laws, even if said Issuer would agree to do so.




     (b) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done
all such other acts as may be reasonable and necessary to make such sale or sales of all or any
portion of such Investment Property or Partnership/LLC Interests valid and binding and in
compliance with any and all other applicable Laws. Each Grantor further agrees that a breach of
any of the covenants contained in this Section 5.3(b) will cause irreparable injury to the
Administrative Agent and the other Secured Parties, that the Administrative Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence,
that each covenant contained in this Section 5.3(b) shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense that no Event of Default
has occurred under the Credit Agreement.



     SECTION 5.4 Application of Proceeds. The proceeds of the Collateral shall be applied
in accordance with the terms of the Credit Agreement. Only after (i) the payment by the
Administrative Agent of any other amount required by any provision of applicable Law, including,
without limitation, Section 9-610 and Section 9-615 of the UCC and (ii) the payment in full of the
Secured Obligations and the termination of the Commitments, shall the Administrative Agent account
for the surplus, if any, to any Grantor, or to whomever may be lawfully entitled to receive the
same (if such Person is not a Grantor).



     SECTION 5.5 Waiver, Deficiency. Each Grantor hereby waives, to the extent permitted
by applicable Law, all rights of redemption, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable Law in order to prevent or delay the



25









 




enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay its Secured Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any other Secured Party to
collect such deficiency.




ARTICLE VI




THE ADMINISTRATIVE AGENT




     SECTION 6.1 Appointment of Administrative Agent as Attorney-In-Fact.



     (a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement,
effective upon the occurrence of an Event of Default, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, (x) to endorse a Grantor’s name on any Payment Item or other
proceeds of Collateral (including proceeds of insurance) that come into the Administrative Agent’s
possession or control and (y) upon the occurrence and during the continuation of an Event of
Default, to do any or all of the:




     (i) in the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances, Payment Item or other
instruments for the payment of moneys due under any Account or Material Contract subject to
a Security Interest or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed appropriate by
the Administrative Agent for the purpose of collecting any and all such moneys due under any
Account or Material Contract subject to a Security Interest or with respect to any other
Collateral whenever payable;




     (ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative Agent may
request to evidence the Administrative Agent’s and the Secured Parties’ security interest in
such Intellectual Property and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby;




     (iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;




     (iv) execute, in connection with any sale provided for in this Agreement, any
endorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral; and




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     (v) (A) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (C) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, Chattel Paper, Document, Instrument, assignments, verifications,
notices and other documents in connection with any of the Collateral; (D) commence and
prosecute any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any other right
in respect of any Collateral; (E) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit,
action or proceeding, and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (G) license or assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), for such term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; (H) receive, open and dispose
of mail addressed to a Grantor, and notify postal authorities to deliver any such mail to an
address designated by the Administrative Agent; (I) use information contained in any data
processing, electronic or information systems relating to Collateral; (J) make or adjust
claims under insurance policies; (K) use a Grantor’s stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (L) sell or assign any Accounts
and other Collateral upon such terms, for such amounts and at such times as the
Administrative Agent deems advisable; (M) collect, liquidate and receive balances in Deposit
Accounts or investment accounts, and take control, in any manner, of proceeds of Collateral;
and (N) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent was the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time,
all acts and things which the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Security Interests of the Secured Parties therein and to
effect the intent of this Agreement, all as fully and effectively as such Grantor might do.



     (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement in accordance with the provisions of
Section 6.1(a); provided that, so long as no Event of Default has occurred and is
continuing, the Administrative Agent shall give such Grantor prior written notice of such failure
and such Grantor shall have a reasonable opportunity to cure such failure if such failure is of a
type that is subject to cure.



     (c) The expenses of the Administrative Agent incurred in connection with actions taken
pursuant to the terms of this Agreement shall be payable by such Grantor to the Administrative
Agent in accordance with Section 10.04 of the Credit Agreement.



27









 





     (d) Each Grantor hereby ratifies all that said attorneys-in-fact shall lawfully do or cause to
be done by virtue hereof in accordance with Section 6.1(a).



     SECTION 6.2 Duty of Administrative Agent. The sole duty of Administrative Agent with
respect to the custody, safekeeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither the Administrative
Agent, any other Secured Party nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and
the other Secured Parties hereunder are solely to protect the interests of the Administrative Agent
and the other Secured Parties in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The Administrative
Agent and the other Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.



     SECTION 6.3 Authority of Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative Agent and the Grantors,
the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement to make any inquiry respecting such authority.



ARTICLE VII




MISCELLANEOUS




     SECTION 7.1 Notices. All notices and communications hereunder shall be given to the
addresses and otherwise made in accordance with Section 10.02 of the Credit Agreement;
provided that notices and communications to the Grantors shall be directed to the Grantors,
at the address of the Borrower Agent set forth on Schedule 10.02 of the Credit Agreement.



     SECTION 7.2 Amendments, Waivers and Consents. None of the terms or provisions of
this Agreement may be amended, supplemented or otherwise modified, nor may they be waived, nor may
any consent be given, except in accordance with Section 10.01 of the Credit Agreement.



     SECTION 7.3 Expenses, Indemnification, Waiver of Consequential Damages, etc.



28









 





     (a) All expenses of protecting, storing, warehousing, insuring, handling, maintaining and
shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale
thereof), and all other payments required to be made by the Administrative Agent to any Person to
realize upon any Collateral, shall be borne and paid by the Grantors. The Administrative Agent
shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss
or damage thereto (except for reasonable care in its custody while Collateral is in the
Administrative Agent’s actual possession), for any diminution in the value thereof, or for any act
or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same
shall be at the Grantors’ sole risk. The Grantors, jointly and severally, shall pay all
out-of-pocket expenses incurred by the Administrative Agent and each other Secured Party to the
extent the Borrowers would be required to do so pursuant to Section 10.04 of the Credit
Agreement.



     (b) The Grantors, jointly and severally, shall pay and shall indemnify each Indemnitee (which
for purposes of this Agreement shall include, without limitation, all Secured Parties) against
Indemnified Taxes and Other Taxes to the extent the Borrowers would be required to do so pursuant
to Section 3.01 of the Credit Agreement.



     (c) Each Grantor shall at all times defend title to the Collateral and the Administrative
Agent’s Liens therein against all Persons, claims and demands whatsoever, except Permitted Liens.



     (d) The Grantors, jointly and severally, shall indemnify each Indemnitee to the extent the
Borrowers would be required to do so pursuant to Section 10.04 of the Credit Agreement.



     (e) Notwithstanding anything to the contrary contained in this Agreement, to the fullest
extent permitted by applicable Law, no Grantor shall assert, and each 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 Credit Extension or the use of the
proceeds thereof.



     (f) No Indemnitee referred to in this Section 7.3 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.



     (g) Each Grantor agrees to pay, and to save the Administrative Agent and the other Secured
Parties harmless from, any and all liabilities with respect to, or resulting from any such
Grantor’s delay in paying, any and all stamp, excise, sales withholding or other taxes which may be
payable or determined to be payable in connection with any of the transactions contemplated by this
Agreement.



     (h) All amounts due under this Section 7.3 shall be payable promptly after demand
therefor.



29









 





     SECTION 7.4 Right of Set Off. If an Event of Default shall have occurred and be
continuing, each Secured Party and each of its 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
Secured Party or any such Affiliate to or for the credit or the account of such Grantor against any
and all of the obligations of such Grantor now or hereafter existing under this Agreement or any
other Loan Document to such Secured Party irrespective of whether or not such Secured Party shall
have made any demand under this Agreement or any other Loan Document and although such obligations
of such Grantor may be contingent or unmatured or are owed to a branch or office of such Secured
Party different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Secured Party and its respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of set off) that such Secured Party or its
respective Affiliates may have. Each Secured Party agrees to notify such Grantor 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.



     SECTION 7.5 Governing Law; Jurisdiction; Venue; Service of Process.



     (a) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York (including Section 5-1401 and Section 5-1402 of the General
Obligations Law of the State of New York) without reference to the conflicts of law principles
thereof.



     (b) Submission to Jurisdiction. Each Grantor irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the state and federal courts of
the State of New York sitting in the Borough of Manhattan, New York City and of the United States
for the Southern District of such State, and any appellate court thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the fullest extent permitted by applicable Law, in
such Federal court. Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by applicable Law. Nothing in this Agreement or in any other Loan
Document shall affect any right that the Administrative Agent or any other Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or any other Loan
Document against any Grantor or its properties in the courts of any jurisdiction.



     (c) Waiver of Venue. Each Grantor irrevocably and unconditionally waives, to the
fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the
laying of venue of any action or proceeding arising out of or relating to this Agreement or any
other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court.



30









 





     (d) Service of Process. Each party hereto irrevocably consents to service of process
in the manner provided for notices in Section 10.16 of the Credit Agreement. Nothing in
this Agreement will affect the right of any party hereto to serve process in any other manner
permitted by applicable Law.



     (e) Appointment of Imation as Agent for the Grantors. Each Grantor hereby irrevocably
appoints and authorizes Imation to act as its agent for service of process and notices required to
be delivered under this Agreement or under the other Loan Documents, it being understood and agreed
that receipt by Imation of any summons, notice or other similar item shall be deemed effective
receipt by each Grantor and its Subsidiaries.



     SECTION 7.6 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.



     SECTION 7.7 Injunctive Relief.



     (a) Each Grantor recognizes that, in the event such Grantor fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement or any other Loan Document,
any remedy of law may prove to be inadequate relief to the Administrative Agent and the other
Secured Parties. Therefore, each Grantor agrees that the Administrative Agent and the other
Secured Parties, at the option of the Administrative Agent and the other Secured Parties, shall be
entitled to temporary and permanent injunctive relief in any such case without the necessity of
proving actual damages.



     (b) The Administrative Agent, the other Secured Parties and each Grantor hereby agree that no
such Person shall have a remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or exemplary damages
that they may now have or may arise in the future in connection with any dispute, whether such
dispute is resolved through arbitration or judicially.



     SECTION 7.8 No Waiver By Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any other Secured Party shall by any act (except by a written



31









 







instrument pursuant to Section 7.2), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event
of Default. No delay or failure to take action on the part of the Administrative Agent or any
other Secured Party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such other Secured Party would otherwise have on any future occasion. The
enumeration of the rights and remedies of the Administrative Agent and the other Secured Parties
set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative
Agent and the other Secured Parties of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in addition to any other
right or remedy given hereunder or under the other Loan Documents or that may now or hereafter
exist at law or in equity or by suit or otherwise.



     SECTION 7.9 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
permitted assigns; except that no Grantor may assign or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the Administrative Agent and
the other Lenders (except as otherwise provided by the Credit Agreement).



     SECTION 7.10 Survival of Indemnities. Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the other Secured Parties are
entitled under the provisions of Section 7.3 and any other provision of this Agreement and
the other Loan Documents shall continue in full force and effect and shall protect the
Administrative Agent and the other Secured Parties against events arising after such termination as
well as before.



     SECTION 7.11 Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.



     SECTION 7.12 Severability of Provisions. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other jurisdiction.



     SECTION 7.13 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all parties, their successors
and assigns, and all of which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Agreement or any document or instrument
delivered in connection herewith by facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement or such other document or
instrument, as applicable.



32









 





     SECTION 7.14 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 the Credit Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the other Secured Parties
in any other Loan Document shall not be deemed a conflict with this Agreement.



     SECTION 7.15 Advice of Counsel; No Strict Construction. Each of the parties
represents to each other party hereto that it has discussed this Agreement with its counsel. The
parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.



     SECTION 7.16 Acknowledgements.



     (a) Each Grantor hereby acknowledges that:




     (i) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;




     (ii) it has received a copy of the Credit Agreement and has reviewed and understands
same;




     (iii) neither the Administrative Agent nor any other Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors, on the one
hand, and the Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and




     (iv) no joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby or thereby among the Secured
Parties or among the Grantors and the Secured Parties.



     (b) Each Issuer party to this Agreement acknowledges receipt of a copy of this Agreement and
agrees to be bound thereby and to comply with the terms thereof insofar as such terms are
applicable to it. Each Issuer agrees to provide such notices to the Administrative Agent as may be
necessary to give full effect to the provisions of this Agreement.



     SECTION 7.17 Releases.



     (a) At such time as there has been Full Payment of the Secured Obligations and the Commitments
have been terminated, the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all without



33









 







delivery of any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors.



     (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable to evidence the release of the Liens created
hereby on such Collateral. In the event that all the Capital Stock of any Grantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit Agreement, then, at
the request of the applicable Borrower and at the expense of the Grantors, such Grantor shall be
released from its obligations hereunder; provided that such Borrower shall have delivered
to the Administrative Agent, at least ten (10) Business Days prior to the date of the proposed
release, a written request for release identifying the relevant Grantor and a description of the
sale or other disposition in reasonable detail, including the price thereof and any expenses in
connection therewith, together with a certification by such Borrower stating that such transaction
is in compliance with the Credit Agreement and the other Loan Documents.



     SECTION 7.18 Additional Grantors. Each Subsidiary of either Borrower that is
required to become a party to this Agreement pursuant to Section 6.13 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by
such Subsidiary of a joinder agreement in form and substance reasonably satisfactory to the
Administrative Agent.



     SECTION 7.19 All Powers Coupled With Interest. All powers of attorney and other
authorizations granted to the Secured Parties, the Administrative Agent and any Persons designated
by the Administrative Agent or any other Secured Party pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and shall be
irrevocable so long as (a) there has not been Full Payment of the Obligations, (b) the Commitments
remain in effect or (c) the Credit Facility has not been terminated.



[Signature Pages to Follow]




34









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by
their duly authorized officers, all as of the day and year first written above.



	 	 	 	 	 
	 	IMATION CORP., as Grantor

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	IMATION ENTERPRISES CORP., as Grantor and Issuer

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	IMATION FUNDING CORP., as Grantor and Issuer

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	IMATION LATIN AMERICA CORP., as Grantor and Issuer

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	

MEMOREX PRODUCTS, INC., as Grantor and Issuer

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 







	 	 	 	 	 
	 	IMN DATA STORAGE LLC, as Grantor and Issuer

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Signature Pages Continue]





 











 





	 	 	 	 	 
	Acknowledged and Agreed to in its respective

capacity as an Issuer as of the date first written

above:





IMATION ELECTRONICS

MEXICO S.A. DE C.V., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	 
	IMN DATA STORAGE HOLDINGS CV,

as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	 
	IMATION DO BRASIL LTDA., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	 
	IMATION MEXICO S.A. DE C.V., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	 
	IMATION CANADA INC., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 













 






	 	 	 	 	 



	 	 	 	 	 
	IMATION HOLDINGS PTE LTD., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	 
	IMATION EUROPE B.V., as Issuer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	IMATION POLSKA SP. Z.O.O., as Issuer

 	 	 
	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	IMATION IRELAND LIMITED, as Issuer

 	 	 
	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 













 






	 	 	 	 	 



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

 	 
	 	By:  	 	 
	 	 	Name:  	  	 	 
	 	 	 Title:  	 	 













 






	 	 	 	 	 



SCHEDULE 3.6

to

Security and Pledge Agreement




Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Registered

Organization Number; Mailing Address; Chief Executive Office and other Locations














 





SCHEDULE 3.9

to

Security and Pledge Agreement




Commercial Tort Claims














 





SCHEDULE 3.10

to

Security and Pledge Agreement




Deposit Accounts and Securities Accounts




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Address of	 	 
	 	 	 	 	Financial	 	 	 	 	 	Financial	 	 
	Grantor	 	Institution	 	Account Number	 	Institution	 	Account Purpose















 






SCHEDULE 3.11

to

Security and Pledge Agreement

Intellectual Property*




     1. The listing of Trademarks (as defined in the Security and Pledge Agreement) should include:
(a) the Trademark; (b) Registration Number or Serial Number; (c) the Owner; (d) the Filing Date;
(e) the Registration Date (if applicable); (f) the Date Affidavit of Use and/or Renewal is Due; and
(g) Whether the Affidavit of Use and/or Renewal has been filed.



     2. The listing of Trademark Licenses (as defined in the Security and Pledge Agreement) should
include: (a) Name and Address of Licensee/Licensor; (b) Date; (c) List of each Trademark
Licensed/Assigned; and (d) Description of product to which license/assignment applies.



     3. The listing of Patents (as defined in the Security and Pledge Agreement) should include:
(a) Country; (b) Patent Number; (c) Issue Date; (d) Inventor(s); (e) Title of Invention; (f) Dates
on which Maintenance Fees were paid; and (g) Identity of Party Paying Maintenance Fees.



     4. The listing of Patent (as defined in the Security and Pledge Agreement) applications should
include: (a) Application Number; (b) Filing Date; (c) Inventors; and (d) Title of Invention.



     5. The listing of Patent Licenses (as defined in the Security and Pledge Agreement) should
include: (a) Name and Address of Licensee/Licensor; (b) Date; (c) List of each Patent
Licensed/Assigned; and (d) Description of product to which license/assignment applies



     6. The listing of Copyrights (as defined in the Security and Pledge Agreement) should include:
(a) Registration Number; (b) Registration Date; (c) Title as listed in Registration; (d)
Publication Date; (e) Creation Date; (f) Author; and(g) Subject Matter Covered.



     7. The listing of Copyright Licenses (as defined in the Security and Pledge Agreement) should
include: (a) Name and Address of Licensee/Licensor; (b) Date; (c) Work Licensed or Assigned.





 




			
	*	 	Each item marked with * is classified as Material
Intellectual Property.














 










SCHEDULE 3.13

to

Security and Pledge Agreement

Investment Property [and Partnership/LLC Interests]




Certificated Securities:

[Grantor]:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	Percentage of
	 	 	 	 	 	 	 	 	 	 	 	Ownership Interests
	 	 	 	 	 	 	 	 	 	 	 	of such Class and
	Name of Issuer	 	Class and Series	 	 	Par Value	 	 	Certificate Number	 	 	Series





     Securities Accounts (including cash management accounts that are Investment Property) and
Uncertificated Securities:



     [Grantor]:





	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	Address of Financial	 	 	 
	Financial Institution	 	Account Number	 	 	Institution	 	 	Account Purpose





	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Percentage of Ownership
	 	 	 	 	 	 	 	 	Interests of such
	 	 	 	 	 	 	 	 	Class and
	Name of Issuer	 	Class and Series	 	 	Par Value	 	 	Series





Partnership/LLC Interests:

[Grantor]:











	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Name of Issuer
 (including of identification
 of 
  type of entity) 	 	Type of Ownership 
Interest 	 	 	Certificate Number 
(if any)  	 	 	Percentage of 
 Ownership Interests of 
 such Type