SUPPLY AGREEMENT

Exhibit 10.4

SUPPLY AGREEMENT

     This SUPPLY AGREEMENT (this “ Agreement ”) is made and entered into as of the 31st day of July, 2007 (the “ Effective Date ”) by and between IMATION CORP. , a corporation organized under the laws of Delaware, USA (“ Imation ”), and TDK CORPORATION , a corporation organized under the laws of Japan (“ TDK ”).

      WHEREAS , Imation and TDK have entered into a certain Acquisition Agreement dated as of April 19, 2007 (the “ Acquisition Agreement ”), whereby Imation has agreed to purchase TDK’s sales, service and support functions for Removable Recording Media Products;

      WHEREAS , the Acquisition Agreement provides that Imation and TDK will enter into an agreement pursuant to which TDK will supply Imation and its Subsidiaries with their requirements of the Products (as defined herein); and

      WHEREAS , Imation and TDK agree to enter into such an agreement on the terms and conditions set forth below.

      NOW, THEREFORE , in consideration of the mutual covenants set forth in this Agreement, Imation and TDK agree as follows:

1. Definitions

     1.1 Certain Defined Terms . The following terms, when used in capitalized form in this Agreement, will have the meanings set forth below:

     “ OUS License ” means the Trademark License Agreement entered into by IMN Data Storage Holdings C.V., a Dutch private limited partnership, and TDK concurrently with the execution of this Agreement.

     “ Products ” means the finished goods and other products listed on Exhibit I , as such exhibit may be amended from time to time in accordance with Sections 2.3 and 3.3 or otherwise by mutual agreement of Imation and TDK.

     “ Product Specifications ” means the specifications for the Products as may be amended, modified or supplemented in accordance with this Agreement. The initial Product Specifications are attached to this Agreement as Exhibit V .

     “ TDK Brand License ” means the Trademark License Agreement entered into by Imation and TDK concurrently with the execution of this Agreement.

     “ TDK Product Category ” means any category of Removable Recording Media Products and Accessory Products listed on Exhibit VII .

     “ TDK Trademark ” means any trademark of TDK that is a Licensed Trademark, as such term is defined in the TDK Brand License.

     1.2 Other Defined Terms; Interpretation and Usage . All other capitalized terms used but not defined in this Agreement, but defined in the Acquisition Agreement, will have the meanings assigned to them in the Acquisition Agreement. Interpretation and usage of terms will be as set forth in the Acquisition Agreement.

2. Supply and Purchase Commitments

     2.1 Supply Commitment . TDK will use commercially reasonable efforts to supply Products to Imation and its Subsidiaries as set forth in Section 4 during the term of this Agreement. For the avoidance of doubt, TDK’s supply commitment under this Section 2.1 , Section 4 and otherwise under this Agreement will not require building or acquiring manufacturing capacity or holding inventory.

     2.2 Exclusivity . TDK will not, and will cause its Subsidiaries not to, sell any Product to third parties for resale under any trademarks of TDK or any of its Affiliates for so long as Imation is purchasing such Product from TDK; provided, however , that commencing on the fifth (5 ^th ) anniversary of the Effective Date TDK or any of its Subsidiaries may sell any Product to third parties for resale under any trademarks of TDK or any of its Affiliates that are not a TDK Trademark or confusingly similar to a TDK Trademark (collectively, “ Other TDK Trademarks ”). In the event that TDK sells a Product under such Other TDK Trademarks after such fifth (5 ^th ) anniversary, Imation’s purchase commitment under Section 2.3 shall no longer apply with respect to such Product. For the avoidance of doubt, TDK may supply any Products hereunder to third parties for resale under a third-party brand and this Section 2.2 shall not limit or otherwise modify any rights of Imation under the Acquisition Agreement or the Brand License Agreement.

     2.3 Purchase Commitment . Imation will, and will cause each of its Subsidiaries to, purchase from TDK all of its respective requirements for Removable Recording Media Products and Accessory Products that: (i) are in any of the TDK Product Categories, (ii) are to be sold under any TDK Trademark, and (iii) TDK is able to supply with prices, delivery performance and features that are competitive with the prices, delivery performance and features of comparable Removable Recording Media Products and Accessory Products that Imation and its Subsidiaries can purchase from a third party. Any Removable Recording Media Product and Accessory Products subject to the purchase commitment set forth in this Section 2.3 , will automatically be deemed and become a Product, and, if necessary, the parties will promptly amend Exhibit I consistent herewith. For purposes of this Section 2.3 , “delivery performance” means on-time shipment in accordance with this Agreement.

3. Product Changes

     3.1 Modifications . TDK may not change the form, fit or function of a Product Imation is purchasing from TDK without the prior written consent of Imation, which consent may not be unreasonably withheld or delayed. For the avoidance of doubt, Imation may not withhold or delay consent if TDK proposes a change for the purpose of addressing a Product’s actual or potential infringement of third party rights, to address safety issues or concerns, or to comply with applicable regulatory requirements; and TDK agrees to use commercially reasonable efforts to minimize any adverse effect of the proposed change. TDK will notify Imation in advance of, and discuss with Imation, any such change in process or materials that could materially and adversely affect the performance of a Product Imation is purchasing from TDK. The parties may agree, from time to time, upon reasonable additional standards and tests to be performed by TDK for any change in process or materials. TDK will use commercially reasonable efforts to discuss with Imation in advance the specifications for any new version of a Product Imation is purchasing from TDK or any new Removable Recording Media Product or Accessory Product in any of the TDK Product Categories and that TDK intends to make generally available for sale to its customers. Except as set forth in Section 2.2 , nothing in this Agreement shall restrict TDK from commercializing a new version of a Product or a new product.

     3.2 Discontinued Products . TDK may discontinue a Product Imation is purchasing from TDK upon not less than one hundred twenty (120) days’ written notice to Imation; provided that Imation and its Subsidiaries will have the right to issue a final Purchase Order of the discontinued Product during such period and on such other terms and conditions as are mutually agreed upon between the parties. Such final Purchase Order will be firm, at a fixed price and non-cancelable, and will provide for shipment no later than one (1) year after the order date set forth therein. Products ordered will be non-returnable except as provided in Section 6.2 or 9.3 .

     3.3 New Products . In the event that (i) Imation or any of its Subsidiaries intends to sell a Removable Recording Media Product under a TDK Trademark that is not in a TDK Product Category (the “ New Product ”), and (ii) it is commercially reasonable for TDK to supply the New Product (for the avoidance of doubt, as of the Effective Date, it would not be commercially reasonable for TDK to supply flash drives and cards, DVD discs, and HD DVD discs, although any of these may change over time depending on the future direction of TDK), then TDK will have the exclusive right of first negotiation and refusal to supply the New Product as follows: Imation will in good faith and promptly notify TDK in writing of its intention to sell the New Product, provide TDK with draft specifications for the New Product and consult with TDK with respect to the intended market and specifications (the “ New Product Specifications ”) for the New Product and with respect to other matters relating to its commercialization. Once Imation has completed the New Product Specifications, Imation will deliver them to TDK, and (i) TDK will have the exclusive right to elect whether to supply the New Product to Imation and will exercise such right as promptly as commercially reasonable but not later than thirty (30) days after TDK’s receipt of the New Product Specifications; (ii) starting upon TDK’s receipt of the New Product Specifications, the parties then will negotiate in good faith and exclusively a price for the New Product that is competitive; and (iii) TDK will provide a commercialization schedule that is competitive. If TDK elects not to supply the New Product, the parties in good faith are unable to agree on such price for the New Product within sixty (60) days after the date on which TDK received the New Product Specifications or TDK does not provide a commercialization schedule that is competitive within sixty (60) days after the date on which TDK received the New Product Specifications, then Imation may make other arrangements for supply of such New Products. Otherwise, the New Product will become subject to the supply and purchase commitments set forth in Article 2 . Nothing in this Section 3.3 will prevent either party from entering into a written joint development agreement with a third party to develop a new product, and Imation shall not be required to buy a New Product from TDK if (i) joint development of the specific New Product under such agreement requires at least a twelve (12)-month period prior to commercial launch and (ii) either (x) Imation manufactures the New Product itself and does not outsource the manufacture of such New Product to any third party or (y) Imation is required under the joint development agreement to have the New Product manufactured by the other party to the joint development agreement.

4. Purchase Orders and Forecasts

     4.1 Forecasts .

          (a) To allow TDK to schedule production and control costs, Imation will provide in good faith to TDK a rolling forecast of Products that Imation and its Subsidiaries expect to purchase from TDK for shipment over the next six (6) months, specifying the quantities of Product to be purchased on: (i) a weekly basis for the first month of such forecast and a monthly basis for the remaining five (5) months of such forecast; and (ii) a Product-by-Product and region-by-region basis with respect to each such month and week (the “ Rolling Forecast ”). Imation will endeavor to deliver each such Rolling Forecast to TDK by the seventh (7 ^th ) day of the month preceding the period covered by such Rolling Forecast. The Rolling Forecast will be non-binding except as provided in Sections 4. 1(b) and 4.1(c) .

          (b) Imation will be obligated to purchase from TDK in any month (the “ Purchase Month ”) a quantity of a particular Product for a particular region (the “ Forecasted Product ”) equal to the highest of the following:

               (i)  ^** percent ( ^** %) of the quantity of Forecasted Products previously forecasted for the Purchase Month in the Rolling Forecast that was two-prior to the then-current and timely submitted Rolling Forecast (the “ Current Rolling Forecast ”) (i.e., when the Purchase Month was the third (3 ^rd ) month of a preceding Rolling Forecast);

               (ii)  ^** percent ( ^** %) of the quantity of Forecasted Products previously forecasted for the Purchase Month in the Rolling Forecast prior to the Current Rolling Forecast (i.e., when the Purchase Month was the second (2 ^nd ) month of a preceding Rolling Forecast); and

               (iii)  ^** percent ( ^** %) of the quantity of Forecasted Products forecasted for the Purchase Month in the Current Rolling Forecast (i.e., when the Purchase Month is the first (1 ^st ) month of the Current Rolling Forecast).

          (c) TDK will be obligated to supply to Imation in the Purchase Month a quantity of the Forecasted Products equal to the lowest of the following:

               (i)  ^** percent ( ^** %) of the Forecasted Products previously forecasted for the Purchase Month in the Rolling Forecast that was two-prior to the Current Rolling Forecast (i.e., when the Purchase Month was the third (3 ^rd ) month of a preceding Rolling Forecast);

               (ii)  ^** percent ( ^** %) of the quantity of Forecasted Products previously forecasted for the Purchase Month in the Rolling Forecast prior to the Current Rolling Forecast (i.e., when the Purchase Month was the second (2 ^nd ) month of a preceding Rolling Forecast); and

               (iii)  ^** percent ( ^** %) of the quantity of Forecasted Products forecast for the Purchase Month in the Current Rolling Forecast (i.e., when the Purchase Month is the first (1 ^st ) month of the Current Rolling Forecast).

          (d) Imation also will provide in good faith to TDK a non-binding twelve (12)-month forecast for Products to be purchased by Imation and its Subsidiaries as part of Imation’s operational planning process in December of each year.

     4.2 Purchase Orders .

          (a) Imation will, and will cause each of its Subsidiaries to, order Products by submitting purchase orders for each forecasted week of the Purchase Month (each, a “ Purchase Order ”) to TDK no later than two (2) weeks in advance of such forecasted week. Each Purchase Order will specify the type and quantity of Products to be purchased and the requested shipment dates. After receiving a Purchase Order, TDK will issue a confirmation to such Purchase Order (each, a “ Purchase Order Confirmation ”) no later than five (5) days in advance of such forecasted week. Each Purchase Order Confirmation will: (i) confirm the shipment date requested by Imation or its Subsidiary, as the case may be, or an earlier shipment date or, to the extent TDK is unable to ship by the shipment date requested by Imation or its Subsidiary, as the case may be, and subject TDK’s obligations in Section 4.6 , specify the earliest date on which TDK is able to ship; and (ii) confirm the quantities requested by Imation or its Subsidiary, as the case may be, or, if TDK is unable to supply the quantities requested by Imation or its Subsidiary, as the case may be, and subject TDK’s obligations in Section 4.6 , specify the quantities which TDK is able to supply. TDK will use commercially reasonable efforts based on lead time and other factors to ship by the shipment date requested by Imation or its Subsidiary, as the case may be; provided , that if TDK fails to ship any Products in accordance with TDK’s minimum supply commitment as set forth in Section 4. 1(c) and such failure is not due in whole or in part to Imation or its Subsidiaries , including as a consequence of a Supply Constraint Situation pursuant to Section 4.6 , the price for such Products shall be the lower of (i) the price of such Products on the relevant Purchase Order date, and (ii) the price of such Products applicable on the date such Products are actually shipped. In addition, TDK will use commercially reasonable efforts to supply any quantities specified in a Purchase Order that are in excess of TDK’s minimum supply commitment for the relevant week as set forth in Section 4.1(c) . Once issued, a Purchase Order Confirmation will be binding upon both parties except as provided in Section 4.4 .

          (b) Except as otherwise agreed in writing by Imation and TDK, all sales of Products shall be governed by the terms of this Agreement and such terms shall not be varied or supplemented by any terms contained in any Purchase Order or Purchase Order Confirmation or by any course of dealings between TDK and Imation or any of its Subsidiaries with respect to supply and purchase of Products hereunder. Any Purchase Order from any of Imation’s Subsidiaries shall be deemed to be on behalf of Imation and such Purchase Order shall not create any obligation on, or duty of, TDK to such Subsidiary.

     4.3 Late Shipment . TDK will notify Imation or its Subsidiary in writing if TDK has any reason to believe that it will be unable to fully supply the quantities of Products which TDK is obligated to supply in any month. If a shipment is delayed, the parties will discuss in good faith whether expedited shipment is necessary based on Imation’s or its Subsidiaries’ commitments to customers, availability of inventory and other factors. If the parties agree that expedited shipment is necessary and applicable, TDK will be responsible for the incremental cost of such expedited shipment.

     4.4 Rescheduling Orders . Imation and its Subsidiaries will have the right to reschedule the shipment date of any Purchase Order not later than five (5) days prior to the scheduled shipment date; provided that (i) Imation may reschedule the shipment date of any Purchase Order no more than two (2) times, (ii) any re-scheduled shipment date, whether re-scheduled from the original or a re-scheduled shipment date, will occur no later than three (3) months in the aggregate after the original shipment date of such Purchase Order and (iii) the pricing and payment terms, as determined in accordance with Section 5 , as of, and applicable to, the original scheduled shipment date of such Purchase Order will continue to apply notwithstanding any rescheduled shipment date. Any further rescheduling will be subject to the written agreement of the parties.

     4.5 Shipment . Delivery will be CIF (INCOTERMS 2000) to the port specified in the Purchase Order, provided that delivery to any port not listed on Exhibit IV will be subject to written agreement of the parties (and a Purchase Order specifying any such port will not be deemed binding until such agreement is reached). Title will pass from TDK to Imation or its Subsidiary, as the case may be, when risk of loss passes. Any change from the foregoing delivery terms will be subject to the written agreement of the parties.

     4.6 Supply Constraints . “ Supply Constraint Situation ” means a shortage of supply, components, materials or capacity affecting the supply of the Products or a particular Product that (a) is industry- or sector-wide, or (b) is caused by demand from TDK’s internal or external customers (including but not limited to Imation and its Subsidiaries). TDK will give Imation reasonable notice of any Supply Constraint Situation that may affect the supply of Products to Imation or any of its Subsidiaries which TDK has an obligation to supply under Section 4. 1(c) (the “ Supply Constraint Product ”). TDK will use commercially reasonable efforts to give priority to orders for Supply Constraint Products other than those that are LTO Products from Imation and its Subsidiaries over orders from TDK’s other customers, subject to pre-existing commitments by TDK, during a Supply Constraint Situation; provided that Imation and its Subsidiaries, in the aggregate, are the largest customer of TDK by revenue and volume for the Supply Constraint Product in the six (6)-month period preceding TDK’s notice of a potential Supply Constraint Situation. Imation may, upon reasonable advance written notice to TDK, request that TDK allocate a Supply Constraint Product among Imation and its Subsidiaries; provided , that the total allocation for Imation and its Subsidiaries will not be increased or decreased thereby. In the event of a Supply Constraint Situation which is not caused in significant part by demand from Imation and its Subsidiaries, (i) the parties will negotiate in good faith a plan to alleviate the Supply Constraint Situation, including without limitation extending shipment dates, prioritizing certain Purchase Orders for the Supply Constraint Product and similar actions and (ii), if the parties are unable to agree upon such a plan with respect to such Supply Constraint Product, Imation will have a right to the extent TDK is unable to meet its commitments under Section 4. 1(c) to purchase Supply Constraint Products from third parties for the duration of the Supply Constraint Situation and a reasonable transition period thereafter. Notwithstanding anything else in this Agreement or otherwise, the above priority and right to purchase Supply Constraint Products from a third party will be Imation’s sole remedy and TDK’s sole liability for shipment delays and failure to supply any Product during a Supply Constraint Situation and all of TDK’s obligations under this Agreement shall be expressly subject to the terms and conditions set forth in this Section 4.6 .

5. Pricing

     5.1 Product Prices . From the Effective Date through September 30, 2007, TDK will sell the Products to Imation and its Subsidiaries at the prices set forth on Exhibit II (the “ Initial Product Prices ”). Thereafter, the parties will determine the prices of the Products in accordance with the pricing methodology set forth on Exhibit III .

     5.2 Post-Effective Date Adjustment to Initial Product Prices

          (a) Imation will have the right to have its independent accountants inspect, upon reasonable advance notice and during normal business hours for a period of not more than twenty (20) Business Days after the Effective Date, TDK’s accounts and other records solely for the purpose of confirming that the Initial Product Prices were determined materially in accordance with the pricing methodology set forth on Exhibit II . Subject to Imation and its independent accountants’ agreement to abide by reasonable confidentiality covenants, TDK shall make its accounts and other records used in preparing the Initial Product Prices available to Imation’s independent accountants at reasonable times and upon reasonable notice in connection with the resolution by Imation and TDK of any objections to the Initial Product Prices.

          (b) If Imation has any objections to the Initial Product Prices based on the review of its independent accountants, Imation will deliver a written statement describing in reasonable detail such objections to TDK within thirty (30) days of the Effective Date. 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 TDK has received a statement of objections from Imation, they shall submit the issues to the Strategic Relationship Committee for resolution.

          (c) If the Strategic Relationship Committee does not resolve all Imation’s objections to the Initial Product Prices within thirty (30) days of submission of the objections by either party to the Strategic Relationship Committee, then the parties shall submit the unresolved issues to Deloitte Touche Tohmatsu (the “ Independent Accountants ”) for resolution. The Independent Accountants shall be directed to determine whether Imation’s objections would require any change to the Initial Product Prices in accordance with the pricing methodology set forth on Exhibit II . 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. Subject to reasonable confidentiality covenants, TDK shall provide the Independent Accountants access to the books, records, accounts and other records to the extent used in preparing the Initial Product Prices to the extent necessary to resolve any unresolved objections. 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 Final Initial Product Prices (as defined below) 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. If Imation and TDK submit any unresolved objections to the Independent Accountants for resolution as provided in this section, (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) After the date on which the final Initial Product Prices (the “ Final Initial Product Prices ”) shall have been finally determined pursuant to this Section 5.2 :

               (i) Within seven (7) days the parties will revise Exhibit II to reflect the Final Initial Product Prices;

               (ii) If any of the Final Initial Product Prices exceeds the Initial Product Price for the corresponding Product and Imation or its Subsidiaries has paid TDK any amounts based on such Initial Product Price, within thirty (30) days Imation will pay to TDK an amount equal to the difference between (a) the aggregate amount Imation and its Subsidiaries would have paid based on the Final Product Prices and (b) the aggregate amount paid by Imation and its Subsidiaries based on the Initial Product Prices; and

               (iii) If any of the Final Initial Product Prices is less than Initial Product Price for the corresponding Product and Imation or its Subsidiaries has paid TDK any amounts based on such Initial Product Price, within thirty (30) days TDK shall pay to Imation an amount equal to the difference between (a) the aggregate amount paid by Imation and its Subsidiaries based on the Initial Product Prices and (b) the aggregate amount Imation and its Subsidiaries would have paid based on the Final Product Prices.

     5.3 Delivery Costs . All prices will be delivery CIF (INCOTERMS 2000) to the port named by Imation or its Subsidiary, as the case may be, in the applicable Purchase Order forwarded pursuant to Section 4.2 . If Imation or any of its Subsidiaries requests delivery to a port other than those listed on Exhibit IV , then Imation or such Subsidiary will be responsible for any additional export, shipping, insurance and other costs that are in excess of the cost of delivery CIF (INCOTERMS 2000) to the nearest port listed on Exhibit IV ; provided , that Imation may designate two (2) of the five (5) ports listed on Exhibit IV for Mexico, Central America and South America (collectively, “ Latin America ”) as Imation’s primary ports in Latin America (the “ Primary Latin American Ports ”), and only the Primary Latin American Ports will be considered to be ports listed in Exhibit IV for purposes of allocating the costs of delivery under this Section 5.3 . The Primary Latin American Ports will be Buenos Aires, Argentina, and Vitoria, Brazil, on the Effective Date. From time to time, Irene may change the Primary Latin American Ports to different Latin American ports listed on Exhibit IV by written notice to Titan, which notice will be effective as the first day of the month following delivery of the notice. Imation shall, and shall cause its Subsidiaries to, use good faith commercial efforts to request in a Purchase Order that any single shipment to any particular port in Latin America or the United States be in container or greater quantities, to the extent consistent with business circumstances. If, at any given time, the monthly quantities of Products being delivered to Latin America merit consideration of increasing the number of Primary Latin American Ports, Imation and TDK shall consider in good faith a request from Imation to increase the number of Primary Latin American Ports to a maximum of five (5).

     5.4 Resale Prices . Imation and its Subsidiaries will be solely responsible for determining their resale prices for the Products.

     5.5 Payment . TDK will invoice Imation or its Subsidiaries for Products shipped under this Agreement at the time of shipment. Unless otherwise agreed, invoices shall be payable in U.S. Dollars within ninety (90) days after the date of shipment. In addition to and not in lieu or limitation of any other remedies TDK may have, if Imation fails to pay invoices when due under this Agreement TDK may request and the Strategic Relationship Committee will consider in good faith imposing on Imation additional terms, including but not limited to interest for late payments, reduced payment periods for future shipments, suspensions of shipment and other potential remedies.

     5.6 Taxes .

          (a) The Product prices, as determined by the parties in accordance with Exhibit III , are exclusive of, and Imation shall pay, any present or future national, state or local sales, use, excise or similar tax, levy, impost, fee, assessment, deduction, charge or foreign shipping charges, including without limitation forwarding, agent or brokerage fees, consular invoices, document fees and duties imposed on any payment by any taxing or other authority (any of the foregoing charges, a “ Tax ”), except to the extent of TDK’s obligation to pay any Taxes according to delivery CIF (INCOTERMS 2000) to the port named by Imation or its Subsidiary, as the case may be, in the applicable Purchase Order forwarded pursuant to Section 4.2 .

          (b) Any amounts payable under any provision of this Agreement by Imation and its Subsidiaries shall be paid without deduction or withholding for or on account of any Taxes. If Imation or its Subsidiary is required by law to deduct or withhold any Tax from or in respect of any amount payable hereunder to TDK other than Taxes payable by TDK under this Agreement: (i) Imation or such Subsidiary shall pay the relevant taxing or other authority the minimum amount necessary to comply with the applicable law; (ii) Imation or such Subsidiary shall make such payment prior to the date on which interest or penalty is attached thereto; and (iii) the amount payable hereunder shall be increased as may be necessary so that after Imation or such Subsidiary makes all required deductions or withholdings, TDK shall receive an amount equal to the amount it would have received had no such deductions or withholdings been made.

          (c) Neither TDK, on the one hand, nor Imation and its Subsidiaries, on the other hand, shall be responsible for taxes assessed on the other party’s net income.

6. Quality

     6.1 Inspection . TDK will use commercially reasonable efforts to inspect and sort all Products and ship to Imation Products conforming to all applicable warranties. Imation, however, reserves the right to inspect, upon reasonable advance notice and during normal business hours a reasonable number of times per year and subject to reasonable confidentiality and other restrictions, TDK’s facilities for manufacturing the Products.

     6.2 Acceptance . Imation, and any Imation Subsidiary ordering Products hereunder, will have the right, at its expense, to inspect and test units of the Products for a period of forty-five (45) days beginning on delivery by TDK at the CIF point (the “ Acceptance Period ”) and to accept or reject, on a per-unit basis, the Products based on whether the Products comply with the warranties set forth in Section 9 . Imation will be deemed to have accepted the Products unless TDK receives written notice of rejection, specifying the units rejected and the basis therefore, within the Acceptance Period; provided that acceptance by Imation or its Subsidiaries under this Section 6.2 will not constitute a waiver of the warranties and remedies in Section 9 . If Imation rejects non-conforming Products, the parties will determine by mutual agreement whether credit, repair or replacement is the appropriate remedy. Any return of non-conforming goods by Imation as provided in the foregoing will be via TDK’s return materials authorization (“RMA”) process. TDK will bear all costs of transportation and risk of loss for shipment of nonconforming Products to and from Imation or its Subsidiaries and Imation will bear all other costs of transportation and risk of loss for shipment of conforming Products to and from Imation or its Subsidiaries.

     6.3 Quality Management . TDK will participate on a non-binding basis only in Imation’s Total Quality Management programs upon request by Imation. The parties will mutually agree on an initial quality plan implementing such programs (the “ Quality Plan ”). The parties acknowledge and agree that any quality programs and the Quality Pl