ACQUISITION AGREEMENT

Exhibit 2.1

ACQUISITION AGREEMENT

between

IMATION CORP.

and

TDK CORPORATION

made as of

April 19, 2007

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS

ACQUISITION AGREEMENT

     This ACQUISITION AGREEMENT (this “ Agreement ”) is made and entered into as of the 19th day of April, 2007, by and between IMATION CORP. , a corporation organized under the laws of the State of Delaware, USA (“ Imation ”), and TDK CORPORATION , a corporation organized under the laws of Japan (“ TDK ”).

Recitals

      WHEREAS , TDK and its subsidiaries are currently engaged in the business of the design, development, marketing, distribution, sale, service and support of certain Removable Recording Media Products, Accessory Products and Ancillary Products, each as defined below.

      WHEREAS , TDK and certain of its Subsidiaries desire to sell, and Imation and certain of its Subsidiaries desire to buy, substantially all of the assets and business of TDK and such Subsidiaries primarily related to the sales, service and support of such products under certain trademarks of TDK, including the capital stock of such Subsidiaries, upon the terms and subject to the conditions set forth in this Agreement.

      NOW , THEREFORE , in consideration of the mutual representations, warranties and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

I. Purchase of Acquired Assets and Closing

     1.1 Purchase and Sale of Acquired Assets . At the Closing and on the terms and subject to the conditions set forth in this Agreement, TDK shall sell, and shall cause the other Selling Entities to sell, to Imation and the other Acquiring Entities, and Imation shall purchase, and shall cause the other Acquiring Entities to purchase, from TDK and the other Selling Entities, all right, title and interest of the Selling Entities in and to:

     (a) the issued and outstanding equity interests of each of the Acquired Entities (the “ Acquired Shares ”); and

     (b) either directly or through the transfer of the Acquired Shares, all of the following assets primarily related to or primarily used in the Business, to the extent of the Relevant Entities’ interests therein (such assets, together with the Acquired Shares, the “ Acquired Assets ”):

     (i) the warehouse and repackaging facility owned by TDK Electronics Corporation located at Anaheim, California, including all buildings, structures, improvements and fixtures appertaining thereto (the “ Anaheim Facility ”);

     (ii) leasehold interests in all of the real property leased or occupied by any of the Relevant Entities pursuant to a lease, as set forth on Schedule 2.8 , together with any of the Relevant Entities’ rights to improvements and fixtures thereon;

     (iii) all personal property, including machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, and vehicles and other items of tangible personal property (other than the Inventories) owned or leased by any of the Relevant Entities (the “ Tangible Personal Property ”);

     (iv) any express or implied warranty by the manufacturers, sellers or lessors of any item of Tangible Personal Property or component part thereof, rights of return, rebate rights or over-payment recovery rights of any of the Relevant Entities relating to these items, to the extent transferable without the consent of any third Person or as to which a Consent has been obtained pursuant to Section 1.10;

     (v) all accounts and notes receivable, factored receivables, checks, negotiable instruments and chattel papers from customers of any of the Relevant Entities or earned in respect of Subject Products or Ancillary Products shipped or provided by any of the Relevant Entities;

     (vi) all inventories, wherever located, of Subject Products and Ancillary Products, including all finished goods, work in process, spare parts, packaging, and other materials and supplies not including any ordered items not yet accounted for as inventory on TDK’s financial statements (the “ Inventories ”);

     (vii) any express or implied warranty by the manufacturers or sellers of any item of the Inventories, as well as rights of return, rebate rights, over-payment recovery rights and other similar rights of any of the Relevant Entities with respect thereto, to the extent transferable without the consent of any third Person or as to which a Consent has been obtained pursuant to Section 1.10;

     (viii) all rights of any of the Relevant Entities with respect to deposits, prepaid expenses, claims for refunds and rights to offset, other than any such rights arising out of the prior payment of Taxes, and any interest payable to any of the Relevant Entities with respect thereto;

     (ix) all Contracts of any of the Relevant Entities or of which any of the Relevant Entities is a third party beneficiary, including all warranty rights of any of the Relevant Entities relating to any Subject Products or Ancillary Products sold or shipped by any of the Relevant Entities prior to Closing, including, for the avoidance of doubt, the Contract entitled Joint Venture Agreement, dated March 27, 1979, by and between TDK Electronics Co., Ltd., and Toyoda Tsusho Kaisha, Ltd., Convoy International Pty. Limited, and Malcolm Buchanan Goldfinch (the “ Acquired Contracts ”);

     (x) all Governmental Authorizations (including the Governmental Authorizations listed on Schedule 2.16(b) ) held by any of the Relevant Entities and primarily related to the Business and all pending applications of any of the Relevant Entities for or renewals of any such Governmental Authorizations, in each case to the extent transferable without the consent of any third Person or as to which a Consent has been obtained pursuant to Section 1.10;

     (xi) all written materials, data and records primarily related to or primarily used in the Business, including (1) client, customer, prospect, supplier, dealer and distributor lists and records, (2) information regarding referral sources, (3) product catalogs and brochures, (4) sales and marketing, advertising and promotional materials, (5) marketing research and reports, (6) equipment logs, (7) service, warranty and claim records, (8) records relating to the Inventories, (9) maintenance records and other documents relating to the real property and the Tangible Personal Property, (10) purchase orders and invoices, (11) sales orders and sales order log books, (12) material safety data sheets, (13) price lists, (14) quotations and bids, (15) operating guides and manuals, (16) correspondence, and (17) books, records, journals and ledgers;

     (xii) all Owned Intellectual Property Rights, including all such items listed on Schedule 2.12(a)(i) , together with all rights of any of the Relevant Entities to institute or maintain any action to protect the same and recover damages for any infringement thereof;

     (xiii) all Licensed-In Intellectual Property Rights for the use of Software (other than Software that is incorporated in any Licensed Products) used by any of the Relevant Entities in the conduct of the Business as of the Closing, including all such items listed on Schedule 2.12(a)(iii) , in each case to the extent transferable without the consent of any third Person or as to which a Consent has been obtained pursuant to Section 1.11;

     (xiv) all Licensed-In Intellectual Property Rights embodied in Software that is incorporated in any Licensed Products that are marketed or distributed by the Relevant Entities as of Closing, including all such items listed on Schedule 2.12(a)(iii) , together with all rights of any of the Relevant Entities to institute or maintain any action to protect the same and recover damages for any infringement thereof;

     (xv) all Licensed-In Intellectual Property Rights other than those relating to Software, including all such items listed on Schedule 2.12(a)(ii) , together with all rights of any of the Relevant Entities to institute or maintain any action to protect the same and recover damages for any infringement thereof (such Intellectual Property Rights, together with the Intellectual Property Rights described in Sections 1.1(b)(xii), 1.1(b)(xiii), and 1.1(b)(xiv), the “ Acquired Intellectual Property ”);

     (xvi) (i) the going concern value of the Business, (ii) goodwill associated with the Business, except to the extent embodied in any trademark, and (iii) directory and other listings, facsimile names, telephone and facsimile numbers and addresses of the Business, and any rights that any of the Relevant Entities may have to institute or maintain any action to protect the same and recover damages for any misappropriation or misuse thereof;

     (xvii) all insurance proceeds received or receivable from insurance policies providing coverage for the Acquired Assets or the Acquired Entities in connection with the damage or complete destruction of any of the Acquired Assets after the date hereof and prior to the Closing that would have been included in the Acquired Assets but for such damage or complete destruction

     (xviii) all the issued patents listed on Schedule 1.1(b)(xviii) ; and

     (xix) all rights, claims, choses-in-action, rights-in-action, rights to tender, and other similar claims of any of the Relevant Entities primarily related to the Business or the Acquired Assets, whether choate or inchoate, known or unknown, contingent or otherwise.

     1.2 Excluded Assets . Notwithstanding anything to the contrary contained in Section 1.1 or elsewhere in this Agreement, the following assets of the Relevant Entities (the “ Excluded Assets ”) are not part of the sale and purchase contemplated by this Agreement and are excluded from the Acquired Assets:

     (a) all rights of any of the Selling Entities under this Agreement and any other agreement that a Selling Entity, on the one hand, and an Acquiring Entity, on the other hand, entered into on or after the date of this Agreement;

     (b) all assets of the Relevant Entities that are not primarily related to or primarily used in the Business, including for the avoidance of doubt (i) all assets used in the research, development, design and manufacturing of Removable Recording Media Products regardless of how marketed or sold and (ii) all assets primarily related to or primarily used in the sale of Removable Recording Media Products on an OEM basis (i.e., to third party resellers that sell such products under brands other than the TDK Brand);

     (c) all real property, other than the Anaheim Facility, owned by the Relevant Entities, wherever located, including all buildings, structures, improvements and fixtures thereon;

     (d) all records of each of the Selling Entities (i) relating to its organization, maintenance and existence as a corporation, including its (1) memorandum and articles of association, (2) registrations or qualifications to conduct business, (3) taxpayer and other identification numbers, (4) minute books, (5) share register, (6) tax records and (7) corporate seal, or (ii) that are not primarily related to or primarily used in the Business;

     (e) all records relating to current or former personnel of the Selling Entities who are not Active Employees;

     (f) all records that the Selling Entities are required by Law to retain in their possession (provided, that copies of any such records primarily related to the Business that are not “ Excluded Assets ” by reason of another provision of this

Section 1.2 shall, to the extent permitted by Law, be provided to Imation at the Closing);

     (g) all Governmental Authorizations and pending applications or renewals of Governmental Authorizations that are nonassignable in accordance with their terms;

     (h) subject to Section 1.1(b)(xvii) and except as set forth on Schedule 1.2(h) , all insurance policies of the Selling Entities and all rights and proceeds thereunder;

     (i) all rights relating to Tax prepayments and claims for Tax refunds;

     (j) subject to the Trademark License Agreement, all right, title and interest in and to the name “TDK” and all derivations thereof;

     (k) the assets listed on Schedule 1.2(k);

     (l) any assets of the Acquired Entities not primarily related to or primarily used or held for use in the Business (which shall be distributed to TDK or another Selling Entity through a dividend in kind or otherwise disposed of pursuant to Section 4.10);

     (m) all Intellectual Property Rights other than (i) such Subject Intellectual Property Rights that are either Owned Intellectual Property Rights or Licensed-in Intellectual Property Rights and (ii) the patents listed on Schedule 1.1(b)(xviii) ;

     (n) the Contract entitled ^** ;

     (o) any Contracts with, or for the sale of products or services to or for the benefit of, purchasers in Iran, Iraq, North Korea, Syria or Zimbabwe; and

     (p) except as provided in Section 1.1(b)(xix), all rights, claims, choses-in-action, rights-in-action, rights to tender, rights to insurance proceeds and other similar claims.

     1.3 Assumed Liabilities . At the Closing, on the terms and subject to the conditions set forth in this Agreement, the Acquiring Entities shall assume, either directly or through the purchase of the Acquired Shares, and the Acquiring Entities and the Acquired Entities shall thereafter pay, discharge and perform in accordance with their terms, all Liabilities of the Relevant Entities, to the extent relating to the Acquired Assets or primarily related to the Business, as the same shall exist on the Closing Date (the “ Assumed Liabilities ”). Without limiting the generality of the foregoing, the following shall be included among the Assumed Liabilities:

     (a) all Liabilities arising under any of the Acquired Contracts;

     (b) all accounts payable that relate primarily to the Acquired Assets or to the Business;

     (c) all Liabilities with respect to any return, warranty or similar claim or obligation relating to products of the Business that were designed, manufactured or sold on or prior to the Closing Date or that are held in the Inventories as of the Closing Date; and

     (d) any other Liabilities reflected in the Closing Date Balance Sheet or set forth on Schedule 1.3(d) .

     1.4 Excluded Liabilities . None of the Acquiring Entities shall, either directly or through the purchase of the Acquired Shares, assume or have any obligation to pay, discharge or perform any Liability of the Relevant Entities other than the Assumed Liabilities. Subject to the provisions of Section 1.3 above, the following Liabilities of the Relevant Entities (the “ Excluded Liabilities ”) are not part of the sale and purchase contemplated by this Agreement, are excluded from the Assumed Liabilities and shall be retained or assumed by the Selling Entities and be the sole responsibility of the Selling Entities following the Closing:

     (a) any Liability of any of the Relevant Entities arising out of or relating to the Excluded Assets;

     (b) any Indebtedness of any of the Relevant Entities;

     (c) any Liability for (i) Taxes which shall have resulted from their operation of the Business or ownership of any of the Acquired Assets prior to the Closing and (ii) any income, profits, capital gains or other similar Tax liability which shall arise as a result of the sale of the Acquired Assets pursuant to this Agreement;

     (d) any Liability to distribute to the Selling Entities’ respective shareholders, or otherwise apply, all or any part of the Purchase Price;

     (e) any Liability of any of the Relevant Entities to indemnify any officer, director, employee or agent of any of the Relevant Entities with respect to any events occurring prior to Closing, or to reimburse or advance expenses in connection therewith;

     (f) any Liability arising out of any Litigation pending as of the Closing; and

     (g) any Liability under this Agreement, the Ancillary Agreements or any other Contract between any of the Selling Entities and any of the Acquiring Entities.

     1.5 Purchase Price .

     (a) The aggregate consideration for the Acquired Assets (the “ Purchase Price ”) shall be (i) $300,000,000, (ii) plus the amount, if any, by which the Closing Date Working Capital Amount (as defined in Section 1.7(a)) exceeds $97,000,000 (the “ Target Working Capital Amount ”) or minus the amount, if any, by which the Closing Date Working Capital Amount is less than the Target Working Capital Amount, (iii) plus the Earnout Amount (as defined in Section 1.8, (iv) plus the assumption by Imation of the Assumed Liabilities pursuant to the Assignment and Assumption Agreement.

     (b) The Acquiring Entities will pay the portion of the Purchase Price described in clause (i) of Section 1.5(a) (the “ Initial Purchase Price ”) by issuing to TDK a number (the “ Imation Share Number ”) of shares of the common stock of Imation, par value $.01 per share (the “Imation Shares”), that shall be determined by dividing the Initial Purchase Price by $40.47 per share (the “ Base Share Price ”), subject to adjustment in accordance with Section 1.7 and to the following provisions:

     (i) On the date that is four (4) Business Days prior to the scheduled Closing Date as determined pursuant to Section 1.6 (the “ Price Confirmation Date ”), Imation shall provide written notice to TDK (the “ Price Notice ”) in the form of Schedule 1.5(b) setting forth the average of the closing sale prices for Imation Shares on the New York Stock Exchange, Inc. Composite Transactions Tape (as reported by The Wall Street Journal (Northeast edition) (the “ WSJ ”), or, if not reported thereby, as reported by any other authoritative source) on the ten (10) Trading Days ending on (and including) the Business Day immediately preceding the Price Confirmation Date (the “ Average Share Price ”). If the Average Share Price is no greater than one hundred thirteen percent (113%) and no less than eighty-seven percent (87%) of the Base Share Price, the Imation Share Number shall be determined as provided above and the Closing shall proceed as scheduled.

     (ii) In the event that the Average Share Price exceeds one hundred thirteen percent (113%) of the Base Share Price, Imation shall also set forth in the Price Notice the Ceiling Share Number (as defined below), the scheduled Closing shall be postponed until the tenth (10th) Business Day after the Price Confirmation Date, and:

     (A) TDK may, in its sole discretion, deliver written notice to Imation on or before the fifth (5th) Business Day after the Price Confirmation Date (a “ TDK Election Notice ”) of its election to:

     (1) receive from Imation at Closing, in lieu of the Imation Share Number, a number of Imation Shares (the “ Ceiling Share Number ”) calculated by dividing (i) one hundred thirteen percent (113%) of the Initial Purchase Price by (ii) the Average Share Price; or

     (2) negotiate with Imation with respect to such lesser number of Imation Shares to be issued to TDK as the parties may agree in good faith, in which case the scheduled Closing shall be further delayed until a date mutually agreed by the parties; and

     (3) the Imation Share Number shall be the number of Imation Shares determined pursuant to clause (1) or (2) hereof, as the case may be; but

     (B) if TDK does not elect to receive the Ceiling Share Number pursuant to subsection (b)(ii)(A)(1) or negotiate a different adjustment to the number of Imation Shares to be issued to TDK pursuant to subsection (b)(ii)(A)(2), or TDK elects to negotiate with Imation pursuant to subsection (b)(ii)(A)(2) but the parties fail to reach an agreement through good faith negotiations on such other adjustment within twenty (20) Business Days after the delivery by TDK of a TDK Election Notice, then either party may, in its sole discretion, terminate this Agreement by providing written notice of such election to the other party.

     (iii) In the event that the Average Share Price is less than eighty-seven percent (87%) of the Base Share Price, Imation shall also set forth in the Price Notice the Floor Share Number (as defined below), the scheduled Closing shall be postponed until the tenth (10th) Business Day after the Price Confirmation Date, and:

     (A) Imation may, in its sole discretion, deliver written notice to TDK on or before the fifth (5th) Business Day after the Price Confirmation date (the “ Imation Election Notice ”) of its election to:

     (1) issue to TDK, in lieu of the Imation Share Number, a number of Imation Shares (the “ Floor Share Number ”) calculated by dividing (i) eighty-seven percent (87%) of the Initial Purchase Price by (ii) the Average Share Price, or

     (2) negotiate with TDK with respect to such greater number of Imation Shares to be issued to TDK as the parties may agree in good faith, in which case the scheduled Closing shall be further delayed until a date mutually agreed by the parties; and

     (3) the Imation Share Number shall be the number of Imation Shares determined pursuant to clause (1) or (2) hereof, as the case may be; but

     (B) if Imation does not elect to issue the Floor Share Number pursuant to subsection (b)(iii)(A)(1) or negotiate a different adjustment to the number of Imation Shares to be issued to TDK pursuant to subsection (b)(iii)(A)(2), or Imation elects to negotiate with TDK pursuant to subsection (b)(iii)(A)(2) but the parties fail to reach an agreement through good faith negotiations on such other adjustment within twenty (20) Business Days after the delivery by Imation of an

Imation Election Notice, then either party may, in its sole discretion, terminate this Agreement by providing written notice of such election to the other party.

     (iv) If the Imation Share Number as determined pursuant to the foregoing provisions of this Section 1.5(b) (the “ Provisional Imation Share Number ”) would exceed that number of Imation Shares that would be equal to nineteen and nine/tenths percent (19.9%) of the number of Imation Shares issued and outstanding immediately prior to the Closing (the “ Maximum Imation Share Number ”), then notwithstanding the other provisions hereof the Imation Share Number shall be equal to the Maximum Imation Share Number and Imation shall (A) issue to TDK at Closing the Maximum Imation Share Number of Imation Shares and (B) pay to TDK cash in an amount in Dollars determined by multiplying the Initial Purchase Price by a fraction (X) the numerator of which shall be the difference between the Provisional Imation Share Number and the Maximum Imation Share Number and (Y) the denominator of which shall be the Provisional Imation Share Number (the “ Cash Supplement ”).

     (v) If the Provisional Imation Share Number would exceed that number of Imation Shares that would be equal to twenty percent (20%) of the number of Imation Shares issued and outstanding immediately after the Closing (the “ Threshold Share Number ”), then that portion of the Cash Supplement to be paid to TDK pursuant to Section 1.5(b)(iv) above that shall be equal to (i) (A) the Provisional Imation Share Number minus (B) the Threshold Share Number multiplied by (ii) the Average Share Price, shall be paid to TDK in the form of a promissory note in substantially the form of attached Exhibit B (the “ Promissory Note ”).

     1.6 The Closing .

     (a) The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Morrison & Foerster LLP, AIG Building, 11th Floor, 1-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan 100-0005, on either June 30 or July 31, 2007, as agreed by the parties after signing, or on the first date thereafter as of which all the conditions set forth in Article VII shall have been satisfied or validly waived or at such other place or on such other date as may be mutually agreed by Imation and TDK, in which case Closing Date means the date so agreed, and the Closing shall be effective upon the completion of the transfer of Imation Shares contemplated by Section 1.6(b)(ii)(C). Subject to the provisions of Section 9.1(e), the failure of the Closing to occur shall not ipso facto result in termination of this Agreement and shall not relieve any party of any obligation under this Agreement. The date and time of the Closing are referred to herein as the “Closing Date”.

     (b) Subject to the conditions set forth in this Agreement, on the Closing Date:

     (i) TDK shall deliver to Imation:

     (A) a certificate of an appropriate officer of TDK dated the Closing Date stating that the conditions set forth in Sections 8.1(a) and 8.1(d) have been satisfied;

     (B) an updated Disclosure Schedule, prepared as though this Agreement had been dated as of the Closing Date, a good faith draft of which shall have been submitted to Imation no later than ten (10) Business Days prior to the Closing Date;

     (C) the text of the resolutions adopted by the board of directors of TDK authorizing the execution, delivery and performance of this Agreement, certified by an appropriate officer of TDK;

     (D) each Ancillary Agreement to which any of the Relevant Entities is a party, duly executed by each of such Relevant Entities;

     (E) all Required Consents, duly executed by all appropriate parties;

     (F) certificates representing all of the Acquired Shares duly endorsed for transfer or accompanied by duly executed stock powers or other analogous transfer instruments or documentation, in each case in a manner reasonably acceptable to Imation, with requisite stock or share transfer stamps, if any, attached;

     (G) the minute books, stock or equity records, corporate seal and other materials related to the corporate administration of the Acquired Entities, to the extent that the same are not in the physical possession of the Acquired Entities as of Closing;

     (H) evidence reasonably satisfactory to Imation of the completion of such corporate formalities on the parts of the Acquired Entities as may be required to effect the transfer of the Acquired Shares on the stock or share transfer registers or analogous records of each of them, respectively, to such of the Acquiring Entities as Imation and TDK shall have agreed at least ten (10) Business Days prior to the Closing;

     (I) resignations in writing, effective as of the Closing Date, of each of the Acquired Entities’ directors as Imation shall have specified at least ten (10) Business Days prior to the Closing;

     (J) bills of sale for the Acquired Assets that are Tangible Personal Property, substantially in the form of attached Exhibit C with such variations as may be required to conform to requirements of applicable Law, duly executed by the appropriate Selling Entities in favor of one or more of the Acquiring Entities as Imation and TDK shall have agreed at least ten (10) Business Days prior to the Closing;

     (K) assignments of the Acquired Assets that are intangible rights and property, including Contracts but excluding Intellectual Property Rights,

substantially in the form of attached Exhibit D with such variations as may be required to conform to requirements of applicable Law, duly executed by the appropriate Selling Entities in favor of one or more of the Acquiring Entities as Imation and TDK shall have agreed at least ten (10) Business Days prior to the Closing, each of which assignments shall also contain the assumption of the related Assumed Liabilities (the “ Assignment and Assumption Agreements ”);

     (L) assignments of the Acquired Assets that are Intellectual Property Rights, substantially in the form of attached Exhibit E with such variations as may be required to conform to requirements of applicable Law, duly executed by the appropriate Selling Entities in favor of one or more of the Acquiring Entities, together with such other agreements, instruments, certificates and other documents as shall be necessary or appropriate to assign to the Acquiring Entities rights and interests that collectively comprise all rights and interests of the Selling Entities in such Acquired Intellectual Property, in each case as Imation and TDK shall have reasonably agreed at least ten (10) Business Days prior to the Closing;

     (M) except as provided in subparagraphs (R) and (S) below, appropriate instruments of transfer for any Acquired Assets subject to certificate of title, duly executed by the appropriate Selling Entities in favor of one or more of the Acquiring Entities as Imation and TDK shall have agreed at least ten (10) Business Days prior to the Closing;

     (N) any other instruments of transfer reasonably requested by Imation at least twenty (20) Business Days prior to the Closing, duly executed by the appropriate Selling Entities as so requested;

     (O) as applicable, evidence of payment or cancellation of any and all Indebtedness of the Acquired Entities;

     (P) duly executed copies of all agreements, instruments, certificates and other documents necessary or appropriate, in the reasonable opinion of Imation’s counsel, to release any Encumbrances other than Permitted Encumbrances against the Acquired Assets and the assets of any of the Acquired Entities;

     (Q) FIRPTA certificates in the form of Exhibit F, duly executed by each of the Selling Entities, for purposes of satisfying Imation’s obligations under Treasury Regulations Section 1.1445-2.

     (R) a duly executed and acknowledged deed in the form of attached Exhibit G (the “ Deed ”); and

     (S) a properly executed California Form 593-C.

     (ii) Imation shall deliver to TDK:

     (A) a certificate of an appropriate officer of Imation dated the Closing Date stating that the conditions set forth in Sections 8.2(a) and 8.2(d) have been satisfied;

     (B) the texts of the resolutions adopted by the board of directors of Imation authorizing the execution, delivery and performance of this Agreement, certified by an appropriate officer of Imation;

     (C) the Imation Share Number of Imation Shares by electronic transfer to securities accounts designated by TDK at least ten (10) Business Days in advance of the Closing;

     (D) the Cash Supplement, if any, by wire transfer of immediately available funds to a bank account designated by TDK at least ten (10) Business Days in advance of the Closing;

     (E) the Promissory Note, if required, duly executed by Imation in favor of TDK; and

     (F) each of the Ancillary Agreements to which any Acquiring Entity is a party, duly executed by each Acquiring Entity that is a party thereto.

     (c) All actions to be taken in connection with consummation of the transactions contemplated by this Agreement and all certificates, instruments and other documents required to effect the transactions contemplated by this Agreement, as well as any opinions of counsel that the parties agree to exchange at Closing, shall be in form and substance reasonably satisfactory to Imation and TDK, respectively.

     (d) All items delivered by the parties at the Closing shall be deemed to have been delivered simultaneously, and no items shall be deemed delivered or waived until all have been delivered.

     (e) The Confidentiality Agreement shall terminate effective as of the time that the Closing becomes effective as provided in Section 1.6(a).

     1.7 Post-Closing Adjustment to Purchase Price .

     (a) Imation shall prepare and deliver to TDK within ninety (90) days after the Closing Date a consolidated balance sheet (the “ Closing Date Balance Sheet ”) for the Business as of the close of business on the Closing Date, denominated in Japanese yen converted from other currencies using the average of the currency exchange rates reported by the WSJ, or, if not reported thereby, as reported by any other authoritative source, on each of the thirty (30) Trading Days preceding the Closing Date, prepared on a pro forma basis without giving effect to the transactions contemplated by this Agreement but after the elimination of any Excluded Assets and any Excluded Liabilities and otherwise in accordance with US GAAP applied on a basis consistent with the preparation of the TDK Financial Statements. The Closing Date Balance Sheet shall include a determination of the Closing Date Working Capital Amount.

“ Closing Date Working Capital Amount ” means the Working Capital Amount as determined in accordance with US GAAP, consistent with TDK’s past practices, reflected on the Closing Date Balance Sheet in Japanese yen and as converted into Dollars using the average of the currency exchange rates reported by the WSJ, or, if not reported thereby, as reported by any other authoritative source, on each of the thirty (30) Trading Days preceding the Closing Date. In connection with the preparation of the Closing Date Balance Sheet, it is expected that Imation’s independent accountants will, within two (2) days prior to and four (4) days after the Closing, take a physical inventory of all product stocks other than those on consignment, which inventory TDK’s independent accountants shall be permitted to observe. Subject to TDK’s compliance with the standard “hold harmless” requirements of Imation’s accountants, Imation shall make the workpapers and back-up materials used in preparing the Closing Date Balance Sheet available to TDK and its accountants and other representatives at reasonable times and upon reasonable notice in connection with (i) the review by TDK of the Closing Date Balance Sheet and (ii) the resolution by Imation and TDK of any objections to the Closing Date Balance Sheet.

     (b) If TDK has any objections to the Closing Date Balance Sheet or the Closing Date Working Capital Amount, TDK shall deliver a written statement describing in reasonable detail such objections to Imation within sixty (60) days after receiving the Closing Date Balance Sheet. Imation and TDK shall attempt in good faith to resolve any such objections. If Imation and TDK do not reach a resolution of all objections within thirty (30) days after Imation has received the statement of objections, they shall submit the issues to Deloitte Touche Tohmatsu (the “ Independent Accountants ”) for resolution. The Independent Accountants shall be directed to determine, in accordance with US GAAP applied on a basis consistent with the preparation of the TDK Financial Statements, the amounts to be included in the Closing Date Balance Sheet and the Closing Date Working Capital Amount. The parties shall provide to the Independent Accountants, within twenty (20) Business Days after its retention, a definitive statement of the position of each party with respect to each unresolved objection and shall advise the Independent Accountants that the parties accept the accounting firm as the appropriate Person to interpret this Agreement for all purposes relevant to the resolution of the unresolved objections. Imation shall provide the Independent Accountants access to the books, records and, subject to compliance with the standard “hold harmless” requirements of Imation’s accountants, the work papers of Imation’s accountants. The parties shall request the Independent Accountants to carry out a review of the unresolved objections and prepare a written statement of its determination regarding each unresolved objection together with its calculation of the Closing Date Working Capital Amount and the Excess Working Capital Amount or the Working Capital Shortfall Amount, as the case may be, based on its resolution of the parties’ objections (the “ Independent Accountant’s Determination ”) within thirty (30) days. The Independent Accountant’s Determination shall be set forth in writing and shall be conclusive and binding upon the parties.

     (c) If Imation and TDK submit any unresolved objections to the Independent Accountants for resolution as provided in Section 1.7(b), (i) each of the parties shall bear its own costs and expenses and (ii) the fees and expenses of the Independent Accountants shall be borne equally by the parties.

     (d) Within seven (7) days after the date on which the Closing Date Working Capital Amount shall have been finally determined pursuant to this Section 1.7:

     (i) If the Closing Date Working Capital Amount exceeds the Estimated Closing Date Working Capital Amount (the amount of such excess, the “ Excess Working Capital Amount ”), Imation shall pay to TDK an amount equal to the Excess Working Capital Amount; and

     (ii) If the Closing Date Working Capital Amount is less than the Estimated Closing Date Working Capital Amount (the amount of such shortfall, the “ Working Capital Shortfall Amount ”), TDK shall pay to Imation an amount equal to the Working Capital Shortfall Amount.

     (e) All payments to be made to Imation or TDK pursuant to Section 1.7(d) shall be made by wire transfer of immediately available funds denominated in Dollars to the account designated by Imation or TDK, as applicable, and all such payments shall include simple interest thereon at a rate equal to one percent (1.00%) over the London Interbank Offered Rate (LIBOR) for ninety (90) day Dollar deposits, accruing from the Closing Date to the date of payment.

     1.8 Earnout .

     (a) The amount of the earnout (the “ Earnout Amount ”) shall be based on the Gross Margin (as defined below, the “ Gross Margin ”) of the Business, calculated for the twelve (12)-month periods ending on each of December 31, 2008 (the “ FY08 Gross Margin ”), December 31, 2009 (the “ FY09 Gross Margin ”) and December 31, 2010 (the “ FY10 Gross Margin ”). The Earnout Amount shall have a cumulative maximum amount of $70,000,000 and shall be determined and paid as follows:

     (i) in the event that the sum of the FY08 Gross Margin and the FY09 Gross Margin (the “ Two-Year Cumulative Gross Margin ”) shall exceed $235,000,000 (the “ First Earnout Threshold ”), Imation shall pay to TDK a first tranche of the Earnout Amount (the “ First Earnout Tranche ”), which shall be payable on or before the last Business Day in the month of March, 2010 in an amount equal to $10,000,000 plus the amount by which the Two-Year Cumulative Gross Margin exceeds the First Earnout Threshold, up to a maximum total for the First Earnout Tranche of $40,000,000; and

     (ii) in the event that the sum of the FY08 Gross Margin, the FY09 Gross Margin and the FY10 Gross Margin (the “ Three-Year Cumulative Gross Margin ”) shall exceed $375,000,000 (the “ Second Earnout Threshold ”), Imation shall pay to TDK a second tranche of the Earnout Amount (the “ Second Earnout Tranche ”),

which shall be payable on or before the last Business Day in the month of March, 2011 in the fixed amount of $30,000,000, regardless of the amount of the First Earnout Tranche, if any.

     (b) For purposes of this Section 1.8, “Gross Margin” shall mean the amount of Imation’s gross revenues recognized for the relevant periods from the sale of products bearing the TDK Brand, net of all discounts, rebates and returns, less the cost of goods sold with respect to such products, in each case as determined in accordance with US GAAP applied in a manner consistent with Imation’s accounting practices and policies in effect for the relevant periods.

     (c) Imation shall provide to TDK, no later than March 31 of each year beginning with 2009 and ending with 2011, a report setting forth the amounts of the FY08 Gross Margin, the FY09 Gross Margin and the FY10 Gross Margin, respectively, as determined by Imation and explaining in reasonable detail the way in which such determination was made (including a breakdown of the sales of, and details of the cost allocations to, specific products bearing the TDK Brand), together with payment of any amounts then due under this Section 1.8, which payments shall be made by wire transfer of immediately available funds to the account designated by TDK. TDK shall have the right, at any time within ninety (90) days after its receipt of the report, to cause TDK’s independent accounting firm to conduct a review of the books and records of Imation to the extent necessary for the verification of those amounts, and Imation shall provide access for such accountants to the relevant books and records at reasonable times and upon reasonable notice.

     (d) For the avoidance of doubt, following the Closing, Imation shall not be obligated to operate the Business in a manner intended to achieve or maximize the Earnout Amount, but shall operate the Business in good faith, in the best interests of its stockholders, disregarding the achievement or anticipated amount of the Earnout Amount.

     (e) Upon the consummation of any transaction constituting a Change of Control with respect to Imation:

     (i) prior to January 1, 2010, the cumulative maximum Earnout Amount of $70,000,000 shall become and be due and payable to TDK, and shall be paid promptly, and in any event within ten (10) Business Days after consummation of the transaction constituting such Change of Control, to TDK by wire transfer of immediately available funds; and

     (ii) prior to January 1, 2011, the Second Earnout Tranche of $30,000,000, plus the amount of any sums remaining due and payable in respect of the First Earnout Tranche, shall become and be forthwith due and payable to TDK, and shall be promptly paid to TDK by wire transfer of immediately available funds.

     1.9 Legends and Transfer of Imation Shares . Each certificate representing Imation Shares will be imprinted with a legend substantially in the following form:

The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be transferred without registration or an exemption therefor.

Subject to the provisions of the Investor Rights Agreement, if, as and whenever TDK intends to transfer any of the Imation Shares, otherwise than pursuant to an registration statement filed in compliance with the Securities Act, it first must furnish Imation with a written opinion reasonably satisfactory to Imation in form and substance from counsel reasonably satisfactory to Imation to the effect that TDK may transfer such Imation Shares without registration under the Securities Act. In the event that TDK should transfer any of its shares to an Affiliate, it shall cause the Affiliate to comply with this Section 1.9.

     1.10 Consents . TDK will use its reasonable best efforts to obtain, prior to Closing, all Consents required for the transfer of the Acquired Assets. In the event that any Required Consent has not been obtained as of the Closing and that Imation, in its sole discretion, elects to waive the closing condition set forth in Section 8.1(d), then, notwithstanding anything to the contrary contained in Section 1.1, Section 1.3 or elsewhere in this Agreement:

     (a) with respect to any Acquired Contract, Governmental Authorization or other item included in the Acquired Assets with respect to which such Required Consent is not obtained (each, a “ Restricted Asset ”), Imation may elect to either:

     (i) exclude such Restricted Asset from the Acquired Assets, in which event, unless and until the applicable Required Consent is obtained after the Closing, neither this Agreement nor any instrument delivered at the Closing shall constitute an assignment or transfer of such Restricted Asset or any interest arising thereunder or resulting therefrom; or

     (ii) accept the assignment or transfer of such Restricted Asset notwithstanding the failure to obtain the applicable Required Consent, in which event such Restricted Asset shall be treated, for purposes of the determination of the Purchase Price, as if it had been transferred and assigned to Imation;

     (b) with respect to any Restricted Asset that Imation has elected to exclude from the Acquired Assets pursuant to Section 1.10(a)(i), if the applicable Required Consent is obtained following the Closing Date, such Restricted Asset shall immediately be deemed to be included in the Acquired Assets, and an appropriate instrument of transfer substantially in the form that would have been used to convey such Restricted Asset pursuant to Section 1.7(b) had such Restricted Asset been acquired by Imation at the Closing and a copy of the Required Consent shall be promptly executed and delivered by and to the appropriate Persons;

     (c) with respect to any Restricted Asset that Imation has elected to have transferred and assigned pursuant to Section 1.10(a)(ii), if the applicable Required Consent is subsequently obtained, a copy of such Required Consent shall be delivered to Imation and any instrument delivered at the Closing shall constitute an assignment

or transfer of such Restricted Asset and all interests arising thereunder or resulting therefrom in their entirety; and

     (d) regardless of which election Imation makes pursuant to Section 1.10(a), TDK shall, for a period of up to six (6) months after the Closing, at Imation’s request, use its reasonable best efforts to obtain any unobtained Required Consents as soon as reasonably practicable following Closing.

     1.11 Proration of Certain Items . Except as provided in this Section 1.11, all property and ad valorem Taxes, leasehold rentals and other customarily proratable items relating to the Acquired Assets payable prior to or subsequent to the Closing Date and relating to a period of time both prior to and subsequent to the Closing Date shall be prorated as of the Closing between Imation and TDK, and the prorated portion due from the Relevant Entities, to the extent not previously paid, shall be reflected on the Closing Date Balance Sheet. If the actual amount of any such item is not known as of the Closing Date, such proration shall be based on the previous year’s assessment of such item and the parties shall adjust such proration and pay any underpayment or reimburse for any overpayment within thirty (30) days after the actual amount becomes known.

     1.12 Allocation . Imation and TDK have agreed that the Purchase Price shall be allocated among the Acquired Assets and all other capitalized costs as set forth in Exhibit H, unless the parties agree otherwise prior to Closing. The parties shall each, and shall cause each of their respective Affiliates to, report, act and file Returns (including Internal Revenue Service Form 8594 and any amendments thereto) in accordance with Exhibit H, although, for the avoidance of doubt, where such Exhibit refers to the relative value of shares and other consideration to be provided at Closing, TDK’s only obligation will be to report the actual values as received.

     1.13 Further Assurances . On and after the Closing Date, each of Imation and TDK shall take, or shall cause the appropriate Person to take, all appropriate action and execute any documents, instruments or conveyances of any kind that may be reasonably requested by the other party to carry out the purposes and intents of this Agreement.

II. Representations and Warranties of TDK

     TDK represents and warrants to Imation that, except as described in the Disclosure Schedule:

     2.1 Incorporation; Power and Authority .

     (a) TDK is a legal entity duly organized and validly existing under the laws of Japan, and has all necessary corporate power and authority to own, lease and operate its assets and to carry on its business as currently conducted. TDK has all necessary corporate power and authority to execute, deliver and perform this Agreement and the Ancillary Agreements to which it is or is contemplated to be a party and to consummate the transactions contemplated by this Agreement and by such Ancillary Agreements.

     (b) Each of the Relevant Entities other than TDK is a legal entity duly organized, validly existing and, where applicable, in good standing under the laws of

the jurisdiction of its organization, and has all necessary corporate power and authority to own, lease and operate its assets and to carry on its business as currently conducted. Each of the Relevant Entities other than TDK has all necessary corporate power and authority to execute, deliver and perform the Ancillary Agreements to which it is or is contemplated to be a party and to consummate the transactions contemplated by this Agreement and by such Ancillary Agreements.

     (c) With regard to the Business, each of the Relevant Entities is duly qualified to do business as a foreign corporation in each jurisdiction in which the nature of its business or its ownership of property requires it to be so qualified. Schedule 2.1(c) lists as to each of the Relevant Entities the jurisdiction of its organization, its form as a legal entity, and each jurisdiction in which such Relevant Entity engages in the Business through a registered branch or representative office. Each of the Relevant Entities is in full compliance with all provisions of its Organizational Documents, except as would not have any material consequence.

     2.2 Valid and Binding Agreement . The execution, delivery and performance by TDK of this Agreement, and the execution and delivery by each of the Selling Entities of each of the Ancillary Agreements to which each of them is or is contemplated to be a party, respectively, have been duly and validly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by TDK and constitutes the valid and binding obligation of TDK, enforceable in accordance with its terms, subject to the Remedies Exception. Each Ancillary Agreement to which any of the Selling Entities is or is contemplated to be a party, when executed and delivered by such Selling Entities, respectively, shall constitute the valid and binding obligation of the Selling Entities, enforceable against them in accordance with its terms, subject to the Remedies Exception.

     2.3 No Breach; Consents . The execution, delivery and performance by TDK of this Agreement, and the execution, delivery and performance by each of the Selling Entities of the Ancillary Agreements to which each of them is or is contemplated to be a party, respectively, will not: (a) contravene any provision of the Organizational Documents of any of the Relevant Entities; (b) violate or conflict with any Law or Governmental Order or Governmental Authorization; (c) conflict with, result in any material breach under (or constitute an event that would, with the passage of time or the giving of notice or both, constitute a material default under or result in a material violation of), result in the termination, suspension, or acceleration of payment (or any right to terminate) under any Contract that is binding upon any of the Relevant Entities or any Governmental Authorization that is held by any of the Relevant Entities; (d) result in the creation of a material Encumbrance upon any Acquired Entity or Acquired Assets; or (e) require any Governmental Authorization other than those that may be required pursuant to any Competition Laws (provided, however, that no representation or warranty is made as to whether existing Governmental Authorizations relevant to the Business will continue to be available to Imation after Closing).

     2.4 Subsidiaries . Schedule 2.4 lists the number of authorized shares and the number of issued and outstanding shares of each of the Acquired Entities, all which (except as set forth in such schedule) are owned, of record and beneficially, by TDK or another of the Selling Entities, free and clear of any Encumbrance. All issued and outstanding equity interests of each of the

Acquired Entities are duly authorized, validly issued, fully paid and nonassessable, free of preemptive rights or any other similar third party right, free and clear of all Encumbrances, and in certificated form. There is no option, warrant, call, subscription, convertible security, right (including preemptive rights) or Contract of any character to which any of the Acquired Entities is a party or by which it is bound obligating any of the Acquired Entities to issue, exchange, transfer, sell, repurchase, redeem or otherwise acquire any equity interest in any of the Acquired Entities or obligating any of the Acquired Entities to grant, extend, accelerate the vesting of or enter into any such option, warrant, call, subscription, convertible security, right or Contract. At Closing (upon payment of the Purchase Price), Imation will obtain good and valid title to the Acquired Shares, of record and beneficially, free and clear of any Encumbrance.

     2.5 Financial Statements and Absence of Undisclosed Liabilities .

     (a) The audited consolidated financial statements of TDK and its consolidated Subsidiaries for the fiscal years ending March 31, 2005 and March 31, 2006 and attached as Schedule 2.5(a) (the “ TDK Financial Statements ”) have been prepared in accordance with US GAAP consistently applied during the periods indicated (except as may otherwise be indicated in the notes) and present fairly in all material respects the financial position, results of operations and cash flows of TDK and its consolidated Subsidiaries on a consolidated basis at the respective dates and for the respective periods indicated.

     (b) The audited financial statements of each Acquired Entity (other than TDK Online Services Corporation (“ TOSC ”)) for the fiscal years ending March 31, 2005 and March 31, 2006 and attached as Schedules 2.5(b)(i) through 2.5(b)(v) (together with the TDK Financial Statements, the “ Financial Statements ”) have been prepared in accordance with applicable Local GAAP consistently applied during the periods indicated (except as may otherwise be indicated in the notes) and present fairly in all material respects the financial position, results of operations and cash flows of each Acquired Entity at the respective dates and for the respective periods indicated. For TOSC, the unaudited income statements for the fiscal years ending March 31, 2005 and March 31, 2006, and balance sheet as of March 31, 2006, are attached as Schedule 2.5(b)(vi) .

     (c) Statements of Business Income & Expenses (“ Statements of I&E ”) . The Statements of I&E for the Business for the fiscal year ended March 31, 2006 and the nine (9) months ended December 31, 2006, as set forth in Schedule 2.5(c) , have been prepared in accordance with applicable Local GAAP, applied on a basis consistent with past financial periods, and fairly represent in all material respects the results of the Business for such periods based upon the principles, assumptions and methodologies, and subject to the exceptions and limitations, set forth in Schedule 2.5(c) .

     (d) Statements of Certain Assets and Liabilities . The Statements of Certain Assets and Liabilities (the “ Latest SCA&L ”), as set forth in Schedule 2.5(d) , have been prepared in accordance with applicable Local GAAP, applied on a basis consistent with past financial periods, and fairly represent in all material respects the

assets and liabilities of the Business described therein as of March 31, 2006 and December 31, 2006, based on the principles, assumptions and methodologies, and subject to the exceptions and limitations, set forth in Schedule 2.5(d) .

     (e) Except as reflected or expressly reserved against in the Latest SCA&L, none of the Relevant Entities has any Liability relating to the Business that would be required to be reflected or reserved against in accordance with the policies applicable thereto, except a Liability that has arisen after the date of the Latest SCA&L in the Ordinary Course of Business.

     2.6 Books and Records . The books of account of TDK and its Subsidiaries are complete and correct in all material respects and have been maintained in accordance with sound business practices and the requirements of Section 13(b)(2) of the Exchange Act (regardless of whether TDK or any of its Subsidiaries is subject to that section). Each transaction relating to the Business is properly and accurately recorded on the books and records of the Relevant Entities, and each document upon which entries in such books and records are based is complete and accurate in all material respects. TDK maintains a system of internal controls that complies with the requirements of Section 13(b)(2) of the Exchange Act (regardless of whether TDK or any of its Subsidiaries is subject to that section). The minute books and stock or equity records of the Acquired Entities, all of which have been made available to Imation, are complete and correct in all material respects. The minute books of the Relevant Entities contain accurate records of all meetings held and actions taken by the holders of stock or other equity interests, or the boards of directors or other governing bodies of the Relevant Entities, that are material to the operation of the Business as a whole. At the Closing, all books and records of the Acquired Entities will be in the possession of the respective Acquired Entities.

     2.7 Absence of Certain Developments . Since the Last Fiscal Year End, there has not been any Material Adverse Change and that the following statements are true, solely insofar as they relate primarily to the Business, or to assets or liabilities primarily related to the Business:

     (a) none of the Relevant Entities has sold, leased, licensed, transferred or assigned any of material assets, tangible or intangible, other than in the Ordinary Course of Business;

     (b) none of the Relevant Entities has entered into any Contract (or series of related Contracts with the same party) (i) contemplating purchases or sales of products or services in excess of $1,000,000, or the equivalent thereof in other currencies, per annum or (ii) relating to the purchase or sale of products or services outside the Ordinary Course of Business;

     (c) no party, including any of the Relevant Entities, has accelerated, suspended, terminated, or canceled, or modified outside the Ordinary Course of Business (except to the extent disclosed herein), any Contract to which any of the Relevant Entities is a party or by which any of them is bound that would have been a Material Contract at the time of any such action;

     (d) no material Encumbrance other than a Permitted Encumbrance has been imposed on any assets of any of the Relevant Entities;

     (e) none of the Relevant Entities has made any capital expenditure (or series of related capital expenditures) involving more than $250,000 or the equivalent thereof in other currencies (for the avoidance of doubt, excluding capital expenditures for research and development or manufacturing);

     (f) none of the Relevant Entities has made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans and acquisitions) either involving more than $500,000 or the equivalent thereof in other currencies, or acquired (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any Person;

     (g) none of the Relevant Entities has issued any note, bond or other debt security in respect of Indebtedness, or created, incurred, assumed or guaranteed any Indebtedness, including advances under existing credit facilities, or Capital Lease, in either case either involving more than $100,000, or the equivalent thereof in other currencies, individually or $250,000, or the equivalent thereof in other currencies, in the aggregate, that will remain outstanding as of the Closing, other than individual advances under credit lines the Contracts governing which are listed in Schedule 2.13 ;

     (h) except as contemplated by this Agreement, none of the Relevant Entities has delayed, postponed or accelerated the payment of accounts payable or other Liability or the receipt of any accounts receivable, in each case outside of the Ordinary Course of Business;

     (i) none of the Relevant Entities has canceled, compromised, waived or released in writing any right or claim (or series of related rights or claims) involving more than $250,000, or the equivalent thereof in other currencies;

     (j) except in the Ordinary Course of Business, none of the Relevant Entities has granted any material license or sublicense of any rights under or with respect to any Owned Intellectual Property Rights or Licensed-In Intellectual Property Rights;

     (k) there has been no change made or authorized in the Organizational Documents of any of the Acquired Entities;

     (l) none of the Relevant Entities has experienced any material damage, destruction or loss (whether or not covered by insurance) to any of the Acquired Assets; provided, however , that this representation and warranty shall be deemed to be true and correct as of Closing to the extent that any such material damage, destruction or loss is fully covered by insurance;

     (m) none of the Relevant Entities has offered, entered into or terminated any employment Contract providing for the payment of base annual compensation in excess of $200,000 or the equivalent thereof in other currencies, to any Active

Employee, director of an Acquired Entity or consultant to the Business, or any collective bargaining agreement or similar arrangement regardless of amount, in each case whether written or oral, or modified or committed in any way to modify the terms of any such existing Contract;

     (n) none of the Relevant Entities has granted any increase in the base compensation or made any other change in employment terms of any Active Employee, director of any Acquired Entity or consultant to the Business, other than in the Ordinary Course of Business;

     (o) none of the Relevant Entities has adopted, amended, modified or terminated any Plan that is subject to ERISA or any other material Plan (or taken any such action with respect to any such Plan) which would result in any additional Assumed Liability with respect to any Plan or Active Employee;

     (p) none of the Relevant Entities has made any change in accounting principles or practices from those utilized in the preparation of the Financial Statements; and

     (q) none of the Relevant Entities has committed to take any of the actions described in this Section 2.7.

     2.8 Property .

     (a) As of Closing, none of the Acquired Entities will own any real property.

     (b) TDK Electronics Corporation owns good and marketable title to the Anaheim Facility, free and clear of all Encumbrances except for Permitted Encumbrances and Encumbrances listed on Schedule 2.8 and in the title report attached thereto.

     (c) The real property leases listed in Schedule 2.8 (the “ Real Property Leases ”) constitute all of the leases with respect to premises at which the Business is conducted by the Relevant Entities as of the date hereof (together with the Anaheim Facility, the “ Business Premises ”), all such Real Property Leases are in full force and effect, and one of the Relevant Entities holds a valid and existing leasehold interest thereunder for the term indicated in Schedule 2.8 . None of the Relevant Entities is in default under any of the Real Property Leases and, to the Knowledge of TDK, there is no condition that with the passage of time would constitute a default by a Relevant Entity thereunder. No Real Property Lease is subject to any Encumbrance entered into by any Relevant Entity that would entitle a third party to interfere with or disturb use or enjoyment of the premises subject thereto, during the term thereof, or the exercise by the lessee of its rights under such lease, in each case for so long as the relevant Real Property Lease remains in effect, without default by the lessee thereunder.

     (d) To the Knowledge of TDK, none of the Relevant Entities is in material violation of any applicable zoning ordinance or other Law relating to the Relevant Entities’ use, occupancy or possession of any Business Premises, and none of them has received any written notice of any such violation or the existence of any condemnation or other proceeding with respect to any Business Premises.

     (e) To the Knowledge of TDK, there are no improvements made or contemplated to be made by any Governmental Entity, the costs of which are to be assessed as assessments, special assessments, special Taxes or charges specifically with respect to any of the Business Premises (as opposed to more broadly applicable Taxes or assessments), and there are no such present assessments, special assessments, special Taxes or charges.

     (f) Each of the Relevant Entities has good and marketable title to, or a valid leasehold interest in, improvements, building systems, machinery, equipment and other tangible assets used by it, located on its Business Premises or otherwise shown in the Latest SCA&L or acquired after the date thereof, free and clear of all material Encumbrances other than Permitted Encumbrances, except for assets disposed of in the Ordinary Course of Business since the date of the Latest SCA&L.

     (g) To the Knowledge of TDK, the buildings, improvements, building systems, material items of machinery and equipment, that are owned or leased and used by the Relevant Entities in the conduct of the Business are usable in the Ordinary Course of Business.

     (h) The fixed asset listing attached as Schedule 2.8 includes all tangible personal property of any Relevant Entity used primarily in the Business as of March 31, 2007, in each case having an individual book value in excess of $15,000.

     (i) Subject to the receipt by the Acquiring Entities of such services and benefits as the parties agree shall be provided pursuant to the Transition Services Agreements and other Ancillary Agreements, and with the exception of any Contracts as to which consent is not obtained notwithstanding TDK’s compliance with the terms of Section 1.10, and except with respect to intellectual property rights which are addressed solely in Section 2.12(a), upon Closing the Acquiring Entities will own and have the right to use (or, in the case of leased or licensed interests, have the right to use) such assets, without contravention of the terms and conditions of any of such assets (or, with respect to assets or services provided under the Transition Services Agreements, the right to use assets or obtain services on the terms and subject to the conditions thereof) as are necessary to enable the Acquiring Entities and the Acquired Entities to conduct the Business in all material respects as it is conducted as of the date hereof and immediately prior to the Closing, in compliance in all material respects with all applicable Laws, Governmental Authorizations and Contracts applicable to the Business.

     2.9 Accounts Receivable . Except as disclosed on Schedule 2.9 , all accounts receivable of the Relevant Entities relating to the Business are reflected properly on their respective books of

account, are valid, have arisen from bona fide transactions in the Ordinary Course of Business, and are subject to no setoff or counterclaim and are collectible, in the aggregate, subject only to the accounts receivable reserves shown on the face of the Latest SCA&L as adjusted on the books of the Relevant Entities for the passage of time through the Closing Date in the Ordinary Course of Business.

     2.10 Inventory . TDK’s policies with respect to the treatment of inventories of supplies and finished goods relating to the Business are attached hereto as Schedule 2.10 . In accordance with TDK’s policies, such inventories are of a quantity and quality usable in the Ordinary Course of Business and are not slow-moving. Based on TDK’s policies, such inventories are not obsolete, damaged or defective, and are merchantable and fit for their particular use, subject only to any reserve for inventory in the Latest SCA&L as adjusted in the books of account of the Relevant Entities for the passage of time through the Closing Date in the Ordinary Course of Business. The Relevant Entities have on hand or have ordered and expect timely delivery of such quantities of supplies and finished goods as are, in the judgment of the Relevant Entities, based on past experience with the Business, reasonably required (and are not in excess) to fill current orders on hand relating to the Business in a timely manner and to maintain the shipment of products at their anticipated level of operations.

     2.11 Tax Matters .

     (a) Each of the Relevant Entities has (i) timely filed (or has had timely filed on its behalf) each material Return required to be filed or sent by it in respect of any Taxes or required to be filed or sent by it by any Governmental Entity, all of which were correctly completed in all material respects and accurately reflected any material liabilities for Taxes of the Relevant Entities and any Tax Affiliates covered by such Returns, (ii) timely and properly paid (or had paid on its behalf) all Taxes due and payable for all Tax periods or portions thereof whether or not shown on such Returns, (iii) established in the books of account of the Relevant Entities, in accordance with US GAAP (or the generally accepted accounting principles in the jurisdiction applicable to each of the Relevant Entities) and consistent with past practices, adequate reserves for the payment of any Taxes not then due and payable and (iv) complied in all material respects with all applicable Laws relating to the withholding of Taxes and the payment thereof.

     (b) There are no Encumbrances for Taxes upon any assets of any of the Acquired Entities, except Encumbrances for Taxes not yet due.

     (c) None of the Acquired Entities has requested any extension of time within which to file any Return, which Return has not since been filed.

     (d) Except as set forth in Schedule 2.11(d) , no deficiency for any Taxes has been proposed, asserted or assessed against any of the Relevant Entities that has not been resolved and paid in full, other than any deficiencies proposed, asserted or assessed against TDK that do not relate to the Business. Any deficiencies described in Schedule 2.11(d) that have not been resolved are being contested in good faith. No waiver, extension or comparable consent given by any of the Relevant Entities

regarding the application of the statute of limitations with respect to any Taxes or any Return is outstanding, nor is any request for any such waiver or consent pending. There has been no material Tax audit or other administrative proceeding or court proceeding, dispute or enquiry with regard to any Taxes or any Return for any Tax year subsequent to the year ended March 31, 2001, nor is any such material Tax audit or other proceeding, dispute or enquiry pending, nor has there been any notice to any of the Relevant Entities by any Governmental Entity regarding any such material Tax, audit or other proceeding or dispute or, to the Knowledge of TDK, is any such material Tax audit or other proceeding or dispute threatened with regard to any Taxes or Returns. None of the Relevant Entities has entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision under any other Law.

     (e) To the Knowledge of TDK, no material additional Taxes will be assessed against any of the Relevant Entities for any Tax period or portion thereof ending on or prior to the Closing Date and, to the Knowledge of TDK, there are no material unresolved questions, claims or disputes concerning the liability for Taxes of any of the Relevant Entities that would exceed by a material amount the estimated reserves (including reserves for deferred Tax liabilities) established on its books of account.

     (f) Schedule 2.11(f) lists all income or franchise Tax Returns under any national, federal, provincial state or local jurisdiction filed by or with respect to any of the Acquired Entities for taxable periods ended on or after March 31, 1999, indicates those Returns that have been audited and indicates those Returns that currently are the subject of audit.

     (g) None of the Acquired Entities has received notice from a taxing authority in any jurisdiction where it does not file a Return that it is or may be subject to taxation by that jurisdiction.

     (h) No property of any of the Acquired Entities is (i) property that such Acquired Entity is or will be required to treat as being owned by another Person under the provisions of Section 168(f)(8) of the Code (as in effect prior to amendment by the Tax Reform Act of 1986), (ii) “tax-exempt use property” within the meaning of Section 168(h) of the Code or (iii) “tax-exempt bond financed property” within the meaning of Section 168(g)(5) of the Code.

     (i) None of the Acquired Entities is required to include in income any adjustment under either Section 481(a) or Section 482 of the Code, or an analogous provision of Law by reason of a voluntary change in accounting method or otherwise, and no Governmental Entity has proposed any such adjustment or change in accounting method.

     (j) All transactions of any of the Acquired Entities that could give rise to an underpayment of tax were reported in a manner for which there is substantial authority or were adequately disclosed on the Returns if and as required by applicable Law.

     (k) None of the Acquired Entities is a party to any Tax allocation or sharing agreement that will be in effect on or after the Closing Date.

     (l) Except as set forth in Schedule 2.11(l) , none of the Acquired Entities has ever been a member of an affiliated, combined or unitary group for purposes of Taxes, nor do any of them have any Liability for the Taxes of any Person.

     (m) None of the Acquired Entities constitutes either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for tax-free treatment under Section 355 of the Code (i) that took place during the two-year period ending on the date of this Agreement or (ii) that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the purchase of the Acquired Shares.

     (n) None of the Acquired Entities has engaged in any transaction that is subject to disclosure under current or former Treasury Regulations Sections 1.6011-4 or 1.6011-4T, as applicable.

     (o) All documents (other than those which have ceased to have any legal effect) to which any of the Acquired Entities is a party that are dependent for their enforcement upon the payment of stamp duty or similar taxes have been duly stamped and no such documents which are outside any jurisdiction in which the Business is conducted would attract stamp duty if they were brought into such jurisdiction.

     (p) All value added taxes payable upon the importation of, and all excise duties payable in respect of, the assets of the Acquired Entities have been paid, and none of such assets is liable to confiscation, forfeiture or duress.

     (q) TDK is not aware of any unresolved questions, claims or disputes concerning the liability for Taxes of any of the Relevant Entities or any Tax Affiliate that would exceed the estimated reserves established on its books and records. There is no dispute or claim concern any Tax liability of any of the Relevant Entities or any Tax Affiliate.

     (r) The assets to be sold, transferred and assigned by TES, THK and TSP to Acquiring Entities pursuant to the terms of this Agreement do not constitute substantially all the assets of TES, THK or TSP and TDK has no present intention to liquidate TES, TSP or THK.

     2.12 Intellectual Property Rights .

     (a) Schedule 2.12(a)(i) lists and describes certain Owned Intellectual Property Rights that are unregistered Trademarks and all Owned Intellectual Property Rights that are Registered Intellectual Property Rights. Schedule 2.12(a)(ii) lists all Contracts relating to material Licensed-In Intellectual Property Rights other than Software and to the extent there is no written Contract covering such Licensed-In Intellectual Property Right, Schedule 2.12(a)(ii) lists the licensor and describes the

Intellectual Property Rights so licensed. Schedule 2.12(a)(iii) lists all Contracts relating to material Licensed-In Intellectual Property Rights that are Software other than Off-the-Shelf Software and to the extent there is no written Contract covering any such Software, Schedule 2.12(a)(iii) lists the licensor and describes the Software so licensed. Schedule 2.12(a)(iv) lists all Contracts related to material Licensed-Out Intellectual Property Rights and to the extent there is no written Contract covering such Licensed-Out Intellectual Property Right, Schedule 2.12(a)(iv) lists the licensee and describes the Subject Intellectual Property Rights so licensed. Subject to (i) the receipt by the Acquiring Entities of such services and benefits as the parties agree shall be provided pursuant to the Transition Services Agreements and (ii) the limitations and restrictions contained in the Ancillary Agreements, and after giving effect to the Ancillary Agreements (including the licenses granted therein), and with the exception of (x) any Contracts as to which consent is not obtained notwithstanding TDK’s compliance with the terms of Section 1.10, (y) any Patents and (z) any Subject Intellectual Property Rights that are not used exclusively in the Business, upon Closing the Acquiring Entities will own and have the right to use (or, in the case of leased or licensed interests, have the right to use) such Owned Intellectual Property Rights and Licensed-In Intellectual Property Rights, without contravention of the terms and conditions of any of such Licensed-In Intellectual Property Rights as are necessary to enable the Acquiring Entities and the Acquired Entities to conduct the Business in all material respects as it is conducted as of the date hereof and immediately prior to the Closing, in compliance in all material respects with all applicable Laws, Governmental Authorizations and Contracts applicable to the Business; provided, however , that the only representations with respect to Trade Secrets are those set forth in subsection (d) below.

     (b) The Relevant Entities own all right, title and interest in all material Owned Intellectual Property Rights free and clear of all Encumbrances (including royalty or other payments), except for Permitted Encumbrances, the Licensed-Out Intellectual Property Rights, payments for use of the Owned Intellectual Property Rights and other Encumbrances listed on Schedule 2.12(b) . The identity of all registrations and legal owners of record of all such Owned Intellectual Property rights is correctly set forth on Schedule 2.12(b) . The Relevant Entities own all Subject Intellectual Property Rights developed by their current and former employees and independent contractors during the period of their employment or within the scope of their contracting or consulting relationship, as the case may be, with any of the Relevant Entities, other than rights that are not assignable under applicable Law. To the Knowledge of TDK, no employee or former employee or independent contractor of any of the Relevant Entities has any claim with respect to any Subject Intellectual Property Right of any of the Relevant Entities, other than with respect to rights that are not assignable under applicable Law.

     (c) No Person has asserted in writing that any of such Owned Intellectual Property Rights are invalid or not enforceable. All material Owned Intellectual Property Rights that are Registered Intellectual Property Rights are in full force and effect, and all actions required to keep Registered Intellectual Property Rights pending or in effect or to provide full available protection, including payment of

filing, examination, annuity, and maintenance fees and filing of renewals, statements of use or working, affidavits of incontestability and other similar actions, have been taken, and no such Registered Intellectual Property Right is the subject of any interference, opposition, cancellation, nullity, re-examination or other proceeding placing in question the validity or scope of such rights.

     (d) With the exception of any Contracts as to which consent is not obtained notwithstanding TDK’s compliance with the terms of Section 1.10 and except such trade secret information as is held by employees of the Business that do not transfer at Closing as contemplated herein, the Acquiring Entities and the Acquired Entities will receive at Closing such rights with respect to trade secrets as are necessary to enable the Acquiring Entities and the Acquired Entities to conduct the Business in all material respects as it is conducted as of the date hereof and immediately prior to the Closing.

     (e) Each material Licensed-In Intellectual Property Right for which any of the Relevant Entities has an exclusive license is in full force and effect, all actions required to keep such right pending or in effect or to provide full protection, including payment of filing, examination, annuity, and maintenance fees and filing of renewals, statements of use or working, affidavits of incontestability and other similar actions, have been taken. No material Licensed-In Intellectual Property Right that is a Registered Intellectual Property Right and for which any of the Relevant Entities has an exclusive license is the subject of any interference, opposition, cancellation, nullity, re-examination or other proceeding placing in question the validity or scope of such right.

     (f) None of the Relevant Entities has received any written notice of any material infringement, misappropriation or violation by any of the Relevant Entities of any Third-Party Intellectual Property Right.

     (g) All Software (other than Software that is incorporated in any Subject Products) that is primarily used in the Business immediately prior to the Closing Date is owned by one of the Relevant Entities or is subject to a current license agreement that covers all use of such Software in the Business as conducted by the Relevant Entities immediately prior to the Closing Date, although no representation is made concerning the assignability of any such rights. To the Knowledge of TDK, none of the Relevant Entities is in breach of any license to, or license of, any such Software. None of the Relevant Entities uses, relies on or contracts with any Person to provide service bureau, outsourcing or other computer processing services to a Relevant Entity material to the operation of the Business, in lieu of or in addition to its use of such Software.

     2.13 Material Contracts .

     (a) Schedule 2.13 lists the following Contracts not listed on Schedule 2.12(a)(ii) , Schedule 2.12(a)(iii) or Schedule 2.12(a)(iv) relating primarily to the Business and to which any of the Relevant Entities is currently a party or currently

subject or by which any of them is bound (together with the Contracts required to be listed on Schedule 2.12(a)(ii) , Schedule 2.12(a)(iii) and Schedule 2.12(a)(iv) , the “ Material Contracts ”):

     (i) each employment Contract with an Active Employee or director of an Acquired Entity, and each agency or consulting Contract, that contemplates payment of more than $200,000, or the equivalent thereof in other currencies, per annum;

     (ii) each collective bargaining Contract;

     (iii) each Contract (A) between or among TDK or any of its Affiliates other than Relevant Entities, on the one hand, and any of the Relevant Entities, on the other; (B) between or among any of the Relevant Entities, on the one hand, and any of the Insiders or their respective Affiliates, on the other; or (C) between or among any of the Insiders;

     (iv) each manufacturer’s representative, broker, sales agency, advertising agency or finder’s Contract not otherwise disclosed pursuant to either of Sections 2.13(a)(vi) or 2.13(a)(vii) below that (A) contemplates payments in excess of $250,000, or the equivalent thereof in other currencies, per annum or involved actual payments in excess of $250,000, or the equivalent thereof in other currencies, during the Last Fiscal Year or (B) is not by its terms terminable by the Relevant Entity party thereto upon notice of ninety (90) days or less without any Liability of such Relevant Entity party thereto by reason of such termination.;

     (v) each franchise agreement;

     (vi) each Contract or group of related Contracts with the same party for the purchase of products or services, including each manufacturing or assembly Contract, that (A) contemplates purchases in excess of $1,000,000, or the equivalent thereof in other currencies, per annum or involved actual purchases in excess of $1,000,000, or the equivalent thereof in other currencies, during the Last Fiscal Year or (B) was entered into outside the Ordinary Course of Business.

     (vii) each Contract or group of related Contracts, including any rebate or similar promotional agreements, with the same party for the sale of Subject Products or Ancillary Products, including each distributor, reseller or dealer Contract, that (A) contemplates sales in excess of $1,000,000, or the equivalent thereof in other currencies, per annum or involved actual sales in excess of $1,000,000, or the equivalent thereof in other currencies, during the Last Fiscal Year or (B) was entered into outside the Ordinary Course of Business;

     (viii) each lease of real or personal property contemplating aggregate annual payments in excess of $300,000 or the equivalent thereof in other currencies;

     (ix) each Contract for the sale of any material capital assets;

     (x) each Contract for capital expenditures in excess of $250,000 or the equivalent thereof in other currencies (for the avoidance of doubt, excluding capital expenditures for research and development or manufacturing);

     (xi) each Contract relating to Indebtedness in excess of $500,000, for the avoidance of doubt excluding trade payables, or to mortgaging, pledging or otherwise placing an Encumbrance (other than a Permitted Encumbrance) on any of the assets of any of the Relevant Entities with respect to Acquired Assets that will remain outstanding as of Closing;

     (xii) each written guaranty or other similar undertaking with respect to contractual performance of a third Person extended by any of the Relevant Entities other than in the Ordinary Course of Business;

     (xiii) each Contract relating to any surety bond or letter of credit for in excess of $500,000 required to be maintained by any of the Relevant Entities;

     (xiv) each Contract concerning a partnership or joint venture;

     (xv) (A) each Contract containing exclusivity or non-competition provisions that would materially restrict the Relevant Entities or that would otherwise prohibit any of the Relevant Entities from freely engaging in the Business anywhere in the world, (B) each reseller, dealer, manufacturer’s representative, broker, sales agency, advertising agency, finder’s, manufacturing or assembly Contract containing exclusivity provisions, and (C) each distributor Contract;

     (xvi) each material Capital Lease;

     (xvii) each Contract that (A) (1) contemplates payments in excess of $1,000,000, or the equivalent thereof in other currencies, per annum or (2) is otherwise material to the Business taken as a whole and (B) is terminable by any other party upon a change of control of any of the Acquired Entities;

     (xviii) each power of attorney issued by an Acquired Entity that is currently in effect;

     (xix) each other material Contract of any of the Relevant Entities that was not entered into in the Ordinary Course of Business and has not been fully performed by all parties thereto; and

     (xx) each other Contract not entered into in the Ordinary Course of Business that is material to the business, financial condition or results of operations of the Business.

     (b) Each Material Contract is valid and binding, currently in force and enforceable in accordance with its terms, subject to the Remedies Exception. Each of the Relevant Entities has performed all material obligations required to be performed

by it under each Material Contract. None of the Relevant Entities has received written notice of any claim of default by it under or termination of any Material Contract.

     (c) TDK has provided or made available to Imation true, complete and correct copies of all written Material Contracts, including all amendments thereto. TDK has provided to Imation, or there are set forth in the Disclosure Schedule, written summaries of all oral Material Contracts, which summaries are true, complete and correct in all material respects.

     2.14 Litigation . Schedule 2.14 lists all Litigation relating to the Business pending or, to the Knowledge of TDK, threatened against any of the Relevant Entities and each Governmental Order to which any of the Relevant Entities is subject. None of the items listed on Schedule 2.14 could reasonably be expected to result in any Material Adverse Effect.

     2.15 Insurance .

     (a) Each of the Relevant Entities has at all times maintained customary levels of insurance relating to the Business as to property, fire, casualty, liability, and workers’ compensation. Such insurance (i) is in full force and effect, (ii) is sufficient for compliance with all requirements of applicable Law, and (iii) to the Knowledge of TDK, is valid and enforceable. Schedule 2.15(a) lists each such material policy of insurance currently in effect (each an “ Insurance Policy ”).

     (b) Schedule 2.15(b) lists each claim in excess of $250,000 made by any of the Relevant Entities relating to the Business under any Insurance Policy since January 1, 2006, setting forth (i) the name of the claimant, (ii) a description of the policy by insurer type of insurance and period of coverage and (iii) the amount and a brief desctiption of the claim.

     2.16 Compliance with Laws; Governmental Authorizations .

     (a) Each of the Relevant Entities has complied in all material respects with all Laws and Governmental Orders applicable to the conduct of the Business. None of the Relevant Entities is relying on any written exemption from or deferral of any material Law, Governmental Order or Governmental Authorization that would not be available to them or to the Acquiring Entities after the Closing.

     (b) Each of the Relevant Entities has in full force and effect all material Governmental Authorizations necessary to conduct the Business and own and operate the properties used in the Business. Each of such Governmental Authorizations is listed in Schedule 2.16(b) . Each of the Relevant Entities has complied in all material respects with all Governmental Authorizations applicable to it.

     (c) To TDK’s Knowledge, none of the Relevant Entities has offered, promised, made or agreed to make any material gift or transfer of property of any kind (other than incidental gifts of nominal value) to any government official, political party or party official, or any candidate for political office, in connection with any

actual or proposed transaction, except as permitted by the Laws of the applicable jurisdiction and by the US Foreign Corrupt Practices Act.

     (d) The Relevant Entities have complied with all applicable export control and trade embargo Laws in connection with their conduct of the Business.

     (e) All copyright levy payments that are applicable to the sale of any Subject Products or Ancillary Products, and which are payable by the Relevant Entities, have been paid to the relevant collecting society.

     (f) All anti-dumping and anti-subsidy duties that are applicable to the sale of any products in connection with the Business by the Relevant Entities have been paid to the relevant customs authority by the importers or suppliers of such products.

     (g) All products offered for sale in connection with the Business by the Relevant Entities and their respective packaging are compliant in all material respects with all applicable Laws.

     2.17 Environmental Matters .

     (a) As used in this Section 2.17, the following terms have the following meanings:

     (i) “ Environmental Costs ” means any and all costs and expenditures, including any fees and expenses of attorneys and of environmental consultants or engineers incurred in connection with investigating, defending, remediating or otherwise responding to any Release of Hazardous Materials, any violation or alleged violation of Environmental Law, any fees, fines, penalties or charges associated with any Governmental Authorization, or any actions necessary to comply with any applicable Environmental Law.

     (ii) “ Environmental Law ” means any Law, Governmental Authorization or Governmental Order relating to pollution, contamination, Hazardous Materials or protection of the environment in effect as of the date hereof.

     (iii) “ Hazardous Materials ” means any pollutant, contaminant, chemical, waste, material or substance that is deemed dangerous, toxic or hazardous to human health or safety as defined in or governed by any Law relating to such substance or otherwise relating to the environment or human health or safety, including any waste, material, substance, pollutant or contaminant that might cause any injury to human health or safety or to the environment or might subject the owner of the Property to any Environmental Costs or Liability under any Environmental Law.

     (iv) “ List ” means the United States Environmental Protection Agency’s National Priorities List of Hazardous Waste Sites.

     (v) “ Property ” means the Anaheim Facility, and the leased real property listed in Schedule 2.8(c) (together with the Anaheim Facility, “ Current Property ”) and the real property previously owned or leased by any of the Acquired Entities (“ Former Property ”).

     (vi) “ Regulatory Action ” means any Litigation with respect to TDK brought or instigated by any Governmental Entity in connection with any Environmental Costs, Release of Hazardous Materials or any Environmental Law.

     (vii) “ Release ” means the spilling, leaking, disposing, discharging, emitting, depositing, ejecting, leaching, escaping or any other release or threatened release, however defined, whether intentional or unintentional, of any Hazardous Material.

     (viii) “ Third-Party Environmental Claim ” means any Litigation (other than a Regulatory Action) based on negligence, trespass, strict liability, nuisance, toxic tort or any other cause of action or theory relating to any Environmental Costs, Release of Hazardous Materials or any violation of Environmental Law.

     (b) No Third-Party Environmental Claim or Regulatory Action is pending or, to the Knowledge of TDK, threatened against any of the Acquired Entities.

     (c) The Anaheim Facility is not on the List.

     (d) To the Knowledge of TDK, with respect to the Business, all transfer, transportation or disposal of Hazardous Materials by any of the Relevant Entities to properties not owned, leased or operated by one of the Relevant Entities has been in compliance in all material respects with applicable Environmental Law.

     (e) There has not been any Release by any of the Relevant Entities or, with respect to the Anaheim Facility, by any other person or entity of any Hazardous Material in the soil or water or on, in, under, about, from or in connection with the Current Property or, to the Knowledge of TDK, the Former Property.

     (f) The Property has at all times been used and operated by the Relevant Entities in compliance in all material respects with all applicable Environmental Law.

     (g) To the Knowledge of TDK, no Hazardous Materials have been generated, treated, contained, handled, located, used, manufactured, processed, buried, incinerated, deposited or stored in, on, under or about any part of the Property by any of the Relevant Entities, except for such activities that are in material compliance with all applicable Environmental Laws. To the Knowledge of TDK, the Anaheim Facility either does not contain, or does not contain at levels that would violate applicable Environmental Law, urea, formaldehyde or radon, PCBs or pesticides.

     (h) All environmental reports and investigations that any of the Relevant Entities has obtained within the last three (3) years with respect to any of the Acquired Entities or the Property are listed in Schedule 2.17(h) .

     2.18 Warranties . Schedule 2.18(i) lists all claims pending or, to the Knowledge of TDK, threatened for product liability or breach of any warranty relating to any products sold or services performed by any of the Relevant Entities in relation to the Business where the cash amount claimed exceeds $250,000, or the equivalent thereof in other currencies, either individually or together with other claims relating to the same occurrence or circumstance. TDK has provided or made available to Imation true and correct copies of the terms of sale for Subject Products and Ancillary Products to the top 15 customers for each of TDK’s Sales Regions (or, if fewer than 15 customers represent eighty percent (80%) or more of revenues for such Sales Region, the customers representing eighty percent (80%) of such revenues), based on gross billings during TDK’s most recently completed full fiscal year. Except as listed on Schedule 2.18(ii) , none of the products currently manufactured, sold, leased or delivered by any of the Relevant Entities in relation to the Business has been the subject of any product recall (whether voluntary or involuntary) during the past three (3) years.

     2.19 Employees .

     (a) Schedule 2.19(a) lists separately for each of the Relevant Entities each Active Employee and shows for each such employee the office or location in which the employee is employed, such employee’s annual salary or hourly compensation, as the case may be, and any other material remuneration arrangements (including contributions payable to any private pension arrangement in respect of the employee and compensation payable pursuant to bonus, incentive, in-kind and deferred compensation, allowances or commission arrangements and identifying in each case the relevant employer and any other entity responsible for such salary or other compensation), date of employment, date of commencement of continuous employment (if different), position and status as full-time, part-time or temporary employees. Each of the Relevant Entities has complied at all times in all material respects with all applicable Laws and Contract terms relating to such employees, including terms relating to the calculation and payment of wages (including overtime pay, maximum hours of work and child labor restrictions), equal employment opportunity (including Laws prohibiting discrimination and/or harassment or requiring accommodation on the basis of race, color, national origin, religion, gender, disability, age, sexual orientation or otherwise), affirmative action and other hiring practices, occupational safety and health, workers’ compensation, unemployment compensation, the payment of social security and other Taxes, and unfair labor practices. Except as set forth in Schedule 2.14 , there are no material workers’ compensation, labor, or similar employment related claims pending or, to the Knowledge of TDK, threatened against any of the Acquired Entities.

     (b) Schedule 2.19(b) (i) lists each Active Employee who is required by applicable Law to hold a temporary work authorization or a particular class of non-immigrant visa in order to work in any jurisdiction in which such employee is employed (each a “ Work Permit ”), and shows for each such employee the type of

Work Permit held and the remaining period of validity. With respect to each Work Permit, all of the information that any of the Acquired Entities has provided to the relevant Governmental Entities (collectively, “ Immigration Authorities ”) in the application for such Work Permit was true and complete. The Acquired Entities have received the appropriate notice of approval from the Immigration Authorities with respect to each such Work Permit. None of the Acquired Entities has received any written notice from the Immigration Authorities that any Work Permit has been revoked. There is no action pending or, to the Knowledge of TDK, threatened to revoke or adversely modify the terms of any Work Permit. Except as disclosed in Schedule 2.19(b) (ii) no employee of any of the Acquired Entities is a non-immigrant employee of a nationality other than that of the jurisdiction in which he or she is employed whose right to remain in such employment would terminate or otherwise be affected by the transactions contemplated by this Agreement. For each Active Employee of any of the Relevant Entities hired after November 6, 1986 who is working in the United States, the respective Relevant Entity has completed and retained an Immigration and Naturalization Service Form I-9, in accordance with applicable Law.

     (c) The employment of any terminated former employee of any of the Relevant Entities who was engaged in the Business has been terminated in material compliance with any applicable Contract terms and applicable Law, and none of the Relevant Entities has any material Liability under any Contract or applicable Law toward any such terminated employee, except as may be set forth in any Plan, that could become a Liability of any of the Acquired Entities or Acquiring Entities. Except as otherwise contemplated herein, the Transactions will not (in and of themselves) cause any of the Acquired Entities or Acquiring Entities to incur or suffer any Liability relating to, or obligation to pay, severance, termination or other payment to any present or former employee.

     (d) None of the Relevant Entities has made any loans (except advances for business expenses in the Ordinary Course of Business) to any Active Employee that have not been fully repaid, forgiven or otherwise satisfied.

     (e) Except as disclosed in Schedule 2.19(e) (i), during the three (3)-year period ending on the date hereof, none of the Relevant Entities has experienced and, to the Knowledge of TDK, there has not been threatened, any strike, work stoppage, slowdown, lockout, picketing, boycott, or other material labor dispute, union organization attempt, demand for recognition from a labor organization or petition for representation with respect to Active Employees. Except as disclosed in Schedule 2.19(e) (ii), none of the Relevant Entities is subject to any collective bargaining agreement or obligation to engage in collective bargaining with any trade union or similar organization with respect to Active Employees. There is no current or, to the Knowledge of TDK, threatened dispute between any of the Relevant Entities and any trade union or similar organization with respect to employees engaged in the Business. Except as disclosed in Schedule 2.14 , no material Litigation is pending or, to the Knowledge of TDK, threatened against any of the Relevant Entities respecting or involving any applicant for employment in the Business, any current employee or

any former employee engaged in the Business, or any class of the foregoing, by or before any Governmental Entity.

     (f) None of the Relevant Entities are liable for any arrears of wages, salaries, bonuses or commissions owed to Active Employees except for bonuses and similar compensation earned during the period in which the Closing falls but payable on a deferred basis in accordance with the terms thereof.

     (g) Except as set forth in Schedule 2.19(g) , there has been no lay-off of employees engaged the Business undertaken by or on behalf of any of the Relevant Entities in the past two (2) years, and no such program as to Business Employees has been adopted by any of the Relevant Entities or publicly announced. No orders, awards, improvements, prohibitions or other notices have been served upon and no other enforcement or similar proceedings have been taken against any of the Relevant Entities in the past two (2) years pursuant to any legislation, regulations, orders or codes of conduct of any Governmental Entity in respect of Business Employees.

     (h) There are no current negotiations with any union or similar organization for any material change in the rate of remuneration or the bonus, incentives, or private pension benefits of any Active Employee.

     2.20 Employee Benefits .

     (a) Schedule 2.20(a) lists all Plans that are subject to ERISA and analogous Laws outside the United States and all other material Plans. True, correct and complete copies of all Plan documents have been provided or made available to Imation.

     (b) Except as disclosed on Schedule 2.20(b) , all Plans are in good standing with such regulatory authorities as may be applicable and no written notice of non-compliance, failure to be in good standing or otherwise has been received by any of the Relevant Entities from any such regulatory authority with respect to any of the Plans. With respect to any unfunded Plan providing pension, retirement, or similar benefits for which applicable Local GAAP or applicable Law mandate that reserves be recorded on a statement of financial position, reserves have been recorded on the TDK Financial Statements in a manner that is consistent with applicable Local GAAP and Law. With respect to any funded Plan providing pension, retirement, or similar benefits, such plans have been funded in accordance with the applicable Law. All Plans maintained by or binding upon any of the Relevant Entities with respect to Active Employees and that are required under applicable Law to be funded will be fully funded at Closing on a basis to be reasonably agreed between the parties (Actual Benefit Obligations (ABO), Potential Benefit Obligations (PBO), or something in between) prior to Closing.

     (c) None of the Relevant Entities has any unsatisfied Liabilities, or is reasonably expected to incur any Liabilities, that could become a Liability of any of the Acquired Entities or the Acquiring Entities with respect to any Plan. Each Plan to

which each of the Relevant Entities contributes that is intended to qualify for any Tax benefit under applicable Law has received any required confirmation of such qualification from an appropriate Governmental Entity and is in material compliance with all requirements of applicable Law, as to both form and operation, necessary to maintain such qualification. The Relevant Entities have performed all of their material obligations in relation to the Plans in accordance with the governing documentation of the Plans and the requirements of all applicable Laws.

     (d) Schedule 2.20(d) lists by position and regular salary or wage level each Active Employee who is (i) absent from active employment due to short or long term disability, (ii) absent from active employment on a leave required to be granted under applicable Law by reason of a medical or other condition of such employee or any family member, (iii) absent from active employment on any other leave or approved absence (together with the reason for each leave or absence) or (iv) absent from active employment due to military service (under conditions that give the employee rights to re-employment).

     (e) No written undertaking or assurance (whether or not constituting a legally binding commitment) has been given to any Active Employee as to the continuation of any of the Plans after the Closing.

     (f) There are no criminal proceedings against, and no material civil, arbitration, administrative or other proceedings or disputes by or against, the trustees, managers or administrators of the Plans or any of the Relevant Entities in relation to the Plans and none is pending or, to the Knowledge of TDK, threatened.

     (g) None of the Relevant Entities sponsors, contributes to or otherwise has any liability with respect to any “multiemployer plan” as defined in Section 3(37) of ERISA.

     2.21 Customers . Schedule 2.21 lists the top 15 customers for each of TDK’s Sales Regions (or, if fewer than 15 customers represent eighty percent (80%) or more of revenues for such Sales Region, the customers representing eighty percent (80%) of such revenues), based on gross billings during TDK’s most recently completed full fiscal year. TDK has provided or made available to Imation true and correct copies of all material Contracts currently in force with each of such customers. No customer listed on Schedule 2.21 has indicated to TDK in writing that it intends to stop doing business with the Relevant Entities.

     2.22 Suppliers . Schedule 2.22 lists the ten (10) largest suppliers of the Business as a whole, based on gross payments during TDK’s most recently completed full fiscal year. TDK has provided or made available to Imation true and correct copies of all material Contracts currently in force with each of such suppliers. No supplier listed on Schedule 2.22 is a sole source of supply for the Business. No supplier listed on Schedule 2.22 has indicated to TDK in writing that it intends to stop doing business with the Acquired Entities.

     2.23 Affiliate Transactions . No Insider has any Contract with any of the Relevant Entities (other than (i) employment agreements not represented by a written Contract and

terminable at will), any loan to or from any of the Relevant Entities or any interest in any assets (whether real, personal or mixed, tangible or intangible) used in or pertaining to the Business. No Insider has any material, direct or indirect interest in any competitor, supplier to or customer of the Business or in any Person from whom or to whom any of the Relevant Entities leases any property, or in any other Person with whom any of the Relevant Entities otherwise transacts business of any nature. Schedule 2.23 lists all transactions relating primarily to the Business between any of the Relevant Entities and each Insider since the Last Fiscal Year End. Schedule 2.23 lists all amounts owed by any of the Relevant Entities to TDK, any of its Affiliates or any Insider and all amounts owed by TDK, any of its Affiliates or any Insider to any of the Relevant Entities, in each case relating primarily to the Business or that will be outstanding as of Closing.

     2.24 Brokerage . No Person shall be entitled to receive any brokerage commission, finder’s fee, fee for financial advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any Contract made by or on behalf of any of the Relevant Entities for which any of the Acquired Entities or the Acquiring Entities is or could become liable or obligated.

     2.25 Investment . TDK (a) understands that the Imation Shares have not been, and will not be, registered under the Securities Act or under any state securities laws, are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering and will contain a legend restricting transfer; (b) is acquiring the Imation Shares solely for TDK’s own account for investment purposes, and not with a view to the distribution thereof; (c) is a sophisticated investor with knowledge and experience in business and financial matters; (d) has received certain information concerning Imation and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Imation Shares; (e) is able to bear the economic risk and lack of liquidity inherent in holding the Imation Shares; and (f) is an “ Accredited Investor ” as that term is defined under Rule 501 of the Securities Act.

     2.26 Completeness of Documents . All documents referred to in the Disclosure Schedule are true, correct and complete in all material respects, including any material amendments thereto. Any written descriptions of oral Contracts provided or made available to Imation and referred to in the Disclosure Schedule are true, correct and complete in all material respects.

     2.27 Disclaimer of Other Warranties . The representations and warranties of TDK expressly set forth in this Article II, in the Ancillary Agreements, and in any certificate delivered pursuant to the terms hereof or thereof at Closing constitute all the representations or warranties of any kind, either express or implied, being provided to Imation, or any of its representatives, with respect to the transactions contemplated hereby. Except for such representations and warranties, TDK expressly disclaims all representations and warranties, oral or written, past or present, express or implied, including with respect to the Acquired Assets, the Acquired Entities or other aspects of the Business or the products thereof, and Imation expressly acknowledges that it is not relying on any other representation or warranty made by or on behalf of TDK or any Relevant Entity of any kind, either express or implied, written or oral, in entering into this Agreement or any Ancillary Agreement, or in consummating the transactions contemplated hereby and thereby. Notwithstanding any investigation made by or on behalf of any of the parties to this Agreement or the results of any such investigation and notwithstanding the fact of, or the participation of such

party in, the Closing, the representations, warranties and agreements in this Agreement shall survive the Closing subject to the limitations set forth in this Agreement.

III. Representations and Warranties of Imation

     Imation represents and warrants to TDK that as of the date of this Agreement:

     3.1 Incorporation; Power and Authority . Each of the Acquiring Entities is a corporation duly organized, validly existing and, where applicable, in good standing under the Laws of its jurisdiction of organization, with all necessary power and authority to execute, deliver and perform this Agreement and the Ancillary Agreements to which it is or is contemplated to be a party.

     3.2 Valid and Binding Agreement . The execution, delivery and performance by Imation of this Agreement, and by each of the Acquiring Entities of the Ancillary Agreements to which each of them is or is contemplated to be a party, have been duly and validly authorized by all necessary corporate action. This Agreement has been duly executed and delivered by Imation and constitutes the valid and binding obligation of Imation, enforceable against it in accordance with its terms, subject to the Remedies Exception. Each Ancillary Agreement to which any of the Acquiring Entities shall become a party, when executed and delivered by such Acquiring Entity, shall constitute the valid and binding obligation of such Acquiring Entity, enforceable against it in accordance with terms thereof, subject to the Remedies Exception.

     3.3 No Breach; Consents . The execution, delivery and performance by Imation of this Agreement, and by each of the Acquiring Entities of the Ancillary Agreements to which each of them is or is contemplated to be a party, shall not (a) contravene any provision of the Organizational Documents of the Acquiring Entities; (b) violate or conflict with any Law or Governmental Order or Governmental Authorization; (c) conflict with, result in any material breach of any of the provisions of, constitute a default (or any event that would, with the passage of time or the giving of notice or both, constitute a default) under, result in a violation of, increase the burdens under, result in the termination, amendment, suspension, modification, abandonment or acceleration of payment (or any right to terminate) or require a consent under, any Contract or Governmental Authorization that is either binding upon or enforceable against any of the Acquiring Entities; or (d) require any Governmental Authorization, other than any Governmental Authorization that may be required pursuant to any Competition Laws.

     3.4 Brokerage . No Person shall be entitled to receive any brokerage commission, finder’s fee, fee for financial advisory services or similar compensation in connection with the transactions contemplated by this Agreement based on any Contract made by or on behalf of any of the Acquiring Entities for which TDK is or could become liable or obligated.

     3.5 Imation Shares . The Imation Shares will, when issued and delivered in accordance with this Agreement, be duly authorized, validly issued, fully paid and nonassessable.

     3.6 GDM . Global Data Media FZ-LLC (“ GDM ”) is a limited liability company, duly organized and validly existing under the laws of the Emirate of Dubai. GDM is a bona fide entity, independent of Imation, and is, and has at all times since formation been, a “Subsidiary” of Imation as the term “Subsidiary” is defined in Section 13 of the Philips Cross-License.

     3.7 SEC Filings; Financial Statements .

     (a) Imation has filed all forms, reports, schedules, statements and other documents required to be filed by it during the twelve (12) months immediately preceding the date of this Agreement (collectively, as supplemented and amended since the time of filing, the “ Imation SEC Reports ”) with the SEC. The Imation SEC Reports (i) were prepared in all material respects in accordance with all applicable requirements of the Securities Act and the Exchange Act, as applicable, and (ii) did not, at the time they were filed, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representation in clause (ii) of the preceding sentence does not apply to any misstatement or omission in any Imation SEC Report that was superseded by subsequent Imation SEC Reports.

     (b) The audited consolidated financial statements and unaudited consolidated interim financial statements of Imation and its consolidated Subsidiaries included or incorporated by reference in the Imation SEC Reports have been prepared in accordance with US GAAP consistently applied during the periods indicated (except as may otherwise be indicated in the notes) and present fairly in all material respects the financial position, results of operations and cash flows of Imation and its consolidated Subsidiaries on a consolidated basis at the respective dates and for the respective periods indicated (except interim financial statements may not contain all notes and are subject to year-end adjustments).

     3.8 Disclaimer of Other Warranties . The representations and warranties of Imation expressly set forth in this Article III, in the Ancillary Agreements, and in any certificate delivered pursuant to the terms hereof or thereof at Closing constitute all the representations or warranties of any kind, either express or implied, being provided to TDK, or any of its representatives, with respect to the transactions contemplated hereby. Except for such representations and warranties, Imation expressly disclaims all representations and warranties, oral or written, past or present, express or implied, and TDK expressly acknowledges that it is not relying on any other representation or warranty made by or on behalf of Imation or any of the other Acquiring Entities of any kind, either express or implied, written or oral, in entering into this Agreement or any Ancillary Agreement, or in consummating the transactions contemplated hereby and thereby. Notwithstanding any investigation made by or on behalf of any of the parties to this Agreement or the results of any such investigation and notwithstanding the fact of, or the participation of such party in, the Closing, the representations, warranties and agreements in this Agreement shall survive the Closing subject to the limitations set forth in this Agreement. With respect to the Anaheim Facility, Imation specifically acknowledges and agrees that, except as expressly provided in this Agreement and in the Deed, TDK is selling and Imation is purchasing the Anaheim Facility on an “as is with all faults” basis. With respect to the Trademarks identified as “common law” on Schedule 2.12(a)(i) and the patents listed on Schedule 1.1(b)(xviii) , Imation specifically acknowledges and agrees that TDK is selling and Imation is purchasing such patents on an “as is with all faults” basis.

IV. Agreements of TDK

     4.1 Conduct of the Business . From the date of this Agreement through the Closing Date, unless otherwise expressly contemplated by this Agreement or the Ancillary Agreements, required by Law or with the prior written consent of Imation (such consent not to be unreasonably withheld or delayed), TDK shall conduct the Business as follows:

     (a) the Relevant Entities shall conduct the Business only in, and shall not take any action except in, the Ordinary Course of Business and in accordance with applicable Law; ^** ;

     (b) none of the Relevant Entities shall amend or modify any Material Contract or enter into any Contract, other than Contracts for the purchase or sale of Subject Products or Ancillary Products entered into in the Ordinary Course of Business, that would have been a Material Contract if such Contract had been in effect on the date of this Agreement;

     (c) none of the Relevant Entities (other than TDK) shall issue, sell or otherwise dispose of any of its capital stock or equity interests, or grant any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;

     (d) each of the Relevant Entities shall, in each case to the extent relating primarily to the Business, (i) use its commercially reasonable efforts to preserve its business organization and goodwill, keep available the services of its officers, employees and consultants and maintain satisfactory relationships with vendors, customers and others having business relationships with it, and (ii) not take any action that would render, or that reasonably could be expected to render, any representation or warranty made by TDK in this Agreement that is not expressly made as of a specified date other than the Closing Date untrue on the Closing Date as though then made and as though the Closing Date had been substituted for the date of this Agreement in such representation or warranty, including any actions referred to in Section 2.7;

     (e) none of the Relevant Entities shall (i) make or rescind any material express or deemed election relating to Taxes, (ii) amend any Return, (iii) settle or compromise any Litigation relating to Taxes or (iv) change any of its methods of reporting income or deductions for federal, state, local or foreign income Tax purposes from those employed in the preparation of the last filed federal, state, local or foreign income Tax Returns; provided, however , that TDK shall be entitled to prepare and file Returns for Tax periods ending on or prior to the Closing Date for which Imation is entitled to indemnification under Section 10.2(a), provided, further ,

that TDK shall provide Imation’s certified public accountants with an opportunity to review such Returns to the extent they relate to the Business and an opportunity to comment thereon to the extent they would effect any of items (i)-(iv) above.

     (f) none of the Relevant Entities shall change any of its methods of accounting in effect on the Latest SCA&L Date, other than changes required by Local GAAP;

     (g) none of the Relevant Entities shall cancel or terminate, or permit the cancellation or termination of, any insurance policy under which any of the Acquired Assets or Acquired Entities is insured or allow any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse replacement policies providing substantially similar coverage to the coverage under the canceled, terminated or lapsed policies for substantially similar premiums are in full force and effect; and

     (h) none of the Relevant Entities shall make any increase in the compensation or benefits of any Active Employee except (i) in the Ordinary Course of Business, (ii) for such retention plans implemented by TDK or its Affiliates with respect to employees of the Relevant Entities as TDK deems appropriate in connection herewith, or (iii) as otherwise contemplated by this Agreement.

     4.2 Notice of Developments . Until the Closing Date, TDK shall promptly notify Imation of any emergency or other change in the Ordinary Course of Business of the Relevant Entities or any Litigation that is commenced or, to the Knowledge of TDK, threatened as to the Business of the Relevant Entities and that, in each case, would be required to be listed on Schedule 2.13 had it occurred, or been commenced or threatened, prior to the date hereof. TDK shall promptly notify Imation in writing if it should discover on or before the Closing Date that any representation or warranty made by it in this Agreement was when made, has subsequently become or shall be on the Closing Date, untrue in any material respect.

     4.3 Access . Through the Closing Date, TDK shall afford to Imation and its authorized representatives access at reasonable times, during normal business hours, and upon reasonable notice, to officers and other managerial employees of the Business. In addition, promptly after the date hereof, the parties shall form a joint team for the purpose of facilitating the effective and efficient post-Closing integration of the Business with a particular focus on (i) human resources and personnel matters, (ii) information technology matters, and (iii) management systems. Subject to applicable Law, including Competition Laws and Laws concerning the protection of personal information, and guidelines agreed by the parties to ensure compliance therewith, such integration team shall have access at reasonable times, during normal business hours, and upon reasonable notice, to Business information of the Relevant Entities reasonably relevant to its integration objectives. Without limiting the generality of the Mutual Non-Disclosure Agreement between Imation and TDK dated as of November 15, 2006 (the “ Confidentiality Agreement ”), all information and documentation provided or made available to Imation and its authorized representatives under this Section 4.3 shall be deemed to constitute Proprietary Information of TDK as defined in the Confidentiality Agreement and shall be subject to the provisions of that agreement.

     4.4 Payment of Indebtedness . TDK shall, prior to the Closing, cause each of the Acquired Entities to repay and discharge in full any and all such Indebtedness to which it may be subject; provided , that, to the extent that repayment of any Acquired Entity’s outstanding Indebtedness to TDK or its Affiliates would cause such Acquired Entity to lack sufficient cash to conduct its operations in the Ordinary Course of Business, TDK shall increase the capitalization of each such Acquired Entity to the extent necessary to enable such Indebtedness to be repaid or cancelled. All transactions between an Acquired Entity, on the one hand, and TDK or its Affiliates (other than Acquired Entities), on the other hand, that give rise to an account payable or receivable of an Acquired Entity that will remain outstanding as of the Closing, will reflect arms’ length terms between the parties thereto. To the extent that TDK believes there is a reasonable likelihood that any such debt payment would result in the insolvency of an Acquired Entity, TDK shall so inform Imation no fewer than fifteen (15) Business Days prior to Closing.

     4.5 Intercompany Contracts . Except as otherwise contemplated in Section 6.2, TDK shall cause any Contracts between any of the Selling Entities, on the one hand, and any of the Acquired Entities, on the other hand, other than outstanding purchase orders for Licensed Products issued in the Ordinary Course of Business, to be terminated, in each case effective as of Closing, and at no cost to Imation or any of the Acquiring Entities or the Acquired Entities other than the payment of any amounts for which any of the Acquired Entities shall have become liable prior to such termination. Effective as of the Closing, TDK waives any claim it might have against any of the Acquired Entities by reason of any incompleteness or inaccuracy of any information provided to TDK by any of such Acquired Entities in relation to the representations and warranties made by TDK under this Agreement.

     4.6 Conditions . TDK shall use its reasonable best efforts to cause the conditions set forth in Section 8.1, to the extent reasonably within TDK’s control, to be satisfied and to consummate the transactions contemplated by this Agreement as soon as reasonably possible.

     4.7 Required Consents and Authorizations . TDK shall use its reasonable best efforts, in cooperation with Imation, to obtain as soon as reasonably practicable after the date of this Agreement, all Required Consents and Governmental Authorizations necessary for the consummation of the transactions contemplated by this Agreement or that could, if not obtained, materially and adversely affect the conduct of the Business by the Relevant Entities as currently conducted, including those listed on Schedule 8.1(d) . TDK shall keep Imation fully advised at reasonable intervals of its progress in obtaining such Required Consents and Governmental Authorizations.

     4.8 No Sale . Except as provided in Section 4.10, TDK shall not sell, pledge, transfer or otherwise place any Encumbrance on any of the Acquired Assets, nor shall TDK cause, permit or suffer any of the Acquired Entities to sell, pledge, transfer or otherwise place any Encumbrance on any of their respective assets, in each case except for Permitted Encumbrances, except (i) for the sale of Inventories in the Ordinary Course of Business and (ii) other dispositions of immaterial Business assets in the Ordinary Course of Business.

     4.9 No-Shop .

     (a) TDK shall not, and shall cause the other Relevant Entities and the representatives of each of them not to, directly or indirectly, (i) solicit, initiate, encourage, induce or facilitate the making, submission or announcement of any Acquisition Proposal or take any action that could reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any information regarding the Business to any Person in connection with or in response to an Acquisition Proposal or an inquiry or indication of interest that could reasonably be expected to lead to an Acquisition Proposal, (iii) engage in discussions or negotiations with any Person with respect to any Acquisition Proposal or that could reasonably be expected to lead to an Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition Proposal, or (v) enter into any letter of intent or similar document or any Contract contemplating or otherwise relating to any Acquisition Transaction. Without limiting the generality of the foregoing, TDK acknowledges and agrees that any violation of or the taking of any action inconsistent with any of the restrictions set forth in the preceding sentence by any representative of any of the Relevant Entities, whether or not such representative of TDK is purporting to act on behalf of any of the Relevant Entities, shall be deemed to constitute a breach of this Section 4.9 to the same extent as if taken by TDK directly.

     (b) TDK shall promptly (and in no event later than three (3) Business Days after receipt of any Acquisition Proposal, any inquiry or indication of interest that could reasonably be expected to lead to an Acquisition Proposal or any request for nonpublic information) advise Imation orally and in writing of any Acquisition Proposal, any inquiry or indication of interest that could reasonably be expected to lead to an Acquisition Proposal or any request for nonpublic information relating to the Relevant Entities (including the identity of the Person making or submitting such Acquisition Proposal, inquiry, indication of interest or request, and the terms thereof) that is made or submitted by any Person prior to the Closing Date. TDK shall keep Imation fully informed with respect to the status of any such Acquisition Proposal, inquiry, indication of interest or request and any modification or proposed modification thereto.

     (c) TDK shall immediately cease and cause to be terminated any existing discussions with any Person that relate to any Acquisition Proposal.

     (d) TDK shall not release or permit the release of any Person from, or waive or permit the waiver of any provision of, any confidentiality, “standstill” or similar agreement to which any of the Relevant Entities is a party, and shall enforce or cause to be enforced each such agreement at the request of Imation.

     4.10 Removal of Excluded Assets and Assumption of Excluded Liabilities . TDK shall be responsible for removing, by distribution to TDK or another Selling Entity of a dividend in kind or otherwise, from each Acquired Entity, prior to the Closing, any Excluded Assets and assuming any Excluded Liabilities of each Acquired Entity. The Excluded Assets to be so removed and Excluded Liabilities to be so assumed shall be identified by TDK to Imation in writing no later

than fifteen (15) Business Days prior to Closing, and TDK may not complete such removal or assumption without the consent of Imation, which consent shall not be unreasonably withheld or delayed (by more than five (5) Business Days).

     4.11 Post-Closing Access and Cooperation .

     (a) For a period of three (3) years from and after the Closing Date, TDK shall afford to Imation, its accountants and counsel, during normal business hours, upon reasonable request and at the expense of Imation, access to the books and records of the Relevant Entities (other than TDK) not theretofore transferred to Imation. After the Closing Date, TDK shall hold all of the books and records of TDK pertaining to Acquired Assets and the Acquired Entities not theretofore transferred to Imation in accordance with TDK’s retention policies in effect from time to time and, if it proposes at any time within three (3) years after the Closing Date to destroy or dispose of any such books and records, including any transfer to a third party (other than for storage purposes), it shall first offer in writing given at least sixty (60) days prior to such proposed destruction or disposition to transfer them to Imation at the sole expense of Imation.

     (b) Following the Closing, TDK will provide Imation’s independent registered public accountants and other accounting representatives during normal business hours, upon reasonable request and at the expense of Imation, reasonable access to (and shall cause the other Selling Entities and TDK’s independent auditors to provide Imation’s registered independent public accountants similar reasonable access to) such financial books and records of TDK and such Selling Entities with respect to the Business as may be necessary solely to allow Imation’s registered public accountants to meet reporting requirements applicable to Imation with respect to pre-Closing periods under the Exchange Act, provided that (i) Imation hereby expressly agrees that such information will be used solely to meet such reporting requirements and not for any other purpose, including in connection with any dispute between the parties concerning the terms hereof or any other Transaction Agreement, and (ii) as a condition to any such access, Imation’s registered public accountants or accounting representatives shall first agree to non-disclosure terms reasonably satisfactory to TDK (consistent with the reporting purposes of such access and the other terms hereof) and to any standard “hold harmless” requirements of TDK’s accountants.

     4.12 Litigation Support . In the event that and for so long as Imation is actively contesting or defending against any Litigation in connection with any fact or circumstance occurring on or prior to the Closing Date involving Acquired Assets, TDK shall cooperate in the contest or defense, and provide such testimony and access to its books and records, in each case solely as may be reasonably necessary in connection with the contest or defense. Such cooperation shall be provided at the cost and expense of Imation, except if and to the extent that Imation is entitled to indemnification therefor under Article X.

     4.13 Non-Solicitation . During the period that commences on the Closing Date and ends on the third anniversary of the Closing Date, TDK shall not solicit for employment, or assist any

third party in soliciting for employment, any of the Active Employees; provided, however , that the parties agree that nothing in this Section 4.13 shall be construed to prohibit TDK from (a) placing a general solicitation for employment, (b) hiring any Active Employees who contact TDK of their own accord, (c) soliciting any Active Employees whose employment is terminated by Imation or (d) discussing employment terms of any kind with Seconded Employees.

     4.14 Confidentiality .

     (a) TDK shall use its commercially reasonable efforts to keep confidential and protect, and shall not divulge, allow access to or use in any way, (i) Intellectual Property Rights included within the Acquired Assets, including any current and planned distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, selling and purchasing policies and strategies, market studies, business plans, models, and strategies, Software and data, (ii) any and all non-public information concerning the Business, the Acquired Assets or the Acquired Entities (including historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials, however documented), (iii) any and all information pertaining to relationships and interactions (including written agreements, purchase orders, and correspondence) between any of the Relevant Entities and customers, suppliers, distributors, licensors, intellectual property licensing organizations, and partners of the Business, and (iv) any and all analyses, compilations, studies, summaries and other material reflecting non-public information of any of the Relevant Entities relating to the Business and included in the foregoing (“ Confidential Information ”). The foregoing obligations shall not apply to any Confidential Information that (i) is or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach by TDK of this Agreement or of any Ancillary Agreement; (ii) subsequently comes lawfully into the possession of TDK, free from any obligation of confidentiality, from a third party that does not owe a duty or obligation of confidentiality to Imation; or (iii) is required to be disclosed by applicable Law, judgment or order of any Governmental Entity, or regulation of any securities exchange.

     (b) TDK agrees that the agreements contained in this Section 4.14 are necessary to protect the legitimate interests of Imation and that any violation or breach of this Section 4.14 may result in irreparable injury to Imation for which no adequate remedy would exist at law. Accordingly, in addition to any relief at law that may be available to Imation for such violation or breach and regardless of any other provision contained in this Agreement, Imation may be entitled to injunctive and other equitable relief restraining such violation or breach.

     (c) In the event that TDK is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, TDK shall, to the extent reasonably practicable, notify Imation promptly of the request or requirement prior to any disclosure so that Imation may seek an appropriate protective order or waive compliance with the provisions of this

Section 4.14. If, in the absence of a protective order or the receipt of a waiver from Imation, TDK believes that it should, on the advice of counsel, disclose any Confidential Information, TDK may disclose the Confidential Information; provided, however, that TDK shall, at the expense of Imation, provide reasonable cooperation to Imation if Imation seeks to obtain, at the expense of Imation, an order or other assurance that confidential treatment shall be accorded to such portion of the Confidential Information required to be disclosed as Imation designates.

     4.15 Assignment of Confidentiality Agreements . To the extent permitted by such agreements, effective upon the Closing, TDK shall assign to Imation all right, title and interest of TDK in and to any confidentiality agreement to which TDK or any of its agents may be a party pertaining to the confidentiality of information relating to the Business.

     4.16 Covenant Not to Compete .

     (a) For a period of five (5) years from the Closing Date, neither TDK nor any of its Subsidiaries will engage in, acquire, own or hold any interest in a business that competes with Imation in the marketing, sales and support of Removable Recording Media Products (other than Medical Media Products and Specific Broadcast Media) anywhere in the world. For purposes of clarification, neither the sale of components manufactured, directly or indirectly, by or for TDK or its Subsidiaries to third parties for incorporation in finished products of such third parties (including into components for further incorporation into finished products), nor the sale of finished products or products in process manufactured, directly or indirectly, by or for TDK or its Subsidiaries for sale under non-TDK branded labels owned by unrelated third parties, shall be deemed to constitute competition in the marketing, sales and support of Removable Recording Media Products.

     (b) Notwithstanding the foregoing, TDK may (a) make purely passive investments (which do not include any management rights) not exceeding ten percent (10%) of the issued and outstanding shares of any company, as a portion of a portfolio or otherwise, (b) make minority investments in companies whose total revenues derived from the marketing, sales and support of Removable Recording Media Products (other than Medical Media Products) do not exceed five percent (5%) of such companies’ consolidated revenues, and (c) make a larger investment in, or acquire, any company engaged in such competing business so long as TDK causes the acquired company to divest the portion of such business which competes in the marketing, sales and support of Removable Recording Media Products (other than Medical Media Products) within twelve (12) months of the investment in, or acquisition of, such company.

     (c) TDK acknowledges that Imation has required that TDK make the agreements in this Section 4.16 as a condition to Imation’s consummation of the Transactions. TDK further acknowledges and agrees that the agreements contained in this Section 4.16 are reasonable (including with respect to duration, geographical area and scope) and necessary to protect the legitimate interests of Imation and that any

violation or breach of this Section 4.16 will result in substantial and irreparable harm to Imation.

     (d) TDK agrees to cause its Subsidiaries to observe and comply with the provisions of this Section 4.16.

     (e) If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 4.16 is invalid or unenforceable, the parties intend that the court making the determination of invalidity or unenforceability have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified commencing on the expiration of the time within which the judgment may be appealed.

     4.17 Compliance with Bulk Sales Laws . If and to the extent reasonably and timely requested by Imation, TDK shall prior to Closing take such actions, including the giving of any notices and compliance with any waiting periods, as may be required under applicable Laws in the nature of “bulk sales” and other creditor notice laws in connection with Imation’s acquisition of the Acquired Assets and the Business.

     4.18 Waiver of Certain Pre-Emptive Rights . TDK shall have obtained from Toyota Tsusho Corporation a waiver or confirmation of non-exercise of its pre-emptive rights with respect to the sale to Imation of the shares of TAP currently held by TDK.

     4.19 Assignment of Contracts . Prior to Closing, (i) TDK shall complete the assignment by TME to TES of the Contract entitled ^** and (ii) to the extent that TRE or TEE retains any rights under any of the Contracts listed in Schedule 4.19 , TDK shall cause TRE or TEE, as the case may be, to assign such rights to TME.

     4.20 Notice of Non-Renewal . TDK shall give written notice of non-renewal, prior to August 30, 2007, under the Contract entitled Framework Agreement, dated as of December 1, 1996, between TDK Corporation, Toyota Tsusho Kaisha, Ltd., and TDK (Australia) Pty. Ltd.

     4.21 **

     4.22 Transfer of TRH Share . TDK shall cause Mr. Hajime Sawabe to transfer to THK the share in the capital of TRH held by him.

     4.23 Transfer of Certain TME Employees . TDK will cause to be transferred to one of the Selling Entities or another of its Affiliates not being one of the Acquired Entities the two employees of TME who are currently employed and engaged in the Medical Business.

     4.24 Certain Leases . To the extent that (i) an Acquired Entity is required, by the Transactions, to obtain a Consent from the landlord under (A) the lease entitled Agreement (office rental agreement), dated March 23, 2006, between Mann GmbH and TDK Marketing Europe GmbH, Agreement (for certain Business Premises in Germany ), (B) the lease dated July 18, 2006, between Gatwick Development Limited and TDK Recording Media (Hong Kong) Co., Ltd., (for certain Business Premises in Hong Kong ), or (C) the lease entitled Annex NR 1 (office rental agreement), dated July 9, 2004 (and amended September 29, 2006), between OVUM Polka z o.o. and TDK Polska Sp. z o.o. (for certain Business Premises in Poland ), and (ii) such entity fails to obtain such Consent, TDK will reimburse Imation for the difference between the market rent paid by Imation or its relevant Affiliate for the use of the relevant Business Premises and the rent set forth in the applicable lease agreement, for the remainder of the existing term thereof, without renewals. Imation will use reasonable best efforts to assist TDK and its Affiliates in obtaining any such Consent that may be required.

     4.25 Use of TDK MID . To the extent TDK’s consent is required in order to permit Imation to continue to purchase products from existing suppliers of TDK and its Affiliates who utilize TDK’s manufacturer’s identification code (“ MID ”) in manufacturing products purchased by TDK as of Closing, TDK will consent to the continued use of TDK’s MID by such suppliers, in manufacturing such products for Imation, for a reasonable period after Closing.

     4.26 Tax Election . Prior to Closing, TDK shall cause TAP to file with the United States Internal Revenue Service an election pursuant to Treasury Regulations Section 301.7701-3(b) to be disregarded, for United States income tax purposes, as an entity separate from its shareholders.

V. Agreements of Imation

     5.1 Conditions . Imation shall use its reasonable best efforts to cause the conditions set forth in Section 8.2, to the extent reasonably within Imation’s control, to be satisfied and to consummate the transactions contemplated by this Agreement as soon as reasonably possible.

     5.2 Required Consents and Authorizations . Imation shall use its reasonable best efforts, in cooperation with TDK, to obtain as soon as reasonably practicable after the date of this Agreement, all Required Consents and Governmental Authorizations necessary for the consummation of the transactions contemplated by this Agreement or that could, if not obtained, materially and adversely affect the conduct of the Business by the Relevant Entities as currently conducted, including those listed on Schedule 8.1(d). Imation shall keep TDK fully advised at reasonable intervals of its progress in obtaining such Required Consents and Governmental Authorizations.

     5.3 Books and Records; Access . After the Closing Date, Imation shall, and shall cause the other Acquiring Entities to, hold all of the books and records of the Acquired Entities in accordance with Imation’s retention policies in effect from time to time for a period of not less than two (2) years from the Closing Date and, if Imation thereafter proposes to destroy or dispose of any such books and records, to offer first in writing at least sixty (60) days prior to such proposed destruction or disposition to surrender them to TDK at the sole expense of TDK. After the Closing Date, Imation shall afford TDK and its authorized representatives full access at reasonable times, during normal business hours, and upon reasonable notice, to such books and

records. Imation shall make available to TDK upon written request and at the expense of TDK, but consistent with Imation’s business requirements, reasonable assistance of any of TDK’s current or former personnel whose assistance or participation is required by TDK in anticipation of, or preparation for, existing or future litigation or other matters in which TDK is involved related to the Acquired Assets.

     5.4 Litigation Support . In the event and for so long as TDK is actively contesting or defending against any Litigation in connection with any fact or circumstance occurring on or prior to the Closing Date involving the Acquired Assets, Imation shall, and shall cause the other Acquiring Entities to, cooperate in the contest or defense, make available its personnel and provide such testimony and access to its books and records, in each case solely as may be reasonably necessary in connection with the contest or defense. Such cooperation shall be provided at the sole cost and expense of TDK, except if and to the extent that TDK is entitled to indemnification therefor under Article X.

     5.5 Notice of Developments . Until the Closing Date, Imation shall promptly notify TDK of any emergency or other change in the Ordinary Course of Business of Imation or the commencement or threat of material Litigation. Imation shall promptly notify TDK if it should discover on or before the Closing Date that any representation or warranty made by it in this Agreement was when made, has subsequently become or shall be on the Closing Date, untrue in any respect.

     5.6 Performance of Acquired Contracts . From and after the Closing, Imation shall, and shall cause each of the Acquiring Entities to, perform each of the Acquired Contracts in accordance with its terms. In addition, Imation shall cause each of the Acquired Entities to continue to perform each Contract to which it is a party in accordance with its terms.

     5.7 ^**

     5.8 License of Certain Marks . Imation on behalf of itself and its Affiliates agrees to grant to TDK and its Affiliates at Closing a fully paid-up, royalty-free, non-exclusive, transferable, sublicensable, perpetual, worldwide right and license to use and display the Durabis Marks, alone or in combination with other trademarks, servicemarks or brand or tradenames, on and/or in connection with good and services of any type and the marketing and promotion thereof and/or of any business or enterprise, other than on or in connection with the marketing, distribution or sale of Licensed Products. TDK agrees that all use of the Durabis Marks, and all goodwill arising out of such use, will inure to the benefit of Imation. TDK shall use the Durabis Marks in a manner that does not unreasonably derogate Imation’s rights in the Durabis Marks or the value of the Durabis Marks, and shall take no action that would unreasonably interfere with, diminish or tarnish those rights or value. At Closing, the parties will enter into a license agreement in agreed form incorporating the foregoing principles. For purposes of clarification, nothing in this Section 5.8 or in the said license agreement shall limit TDK’s obligations under Section 4.16.

     5.9 Use-up Rights With Respect to Acquired Assets Bearing a TDK Mark as of Closing . Imation shall have the right to (i) sell and/or otherwise dispose of any Licensed Products transferred at Closing in accordance with the terms hereof that bear a TDK Mark, and (ii) use existing stocks of packaging, Promotional Material, and other documents and materials that bear a TDK Mark in connection with such sales, in each case for up to one (1) year after Closing, provided that (A) Imation shall seek to migrate all sales and use of materials to the Licensed Trademarks as promptly as reasonably practicable, consistent with business requirements, over such period, and (B) such use shall be subject to a trademark license, reasonably agreed by the parties prior to Closing and consistent where applicable with the terms of the Trademark License Agreement.

VI. Additional Agreements

     6.1 Filings Under the HSR Act and Other Competition Laws .

     (a) Pursuant to, and without limiting the generality of, Section 4.7 and Section 5.2, TDK and Imation shall each, and shall cause each of their respective Subsidiaries to, use its reasonable best efforts to (i) as promptly as practicable, but in any event within fourteen (14) calendar days of the date of this Agreement, make all necessary filings, and thereafter make any other required submissions with respect to the transactions contemplated by this Agreement required under the Sherman Act, the Clayton Act or the Federal Trade Commission Act, and (ii) as promptly as practicable, but in any event within forty (40) calendar days of the date of this Agreement, make all necessary filings, and thereafter make any other required submissions with respect to the transactions contemplated by this Agreement required under the analogous laws of the European Union, the Member States thereof, and any other federal, state or foreign law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade (U.S. and non-U.S. laws collectively, “ Competition Laws ”), as well as any other Laws applicable to the Relevant Entities, that are required for the consummation of the transactions contemplated by this Agreement. Each of TDK and Imation agrees that, during the term of this Agreement, it will not withdraw its filing under any of the Competition Laws without the written consent of the other party. Each of TDK and Imation agrees that it will not enter into any timing agreement with any Governmental Entity without the written consent of the other party. The parties agree that they will equally share the filing fees required under any of the Competition Laws.

     (b) Subject to the terms hereof, TDK and Imation agree, and shall cause each of their respective Subsidiaries, to cooperate and to use their reasonable best efforts to obtain as expeditiously as reasonably possible the termination of any waiting periods or any government clearances or approvals required for Closing under any Competition Law, to respond to any government requests for any information under any Competition Law, and to contest and resist any action, including any legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) (an “ Antitrust Order ”) that restricts, prevents or prohibits under any Competition Law the consummation of the transactions contemplated by

this Agreement; provided, however , (i) that Imation shall have no obligation under this Section 6.1 to dispose of, hold separately or make any change in or to any portion of its business or assets (or in or to any portion of the Business or the Acquired Assets) as a condition of such governmental clearances or approvals and (ii) that each party’s obligation to contest and resist the entry of, and to have vacated or overturned, an Antitrust Order restricting, preventing or prohibiting under any Competition Law the consummation of the transactions contemplated by this Agreement shall cease on the termination of this Agreement in accordance with Section 9.1 or sooner in the event such an Antitrust Order is entered by court of initial jurisdiction. Each party hereto shall (i) give the other party hereto prompt notice upon obtaining knowledge of the making or commencement of any request, inquiry, investigation, action or legal proceeding by or before any Governmental Entity with respect to any of the transactions contemplated by this Agreement, (ii) keep the other party hereto informed as to the status of any such request, inquiry, investigation, action or legal proceeding, and (iii) promptly inform the other party hereto of any communication to or from the U.S. Federal Trade Commission, the U.S. Department of Justice, any foreign competition authority or any other Governmental Entity regarding the any of the transactions contemplated by this Agreement. The parties hereto will consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to the other parties in advance, any analyses, presentations, memoranda, briefs, arguments opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to any Competition Law. In addition, except as may be prohibited by any Governmental Entity or by any Law, each party hereto will permit authorized representatives of the other party to be present at each meeting or telephone conference with representatives of any Governmental Entity relating to any such request, inquiry, investigation, action or legal proceeding and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any Governmental Entity in connection with any such request, inquiry, investigation, action or other legal proceeding.

     6.2 Name of Acquired Entities . Prior to or effective upon Closing, TDK shall change the name of each Acquired Entity to a name reasonably designated by Imation that does not include “TDK” or any derivative thereof. Following the Closing, neither any Acquired Entity nor any Acquiring Entity shall have a corporate name, or do business using a name, that includes as part of its name, “TDK” or any derivative thereof. Notwithstanding the foregoing, an Acquired Entity may continue to use its corporate name as of the date hereof for a period not to exceed six (6) months after Closing subject to compliance with the applicable license agreement between TDK and the relevant Acquired Entity and with the prior written consent of TDK.

     6.3 Additional Discussions Regarding Commercial Relationships . Between the date hereof and Closing, the parties shall discuss in good faith (i) a possible short-term distribution arrangement with respect to TDK’s consumer battery products and (ii) possible cooperation with respect to supply after Closing of Specific Broadcast Media under the TDK Brand.

     6.4 Transaction Structure . Notwithstanding any provision to the contrary in Section 1.6, the Transaction will be structured substantially as contemplated in Exhibit I, provided that

Imation will discuss and consider in good faith any adjustments to such structure that TDK may reasonably request in order to avoid any adverse tax or accounting consequences to TDK without impairing the tax or accounting benefits of the transaction to Imation. Conversely, TDK will discuss and consider in good faith any adjustments to such structure or actions that Imation may reasonably request in order to remove cash from any of the Acquired Entities prior to Closing without creating adverse tax or accounting consequences for TDK.

     6.5 Payment of Transaction Taxes . Other than as expressly addressed in the Trademark License Agreement, all sales, use, value added, transfer, stamp, documentary, filing, recording, registration, conveyance, license and other similar Taxes that arise from or are attributable to the transactions contemplated by this Agreement (excluding, for the avoidance of doubt, any Income Taxes), and all recording or filing fees, notarial fees and other similar costs of Closing with respect to the purchase and sale of the Acquired Assets, or otherwise on account of this Agreement or the transactions contemplated by this Agreement, shall be cumulated, regardless of which party bears such tax or fee in the first instance, and the total amount of such taxes and fees shall be borne equally by the parties.

     6.6 Licensed Mark . Between the date hereof and Closing, the parties shall discuss in good faith the phrase “**,” as well as its placement and sizing, as set forth in Exhibit A to the Trademark License Agreement, including whether an alternative phrase, placement or sizing could more fully achieve the parties’ respective goals thereunder, as well as up to one (1) alternative phrase for use on products other than Removable Recording Media Products. Upon any agreement between the parties with respect thereto, Exhibit A to the Trademark License Agreement shall be revised to reflect such agreement, provided, however , that, the parties shall not be obligated to agree to any changes and, absent any agreement, Exhibit A shall remain as incorporated in the the form of the Trademark License Agreement attached hereto.

     6.7 Co-Branding . Between the date hereof and Closing, the parties shall discuss in good faith the co-branding arrangements currently in effect with the respect to the TDK Brand in the Business, and the possibility of continuing some or all of these arrangements after Closing, as well as the terms and conditions on which any agreed arrangements will continue.

     6.8 Product Specifications . Imation has made a preliminary review of certain sample product specifications provided by TDK for inclusion as Attachment C to the Quality Guidelines (as defined in the Trademark License Agreement) and believes that they are acceptable except to the extent that they refer to standards or specifications that are not performance or quality-related or that rely on equipment or tools that are unique to TDK, such as: (a) the use of TDK-specific testing apparatus (including fixtures) that Imation does not have direct access to (possible example “TDK proprietary defect tester”); (b) the use of reference tapes for evaluating the performance of recording characteristics that Imation does not have access to; (c) recitations of specific packaging materials or configurations that are not required for product performance; and (d) recitations of product components and materials that are not specifically required for performance or format interchange (e.g., internal components of a tape reel). Between the date hereof and Closing, Imation shall complete its review and the parties shall reasonably agree to the final form of these product specifications, which shall then be included in Attachment C to the Quality Guidelines.

VII. Employee Matters and Transition Services

     7.1 Employees Generally . Except as otherwise provided herein, at Closing Imation shall make offers of employment to the employees of the Relevant Entities who are primarily engaged in the Business other than those employed at (i) ^** or (ii) TEC facilities other than the Anaheim Facility (the “ Business Employees ”).

     7.2 Transition Services . From and after the Closing Date, for the periods specified in the Transition Service Agreement, TDK shall, and shall cause the following other Selling Entities to, provide Transition Services as follows (each of the below-referenced schedules to be agreed prior to Closing):

     (a) Japan . TDK will provide services from its Nihonbashi Facility to TMK pursuant to one or more schedules to the Transition Services Agreement;

     (b) **;

     (c) U.S . TEC will provide services from its New York Facility and its Georgia Facility to Imation pursuant to one or more schedules to the Transition Services Agreement; and

     (d) Other Locations . If and to the extent that the parties determine after appropriate integration planning that the relevant Affiliates of Imation will exit the existing facilities of the Business in Shanghai, Singapore, Hong Kong and Sydney at Closing, the relevant Selling Entities will provide limited transition services pursuant to one or more schedules to the Transition Services Agreement for a period not to exceed two (2) months after Closing.

Subject to Section 5.7 hereof **, services provided under the Transition Services Agreement shall, in each of the above cases, be billed to Imation (or, at Imation’s request, the Affiliate of Imation receiving such services, at the service provider’s fully allocated cost for such services, including without limitation (i) all compensation, benefit and other costs and expenses incurred by or with respect to employees directly engaged in providing such services, including (a) in respect of compensation, all applicable bonus compensation, (b) in respect of benefits, all benefits under Plans, and (c) in respect of costs and expenses, all costs for materials and for such items as travel incurred in respect of the services, as well as a reasonable allocation for space, maintenance, and facilities costs allocable to employees engaged in providing services, as well as the actual cost of any third party services used in providing the services, and (ii) similar costs with respect to those directly engaged in the supervision of such services. Service providers will also bill under the Transition Services Agreement the actual cost of any services of third party providers. Imation also agrees, with respect to services provided by TEC under the Transition Services Agreement that it will use commercially reasonable efforts to minimize its use of such services after Closing,

to the extent consistent with business requirements, with the goal of eliminating the need for such services within six (6) months after Closing. Between the date hereof and Closing, the parties shall discuss and reasonably agree on statements of work (“ SOWs ”) to be attached to the Transition Services Agreement with respect to the specific services to be provided thereunder, such SOWs to provide for a continuation of those services currently provided to the Business by the Selling Entities for: ^** .

     7.3 Japan Secondees .

     (a) Secondment .

     (i) Current TDK Secondees . As of the Closing, subject to normal attrition prior to Closing: (i) the thirty-nine (39) Current Secondees shall be seconded to TMK until the second (2nd) anniversary of the Closing (the “ Secondment Period ”), and (ii) all other Business Employees of TDK shall be seconded to TMK for the Secondment Period (the “ Closing Secondees ”), in each case in accordance with a secondment agreement in a form reasonably agreed between the parties hereto at least fifteen (15) Business Days prior to Closing (the “ Secondment Agreement ”). During the first three (3) months of the Secondment Period (the “Assessment Period” ), Imation shall assess the performance of the Secondees and, if Imation reasonably determines based on such review that any Secondee is not required for the continuing operation of the Business, Imation may, during a period of one (1) month commencing ten (10) weeks after Closing (the “ Determination Period ”), request, by written notice to TDK, that the SRC consider returning such Secondee to TDK. In the event that Imation wishes to call such a meeting, it shall (i) provide each SRC member with a statement in reasonable detail at least ten (10) Business Days prior to the relevant meeting identifying the affected Secondee and setting out the evaluation steps completed by Imation prior to requesting an SRC meeting, and the results thereof, and (ii) discuss in good faith with the SRC whether to return the Secondee in question to TDK (or a TDK Affiliate designated by TDK); provided , that, for the avoidance of doubt, the return decision may be made in Imation’s discretion and the agreement of the SRC shall not be required for any such return. Any return decision shall be effective on the next following first (1st) or fifteenth (15th) day of the month following the SRC meeting called to discuss such return decision.

     (ii) Subsequent Review of Secondees . If, after the Assessment Period, Imation believes in good faith that the services of a Secondee may no longer be required for the operation of the Business, Imation may request that the SRC review the circumstances of such Secondee’s employment, provided that it shall not do so for this purpose more than once in any six (6) month period. In any such case, Imation shall first (i) call a meeting of the SRC to discuss such Secondee’s

employment, (ii) provide each SRC member with a statement in reasonable detail at least ten (10) Business Days prior to the relevant meeting identifying the affected Secondee and setting out the evaluation steps completed by Imation prior to requesting an SRC meeting, and the results thereof, and (iii) discuss in good faith with the SRC whether to return the Secondee in question to TDK (or a TDK Affiliate designated by TDK) and, if so, the timing and terms of such return; provided , that, for the avoidance of doubt, any such return decision shall require the agreement of the SRC.

     (iii) Supervision . The parties agree that, for the term of their secondment, the Secondees will be under the sole supervision and control of TMK, and that neither TDK nor any of its Affiliates shall be responsible to Imation, any of its Affiliates, or to any other Person, for any acts or omissions of any Secondee.

     (b) Secondee Information . In connection with the secondments described in Section 7.3(a), TDK shall transfer or otherwise make available to Imation Japan such personal information with respect to Secondees as is agreed by the parties prior to the Closing consistent, and in accordance, with the Japanese Law Concerning the Protection of Personal Information (the “ PIPL ”). During the Secondment Period, Imation Japan shall provide TDK with complete copies of all evaluations of Secondees, and shall further transfer or otherwise make available to TDK such personal information with respect to any Secondees who return to TDK (or a TDK Affiliate) during or at the end of the Secondment Term as is agreed by the parties prior to Closing consistent, and in accordance, with the PIPL.

     (c) Amendment of TDK’s Existing Employment Terms . Notwithstanding anything herein or in the Secondment Agreement to the contrary, TDK shall, in its sole discretion, have the right to modify any of its rules, regulations and policies, from time to time, including those relating to or otherwise governing the Secondees; provided, however , that any such modification which either (i) is not consistently applied to Secondees and other employees of TDK, or (ii) results in Imation bearing material additional costs with respect to any Secondee (excluding annual salary increases consistent with past practice and bonuses paid in amounts, and on a timing, consistent with payments to other TDK employees) shall, prior to its application to Secondees, be subject to the prior written consent of Imation, such consent to not be unreasonably withheld or delayed.

     (d) Secondee Benefits . Each Secondee shall remain eligible to participate during the Secondment Period in all insurance and other benefit programs made generally available by TDK from time to time to similarly situated TDK employees, and Imation shall promptly reimburse TDK for its costs for the foregoing in accordance with the Secondment Agreement. At Imation’s reasonable request, TDK shall provide reasonable documentation evidencing such costs.

     (e) Pre-Secondment Accruals . All Liabilities with respect to Secondee benefits calculated with respect to any time period ending prior to the commencement of the Secondment Period for a Secondee under any benefit plan maintained or contributed to, or required to be maintained or contributed to, by TDK or for the benefit of such Secondee,

including any Liabilities relating to unpaid salary, vacation days, commissions, bonuses, allowances, subsidies, reimbursements, social insurance payments, workers’ compensation contributions, or other payroll amounts, together with all Taxes applicable thereto (other than income Taxes), shall be for the account of TDK regardless of whether any such Liability is to be paid to any Secondee at any time after the commencement of the Secondment Period.

     (f) Post-Secondment Accruals . All Liabilities with respect to Secondee benefits calculated with respect to any time period commencing on or after the commencement of the Secondment Period for a Secondee under any benefit plan maintained or contributed to, or required to be maintained or contributed to, by TDK or for the benefit of such Secondee, including any Liabilities relating to unpaid salary, vacation days, commissions, bonuses, allowances, subsidies, reimbursements, social insurance payments, workers’ compensation contributions, or other payroll amounts, together with all Taxes applicable thereto (other than income Taxes), shall be for the account of Imation and, if paid by TDK in the first instance, shall be promptly reimbursed by Imation to TDK; provided, however , that nothing herein shall be construed as allocating to Imation costs resulting from any underfunding of any Plan prior to commencement of the Secondment Period.

     (g) Transfer of Secondees to Imation . Imation may offer any Secondee permanent employment with Imation Japan as of the end of the Secondment Period (but not otherwise).

     7.4 Japan Transferred Employees . Imation shall, and shall cause the Acquiring Entities or TMK to, offer to employ or continue the employment of each of the sixty-one (61) employees of TMK (each a “ TMK Regular Employee ”) and shall, for a period of one (1) year following the Closing and subject to normal attrition and to employee acceptance of such offer, maintain the employment of such TMK Regular Employee at a level of compensation and benefits (including salary or wages, bonuses, incentive compensation, and employee benefits) that is substantially similar, in the aggregate, to that provided by TDK immediately prior to the Closing. The continued employment of such TMK Regular Employees after the end of such one (1)-year period will be at the discretion of Imation and will be “at will” employment, subject to the provisions of applicable Law and any Acquired Contracts.

     7.5 U.S. Employees .

     (a) Closing Transferees . With respect to each Business Employee of TEC employed at the Anaheim Facility as of Closing (each, an “ Anaheim Transferee ”) and each other Business Employee of TEC whom the parties agree prior to the Closing shall be transferred to Imation or an Acquiring Entity (such employees, together with the Anaheim Transferees, the “ TEC Closing Transferees ”), Imation shall, or shall cause the relevant Acquiring Entity to, make offers of employment to be effective as of 12:01 a.m. (in the respective workplace locations) on the first day after the Closing Date and contingent upon the Closing. Such offers to TEC Closing Transferees shall be sufficient to avoid triggering any notice obligation under the Worker Adjustment and Retraining Notification (the “ WARN Act ”), or any similar statute, or other statutory severance obligations, with respect

to affected employees. Imation shall, or shall cause the Acquiring Entities to, offer to employ (or, as the case may be, continue the employment of) each TEC Closing Transferee, and shall, subject to normal attrition and to employee acceptance of such offer, maintain the employment of such employee at a level of compensation and benefits (including salary or wages, bonuses, incentive compensation, and employee benefits) that is substantially similar, in the aggregate, to that provided immediately prior to the Closing. The continued employment of such TEC Closing Transferees after Closing will be at the discretion of Imation and will be “at will” employment, subject to the provisions of applicable Law and any Acquired Contracts; provided , that, in the event that Imation or its Affiliates terminate the employment of any TEC Closing Transferee within one (1) year after Closing, Imation shall promptly notify TDK of such termination, identifying the terminated employee, and provide such terminated employee with severance benefits in accordance with TEC’s severance policy as in effect as of the date hereof; provided, that, if such TEC Closing Transferee is terminated after the three (3) month anniversary of Closing and prior to the one (1) year anniversary of Closing, TDK shall reimburse Imation for the amount by which the severance benefit paid to such terminated employee in accordance with TEC’s severance policy exceeds the amount that such terminated employee would have been paid under Imation’s severance policy.

     (b) Post-Closing Transferees . TEC shall provide the transition services set forth on one or more schedules to the Transition Services Agreement from the Closing Date until December 31, 2007 (the “ Transition Period ”). During the Transition Period, in addition to the information provided to Imation pursuant to the Transition Services Agreement, TDK shall provide Imation with such access to the continuing Business Employees of TEC (each a “ TEC Retained Employee ”), to the extent consistent with applicable Law and TEC’s own generally applicable personnel policies, as may be reasonably necessary to allow Imation to evaluate the TEC Retained Employees in accordance with Imation’s generally applicable employment assessment procedures (the “ Assessment Procedures ”). Subject to the last sentence of this Section 7.5(b), Imation may make offers of employment to any TEC Retained Employee at any time prior to the earlier of (i) the end of the Transition Period, and (ii) the termination of such employee by TEC. Any such offer will be in writing and will be copied to TEC. Each TEC Retained Employee who accepts such an offer shall thereafter transfer to Imation on a date reasonably agreed between Imation and TEC, and the scope of the Transition Services shall be equitably adjusted to reflect such transfer as of the date on which such transfer occurs (the “ TEC Transfer Date ”). Imation shall maintain the employment of each such TEC Post-Closing Transferee for at least one (1) year after the TEC Transfer Date at a level of compensation and benefits (including salary or wages, bonuses, incentive compensation, and employee benefits) that is substantially similar, in the aggregate, to that provided immediately prior to the TEC Transfer Date. The continued employment of such TEC Retained Employees after the end of such one (1)-year period will be at the discretion of Imation and will be “at will” employment subject to the provisions of applicable Law and any Acquired Contracts.

     (c) Termination and Severance . TEC shall retain the right to terminate any TEC Retained Employee at any time. TEC shall have the right to include within the costs billed to Imation under the Transition Services Agreement any severance amount paid by

TEC to a TEC Retained Employee notified of termination during, or within thirty (30) days after, the Transition Period, up to the amount that would have been payable to such employee under Imation’s applicable plans if such employee had been employed by Imation at the time of termination rather than TEC (and, for the avoidance of doubt, crediting service accrued at the Relevant Entities by such TEC Retained Employee for purposes of such calculation).

     7.6 European Employees . Imation shall, and shall cause the other Acquiring Entities to, offer to employ or continue the employment of the Business Employees of TME and TPL (the “ European Employees ”), from and after Closing, at a level of compensation and benefits (including salary or wages, bonuses, incentive compensation, and employee benefits) that is substantially similar, in the aggregate, to that provided immediately prior to the Closing, and shall, subject to normal attrition and to employee acceptance of such offer, maintain the employment of such employees on such terms as and to the extent required by applicable Law (including the Transfer Regulations) or as a result of negotiation with applicable works councils and/or unions; provided , that, subject to Imation’s and its Affiliates’ compliance with applicable Law and any Acquired Contracts, the continued employment of such European Employees will be at the discretion of Imation and will be “at will” employment. Imation shall undertake, and shall cause each of its Affiliates to undertake, all required notices to and negotiations with works councils and unions and shall comply with any applicable Transfer Regulations. In the event that Imation or any of its Affiliates terminates any European Employee within one (1) year after the Closing, Imation shall (i) pay or provide such European Employee the severance, outplacement and other benefits provided for under the applicable TDK Severance Plan and (ii) promptly notify TDK of such termination, identifying the terminated employee.

     7.7 APAC Employees . Imation shall, and shall cause the other Acquiring Entities to, offer to employ or continue the employment, subject to normal attrition and to employee acceptance of such offer, of the Business Employees of TSP, TRH, and TAP (the “ APAC Employees ”), from and after Closing, at a level of compensation and benefits (including salary or wages, bonuses, incentive compensation, and employee benefits) that is substantially similar, in the aggregate, to that provided by the Relevant Entities immediately prior to the Closing. The continued employment of such APAC Employees after Closing will be at the discretion of Imation and will be “at will” employment subject to the provisions of applicable Law and any Acquired Contracts. In the event that Imation or any of its Affiliates terminates any APAC Employee within one (1) year after the Closing, Imation shall (i) pay or provide such APAC Employee the severance, outplacement and other benefits provided for under the applicable TDK Severance Plan and (ii) promptly notify TDK of such termination, identifying the terminated employee.

     7.8 Employee Benefits Arrangements .

     (a) U.S. Defined Benefit Plan . As of the Closing, the TEC Closing Transferees shall, and as of the TEC Transfer Date the TEC Post-Closing Transferees (the TEC Closing Transferees and the TEC Post-Closing Transferees, collectively, the “ TEC Transferees ”) shall, cease active participation in TDK’s defined benefit pension plan for TEC Employees (the “ U.S. Pension Plan ”). TDK shall take all actions required in order for all TEC Transferees with vested benefits under the U.S. Pension Plan to receive such benefits in accordance with the terms thereof. With the exception of any “eligible rollover

distributions” (within the meaning of Section 401(a)(31) of the Code) made at the direction of TEC Transferees, no transfer of assets or liabilities relating to the TEC Transferees from the U.S. Pension Plan shall be made to any tax-qualified retirement plans maintained by Imation or any of its Affiliates.

     (b) U.S. Flexible Spending Account . As of the Closing Date, Imation shall establish flexible spending accounts for medical and dependent care expenses under a new or existing plan (an “ Imation FSA ”) for each Transferred Employee who, on or prior to the Closing Date, is a participant in TDK’s flexible spending account for medical and dependent care expenses (the “ TDK FSA ”) or who elects to participate in the Imation FSA. Subject to Imation being provided all information reasonably necessary to permit the administrator of the Imation FSA to accommodate the inclusion of the Transferred Employees in the Imation FSA on the basis described herein, Imation will credit or debit, as applicable, effective as of the Closing Date for Closing Transferees, and as of the date of transfer or secondment to Imation or an Affiliate of Imation in the case of other Transferred Employees (such date, the “ Benefits Transfer Date ”), the applicable account of each Transferred Employee under the Imation FSA with an amount equal to the balance of each such Transferred Employee’s account under the TDK FSA as of immediately prior to the Benefits Transfer Date. As soon as practicable after the expiration of the Transition Period, TDK will pay to Imation the net aggregate amount of the account balances credited under the Imation FSA, if such amount is positive, and Imation will pay to TDK the net aggregate amount of the account balances credited under the Imation FSA, if such amount is negative. No later than as soon as reasonably practicable following the Closing Date, TDK shall provide to Imation a complete and accurate listing of year-to-date contributions and reimbursements under the Imation FSA for the calendar year in which the Closing Date occurs (such listing to be updated periodically to reflect any such information reported following the Closing Date through the expiration of the Transition Period).

     (c) Non-U.S. Pensions . With respect to TDK’s pension plans for Transferred Employees, subject to applicable Law, (i) if and to the extent that the transaction is a purchase of an Acquired Entity, assets and liabilities for pension benefits shall become the assets and liabilities of the relevant Acquiring Entity; and (ii) if and to the extent that the transaction is a purchase of assets from the Selling Entities, TDK shall retain all assets and liabilities under its plans (and, to the extent applicable, under the pension fund rules or insurance company contracts maintained to fund such plans), and shall make payments to Transferred Employees with vested rights thereunder in accordance with the terms of TDK’s plans and applicable Law.

     (d) Medical, Dental, Disability and Life Insurance Benefits .

     (i) TDK shall be responsible in accordance with its applicable welfare plans in effect prior to the Closing Date for all medical and dental claims for expenses incurred prior to the applicable Benefits Transfer Date. Reimbursement of employees and their dependents for medical and dental expenses associated with such claims (including claims submitted on behalf of disabled employees and their dependents) shall be determined in accordance with the terms of TDK’s medical and dental programs as in effect immediately prior to the Closing Date. TDK shall

terminate coverage of Transferred Employees and their dependents effective for claims for expenses incurred on and after the applicable Benefits Transfer Date. Imation and its Affiliates shall be responsible for all medical and dental claims for expenses incurred on and after the applicable Benefits Transfer Date by Transferred Employees.

     (ii) Imation and its Affiliates, or insurers with whom they shall have contracted for such insurance, shall be responsible for all claims by Transferred Employees and their dependents (including responsibility for post-retirement life insurance claims by Transferred Employees and their dependents) incurred after the applicable Benefits Transfer Date, under group life, travel and accident, and accidental death and dismemberment insurance policies. TDK shall be responsible for claims of these types that are incurred on or prior to the applicable Benefits Transfer Date.

     (iii) Imation and its Affiliates shall exercise reasonable efforts to cause to be waived any pre-existing condition limitation under the welfare plans applicable to Transferred Employees or their dependents if such condition would otherwise have been covered under the terms of TDK’s welfare plans. In those countries in which health benefits are subject to co-payments or deductibles, the Imation and its Affiliates will exercise reasonable efforts to give or cause to be given full credit for all co-payments and deductibles satisfied prior to the Closing in the same plan year as if there had been a single continuous employer, and TDK will cooperate by providing, and causing its agents to provide, information to the Imation regarding co-payments and deductibles during that plan year.

     (e) Credited Service . Imation shall, and shall cause each of its Affiliates to, credit service accrued by Transferred Employees with, or otherwise recognized for benefit plan purposes by, the Relevant Entities as of the Closing for purposes of eligibility and vesting under its benefit plans, programs, policies and arrangements (including under any applicable pension, 401(k), savings, medical, dental, life insurance, vacation, post-retirement health and life insurance, severance and separation pay plans).

     (f) Claims and Liabilities . For purposes of this Agreement, claims for benefits and the liabilities for such claims under the following plans and policies shall be deemed to be incurred as follows: (i) life, accidental death and dismemberment and business travel accident insurance benefits, upon the death or accident giving rise to such benefits; (ii) health, dental, prescription drug or other benefits that become payable during or in connection with any hospital confinement or confinement to a skilled nursing facility or similar facility, as of the date of occurrence of the accident or injury, or the inception of the illness, that is the cause of the hospital or other facility confinement and (iii) health, dental and/or prescription drug benefits not described in (ii), upon provision of such services, materials or supplies. For purposes of this Agreement, liabilities for premiums, contributions or similar purchase obligations to obtain coverage under welfare plans and insurance policies shall be deemed to be incurred as of the due date, without giving effect to any grace period for late payment.

     7.9 Workers Compensation . TDK currently sponsors a program that provides workers compensation benefits for eligible Transferred Employees (the “ TDK Workers Compensation Program ”). TDK shall be responsible for all claims for workers compensation benefits which are incurred prior to the applicable Benefits Transfer Date by Transferred Employees, and which are payable under the terms and conditions of TDK Workers Compensation Program. Effective as of the Closing Date, Imation shall, and shall cause each of its Affiliates to, take all necessary and appropriate action to adopt a workers compensation program providing such workers compensation benefits as are required by Law for the Transferred Employees (the “ Imation Workers Compensation Program ”). Such Imation Workers Compensation Program shall be responsible for all claims for benefits which are incurred after the applicable Benefits Transfer Date by Transferred Employees, and which are payable under the terms and conditions of the Imation Workers Compensation Program. For purposes of this Section 7.9, a claim for workers compensation benefits shall be deemed to be incurred when the event giving rise to the claim occurs.

     7.10 Compliance with Legal Requirements . TDK agrees to provide or cause to be provided any required notice under the WARN Act, and any similar statute, and otherwise to comply with such statute with respect to terminations, layoffs or similar events affecting the employees of TEC that occur prior to Closing; provided , that Imation and the Acquiring Entities shall not effect, or attempt to effect, on the Closing Date any terminations, layoffs or similar events that could give rise to liabilities or obligations under the WARN Act or similar statute. With respect to any terminations, layoffs or similar events occurring after the Closing Date, Imation and its Affiliates shall have sole responsibility for providing any required notice under, and otherwise complying with, the WARN Act and any similar statute.

     7.11 Disclaimer . Nothing herein shall be construed as a representation or guarantee by TDK that Business Employees will accept the offer of employment from any Acquiring Entities or will continue in employment with Imation or any Affiliate of Imation following the Closing.

VIII. Conditions to Closing

     8.1 Conditions to Imation’s Obligations . The obligation of Imation to take the actions required to be taken by it, and to cause the other Acquiring Entities to take the actions required to be taken by them, at the Closing is subject to the satisfaction of each of the following conditions at or prior to the Closing (any of which may be waived, in whole or in part, in Imation’s sole discretion):

     (a) the representations and warranties set forth in Article II that are not subject to materiality qualifications shall be true and correct in all material respects and those that are subject to such qualifications shall be true and correct, without taking into account any supplemental disclosures after the date of this Agreement by TDK, at and as of the Closing Date as though then made and as though the Closing Date had been substituted for the date of this Agreement in such representations and warranties, and provided that any representation or warranty expressly made as of a specified date shall be considered not to have been true and correct at and as of the Closing Date if and only if it shall not have been true and correct on and as of the date so specified;

     (b) the Selling Entities shall have performed and complied in all material respects with all covenants and agreements to be performed and complied with by each of them respectively on or prior to the Closing Date under this Agreement;

     (c) the applicable waiting periods under all applicable Competition Laws shall have expired or shall have been terminated and any approvals required thereunder shall have been obtained;

     (d) each of the material consents and Governmental Authorizations listed in Schedule 8.1(d) (the “ Required Consents ”) shall have been obtained and be in full force and effect;

     (e) no Litigation shall have been commenced or threatened in writing by a Person who is not an Affiliate of Imation, and which Imation has concluded, based on the advice of counsel, has a colorable basis, that (i) expressly seeks to prevent or delay consummation of any of the transactions contemplated by this Agreement, (ii) asserts the illegality of, or seeks to render unenforceable, any material provision of this Agreement or any of the Ancillary Agreements, (iii) seeks to prohibit direct or indirect ownership or operation by Imation of any portion of the Business, or to compel Imation or any of its Subsidiaries or any of the Acquired Entities to dispose of any material Acquired Assets, or (iv) seeks to require direct or indirect transfer or sale by any of the Acquiring Entities of, or to impose material limitations on the ability of any of the Acquiring Entities to exercise, transferred rights with respect to, any of the Acquired Assets; provided , that, for the avoidance of doubt, the Litigation referred to in this subsection shall not include Litigation based on claims relating solely to the operation of the Business after Closing or seeking to impose royalty or other liabilities on the Business with respect to any period prior to or after Closing, whether or not as a result of the transactions contemplated herein;

     (f) no Law or Governmental Order shall have been enacted, entered, enforced, promulgated, issued or deemed applicable to the transactions contemplated by this Agreement by any Governmental Entity that materially restricts the consummation of the transactions contemplated hereby or the ability of the Acquiring Entities to own or operate the Business, in whole or material part;

     (g) no Material Adverse Change with respect to TDK shall have occurred; and

     (h) TDK shall have delivered or caused to be delivered each of the agreements, certificates, instruments and other documents to be delivered by the Relevant Entities pursuant to Section 1.6(b)(i), and such agreements so delivered shall be in full force and effect.

     8.2 Conditions to TDK’s Obligations . The obligation of TDK to take the actions required to be taken by it at the Closing is subject to the satisfaction of each of the following conditions at or prior to the Closing (any of which may be waived by TDK, in whole or in part, in TDK’s sole discretion):

     (a) the representations and warranties set forth in Article III shall be true and correct in all material respects as of the Closing Date, without taking into account any supplemental disclosures after the date of this Agreement by Imation, as though then made and as though the Closing Date had been substituted for the date of this Agreement in such representations and warranties;

     (b) Imation shall have performed and complied in all material respects with all covenants and agreements to be performed and complied with by it on or prior to the Closing Date under this Agreement;

     (c) the applicable waiting periods under the Competition Laws shall have expired or been terminated and any approvals required thereunder shall have been obtained;

     (d) each Required Consent shall have been obtained and be in full force and effect;

     (e) no Litigation shall have been commenced or threatened in writing by a Person who is not an Affiliate of TDK, and which TDK has concluded, based on the advice of counsel, has a colorable basis, that (i) expressly seeks to prevent or delay consummation of any of the transactions contemplated by this Agreement, or (ii) asserts the illegality of, or seeks to render unenforceable, any material provision of this Agreement or any of the Ancillary Agreements; provided , that, for the avoidance of doubt, the Litigation referred to in this subsection shall not include Litigation based on claims relating solely to the operation of the Business after Closing or seeking to impose royalty or other liabilities on the Business with respect to any period prior to or after Closing, whether or not as a result of the transactions contemplated herein;

     (f) no Law or Governmental Order shall have been enacted, entered, enforced, promulgated, issued or deemed applicable to the transactions contemplated by this Agreement by any Governmental Entity that materially restricts the consummation of the transactions contemplated hereby or the ability of the Acquiring Entities to own or operate the Business, in whole or material part;

     (g) TDK shall have obtained the TDK Union Approval;

     (h) no Material Adverse Change with respect to Imation shall have occurred; and

     (i) Imation shall have delivered or caused to be delivered each of the certificates, instruments and other documents that the Acquiring Entities are to deliver pursuant to Section 1.6(b)(ii), and such certificates, instruments and other documents so delivered shall be in full force and effect.

IX. Termination

     9.1 Termination . This Agreement may be terminated prior to the Closing:

     (a) by the mutual written consent of Imation and TDK;

     (b) by either party if the other party shall have failed to perform or comply in any material respect with any material agreement or covenant contained herein, unless within thirty (30) days following written notice of such failure the other party has cured such failure;

     (c) by either party if satisfaction of a Closing condition of the terminating party in Article VII is impossible notwithstanding the terminating party’s compliance, on the date of termination, with Section 4.7 or 5.2, as the case may be, and Section 6.1;

     (d) by either party, if the conditions set forth in Section 1.5(b)(ii)(B) or Section 1.5(b)(iii)(B) are satisfied; or

     (e) by either party if the Closing has not occurred by December 31, 2007; provided , that the terminating party shall not have materially breached its obligations hereunder in any manner that shall have contributed to the failure to consummate the Closing by such date.

     9.2 Effect of Termination . In the event of termination of this Agreement by either Imation or TDK, as the case may be, as provided above, all rights and obligations of the parties under this Agreement shall terminate without any liability of any party to any other party, except that Article X shall survive indefinitely (and the Confidentiality Agreement shall survive in accordance with its terms), in each case, unless sooner terminated or modified by the parties in writing, and provided that nothing in Section 9.1 or this Section 9.2 shall be deemed to release any party from liability that has already accrued as of the effective date of such termination, and shall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims which a party may have hereunder, at law, equity or otherwise or which may arise out of or in connection with such termination.

X. Survival; Indemnification .

     10.1 Survival of Representations, Warranties and Claims . The representations and warranties of the parties contained in this Agreement, any Ancillary Agreements, and any certificate delivered pursuant hereto or thereto shall survive the Closing and shall terminate and expire on the eighteen (18) month anniversary of the Closing Date, except for representations and warranties set forth in Sections 2.11, 2.17 and 2.20(b) hereof, which shall survive through the expiration of the applicable statute of limitation, and provided that, where a claim is made pursuant to Sections 10.2, 10.3 or 10.4 prior to such anniversary of the Closing Date, the representation and warranty relevant to such claim shall survive until such claim is resolved.

     10.2 Indemnification by TDK .

     (a) TDK shall pay, indemnify, reimburse and hold harmless Imation from and against any and all Losses to the extent incurred by Imation or any of the Acquiring Entities or the Acquired Entities as a result of, arising from or with respect to any of the following (such indemnified Losses are referred to herein as “ Imation Losses ”):

     (i) subject to Section 10.1, any inaccuracy in or breach of any representation or warranty by TDK contained in this Agreement, either at the date of this Agreement or on the Closing Date as though then made and as though the Closing Date had been substituted for the date of this Agreement, or in any Ancillary Agreement or in any certificate delivered pursuant hereto or thereto, taking into account, for purposes of this Section 10.2(a)(i), any supplemental disclosures by TDK between the date of this Agreement and Closing;

     (ii) any breach by TDK of, or any failure of any of the Selling Entities to perform or comply with, any of their respective obligations under or pursuant to this Agreement or any of the Ancillary Agreements;

     (iii) any Excluded Liabilities, including any Liabilities of any of the Acquired Entities that were to have been assumed by one of the Selling Entities prior to Closing pursuant to Section 4.10;

     (iv) any Liability arising out of any Litigation pending as of the Closing;

     (v) any Liability under applicable Law arising prior to the Closing by reason of the funding, operation, transfer, termination or winding up of any Plan established or maintained by any of the Relevant Entities other than, for the avoidance of doubt, any failure to fully fund any such Plan (except as required under Section 2.20(b) hereof);

     (vi) subject to Section 10.3, any Liability to any employee or former employee of any of the Relevant Entities, or to any third party for indemnification with respect to any such Liability, caused by any action of any of the Relevant Entities prior to the Closing or by any decision of any of the Acquiring Entities not to hire such employee or former employee;

     (vii) any claim or cause of action asserted by any Person against any of the Acquiring Entities or the Acquired Entities arising before, on or after the Closing Date out of or with respect to the operations of the Relevant Entities, the Acquired Assets, or the Business prior to the Closing Date;

     (viii) subject to Section 6.5, any Liability of any of the Selling Entities for Taxes, whenever incurred (excluding Taxes, other than profits, capital gain or other Taxes on net income addressed in Section 1.4(c), relating to or arising out of the transfer of Acquired Assets at Closing or the ownership or use of the Acquired Assets thereafter), and any Liability of any of the Acquired Entities for Taxes for

any taxable period ending prior to the Closing, including any Pre-Closing Period or Interim Period (as defined in Section 10.2(e)) to the extent Taxes are allocable to such Pre-Closing Period or Interim Period in accordance with Section 10.2(e);

     (ix) any claims arising out product failures, in speakers sold by TDK prior to Closing, under the “TAPEX” brand resulting from the same root cause as the failures which which caused TDK to initiate a voluntary recall of such products prior to the date hereof; and

     (x) any claims with respect to the sale or purported sale by TME of the real property known as TDK House, located at Redhill, Surrey, England.

     (b) Notwithstanding anything herein to the contrary, TDK shall not be obligated under Section 10.2(a) above to indemnify as to the matters set forth in clause (i) above, and shall not have any Liability with respect to such matters:

     (i) unless the aggregate of all Imation Losses exceeds on a cumulative basis $2,500,000 (the “ Basket Amount ”), in which case Imation shall be entitled to recover the Imation Losses only to the extent of such excess;

     (ii) to the extent that the aggregate of all of the Imation Losses exceeds $35,000,000 (the “ Indemnification Cap ”); or

     (iii) for any individual item where the loss, liability, cost or expense relating thereto is less than $150,000 (the “ De Minimis Amount ”), provided, that such items may be aggregated for purposes of clause (i);

provided , that the foregoing limits shall not apply to any indemnification obligation of TDK arising out of, relating to or resulting from any inaccuracy of the representations and warranties in any of Sections 2.1, 2.2, 2.3(a) or 2.4 hereof, or related certificates.

     (c) If Imation has a claim for indemnification under this Section 10.2, Imation shall deliver to TDK one or more written notices of Imation Losses (each, an “ Imation Claim Notice ”), on or before the eighteen (18) month anniversary of the Closing Date, except for Imation Losses arising from a breach or inaccuracy in the representations and warranties made in Sections 2.11, 2.17 or 2.20(b), or for any of the matters described Section 10.2(a)(v), for which Imation may deliver an Imation Claim Notice prior to the expiration of the applicable statute of limitations. TDK shall have no Liability under this Section 10.2 except with respect to indemnification claims described in an Imation Claim Notice provided in accordance with the terms hereof and within the applicable time limits specified in the preceding sentence. Any Imation Claim Notice shall (i) expressly state that it constitutes an Imation Claim Notice under this Section 10.2(c), (ii) describe in reasonable detail the basis for such Imation Losses and the nature of the Imation Losses for which indemnification is sought, (iii) state the amount of the Imation Losses claimed if then known to Imation, and (iv) set forth Imation’s calculation thereof in reasonable detail. If the amount of Imation Losses is not known at the time of the submission of the Imation Claim Notice, then Imation shall provide a good faith estimate based upon the facts then

known and shall submit an amended Imation Claim Notice promptly after the amount thereof has become known to Imation. If TDK notifies Imation in writing, within twenty (20) Business Days after its receipt of any Imation Claim Notice, that TDK agrees to make the indemnification payment requested therein, (A) upon such acceptance, the parties shall be deemed to have settled all claims arising out of the facts and circumstances giving rise to the applicable Imation Claim Notice, and (B) TDK shall pay the agreed amount to Imation within twenty (20) Business Days after such acceptance. If TDK disputes any aspect of an Imation Claim Notice, including the amount or calculation of the Imation Losses claimed therein, or has not notified Imation in writing of its election to pay such amount within twenty (20) Business Days after its receipt of any Imation Claim Notice, such claims shall be deemed a “Dispute” under the Trademark License Agreement and shall be subject to the dispute resolution provisions of Section 5.3 thereof. If an Imation Claim Notice does not state the amount of the Imation Losses claimed because such amount is not known at the time of submission of the Imation Claim Notice, such omission shall not preclude Imation from recovering from TDK the actual amount of the Imation Losses resulting from the specific matters described in such Imation Claim Notice if any such amount is provided in an amended Imation Claim Notice submitted promptly after the amount thereof shall have become known to Imation in accordance with the terms hereof. In order to assert its right to indemnification under this Article X, Imation shall not be required to provide any notice except as provided in this Section 10.2(c).

     (d) TDK shall pay to Imation the amount of any Imation Losses indemnifiable hereunder twenty (20) Business Days following the determination of TDK’s liability for and the amount of such Imation Losses (whether such determination is made by agreement between Imation and TDK or by final adjudication).

     (e) For purposes of this Article X, the parties hereto will, to the extent permitted by applicable Law, elect with the relevant taxing authorities to treat for all purposes the Closing Date as the last day of a taxable period of any Acquired Entity, and such period shall be treated as a “ Short Period ” and a “ Pre-Closing Period ” for purposes of this Agreement. In any case where applicable Law does not permit an Acquired Entity to treat the Closing Date as the last day of a Short Period, then for purposes of this Agreement, the portion of such Taxes that is attributable to the operations of such Acquired Entity for such Interim Period (as defined below) shall be (i) in the case of Taxes that are not based on income or gross receipts, the total amount of such Taxes for the period in question multiplied by a fraction, the numerator of which is the number of days in the Interim Period, and the denominator of which is the total number of days in the entire period in question, and (ii) in the case of Taxes that are based on income or gross receipts, the Taxes that would be due with respect to the Interim Period, if such Interim Period were a Short Period. “ Interim Period ” means with respect to any Taxes imposed on such Acquired Entity on a periodic basis for which the Closing Date is not the last day of a Short Period, the period of time beginning on the first day of the actual taxable period that includes (but does not end on) the Closing Date and ending on and including the Closing Date.

     10.3 Indemnification by Imation .

     (a) Imation shall pay, indemnify, reimburse and hold harmless TDK from and against any and all Losses to the extent incurred by TDK as a result of, arising from or with respect to any of the following (such indemnified Losses are referred to herein as “ TDK Losses ”):

     (i) subject to Section 10.1, any inaccuracy in any representation or warranty by Imation contained herein, either at the date of this Agreement or on the Closing Date as though then made and as though the Closing Date had been substituted for the date of this Agreement, or in any Ancillary Agreement or in any certificate delivered pursuant hereto or thereto, taking into account, for purposes of this Section 10.3(a)(i), any supplemental disclosures after the date of this Agreement by Imation;

     (ii) any breach by Imation of, or any failure of any of the Acquiring Entities to perform or comply with, any of its obligations under or pursuant to this Agreement or any of the Ancillary Agreements (including any failure to offer employment to Business Employees as provided in Article VII, in which case any costs of defense incurred by TDK pursuant to Section 9.2(a)(iv) shall be included within the indemnified amounts hereunder, so that, for the avoidance of doubt, TDK will be responsible in the first instance for addressing such employee claim, but TDK’s costs for doing so will be fully indemnified by and recoverable from Imation);

     (iii) any claim or cause of action asserted by any Person against any of the Selling Entities arising before, on or after the Closing Date out of or with respect to (A) the operations of the Acquired Entities, the Acquired Assets or the Business after the Closing Date (including, without limitation, any termination by an Acquiring Entity of any Acquired Contract or by an Acquired Entity of any Contract, or breach by an Acquiring Entity or an Acquired Entity of any term or condition thereof) or (B) Imation’s election to accept the assignment or transfer of any Restricted Asset pursuant to Section 1.10(a)(ii), except in either case for any claims with respect to which TDK is obligated to indemnify Imation under Section 10.2(a) hereof; and

     (iv) any Assumed Liability, including any Liabilities of any of the Acquired Entities not required to be assumed by one of the Selling Entities prior to Closing pursuant to Section 4.10;

provided, that TDK Losses shall not include any diminution in the value of the Imation Shares by reason of any Losses sustained solely by Imation separate from, and in addition to, any Losses sustained directly by TDK.

     (b) Limits . Notwithstanding anything herein to the contrary, Imation shall not be obligated under Section 10.3(a) above to indemnify or hold harmless TDK as

to matters set forth in clause (i) above, and shall not have any Liability with respect to such matters:

     (i) unless the aggregate of all TDK Losses exceeds the Basket Amount, in which case TDK shall be entitled to recover the TDK Losses only to the extent of such excess;

     (ii) to the extent that the aggregate of all of the TDK Losses exceeds the Indemnification Cap; or

     (iii) for any individual item where the loss, liability, cost or expense relating thereto is less than the De Minimis Amount (provided, that such items may be aggregated for purposes of clause (b)(i));

provided , that the foregoing limits shall not apply to any indemnification obligation of Imation arising out of, relating to or resulting from any inaccuracies in the representations and warranties contained in any of Sections 3.1, 3.2, 3.3(a) and 3.5 hereof, or related certificates.

     (c) If TDK has a claim for indemnification under this Section 10.3 , TDK shall deliver to Imation one or more written notices of TDK Losses (each a “ TDK Claim Notice ”) on or before the eighteen (18) month anniversary of the Closing Date. Imation shall have no liability under this Section 10.3 except with respect to indemnification claims described in a TDK Claim Notice provided in accordance with the terms hereof and within the applicable time limits specified in the preceding sentence. Any TDK Claim Notice shall (i) expressly state that it constitutes a TDK Claim Notice under this Section 10.3(c), (ii) describe in reasonable detail the basis for such TDK Losses and the nature of the TDK Losses for which indemnification is sought, (iii) state the amount of the TDK Losses claimed if then known to TDK, and (iv) set forth TDK’s calculation thereof in reasonable detail. If the amount of TDK Losses is not known at the time of the submission of the TDK Claim Notice, then TDK shall provide a good faith estimate based upon the facts then known and shall submit an amended TDK Claim Notice promptly after the amount thereof has become known to TDK. If Imation notifies TDK in writing, within twenty (20) Business Days after its receipt of any TDK Claim Notice, that Imation agrees to make the indemnification payment requested therein, (A) upon such acceptance, the parties shall be deemed to have settled all claims arising out of the facts and circumstances giving rise to the applicable TDK Claim Notice, and (B) Imation shall pay the agreed amount to TDK within twenty (20) Business Days after such acceptance. If Imation disputes any aspect of a TDK Claim Notice, including the amount or calculation of the TDK Losses claimed therein, or has not notified TDK in writing of its election to pay such amount within twenty (20) Business Days after its receipt of any TDK Claim Notice, such claims shall be deemed a “Dispute” under the Trademark License Agreement and shall be subject to the dispute resolution provisions of Section 5.3 thereof. If a TDK Claim Notice does not state the amount of the TDK Losses claimed because such amount is not known at the time of submission of the TDK Claim Notice, such omission shall not preclude TDK from recovering from Imation the

actual amount of the TDK Losses resulting from the specific matters described in such TDK Claim Notice if any such amount is provided in an amended TDK Claim Notice submitted promptly after the amount thereof shall have become known to TDK in accordance with the terms hereof. In order to assert its right to indemnification under this Article X, TDK shall not be required to provide any notice except as provided in this Section 10.3(c).

     (d) Imation shall pay the amount of any TDK Losses to TDK within twenty (20) Business Days following the determination of Imation’s liability for and the amount of TDK Losses (whether such determination is made pursuant to the procedures set forth in this Section 10.3, by agreement between TDK and Imation or by final adjudication).

     10.4 Third-Party Action .

     (a) If any third party shall notify a party (the “ Indemnified Party ”) with respect to any matter which may give rise to a claim for indemnification against the other party (the “ Indemnifying Party ”) under this Section 10.4 for Losses of the Indemnified Party arising from, relating to or constituting any Litigation instituted by any third party (any such third party action or proceeding being referred to as a “ Third-Party Action ”), the Indemnified Party shall give the Indemnifying Party prompt written notice of the commencement of such Third-Party Action. The complaint or other papers pursuant to which the third party commenced such Third-Party Action shall be attached to such written notice. The failure to give prompt written notice shall not affect an Indemnified Party’s right to indemnification unless such failure has materially and adversely affected the Indemnifying Party’s ability to defend such Third-Party Action.

     (b) The Indemnifying Party may participate in, and, to the extent the Indemnifying Party desires, at any time assume the defense of, such Third-Party Action with reputable attorneys retained by the Indemnifying Party and at the Indemnifying Party’s expense. Upon and after notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such Third-Party Action, the Indemnifying Party shall not be liable to the Indemnified Party under this Article X for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however, that the Indemnified Party shall be entitled at any time, at its own cost and expense, to participate in the Indemnifying Party’s conduct of such defense and to be represented by attorneys of its own choosing. The Indemnified Party shall cooperate with the Indemnifying Party in the Indemnifying Party’s conduct of such defense to the extent reasonably requested by the Indemnifying Party in the contest and defense of such Third-Party Action, including but not limited to providing reasonable access (upon reasonable notice) to the books, records and employees of the Indemnified Party if relevant to the defense of such Third-Party Action; provided, that such cooperation shall not unduly disrupt the operations of the business of the Indemnified Party or cause the Indemnified Party to waive any statutory or common law privileges, breach any confidentiality

obligations owed to third parties or otherwise cause any confidential information of the Indemnified Party to become public.

     (c) If the Indemnifying Party does not elect to assume the defense of any Third-Party Action, the Indemnified Party shall be entitled to conduct its own defense and to be represented by attorneys of its own choosing. For the avoidance of doubt, the costs and expenses of such defense shall be included in Losses indemnifiable in accordance with and subject to the provisions of this Article X.

     (d) Neither the Indemnified Party nor the Indemnifying Party may concede, settle or compromise any Third-Party Action without the consent of the other party, which consent shall not be unreasonably withheld or delayed.

     10.5 Sole and Exclusive Remedy . Each party hereto agrees that, with the exception of the equitable remedies provided for in Sections 4.14(b) and 4.16(c), its sole and exclusive remedy in respect of a breach by the other party of any representation, warranty, covenant, agreement or obligation of such party hereunder, or in any certificate provided in accordance herewith, or with respect to any breach by the other party of any representation or warranty provided in any Ancillary Agreement, shall be the right to obtain indemnification as provided in this Article X, and all other rights and remedies in respect of such a breach or breaches (excluding any act or omission that constitutes fraud by either of the parties hereto) are hereby expressly forever waived and released. Each party hereto covenants not to institute any litigation or other proceeding with respect to any rights and remedies waived by such party under this Section 10.5. However, for the avoidance of doubt and notwithstanding the foregoing, nothing in this Article X shall limit in any respect either party’s rights with respect to amounts payable pursuant to Section 1.7 (Post-Closing Adjustment to Purchase Price) or Section 1.8 (Earnout).

     10.6 Limitations on Indemnification . The amount of any Loss for which indemnification is provided under this Article X shall be net of any amounts actually recovered or recoverable by the Indemnified Party under insurance policies with respect to such Loss and shall be (i) increased to take account of any net Tax cost incurred by the Indemnified Party arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (ii) reduced to take account of (A) any net Tax benefit realized by the Indemnified Party arising from the incurrence or payment of any such Loss, and (B) the extent to which any Losses recoverable pursuant to this Article X have been taken into account in the determination of the Closing Date Working Capital Amount (pursuant to Section 1.7) for purposes of calculating any adjustment to the Purchase Price. In computing the amount of any such Tax cost or Tax benefit, the Indemnified Party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Loss. Any indemnity payment hereunder shall be treated as an adjustment to the Purchase Price and the portion of the Purchase Price allocated to the relevant Acquired Asset for Tax purposes; provided, however , that where, as a result of a final determination (which shall include the execution of a Form 870-AD or successor form) with respect to the Indemnified Party or any of its affiliates, an indemnity payment hereunder is treated as other than an adjustment to the Purchase Price, the Indemnified Party shall be entitled to receive an additional indemnity payment in an amount equal to the excess of the indemnity payment that the Indemnified Party would have been entitled to receive if the indemnity payment had been

treated for Tax purposes in the manner required by the final determination over the indemnity payment actually received by such Indemnified Party as a result of treating the indemnity payment for Tax purposes as an adjustment to the Purchase Price and the portion of the Purchase Price allocated to the relevant Acquired Asset.

XI. General

     11.1 Press Releases and Announcements .

     (a) Generally . From the date of execution of this Agreement until the Closing, neither party shall issue any press release (or make any other public announcement) related to this Agreement or the transactions contemplated hereby without prior written approval of the other party hereto, except as may be necessary, in the opinion of counsel to the party seeking to make disclosure, to comply with the requirements of applicable Law, including the applicable rules of any securities market or exchange on which such party is listed. The parties shall seek in good faith to coordinate all announcements and communications with each party’s employees, customers and suppliers.

     (b) SEC Filings . Imation acknowledges that the Trademark License Agreement as well as certain other Ancillary Agreements contain information that TDK views as commercially sensitive terms and agrees that (i) Imation will consult in good faith with TDK prior to filing such documents concerning the question of whether confidential treatment should be requested and, (ii) with respect to the Trademark License Agreement, shall initially file the agreement in a form reasonably agreed between the parties hereto and request confidential treatment for all portions of the Trademark License Agreement highlighted therein.

     11.2 Expenses . Except as otherwise expressly provided for in this Agreement, TDK and Imation shall each pay all of their own expenses with respect to the transactions contemplated by this Agreement, including legal, accounting, investment banking and consulting fees and expenses incurred in negotiating, executing and delivering this Agreement and the other agreements, exhibits, documents and instruments contemplated by this Agreement (whether the transactions contemplated by this Agreement are consummated or not); provided, however , that the parties will share equally any filing fees for filings under Competition Laws.

     11.3 Amendment and Waiver . No provision of this agreement may be amended, and no breach of any provision hereof may be waived, except in a writing executed by the party against which such action is sought to be enforced. Neither the failure nor any delay by any Person in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. In addition, no course of dealing between or among any Persons having any interest in this Agreement shall be deemed effective to modify or amend any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement. The rights and remedies of the parties to this Agreement are cumulative and not alternative.

     11.4 Notices . All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and shall be deemed to have been given (i) when delivered if personally delivered by hand (with written confirmation of receipt), (ii) when received if sent by an internationally recognized overnight courier service (receipt requested), (iii) five (5) Business Days after being mailed, if sent by first class mail to a United States address, return receipt requested, (iv) ten (10) Business Days after being mailed, if sent by first class mail to a non-United States address, return receipt requested or (v) when receipt is acknowledged by an affirmative act of the party receiving notice, if sent by facsimile, telecopy or other electronic transmission device (provided that such an acknowledgement does not include an acknowledgment generated automatically by a facsimile or telecopy machine or other electronic transmission device). Notices, demands and communications to Imation and TDK shall, unless another address is specified in writing, be sent to the address indicated below:

If to Imation:

Imation Corp.
1 Imation Place
Oakdale, Minnesota 55128
USA

Attn:      John Sullivan
Facsimile No. (651) 704-4412

With a copy (which shall not constitute notice) to:

Dorsey & Whitney
3008 One Pacific Place
88 Queensway
Hong Kong SAR, China

Attn:       Steven C. Nelson, Esq.
Facsimile No. (852) 2524-3000

If to TDK:

TDK Corporation
13-1 Nihonbashi 1-chome
Chuo-ku
Tokyo 103-8272
Japan

Attn:       Seiji Osaka
Facsimile No. (813) 5201-7114

With a copy (which shall not constitute notice) to:

Morrison Foerster
AIG Building, 11/F
1-3, Marunouchi 1-chome
Chiyoda-ku
Tokyo 100-0005
Japan

Attention:       Ken Siegel, Esq.
Facsimile No. (81) 3 3214- 6512

     11.5 Assignment . Neither this Agreement, nor any of the rights, interests or obligations any party hereunder, may be assigned by a party to this Agreement without the prior written consent of the other party.

     11.6 No Third-Party Beneficiaries . Nothing expressed or referred to in this Agreement confers any rights or remedies upon any Person that is not a party to this Agreement.

     11.7 Severability . In addition to the severability provisions of Section 4.16, whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

     11.8 Complete Agreement . This Agreement, the Confidentiality Agreement and, when executed and delivered, the Ancillary Agreements, contain the complete agreement between the parties and supersede any prior understandings, agreements or representations by or between the parties, written or oral.

     11.9 Schedules . The Disclosure Schedule contains a series of schedules corresponding to the sections contained in Article II. The schedules in the Disclosure Schedule relate only to the representations and warranties in the section and subsection of this Agreement to which they correspond and not to any other representation or warranty in this Agreement except where the relevance to another representation or warranty is reasonably apparent on the face of the statement in the Disclosure Schedule.

     11.10 Signatures; Counterparts . This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same instrument. A facsimile signature shall be considered an original signature.

     11.11 Governing Law . This Agreement shall be governed by the laws of the State of New York, USA, which shall be the proper law hereof notwithstanding any rule or principle of conflict of laws under which any other body of law would be made applicable.

     11.12 Consent to Jurisdiction .

     (a) TDK and Imation irrevocably submit, to the exclusive jurisdiction of the state and federal courts located in the State of New York, New York County, for the purposes of any suit, action or other proceeding arising out of this Agreement (and each agrees that no such action, suit or proceeding relating to this Agreement shall be brought by it or any of its affiliates except in such courts). TDK and Imation irrevocably and unconditionally waive (and agree not to plead or claim) any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement in such courts or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum, and furthermore irrevocably and unconditionally waive any defense based on the absence of or failure to join any other party in any suit, action or other proceeding arising out of this Agreement.

     (b) TDK and Imation further agree that service of any process, summons, notice or document by U.S. registered mail to such person’s respective address set forth above shall be effective service of process for any action, suit or proceeding in the state and federal courts located in the State of New York, New York County, with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding clause (a).

     11.13 Waiver of Jury Trial . EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10.12.

     11.14 Certain Definitions . Capitalized terms used in this Agreement have the respective meanings set forth in Exhibit A.

     11.15 Usages . Any reference to any Law shall be deemed to include any amendments thereto and all rules and regulations promulgated thereunder, unless the context requires otherwise. The headings preceding the text of articles and sections included in this Agreement and the headings to the schedules and exhibits are for convenience only and are not be deemed part of this Agreement or given effect in interpreting this Agreement. References to Sections, Articles, Schedules and Exhibits are to the corresponding sections, articles, schedules and exhibits contained in, referred to or attached to this Agreement, unless otherwise specified. Unless

otherwise expressly provided, the word “including” means “including without limitation.” Except as otherwise expressly stated, the word “days” means calendar days, including weekends and holidays. The phrase “or the equivalent in other currencies” means an amount in Dollars converted from the applicable currency or currencies at the rates of exchange quoted in the WSJ dated on the next to last Business Day immediately preceding the Closing. When any party may take any permissive action, including the granting of any consent, the waiver of any provision of this Agreement or otherwise, whether to take such action is in its sole and absolute discretion, except as otherwise expressly provided. The use of the masculine, feminine or neuter gender or the singular or plural form of words shall not limit any provisions of this Agreement. Capitalized terms defined in the singular shall have the same meanings when used in the plural, and vice versa. A statement that an item has been listed means that it is correctly listed, disclosed or described, and a statement that a copy of an item has been provided or made available means a true and correct copy of the item, including all amendments, updates and modifications thereto, has been provided or made available. The word “primary” or “primarily” where used with reference to any use or purpose of an asset means that such use or purpose is more important than any other use or purpose of such asset.

     11.16 Construction . The parties and their respective counsel have participated jointly in the negotiation and drafting of this Agreement. In addition, each of the parties acknowledges that it is sophisticated and has been advised by experienced counsel and, to the extent it deemed necessary, other advisors in connection with 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 and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

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     IN WITNESS WHEREOF, Imation and TDK have executed this Acquisition Agreement as of the date first above written.

EXHIBIT A

DEFINITIONS

     “ 13D Group ” means any partnership, syndicate or other group, as those terms are used within the meaning of Section 13(d)(3) of the Exchange Act.

     “ Accessory Products ” has the meaning ascribed to such term in the Trademark License Agreement.

     “ Active Employees ” means those Business Employees, as of the date of this Agreement as listed on Schedule 2.19(a) and who may reasonably be expected to be either Transferred Employees or Secondees after Closing.

     “ Acquired Entities ” means TDK Marketing Corporation, TDK Marketing Europe GmbH, TDK (Australia) Pty. Ltd., TDK Recording Media (Hong Kong) Co., Ltd., TDK Online Services Corporation, and TDK Polska Sp. Z.o.o.

     “ Acquired Transferees ” means those Business Employees employed by an Acquired Entity as of the Closing.

     “ Acquiring Entities ” means Imation and any of Imation’s Subsidiaries that Imation may, with the prior written consent of TDK, which consent shall not be unreasonably withheld, cause to purchase any of the Acquired Assets or enter into any of the Ancillary Agreements in place of Imation pursuant to this Agreement.

     “ Acquisition Proposal ” means any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest by Imation) contemplating an Acquisition Transaction.

     “ Acquisition Transaction ” means any transaction pursuant to which any Person would acquire all, or a material portion, of the Business.

     “ Active Employees ” means those Business Employees, as of the date of this Agreement as listed on Schedule 2.19(a) and who may reasonably be expected to be either Transferred Employees or Seconded Employees after Closing.

     “ Agreement ” has the meaning set forth in the first paragraph of this Agreement.

     “ Affiliate ” means, when used with reference to any Person, any other Person that directly, or indirectly through one or more intermediaries, has Control of the first Person, or of which the first Person has Control, or which is under common Control with the first Person.

     “ Ancillary Agreements ” means the (i) Trademark License Agreement, in substantially the form of attached Exhibit J, (ii) the Investor Rights Agreement, in substantially the form of attached Exhibit K, (iii) the Supply Agreement, in substantially the form of attached Exhibit L, (iv) the Transition Services Agreements, in substantially the form of attached Exhibit M, (v) the Bills of Sale, in substantially the form of attached Exhibit C, (vi) the Intellectual Property Assignments, in

substantially the form of attached Exhibit E, (vii) the Assignment and Assumption Agreements, in substantially the form of attached Exhibit D, and (viii) the Secondment Agreement.

     “ Ancillary Products ” means Headphone Products and Speaker Products, each as defined in the Trademark License Agreement.

     “ Antitrust Order ” has the meaning set forth in Section 6.1(b).

     “ APAC Employees ” means those Business Employees (other than Seconded Employees) whose place of employment is within TDK’s Asia-Pacific Sales Region.

     “ Basket Amount ” has the meaning set forth in Section 10.2(b)(i).

     “ Business ” means the marketing, distribution, and sale, including customer service and support, of Removable Recording Media Products, Accessory Products, and Ancillary Products, in each case bearing the TDK Brand, as conducted by the Relevant Entities; provided , that, for the avoidance of doubt, the Business does not include the Medical Business or TDK’s facility in Chicago, Illinois, which is primarily engaged in the Medical Business.

     “ Business Day ” means any day, other than weekends, on which commercial banks in New York City, New York, and Tokyo, Japan, are open for business.

     “ Business Employees ” has the meaning set forth in Section 7.1.

     “ Business Premises ” has the meaning set forth in Section 2.8(c).

     “ Capital Lease ” means a lease on which any of the Relevant Entities is a lessee that is a capital lease as determined in accordance with US GAAP.

     “ Change of Control ” with respect to a Person means any of the following transactions as a result of which such Person is under the direct or indirect control of any other Person, whether singly or as a part of a 13D Group: (a) the acquisition by any Person, as a result of one transaction or a series of transactions over time, of voting Securities representing, directly or indirectly, more than fifty percent (50%) of the aggregate voting rights of the first Person; or (b) the first Person’s consolidation with or merger with or into another Person, whether or not the first Person is the surviving entity in such transaction, unless, immediately after such consolidation or merger, shareholders of the first Person prior to the transaction continue to own voting securities representing, directly or indirectly, more than fifty percent (50%) of the aggregate voting rights of such new or surviving entity.

     “ Closing Transferee ” means those Business Employees of a Selling Entity who accept an offer of employment with an Acquiring Entity as of the Closing.

     “ Code ” means the US Internal Revenue Code of 1986, as amended.

     “ Competition Laws ” has the meaning set forth in Section 6.1(a).

     “ Confidential Information ” has the meaning set forth in Section 4.14(a).

     “ Confidentiality Agreement ” has the meaning set forth in Section 4.3.

     “ Consent ” means any authorization, consent, approval, filing, waiver, exemption or other action by or notice to any Person.

     “ Contract ” means a contract, agreement, lease, commitment or other legally binding understanding, whether oral or written, that is an Acquired Contract or a contract of an Acquired Entity that relates primarily to the Business, and, in each case, is in effect as of the date of this Agreement or any time after the date of this Agreement prior to Closing.

     “ Control ” of any Person means either (i) direct or indirect ownership of at least fifty-one percent (51%) of the voting share capital of, or other analogous ownership interest in, such Person or (ii) the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, by contract or otherwise.

     “ Current Properties ” has the meaning set forth in Section 2.17(a)(v).

     “ Current Secondees ” means those Business Employees of TDK who are seconded as of the date hereof to TMK.

     “ De Minimis Amount ” has the meaning set forth in Section 10.2(b)(iii).

     “ Disclosure Schedule ” means the schedule delivered by TDK to Imation on or prior to the date of this Agreement concerning the representations and warranties contained in Article II.

     “ Dollars ” or “$” means units of the lawful currency of the United States of America.

     “ Durabis Marks ” means those trademarks and applications listed on Schedule 2.13(a)(i) that contain the word “Durabis.”

     “ Encumbrance ” means any charge, claim, community property interest, easement, covenant, condition, equitable interest, lien, mortgage, lease, option, pledge, security interest, right of first refusal and,