Additional Proxy Soliciting Materials (definitive) (defa14a)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 22, 2016
____________________

IMATION CORP.

(Exact name of registrant as specified in its charter)

___________________

Delaware

001-14310

41-1838504

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification Number)

1099 Helmo Ave. N., Suite 250, Oakdale, Minnesota 55128

(Address of principal executive offices, including zip code)

(651) 704-4000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Introductory Note

As previously disclosed, in August 2015, the Board of Directors (the “Board”) of Imation Corp. (the “Company” or “we”) formed a Strategic Alternatives Committee to develop strategic value creation initiatives and make recommendations to the Board regarding the Company’s use of excess capital. As part of this strategic evaluation, the Company has eliminated money losing businesses and harvested capital from non-core assets. As previously disclosed, after a thorough review, the Board concluded that establishing an investment adviser as a wholly-owned subsidiary of the Company could be utilized to create significant long-term stockholder value. We have concluded that the transactions described below, which provide us with the ability to develop a differentiated approach to the investment and asset management businesses by utilizing a quantitative equity strategy, will assist us in this goal and in building a sustainable, profitable business.

Item 1.01 Entry into a Material Definitive Agreement.

Stock Purchase Agreement

On November 22, 2016, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with NXSN Acquisition Corp., a Delaware corporation (“NXSN”) and an affiliate of Spear Point Capital Management LLC (“Spear Point”), providing for, among other things, (i) the contribution by the Company of all of the issued and outstanding common stock of Connected Data, Inc. (“Connected Data”) to Nexsan Corporation (“Nexsan”), and (ii) the subsequent sale by the Company of all of the issued and outstanding common stock of Nexsan to NXSN (the “Stock Sale”). Upon the consummation of Stock Sale (the “SPA Closing”), Nexsan and its subsidiaries, including Connected Data (collectively, the “Subsidiaries”), will be wholly-owned subsidiaries of NXSN.

The Stock Purchase agreement also contemplates the issuance and sale by NXSN of up to $10 million of its Series A Preferred Stock (“Preferred Stock”) to certain investors identified by NXSN, and for an individual designated by NXSN to be appointed to our Board.

Consideration

The consideration to be paid to the Company in respect of the Stock Sale will consist of (i) a senior secured convertible promissory note issued by NXSN in an initial aggregate principal amount of $25 million, subject to certain adjustments (the “Note”), and (ii) shares of common stock, par value $0.01 per share, of NXSN (“NXSN Common Stock”) representing 50% of the issued and outstanding NXSN Common Stock (the “NXSN Shares”). The form of Note is attached as an exhibit to the Stock Purchase Agreement.

The Note will represent a senior secured obligation of NXSN, will mature on the third anniversary of the date of issuance, will rank senior in right of payment to all other indebtedness of NXSN, will be guaranteed by all of Nexsan and certain of its Subsidiaries, and will be secured by a first priority lien on all of the assets of NXSN, including the capital stock of Nexsan and certain of its Subsidiaries. The Note will bear interest at a rate of 5 percent per annum from the date of issuance through the second anniversary thereof, and 8 percent per annum thereafter, and will be payable quarterly from the date of issuance through the first anniversary thereof, and monthly thereafter. The principal amount, and in certain circumstances, the interest rate of the Note will be subject to certain adjustments from time-to-time after the SPA Closing, including as a result of (i) the failure of NXSN to sell $10 million of Preferred Stock during the period beginning date of the Stock Purchase Agreement and ending on the 6 month anniversary of the SPA Closing, (ii) certain surpluses or deficiencies in the net working capital of Nexsan and the Subsidiaries as of the SPA Closing, and (iii) the satisfaction of any indemnity obligation of the Company arising under the Stock Purchase Agreement.

The Note will also permit the Company, at any time following the SPA Closing, to convert up to $10 million of the aggregate principal amount thereof into shares of NXSN Common Stock at a conversion price of $1.25 per share, representing a 25% premium. The Note will include anti-dilution provisions, negative covenants and other protective provisions that are customary for instruments of its type.

The NXSN Shares, along with all other NXSN Common Stock, will be entitled (i) to one vote per share of NXSN Common Stock, (ii) to vote, exclusively and as a separate class, on all matters relating to the size and composition of the board of directors, and the election and removal of directors, of NXSN, (iii) to vote as a separate class, on all amendments to the certificate of incorporation and bylaws of NXSN and (iv) to vote as a single class on all other matters submitted to the stockholders of NXSN, excluding matters solely effecting the Preferred Stock. The remaining 50 percent of the issued and outstanding NXSN Common Stock following the SPA Closing will be owned by Spear Point Private Equity LP (“SPPE”).

The Stock Purchase Agreement provides that, simultaneously with the SPA Closing, the Company will enter into a stockholders agreement with SPPE, and each purchaser of Preferred Stock, providing certain oversight, management and veto rights with respect to NXSN. The Company will have the right to designate, individually, two of the five directors serving on the board NXSN, and to designate jointly, with SPPE, an additional independent director to serve on the board, until the Note is paid in full. The Company will also have a consent right with respect to certain actions proposed to be taken by NXSN, including the issuance of additional amendments to its organizational documents and issuances of additional capital stock.

Representations, Warranties, Covenants and Indemnification

Each of the Company and NXSN have made representations and warranties and have agreed to covenants in the Stock Purchase Agreement that are customary for transactions of this type. Each of the Company and NXSN have agreed to indemnify and hold harmless the other party and its affiliates from and against damages arising out of inaccuracies in or breaches of their respective representations, warranties and covenants in the Stock Purchase Agreement.

Until the earlier of the SPA Closing and the termination of the Stock Purchase Agreement in accordance with its terms, NXSN is required use commercially reasonable best efforts to seek commitments to purchase or to sell up to $10 million of Preferred Stock. If NXSN fails to obtain aggregate commitments to purchase or to sell $10 million of Preferred Stock at the SPA Closing, NXSN will be entitled to sell additional Shares of Preferred Stock up to such amount for a period of 6 months following the SPA Closing. To the extent that NXSN fails to sell $10 million of Preferred Stock prior to the six month anniversary of the SPA Closing, then following the expiration of such 6 month period (i) the aggregate principal amount of the Note will be increased by an amount equal to such shortfall, and (ii) the applicable interest rate on the Note will be increased to 6 percent per annum until the second anniversary of the original issue date, and 9 percent per annum thereafter, and in each case, such increases will be applied retroactively to the original issue date of the Note.

The Preferred Stock will accrue dividends at a rate of 5 percent per annum from the date of issuance through the second anniversary thereof, and 8 percent per annum thereafter, compounded annually. In the event of any dissolution or liquidation of NXSN, or the occurrence of certain deemed liquidation events, each share of Preferred Stock will be entitled (i) first to receive from the assets available for distribution to its stockholders (and prior to any other distribution being made) amount equal to 120% the original issue price per share (subject to certain adjustments), plus accrued and unpaid dividends thereon, and (ii) thereafter the Preferred Stock will participate in all other distributions with the holders of NXSN’s common stock, pro-rata on an as converted basis. Each share of Preferred Stock will be convertible into shares of common stock of NXSN at a rate equal to (y) 120% of the original issue price (subject to certain adjustments), plus accrued and unpaid dividends thereon, divided by (z) the original issue price.

The Preferred Stock will have the right to vote with the NXSN common stock, on an as-converted basis and as a single class, on all matters submitted to the stockholders of the Company, except with respect to the election of directors and similar matters reserved exclusively for the holders of common stock, and will have the right to vote as a single class with respect to certain matters effecting the rights and preferences of the Preferred Stock, including the liquidation or dissolution of the NXSN, the amendment of NXSN’s certificate of incorporation or bylaws, and matters concerning the authorization or issuance of additional shares of capital stock.

The proceeds of the Preferred Stock sales are expected to be used to fund the ongoing operations of the NXSN following the SPA Closing. On the date of the Stock Purchase Agreement, NXSN delivered to the Company documents evidencing its receipt of commitments to purchase $2.5 million of Preferred Stock. For each $2.5 million increment of Commitments delivered by NXSN at the Closing, the Company will issue to NXSN 62,500 warrants (the “Warrants”) entitling NXSN, for a period of 60 days following the Closing, to purchase 62,500 shares of Common Stock at an exercise price equal to the greater of (i) $0.75 per share, and (ii) the 10 trading day average ending on the date immediately preceding the date of the Closing, but in no case greater than $1.20 per share. All shares issued upon exercise of the Warrants will be subject to customary lock-up agreements for a period of 6 months.

Termination

For a period of 45 days following the date of the Stock Purchase Agreement (the “Go-Shop Period”), the Company and its affiliates and representatives may initiate, solicit, receive, evaluate, and engage in discussions and negotiations with third parties regarding competing acquisition proposals. Following expiration of the Go-Shop Period and until the earlier of the SPA Closing and the termination of the Stock Purchase Agreement in accordance with its terms, the Company will be subject to customary restrictions on its ability to initiate, solicit, receive, evaluate, and engage in discussions and negotiations with third parties regarding competing acquisition proposals. However, the Company and its affiliates and representatives may continue to engage in discussions or negotiations regarding a competing acquisition proposal with third parties engaged by the Company during the Go-Shop Period following the expiration thereof, and engage in discussions or negotiations with third parties from whom the Company has received an unsolicited competing acquisition proposal during the “no-shop” period, if the Company’s board of directors determines in good faith (after consultation with its advisors and counsel) that (i) such competing proposal either constitutes, or could reasonably be expected to lead to, a superior acquisition proposal and (ii) the failure to take such action would be inconsistent with the directors’ fiduciary duties. To the extent that the Company notifies NXSN of its receipt of a superior acquisition proposal, the Stock Purchase Agreement provides NXSN with the right to deliver to the Company a binding proposal that is at least as favorable to the Company and its stockholders as the superior acquisition proposal.

Each of the Company and NXSN has the right to terminate the Stock Purchase Agreement under certain circumstances, including (i) by mutual agreement, (ii) the failure of the other party to cure any material representation, warranty or covenant, (iii) if the SPA Closing has not occurred on or before January 31, 2017, by reason of the failure of any condition precedent, (iv) the Company’s board of directors withdraws or materially and adversely modifies its approval or recommendation of the Stock Purchase Agreement or the Transaction, or recommended any competing acquisition proposal, and (v) the Company violates the restrictions applicable during the “no shop” period.

If the Stock Purchase Agreement is terminated by the Company or NXSN, due to a failure to obtain the approval of the Stock Purchase Agreement and the transactions contemplated thereby by the Company’s stockholders (“SPA Stockholder Approval”), then the Company will owe to NXSN a termination fee equal to (i) $375,000 multiplied by (ii) a fraction, the numerator of which is the aggregate Commitments as of the close of business on the fourteenth day of the Go-Shop Period, and the denominator of which is $10,000,000. If the Stock Purchase Agreement is terminated by NXSN, then upon the closing of the transactions contemplated by the superior acquisition proposal the Company will owe to NXSN a termination fee equal to (y) $750,000 multiplied by (z) a fraction, the numerator of which is the aggregate Commitments as of the close of business on the fourteenth day of the Go-Shop Period, and the denominator of which is $10,000,000.

Closing Conditions

The SPA Closing is subject to certain conditions, including, among others, (i) the SPA Stockholder Approval, (ii) the accuracy of the representations and warranties of the parties, and compliance by the parties with their respective obligations under the Stock Purchase Agreement, (iii) the completion of the contribution of Connected Data to Nexsan, (iv) receipt of consents of certain third parties and governmental authorities and (v) the absence of any law or order restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Stock Purchase Agreement.

The Company’s obligation to close the transaction is also contingent upon certain financing conditions being met, including that NXSN must have received commitments to purchase or must have otherwise sold at least $2.5 million of Preferred Stock.

We qualify the foregoing summary of the Stock Purchase Agreement and the Note and the related guaranty and security agreement in their entirety by reference to the actual agreement. A copy of the Stock Purchase Agreement is filed herewith as Exhibit 10.1.

Subscription Agreement and Capacity and Services Agreement

On November 22, 2016, we entered into a Subscription Agreement (the “Subscription Agreement”) with Clinton Group, Inc. (“Clinton”) pursuant to which we have agreed, subject to the satisfaction of certain conditions including the approval of our stockholders, to issue 12,500,000 shares of our common stock, par value $0.01 per share (“Common Stock”), plus an additional 2,500,000 shares of Common Stock at a subsequent closing date, if any, subject to the conditions described below, to Clinton in exchange for Clinton’s agreement to provide certain investment capacity and services to North Stars Technologies LLC (“North Stars”), our subsidiary and an investment adviser, in accordance with the terms and conditions of the Capacity and Services Agreement described below. We intend to change the North Stars name in connection with the closing of the transactions contemplated by the Subscription Agreement. Clinton is a diversified asset management firm that invests globally across multiple alternative investment strategies, an investment adviser registered with the U.S. Securities and Exchange Commission (the “SEC”) and a stockholder of the Company. Joseph A. De Perio, the Non-Executive Chairman of our Board, is a Senior Portfolio Manager at Clinton.

On the initial closing date of the transactions contemplated by the Subscription Agreement (the “Initial Closing Date”), we will enter into a Capacity and Services Agreement (the “Capacity and Services Agreement”) with Clinton and North Stars. The Capacity and Services Agreement provides that, for a period of five years from the Initial Closing Date (the “Initial Term”), North Stars may place under Clinton’s management cash, to be held in a private investment fund or similar investment vehicle sponsored by North Stars or a managed account established by North Stars, to be managed by Clinton on a discretionary basis, subject to North Stars’s supervision, using Clinton’s quantitative equity strategy, split evenly between long and short, with a leverage ratio not to exceed five times on either side of such split (the “Investment Management Services”). These characteristics of the Investment Management Services may be altered by agreement between Clinton and North Stars, subject to the approval of our Board.

Under the terms of the Capacity and Services Agreement, North Stars and its third-party investors may invest an amount with Clinton not to exceed $1 billion (the “Capacity”), which aggregate amount includes our investment in Clinton Lighthouse Equity Strategies Fund (Offshore), Ltd. (“Clinton Lighthouse”), subject to certain adjustments. As of November 22, 2016, we made $31.5 million in net capital contributions to Clinton Lighthouse, which is net of our $3.5 million redemption from Clinton Lighthouse subsequent to our initial investment. Under the Capacity and Services Agreement, our investment in Clinton Lighthouse will not incur any fees following the Initial Closing Date. Our investment in Clinton Lighthouse may be redeemed by the Company in accordance with Clinton Lighthouse’s fund documents which provide for daily liquidity, subject to certain ordinary course restrictions. The amount of utilized Capacity will be based on the fair value of the amount invested, as calculated by a nationally-recognized third-party fund administrator and based on Clinton’s valuation policies and U.S. generally accepted accounting principles.

We have agreed to issue to Clinton, as consideration for the Capacity and Services (as defined below), 12,500,000 shares of Common Stock (the “Initial Capacity Shares”) on the Initial Closing Date, as adjusted for any stock splits, stock dividends, stock combinations, reclassifications or similar transactions, pursuant to, and subject to the terms and conditions of the Subscription Agreement. If desired and approved by our Board, we may increase the Capacity by any amount up to an additional $500 million for a maximum Capacity of up to $1.5 billion (the “Capacity Expansion”). In the event we increase the Capacity by any amount beyond $1 billion, we have agreed to issue an additional 2,500,000 shares of Common Stock to Clinton (the “Subsequent Capacity Shares” and together with the Initial Capacity Shares, the “Capacity Shares”), as adjusted for any stock splits, stock dividends, stock combinations, reclassifications or similar transactions, pursuant to, and subject to the terms and conditions of the Subscription Agreement, which would occur on a subsequent closing date (the “Subsequent Closing”).

Clinton has agreed to a three-year lock-up with respect to the Initial Capacity Shares and Subsequent Capacity Shares, if any, beginning on each of the Initial Closing Date and the date of the Subsequent Closing (the “Subsequent Closing Date”), respectively.

On the Initial Closing Date, we will enter into a Registration Rights Agreement (the “Registration Rights Agreement”) with Clinton relating to the registration of the resale of the Capacity Shares, which is described below.

In considering the transactions contemplated by the Subscription Agreement and the Capacity and Services Agreement, our Board formed a special committee (the “Special Committee”) of independent members of the Board, consisting of directors who are not directly or indirectly affiliated with Clinton and who are not members of our management. The members of the Special Committee are Alex Spiro, who serves as its Chair, Tracy McKibben, Donald H. Putnam and Robert Searing. The Special Committee was formed to (i) review and evaluate the terms and conditions and determine the advisability of the transactions contemplated by the Subscription Agreement, the Capacity and Services Agreement and the Registration Rights Agreement (collectively, the “Transaction Documents”), (ii) consider whether there were alternatives to the transactions contemplated by the Transaction Documents that would be in the best interests of the Company (each an “alternative transaction”), (iii) review and evaluate the terms and conditions and determine the advisability of any alternative transaction, (iv) if the Special Committee deemed it appropriate or advisable, negotiate the price, structure, form, terms and conditions of the transactions contemplated by the Transaction Documents or any alternative transaction, as well as any related agreements, (v) after obtaining full knowledge of the material facts, determine whether any such transaction is fair, just and reasonable to, and in the best interests of the Company; and (vi) if the Special Committee deemed it appropriate or advisable, recommend to the entire Board what action, if any, should be taken by the Company with respect to the transactions contemplated by the Transaction Documents or any alternative transaction. The Special Committee engaged separate legal counsel and Keefe, Bruyette & Woods, Inc. and Cypress Partners LLC to serve as its financial advisors. The Special Committee determined that the transactions contemplated by the Transaction Documents are fair, just and reasonable to, and in the best interests of, the Company and recommended to the Board that it approve the Company’s entry into the Transaction Documents.

Our Board approved the transactions contemplated by the Transaction Documents, subject to applicable stockholder approval. In making such approval, our Board determined that the transactions contemplated by the Transaction Documents will not be deemed to result in Clinton becoming an “Acquiring Person” or give rise to a “Triggering Event” or a “Distribution Date,” as such terms are defined in the 382 Rights Agreement, dated as of August 7, 2016 (the “382 Rights Agreement”), by and between the Company and Wells Fargo Bank, N.A. In reaching such determination, our Board determined that the transactions contemplated by the Transaction Documents will not, directly or indirectly, jeopardize or endanger the availability to the Company of the “Tax Benefits,” as such term is defined in the 382 Rights Agreement. We qualify the foregoing summary of the 382 Rights Agreement in its entirety by reference to the actual 382 Rights Agreement, a copy of which is filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 11, 2016 and is incorporated herein by reference.

The closing of the transactions contemplated by the Subscription Agreement on the Initial Closing Date (the “Initial Closing”) is subject to certain conditions described in the Subscription Agreement. At the Initial Closing, the Initial Capacity Shares will be issued and the Capacity and Services Agreement and Registration Rights Agreement described below will be executed. The Subsequent Closing, if any, will be subject to, among other things, there having been no material adverse changes from the Initial Closing. These conditions include the following:

Stockholder Approval. The Common Stock is listed on the New York Stock Exchange (the “NYSE”) and is subject to the rules set forth in the NYSE Listed Company Manual (the “NYSE Rules”). Section 312 of the NYSE Rules (“NYSE Rule 312”) requires stockholder approval prior to the issuance of Common Stock: (1) to a “related party” or any company or entity in which a “related party” has a substantial direct or indirect interest (as defined in NYSE Rule 312) if the number of shares of Common Stock to be issued exceeds either 1% of the number of shares of Common Stock or 1% of the voting power outstanding before the issuance; (2) if the number of shares of Common Stock to be issued equals or exceeds 20% of the number of shares of Common Stock outstanding prior to the issuance or if the number of votes entitled to be cast by such shares of Common Stock equals or exceeds 20% of the voting power outstanding prior to the issuance; or (3) if the issuance will result in a change of control. Because the issuance of the Capacity Shares will satisfy each of the foregoing criteria, the Company must obtain approval of its stockholders to issue the Capacity Shares. As a result, the Initial Closing is subject to the condition that the Company obtain stockholder approval of the issuance of the Capacity Shares. The Company intends to hold a special meeting of the stockholders to seek such approval.

Clinton Lighthouse. The Initial Closing is subject to the condition that the Company pay all fees, expenses and other amounts owned pursuant to the letter agreement, dated as of April 29, 2016, by and between the Company and Clinton regarding Clinton Lighthouse. As of November 22, 2016, the Company owes $499,042 pursuant to the letter agreement.

Under the Subscription Agreement, in the event we are unable to obtain the requisite stockholder approval of the issuance of the Capacity Shares to Clinton by February 15, 2017, we have agreed to pay Clinton a $500,000 break-up fee. In addition, the Subscription Agreement provides that we must pay Clinton a $1,500,000 break-up fee if we elect to not consummate the Initial Closing in the event we enter into an agreement for the provision by a third-party registered investment adviser to North Stars of services that are comparable to the Services (as defined below) which we and our Board determine to be more favorable to North Stars than the terms of the Capacity and Services Agreement.

The Subscription Agreement contains customary representations and warranties of the Company and Clinton.

Under the Subscription Agreement, we have agreed to indemnify Clinton and any holder of Capacity Shares and certain of their respective related parties for any losses relating to (i) our misrepresentation or breach of any representation or warranty in the Subscription Agreement or Registration Rights Agreement, (ii) our breach of any of our covenants contained in the Subscription Agreement or Registration Rights Agreement or (iii) any third-party claim arising out of resulting from the execution, delivery, performance or enforcement of the Subscription Agreement or Registration Rights Agreement. With respect to the losses described in (iii), we will not be obligated to indemnify such parties for the first $400,000 incurred. We have also agreed that the aggregate amount of our indemnity will be capped at a dollar amount equal to the number of Initial Capacity Shares multiplied by the closing price of our Common Stock on the Initial Closing Date plus, to the extent liabilities subject to our indemnification obligation were incurred on or prior to the Subsequent Closing Date, the number of Subsequent Capacity Shares multiplied by the closing price of our Common Stock on the Subsequent Closing Date.

If approved by our Board, we may extend the Initial Term under the Capacity and Services Agreement for two subsequent one-year periods (each, a “Capacity Extension” and, collectively with the Initial Term, the “Term”). In such event, we have agreed to pay Clinton $1.75 million for the first Capacity Extension (or $2.5 million if we have previously opted for the Capacity Expansion) and an additional $1.75 million for the second Capacity Extension (or $2.5 million if we have previously opted for the Capacity Expansion), or a maximum of $5 million in the aggregate.

Clinton has agreed, during the Term and for a subsequent three-month transition period, to consult with North Stars regarding the responsibilities North Stars will retain with respect to the Capacity (the “Capacity-Related Consultation Services”), which are operations and management, account reconciliation, profit and loss reporting, position monitoring, cash management, collateral management, liaising with the administrator, counsel and auditor to be engaged by North Stars, fund formation documentation, regulatory filings, information technology and investor relations. Clinton has also agreed to consult with North Stars regarding North Stars’s management and compliance functions for up to one year commencing no later than 90 days from the Initial Closing Date (the “Launch-Related Services” and, together with the Investment Management Services and the Capacity-Related Consultation Services, the “Services”). Clinton will be responsible for its own operating and overhead expenses and any expenses attributable to the Capacity and Services (other than reasonable legal, marketing, administrative, accounting and research costs and expenses, excluding data, which costs will be reimbursed by North Stars), attributable to Clinton’s performance of the Services and provision of the Capacity.

Pursuant to the terms of the Capacity and Services Agreement, North Stars’s initial board of directors will be comprised of Joseph A. De Perio, the Non-Executive Chairman of our Board and a Senior Portfolio Manager at Clinton, Daniel Strauss, a Portfolio Manager at Clinton, Donald H. Putnam, a member of our Board, Alex Spiro, a member of our Board and Chair of its Special Committee, and one additional or substitute director agreed upon by the Company, North Stars and Clinton.

Clinton has agreed that during the Term it will not provide opportunities or services substantially similar to the Capacity-Related Consultation Services to any other publicly-traded or quoted entity or their affiliates. Clinton has agreed that it will not knowingly, without North Stars’s consent, accept any investments in any investment vehicle or account managed by Clinton or its affiliates directly from North Stars’s third-party clients with whom Clinton does not have a pre-existing relationship.

We may terminate the Capacity and Services Agreement if (i) Clinton’s registration as an investment adviser with the SEC is revoked, suspended, terminated, not renewed, limited or qualified, (ii) Clinton sells or transfers its advisory business or all or a substantial portion of its assets, trading systems or methods or goodwill to a third-party that is not an affiliate of Clinton, (iii) Clinton fails to perform its obligations under the Transaction Documents, (iv) Clinton engages in fraud or embezzlement in connection with the Services, (v) Clinton acts with gross negligence or willful misconduct in connection with the Services or (vi) Clinton enters bankruptcy or similar proceedings. If we terminate the Capacity and Services Agreement due to either of the reasons specified in clauses (i) or (vi) of the preceding sentence, Clinton will be obligated to pay us $2 million.

Clinton may terminate the Capacity and Service Agreement if (i) North Stars fails to comply with law or we fail to inform Clinton that the Company or North Stars has become subject to certain types of legal proceedings, (ii) if, at such time when North Stars is required to be registered as an investment adviser, North Stars is not so registered or, if after and during such time when North Stars is required to be registered as an investment adviser, North Stars’s registration as an investment adviser with the applicable state securities authority or the SEC is revoked, suspended, terminated, not renewed, limited or qualified, (iii) North Stars sells or transfers its advisory business or all or a substantial portion of its assets, trading systems or methods or goodwill to a third-party that is not an affiliate of the Company, (iv) the Company or North Stars fails to perform its obligations under the Transaction Documents; or (v) the Company or North Stars enters bankruptcy or similar proceedings.

The Capacity and Services Agreement contains customary representations and warranties of the Company, North Stars and Clinton.

Pursuant to the Capacity and Services Agreement, the Company, North Stars and Clinton will agree to certain mutual confidentiality covenants for a period lasting until two years after the termination of the Capacity and Services Agreement.

Under the Capacity and Services Agreement, we will agree that Clinton and certain parties related to Clinton will not be liable for damages to the Company or our stockholders for any action taken or the failure to act on behalf of the Company within the scope of the Services unless the action or omission was performed or omitted fraudulently or constituted willful misconduct or gross negligence. In addition, Clinton will agree that the Company, North Stars and certain parties related to the Company will not be liable for damages to Clinton or its affiliates for any action taken or the failure to act pursuant to the Capacity and Services Agreement unless the action or omission was performed or omitted fraudulently or constituted willful misconduct or gross negligence.

Under the Capacity and Services Agreement, we will agree to indemnify Clinton and certain parties related to Clinton for any losses arising out of the Capacity and Services, provided that the losses did not result from the fraud, gross negligence or willful misconduct of Clinton or such related parties. Clinton will agree to indemnify the Company, North Stars and certain parties related to the Company from any losses arising out of the fraud, gross negligence or willful misconduct of Clinton or its related parties.

We qualify the foregoing summaries of the Subscription Agreement and the Capacity and Services Agreement in their entirety by reference to the actual agreements. A copy of the Subscription Agreement is filed herewith as Exhibit 10.2, and the form of the Capacity and Services Agreement is attached as an exhibit to the Subscription Agreement.

Registration Rights Agreement

We will agree, subject to the terms and conditions of the Registration Rights Agreement, to file a resale shelf registration statement covering the Initial Capacity Shares (the “Initial Registration Statement”) by the date which is 150 calendar days immediately preceding the third anniversary of the Initial Closing Date and will agree to file a resale shelf registration statement covering the Subsequent Capacity Shares, if any (the “Subsequent Registration Statement”), by the date which is 150 calendar days immediately preceding the third anniversary of the Subsequent Closing Date. The Company must use its reasonable best efforts to have the Initial Registration Statement declared effective by the SEC by no later than the earlier of the third anniversary of the Initial Closing Date and the fifth business day after the date the Company is notified by the SEC that the Initial Registration Statement will not be reviewed or will not be subject to further review. If applicable, the Company must use its reasonable best efforts to have the Subsequent Registration Statement declared effective by the SEC by no later than the earlier of the third anniversary of the Subsequent Closing Date and the fifth business day after the date the Company is notified by the SEC that the Subsequent Registration Statement will not be reviewed or will not be subject to further review.

We qualify the foregoing summary of the Registration Rights Agreement in its entirety by reference to the actual agreement. A copy of the form of Registration Rights Agreement is attached as an exhibit to the Subscription Agreement, which is filed herewith as Exhibit 10.2.

Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosure set forth in Item 1.01 of this Current Report on Form 8-K, which is incorporated herein by reference. The Capacity Shares issuable in connection with the Subscription Agreement, Warrants issuable in connection with the Stock Purchase Agreement and the Common Stock underlying the Warrants will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the registration requirements as provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with our entry into the Stock Purchase Agreement, Robert B. Fernander, our Interim Chief Executive Officer, will continue his employment with the Company on a month-to-month basis until the SPA Closing, at which point he will also take on the role of serving as Nexsan’s Interim Chief Executive Officer.

Second Amendment of Employment Agreement

On November 22, 2016, the Company and Mr. Fernander entered into a Second Amendment (the “Employment Agreement Amendment”) of the Employment Agreement, dated October 14, 2015, as amended by the Renewal, Extension and Amendment, dated October 14, 2016, by and between Mr. Fernander and the Company (the “Employment Agreement”).

The Employment Agreement Amendment provides for Mr. Fernander’s continued employment with the Company on a month-to-month basis. Mr. Fernander will continue to receive a base salary at an annual rate of $600,000 from the Company, but upon the SPA Closing his base salary will be lowered to an annual rate of $50,000. If Mr. Fernander’s employment with the Company terminates for any reason on or after the SPA Closing, Mr. Fernander will resign as a member of our Board.

The Employment Agreement Amendment provides that Mr. Fernander will be eligible to receive a fee if he and Geoff Barrall, our Chief Technology Officer, directly secure an offer for the purchase of Nexsan pursuant to the Go-Shop Period described above, other than by any party that has executed a letter of intent with the Company with respect to such purchase prior to the date of the Employment Agreement Amendment, that is accepted and consummated during the period between the date of execution of the Stock Purchase Agreement and the SPA Closing. Such fee will be equal to 3% of the market value of Nexsan after taking into account both holders of debt and equity and will be divided evenly between Messrs. Fernander and Barrall.

The foregoing description of the Employment Agreement Amendment is qualified in its entirety by reference to the text of the Employment Agreement Amendment, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference. Subject to the terms provided by the Employment Agreement Amendment, the employment of Mr. Fernander will continue to be governed by the Employment Agreement, which is filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 20, 2015 and incorporated herein by reference.

Nexsan Employment Agreement

On November 22, 2016, the Company, Mr. Fernander and Nexsan entered into an Employment Agreement (the “Nexsan Employment Agreement”) appointing Mr. Fernander as the Interim Chief Executive Officer of Nexsan, subject to and commencing on the SPA Closing.

The Nexsan Employment Agreement has a term of six months from the SPA Closing and provides that Mr. Fernander will receive an initial annual base salary of $600,000, one-third of which is payable by the Company and two-thirds of which is payable by Nexsan.

The Nexsan Employment Agreement provides that Mr. Fernander will be eligible to receive a fee, subject to certain conditions relating to Mr. Fernander’s continued employment with Nexsan, upon the occurrence of certain change in control or liquidity events at Nexsan, such as a sale of Nexsan or the registered public offering of its equity securities. Such fee will be equal to 3% of the market value of Nexsan, after taking into account both holders of debt and equity, and will be payable in equal halves by Nexsan and the Company.

The Nexsan Employment Agreement also provides that if Mr. Fernander’s employment with Nexsan is terminated by Nexsan without “cause,” if Mr. Fernander resigns for “good reason” (as such terms are defined in the Nexsan Employment Agreement) or upon the expiration of the term thereof, Mr. Fernander will be entitled to receive a lump sum severance payment of $450,000, payable in equal halves by Nexsan and the Company (or solely by the Company in the event of a termination due to the expiration of the term). Upon the SPA Closing, Nexsan and the Company will each deposit the gross amounts of their respective portions of the severance payment in escrow.

The foregoing description of the Nexsan Employment Agreement is qualified in its entirety by reference to the text of the Nexsan Employment Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

Attached as Exhibit 99.1 hereto is a presentation that representatives of the Company plan to use with investors relating to the transactions described in this Current Report on Form 8-K.

Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

On November 14, 2016, our Board authorized a share repurchase program under which we may repurchase up to 5 million of our outstanding shares of Common Stock. Under the share repurchase program, we may repurchase shares from time to time using a variety of methods, which may include open market transactions and privately negotiated transactions. This authorization replaces the Board’s previous share repurchase authorization from May 2, 2012.

To the extent we repurchase shares, and the timing and manner of such repurchases, will depend on a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by our Audit and Finance Committee. We are not obligated to repurchase any specific number of shares under the repurchase program, and repurchases may be suspended or discontinued at any time without prior notice. We expect to finance the repurchases with existing cash balances.

Additional Information About the Transaction and Where to Find It

In connection with the proposed issuance of Capacity Shares and the transactions contemplated by the Stock Purchase Agreement (the “SPA Transaction”), the Company intends to file with the SEC a preliminary proxy statement. When completed, the Company will mail a definitive proxy statement and other relevant documents to its stockholders in connection with its solicitation of proxies for the special meeting of stockholders to be held to approve the proposed issuance of Capacity Shares and the SPA Transaction. This Current Report on Form 8-K does not contain all the information that should be considered concerning the proposed issuance of Capacity Shares and the SPA Transaction. It is not intended to provide the basis for any investment decision or any other decision in respect to the proposed issuance of Capacity Shares or the SPA Transaction. The Company’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement, the amendments thereto, and definitive proxy statement in connection with the Company’s solicitation of proxies for the special meeting to be held to approve the proposed issuance of Capacity Shares and the SPA Transaction, as these materials will contain important information about the Company, the proposed issuance of Capacity Shares and the SPA Transaction. The definitive proxy statement will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed issuance of Capacity Shares and the SPA Transaction. Stockholders will also be able to obtain copies of the proxy statement and other documents filed with the SEC that will be incorporated by reference in the proxy statement, without charge, once available, at the SEC’s web site at (www.sec.gov), or by directing a request to: Imation Corp., 1099 Helmo Ave. N., Suite 250, Oakdale, Minnesota 55128, Attn: Corporate Secretary, (651) 704-4000.

Participants in Solicitation

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed issuance of Capacity Shares and the SPA Transaction. Information regarding the special interests of these directors and executive officers in the proposed issuance of Capacity Shares will be included in the proxy statement referred to above. Additional information regarding the directors and executive officers of the Company is also included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, which is available free of charge at the SEC web site (www.sec.gov) and at the address described above and will also be included in the definitive proxy statement for the proposed issuance of Capacity Shares and the SPA Transaction when available.

Forward Looking Statements

This Current Report on Form 8-K may include “forward looking statements” within the meaning of the “safe harbor” provisions of the United Stated Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “seeks” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements with respect to the transactions contemplated by the Transaction Documents, the SPA Transaction and potential repurchases of our Common Stock are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. These factors include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Subscription Agreement or Stock Purchase Agreement, (2) the outcome of any legal proceedings that may be instituted against the Company or others following announcement of the transactions contemplated by the Transaction Documents or Stock Purchase Agreement; (3) the inability to complete the transactions contemplated by the Transaction Documents or Stock Purchase Agreement due to the failure to obtain approval of the stockholders of the Company or other conditions to closing in the Subscription Agreement or Stock Purchase Agreement, (4) delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulatory reviews required to complete the transactions contemplated by the Transaction Documents or Stock Purchase Agreement; (5) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the transactions described herein; (6) the ability to recognize the anticipated benefits of the proposed transactions; (7) costs related to the proposed transactions; (8) changes in applicable laws or regulations; (9) the possibility that Clinton may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties indicated from time to time in the proxy statement relating to the proposed issuance of Capacity Shares and SPA Transaction, including those under “Risk Factors” therein, and other filings with the SEC by the Company. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and the Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

Disclaimer

This communication shall not constitute an offer to sell or the solicitation of an offer to buy the Capacity Shares or any other security. The Capacity Shares have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

We incorporate by reference herein the Exhibit Index following the signature page to this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	IMATION CORP.

Dated: November 22, 2016	By:	/s/ Danny Zheng
	Name:	Danny Zheng
	Title:	Chief Financial Officer

Exhibit Index

Exhibit No.		Description
10.1*		Stock Purchase Agreement, dated as of November 22, 2016, by and between the Company and NXSN Acquisition Corp.
10.2		Subscription Agreement, dated as of November 22, 2016, by and between the Company and Clinton Group, Inc.
10.3		Second Amendment to Employment Agreement, dated as of November 22, 2016, by and between the Company and Robert B. Fernander.
10.4		Employment Agreement, dated as of November 22, 2016, by and among Nexsan Corporation, Robert B. Fernander and the Company.
99.1		Investor Presentation.

* The schedules and certain exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish suplementally copies of such omitted schedules and exhibits to the SEC upon request.

Exhibit 10.1

STOCK PURCHASE AGREEMENT

Between

IMATION CORP. AND NXSN ACQUISITION CORP.

Dated as of November 22, 2016

TABLE OF CONTENTS

1.	Definitions	1

2.	Purchase and Sale of Company Shares	9

3.	Representations and Warranties of the Purchaser	11

4.	Representations and Warranties of the Seller	14

5.	Pre-Closing Covenants	26

6.	Post-Closing Covenants	32

7.	Conditions to Obligation to Close	36

8.	Remedies for Breaches of This Agreement	38

9.	Tax Matters	42

10.	Termination	46

11.	Miscellaneous	47

LIST OF EXHIBITS, ANNEXES AND SCHEDULES

Exhibit A – Form of Purchaser Note

Exhibit B – Form of Security Agreement

Exhibit C – Form of Equity Commitment Letter

Exhibit D – Form of Contribution Agreement

Exhibit E – Form of Stockholders Agreement

Exhibit F – Form of Preferred Stock Purchase Agreement

Exhibit G – Form of A&R Charter

General Schedules

Purchaser Schedules

Seller Schedules

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) entered into as of November 22, 2016, by and between Imation Corp., a Delaware corporation (the “Seller”) and NXSN Acquisition Corp., a Delaware corporation (the “Purchaser”). The Purchaser and the Seller are each referred to as a “Party” and collectively as the “Parties.”

WHEREAS, the Seller owns 1,000 shares of Common Stock (collectively, “Company Shares”) of Nexsan Corporation, a Delaware corporation (the “Company”), which Company Shares represent all of the issued and outstanding capital stock of the Company;

WHEREAS, the Seller owns all of the issued and outstanding capital stock of Connected Data; and

WHEREAS, the Seller wishes to contribute to the Company all of the issued and outstanding capital stock of Connected Data, and thereinafter, sell to the Purchaser the Company Shares on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions.

“A&R Charter” means the amended and restated certificate of incorporation of the Purchaser in the form of Exhibit G hereto.

“Accounting Firm” means any nationally recognized accounting firm mutually agreeable to the Parties.

“Accredited Investor” has the meaning set forth in Rule 501(a) of Regulation D promulgated under the Securities Act.

“Adverse Consequences” means all Proceedings, Orders, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and attorneys’ fees and expenses, other than any special, consequential, incidental, exemplary, punitive or indirect damages, including lost profits or revenues, diminution in value or damages based on any type of multiple.

“Affiliate” means, with respect to any Person, any other Person who directly or indirectly (through one or more intermediaries), controls, is controlled by or under common control with such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and "under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. Without limiting the foregoing, (A) prior to the Closing, the Company and each Subsidiary of the Company shall be Affiliates of Seller, and (B) from and after the Closing, the Company and each Subsidiary of the Company shall be Affiliates of the Purchaser, and (C) the Seller and the Purchaser shall not be Affiliates.

“Affiliated Group” means any affiliated group within the meaning of Code §1504(a) or any similar group defined under a similar provision of Law.

“Applicable Rate” means the prime rate of interest publicly announced from time to time by Citibank, N.A. plus 3% per annum.

“Bylaws” has the meaning set forth in §5(n).

“Closing” has the meaning set forth in §2(c) below.

“Closing Date” has the meaning set forth in §2(c) below.

“Closing Statement” has the meaning set forth in §2(f)(i) below.

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of any similar state Law.

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

“Common Stock” means the common stock of the Company.

“Company” has the meaning set forth in the recitals of this Agreement.

“Company Acquisition Agreement” has the meaning set forth in §5(h) below.

“Company Acquisition Proposal” has the meaning set forth in §5(g)(iii) below.

“Company Agreements” means any written or oral contract, instrument, agreement, lease, commitment, obligation, plan, or arrangement (or group of related agreements) to which the Company or any of its Subsidiaries is a party or by which it or its property may be bound, including all Leases, and all licensing, reseller, development, marketing, support and alliance agreements, and any agreements which relate primarily to the business, assets, liabilities, Intellectual Property, financial condition, operations or prospects of the Company or such Subsidiary.

“Company Shares” has the meaning set forth in the recitals of this Agreement.

“Company Superior Proposal” has the meaning set forth in §5(g) below.

“Company Working Capital” means, as of the Closing Date,

(i) the sum of the Company’s and its Subsidiaries’ (including Connected Data’s) (A) accounts receivable (net of allowances for doubtful accounts), (B) prepaid expenses (but not including any prepaid amounts due to Seller or any Affiliate of the Seller), (C) Inventory (net of allowances) and (D) other current assets (but not including (1) cash, cash equivalents, and marketable securities, and (2) any amounts due from Seller or any Affiliate of the Seller), minus

(ii) the sum of the Company’s and its Subsidiaries’ (including Connected Data’s) accounts payable, accrued liabilities, deferred revenue (current portion) and other current liabilities (but not including any payables, liabilities or other amounts due or owed to the Seller or any Affiliate of the Seller),

calculated in accordance with GAAP and any accounting methods, practices, principles, policies, classifications, judgments and valuation and estimation methodologies set forth in §1 of the General Schedules.

“Competitive Business” has the meaning set forth in §6(g) below.

“Confidential Information” means, with respect to any Party, any information of or concerning the businesses and affairs of such Party and its Affiliates, other than information that (a) is or becomes generally available to and known by the public (other than as a result of any breach of this Agreement), or (b) is lawfully acquired by another Party or its Affiliates or Representatives from a source that was not subject to a confidentiality obligation (whether by contract, as fiduciary or otherwise) with respect to such information. For the avoidance of doubt, all information of or concerning the businesses and affairs of Company and its Subsidiaries shall be Confidential Information of the Purchaser from and after the Closing subject to §11(q).

“Connected Data” means Connected Data, Inc., a California corporation.

“Contribution Agreement” means the agreement between the Company and the Seller dated as of the date of the Closing, in the form of Exhibit C.

“DGCL” means the Delaware General Corporation Law.

“Employee Benefit Plan” means any “employee benefit plan” (as such term is defined in ERISA §3(3)) and any other employee benefit plan, program or arrangement of any kind.

“Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2).

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).

“Employment Agreements” has the meaning set forth in §2(d)(i)(B).

“Environmental, Health, and Safety Requirements” shall mean all federal, state, local and foreign statutes, regulations, ordinances and other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or by-products, asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as now or hereafter in effect.

“Equity Commitment Letters” means those commitment letters in the form of Exhibit B hereto pursuant to which, subject to the terms and conditions thereof, the Equity Investors commit to provide equity financing to the Purchaser, with such commitments being satisfied by the purchase of Series A Preferred Stock under the Preferred Stock Purchase Agreement and any confirmations, acknowledgments, guarantees and other ancillary documents relating thereto.

“Equity Investor” means each Person (other than the Purchaser) who executes an Equity Commitment Letter committing to the purchase of Series A Preferred Stock pursuant to the Preferred Stock Purchase Agreement, or who enters into the Preferred Stock Purchase Agreement committing to purchase Series A Preferred Stock.

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

“ERISA Affiliate” means each entity which is treated as a single employer with the Company for purposes of Code §414.

“Fiduciary” has the meaning set forth in ERISA §3(21).

“Final Working Capital” means the Company Working Capital (a) as set forth in the Closing Statement delivered by the Purchaser and accepted by the Seller; (b) as set forth in the Closing Statement delivered by the Purchaser, if Seller fails to timely deliver Notice of Dispute in accordance with §2(f)(ii); (c) as finally determined by the Accounting Firm pursuant to §2(f)(iii); or (d) as modified by any agreement among the Purchaser and the Seller.

“Financial Statement” has the meaning set forth in §4(h) below.

“Firm” means Winston & Strawn LLP.

“Fraud” means any intentional act or omission knowingly committed by a Party with the intent to deceive and mislead another Person.

“Funded Equity Commitments” means the aggregate amount, determined as of any given time, of (i) equity commitments represented by duly executed Equity Commitment Letters that have been delivered to Seller as of such time (not including the amount of any such commitments that have been satisfied by the purchase of Series A Preferred Stock under the Preferred Stock Purchase Agreement), and (ii) amounts that have been received by the Purchaser (and that would otherwise be immediately available for investment in the Company and its Subsidiaries) as of such time from the issuance and sale of shares of Series A Preferred Stock pursuant to the Preferred Stock Purchase Agreement.

“GAAP” means United States generally accepted accounting principles as in effect from time to time.

“General Schedules” means the disclosure schedules jointly prepared and delivered by the Seller and the Purchaser concurrently with the execution and delivery of this Agreement, which disclosure schedules are arranged in sections, subsections and paragraphs corresponding to the numbered and lettered sections, subsections and paragraphs in this Agreement, other than those in §3 and §4.

“Go-Shop Period” has the meaning set forth in §5(g)(ii) below.

“Governmental Entity” means any transnational, domestic or foreign, federal, state or local governmental authority, department, court, agency or official, including any political subdivision thereof (including the IRS).

“Income Tax” means any Tax that is based on, or computed with respect to, net income or earnings (and any franchise Tax or Tax on doing business imposed in lieu thereof) and all related interest and penalties.

“Income Tax Return” means any Tax Return relating, or with respect, to Income Taxes.

“Indemnified Party” means any Purchaser Party, Seller Party or other Person (as applicable) entitled to indemnification pursuant to §8 of this Agreement.

“Indemnifying Party” means any of the Purchaser, the Seller or other Person (as applicable) who has an obligation to indemnify and hold harmless any Indemnified Party pursuant to §8 of this Agreement.

“Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations in part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including databases and related documentation), (g) all other similar intellectual property rights, and (h) all copies and tangible embodiments thereof (in whatever form or medium).

“Interest Rate” shall have the meaning set forth in the Purchaser Note.

“Knowledge” means actual knowledge of Robert Fernander, Danny Zheng and Geoff Barrall.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and principles of common law, including the interpretation or administration thereof by any Governmental Entity charged with the enforcement, interpretation or administration thereof, in each case having the force of law.

“Leased Real Property” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures or other interest in real property held by any of the Company or its Subsidiaries.

“Leases” means all leases, subleases, licenses, concessions and other agreements (written or oral), including all amendments, extensions, renewals, guaranties and other agreements with respect thereto, pursuant to which any of the Company or its Subsidiaries holds any Leased Real Property, including the right to all security deposits and other amounts and instruments deposited by or on behalf of the Company or its Subsidiaries thereunder.

“Liability” means any liability (whether absolute or contingent, whether accrued or unaccrued, or whether liquidated or unliquidated), including any liability for Taxes.

“Material Adverse Change” means a material adverse change in, or effect on, the business, financial condition, operations, results of operations or prospects of the Company and its Subsidiaries taken as a whole, excluding any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (a) general economic, regulatory or political conditions (or changes therein) or conditions (or changes therein) in the financial, credit or securities markets (including changes in interest or currency exchange rates) in any country or region in which the Company and its Subsidiaries, as applicable, operate; (b) any natural or man-made disaster or act of war, armed hostilities or terrorism, or the escalation or worsening thereof; (c) condition, change, event, occurrence or effect generally affecting the industries in which the Company and its Subsidiaries operate; (d) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of the Purchaser or its Affiliates; (e) the announcement, pendency or completion of the Transactions, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Company or any of its Subsidiaries; (f) any changes in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; or (g) any failure by the Company or any of its Subsidiaries to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded).

“Multiemployer Plan” has the meaning set forth in ERISA §3(37).

“Notice of Dispute” has the meaning set forth in §2(f)(ii).

“Order” means any order, award, decision, injunction, judgment, ruling, decree, charge, writ, subpoena or verdict entered, issued, made or rendered by any Governmental Entity.

“Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

“Partnership” has the meaning set forth in §3(b)(i).

“Party” has the meaning set forth in the preface above.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Entity.

“Post-Closing Tax Period” means any Tax period beginning after the Closing Date.

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date.

“Preferred Stock Purchase Agreement” means an agreement, substantially in the form of Exhibit F hereto, among the Purchaser and the Equity Investors providing for the issuance and sale of Series A Preferred Stock to the Equity Investors.

“Proceeding” means any action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, arbitration, audit, or judicial or administrative proceeding.

“Prohibited Transaction” has the meaning set forth in ERISA §406 and Code §4975.

“Proxy Statement” has the meaning set forth in §5(l) below.

“Purchase Price” has the meaning set forth in §2(b) below.

“Purchaser” has the meaning set forth in the preface above.

“Purchaser Common Stock” means the common stock, $0.01 par value per share, of the Purchaser.

“Purchaser Note” has the meaning set forth in §2(b) below.

“Purchaser Parties” means, collectively, the Purchaser, the Purchaser’s Affiliates (including the Company and the Company’s Subsidiaries) and the Purchaser’s Representatives; provided, that “Purchaser Parties” shall not include the Seller or the Seller’s controlled Affiliates (other than the Company and the Company’s Subsidiaries).

“Purchaser Schedules” means the disclosure schedules delivered by the Purchaser concurrently with the execution and delivery of this Agreement, together with any Schedule Supplement delivered hereinafter, which disclosure schedules are arranged in sections, subsections and paragraphs corresponding to the numbered and lettered sections, subsections and paragraphs in §3 of this Agreement.

“Purchaser Shares” has the meaning set forth in §2(b) below.

“Purchaser Tax Losses” means, collectively: (a) Seller Indemnified Taxes; (b) any reasonable fees and out-of-pocket expenses of attorneys or other tax advisors, arising out of or incident to the imposition, assessment or assertion of any Seller Indemnified Tax; and (c) any Tax (and related costs) imposed on the Purchaser, any of its Affiliates, or the Company and its Subsidiaries as a result of a breach of any covenant of the Seller in §9; it being understood that “Purchaser Tax Loss” means any of the foregoing.

“Recommendation Change” has the meaning set forth in §5(h) below.

“Reference Balance Sheet” means, collectively, the combined unaudited balance sheets of the Company and its Subsidiaries (including Connected Data) as of September 30, 2016.

“Reportable Event” has the meaning set forth in ERISA §4043.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Requisite Vote” means the adoption of this Agreement, each other Transaction Document and the Transactions by the affirmative vote or consent of the holders of a majority of the issued and outstanding shares of the Seller’s capital stock entitled to vote thereon.

“Review Period” has the meaning set forth in §2(f)(ii).

“Schedule Supplement” has the meaning set forth in §5(f).

“Schedules” means, collectively, the Purchaser Schedules, the Seller Schedules and the General Schedules; it being understood that the term “Schedule” means any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Security Agreement” means the guaranty and security agreement between the Company and the Seller dated as of the date of the Closing, substantially in the form of Exhibit E.

“Security Interest” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) those set forth in the Financial Statements, (b) mechanic’s, materialmen’s, carriers’, workmen’s, warehousemen’s, repairmen’s and similar liens, (c) liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings, (d) liens securing rental payments under capital lease arrangements, (e) requirements and restrictions of zoning, licensing, permitting, building and other similar Laws, or easements, encroachments, overlaps, overhangs, or any other matter which would be disclosed by an accurate survey or physical inspection of the property, (f) lien, encumbrance or other security interest incurred or deposits made in connection with workers’ compensation, unemployment insurance, and other types of social security or to secure the performance of tenders or statutory obligations, (g) those arising under federal or state securities Laws or a Person’s organizational documents, and (h) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

“Seller” has the meaning set forth in the preface above.

“Seller Affiliated Group” means any Affiliated Group the common parent of which is the Seller.

“Seller Indemnified Taxes” means any Liability (a) for any Taxes of the Company and its Subsidiaries with respect to any Pre-Closing Tax Period, (and the portion of any Straddle Period ending on the Closing Date as determined pursuant to §9(b)), and (b) for any Income Tax of a Seller Affiliated Group for which the Company or any of its Subsidiaries is liable under Treasury Regulation Section 1.1502-6 (or any analogous provision of state or local Law), in each case, excluding any (x) Taxes included in the computation of Final Working Capital, (y) Taxes attributable to or resulting from any breach by Purchaser or its Affiliates of the covenants and agreements contained in §9 of this Agreement, and (z) Transfer Taxes.

“Seller Parties” means, collectively, the Seller, the Seller’s Affiliates and the Seller’s Representatives; provided, that “Seller Parties” shall not include the Company, the Company’s Subsidiaries, the Purchaser or the Purchaser’s controlled Affiliates.

“Seller Schedules” means the disclosure schedules delivered by the Seller concurrently with the execution and delivery of this Agreement, together with any Schedule Supplement delivered hereinafter, which disclosure schedules are arranged in sections, subsections and paragraphs corresponding to the numbered and lettered sections, subsections and paragraphs in §4 of this Agreement.

“Seller Stockholders” means, collectively, the holders of capital stock of the Seller.

“Seller Stockholders Meeting” has the meaning set forth in §5(k) below.

“Seller Tax Losses” means (a) any Tax of the Company or any of its Subsidiaries that is not a Seller Indemnified Tax, (b) any reasonable fees and out-of-pocket expenses of attorneys or other tax advisors, arising out of or incident to the imposition, assessment or assertion of any Tax that is not a Seller Indemnified Tax, and (c) any Tax (and related costs) imposed on the Seller or any of its Affiliates as a result of a breach of any covenant of the Purchaser in §9; it being understood that “Seller Tax Loss” means any of the foregoing.

“Seller Tax Matter” means (a) amending a Tax Return of the Company or any Subsidiary of the Company for a Pre-Closing Tax Period or Straddle Period; (b) making or revoking an election on any Tax Return filed after the Closing Date that adversely affects the Taxes or Tax Returns of the Company or any Subsidiary of the Company for a Pre-Closing Tax Period (or Straddle Period); (c) extending or waiving the applicable statute of limitations with respect to a Tax of the Company or any Subsidiary of the Company for a Pre-Closing Tax Period or Straddle Period; (d) filing any ruling request with any Governmental Entity that relates to Taxes or Tax Returns of the Company or any Subsidiary of the Company for a Pre-Closing Tax Period or Straddle Period; or (e) entering (or pursuing) any voluntary disclosure agreements with any Governmental Entity that relate to Taxes or Tax Returns of the Company or any Subsidiary of the Company for any Pre-Closing Tax Period or Straddle Period.

“Seller Warrant” means a warrant entitling the holder thereof, for a period of sixty (60) days following the Closing Date, to purchase one share of common stock of the Seller at an exercise price per share of the greater of (a) $0.75, and (b) the average closing price of the Seller’s common stock for the ten (10) trading day period ending the day immediately prior to the Closing Date; provided, that (x) the exercise price per share shall not exceed $1.20; (y) such warrants shall only be exercisable in cash; and (z) all shares of the Seller’s common stock issued upon the exercise of such warrants shall be subject to customary lock-up agreements restricting the pledge, sale, transfer or other disposition of such shares of common stock for a period of six (6) months following the exercise of such warrants.

“Series A Preferred Stock” means the preferred stock, $0.01 par value per share, of the Purchaser designated Series A Preferred Stock in the A&R Charter and having the rights, privileges and preferences set forth therein.

“Stockholders Agreement” means the stockholders agreement among the Purchaser, the Seller, and the Equity Investors dated as of the date of the Closing, substantially in the form of Exhibit D.

“Straddle Period” means any Tax period that includes, but does not end on, the Closing Date.

“Subsidiary” means any Person with respect to which a specified Person, directly or indirectly, owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors. For purposes of this Agreement, Connected Data shall be deemed to be a Subsidiary of the Company.

“Target Working Capital” means $850,000.

“Tax” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“Tax Benefit” means for any year a reduction in Taxes payable to a Governmental Entity or any increase in any Tax refund receivable (including any related interest) from any Governmental Entity (determined on a with or without basis).

“Tax Representations” has the meaning set forth in §4(l)(viii).

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Tax Sharing Agreement” means any existing agreement or arrangement binding the Company or any of its Subsidiaries that provides for the allocation, apportionment, sharing or assignment of any Tax Liability or benefit, or the transfer or assignment of income, revenues, receipts, or gains for the purpose of determining any Person’s Tax Liability, provided, that such term shall not include (i) any provisions of contracts entered into in the Ordinary Course of Business with third parties that normally include these type of provisions such as leases or credit agreements; (ii) any such agreement sharing responsibilities solely between the Company and its Subsidiaries; or (iii) any provision of this Agreement.

“Termination Fee” has the meaning set forth in §10(b) below.

“Third Party Claim” has the meaning set forth in §8(e) below.

“Transaction Costs” means (i) all fees and expenses unpaid as of immediately prior to Closing that have been incurred by the Company or any of its Subsidiaries or the Seller in connection with the sale of the Company and its Subsidiaries, and the consummation of Transactions, and (ii) any success bonus, sales bonus, change in control payments, severance payments, retention payments, stock appreciation right payments, “phantom stock” payments or other payments to employees or consultants that are due and payable on the Closing Date, including the employer portion of any related payroll and other employment Taxes). Transaction Costs shall include the unpaid fees and expenses payable at the Closing to the Company’s financial advisors and attorneys.

“Transaction Documents” means this Agreement, the Purchaser Note, the Contribution Agreement, the Stockholders Agreement, the Security Agreement and any other agreements, instruments, certificates, opinions, or other documents, entered into, delivered or otherwise contemplated hereby or required to effect the Transactions.

“Transactions” means the transactions contemplated by this Agreement or by the other Transaction Documents.

“Transfer Taxes” has the meaning set forth in §9(f).

2. Purchase and Sale of Company Shares.

(a) Basic Transaction. On and subject to the terms and conditions of this Agreement, at the Closing, the Purchaser shall purchase, acquire and accept from the Seller, and the Seller shall sell, assign, convey and deliver to the Purchaser, the Company Shares for the consideration specified below in §2(b).

(b) Purchase Price. In consideration for the purchase of the Company Shares, at the Closing, the Purchaser agrees to:

(i) deliver to the Seller a promissory note (the “Purchaser Note”) in the form of Exhibit A in the aggregate principal amount of $25,000,000, subject to the adjustments set forth in §2(e), §2(f), and §8(g) (the principal amount thereof, as so adjusted, the “Purchase Price”); and

(ii) issue to the Seller five (5) shares of Purchaser Common Stock, representing fifty percent (50%) of the issued and outstanding shares of Purchaser Common Stock (the “Purchaser Shares”) as of the Closing Date.

(c) The Closing. The closing of the Transactions (the “Closing”) shall take place on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the Transactions set forth in §7 (other than conditions that by their nature are to be satisfied at the Closing itself but subject to the satisfaction or waiver of those conditions) or such other date as the Parties may mutually determine (the “Closing Date”).

(d) Deliveries.

(i) Signing Deliverables. Contemporaneously with the execution and delivery hereof:

(A) the Purchaser is delivering to the Seller documents and instruments evidencing Funded Equity Commitments in an aggregate amount greater than or equal to $2,500,000; and

(B) the Seller is delivering to the Purchaser duly executed copies of employment agreements between the Company and each of Robert Fernander and Geoff Barrall (the “Employment Agreements”).

(ii) Closing Deliverables. At the Closing:

(A) the Seller will deliver to the Purchaser the various Transaction Documents referred to in §7(a);

(B) the Seller will issue and deliver to the Purchaser Sixty-two Thousand Five Hundred (62,500) Seller Warrants for each $2,500,000 increment of Funded Equity Commitments secured by the Purchaser as of the Closing Date; provided, that in no event shall the Purchaser be (1) issued more than 250,000 Seller Warrants or (2) entitled to receive any Seller Warrants in respect of any increment of Funded Equity Commitments that is less than $2,500,000; and

(C) the Purchaser will deliver to the Seller the various Transaction Documents referred to in §7(b).

(e) Adjustments to Purchase Price.

(i) If, on the six (6) month anniversary of the Closing Date, the aggregate Funded Equity Commitments are less than $10,000,000, then the aggregate principal amount of and the Interest Rates stated in the Purchaser Note shall be adjusted as follows:

(A) the aggregate principal amount of the Purchaser Note shall be increased by an amount equal to $10,000,000, minus the aggregate Funded Equity Commitments on such date; and

(B) the base Interest Rates stated in the Purchaser Note shall be increased one percent (1%) per annum, such that the base Interest Rate during the period from such date until the second anniversary of the Closing will be six percent (6%) per annum, and thereafter the base Interest Rate will be nine percent (9%) per annum;

provided, that, for the avoidance of doubt, (i) during such six (6) month period, interest on the original principal amount of the Purchaser Note shall accrue at the Interest Rate stated in the Purchaser Note; and (ii) if the principal amount of the Purchaser Note and Interest Rate are adjusted pursuant to the foregoing clauses (A) and (B), then such adjustments shall be applied as if they were effective on the original issue date.

(ii) Any amounts which become payable as adjustments to the Purchaser Note as a result of the application of §2(e)(i)(A) will constitute adjustments to the Purchase Price for all purposes hereunder.

(f) Post-Closing Working Capital Adjustment.

(i) Closing Statement. As soon as practicable, but no later than sixty (60) days following the Closing, the Purchaser shall prepare and deliver to Seller a statement setting forth the Purchaser’s good faith calculation of (A) the balance sheet of the Company and its Subsidiaries (including Connected Data) as of the Closing Date, and (B) the Company Working Capital (such statement, the “Closing Statement”).

(ii) Review. The Seller shall have thirty (30) days (the “Review Period”) to review the Closing Statement. During the Review Period, the Purchaser shall, and shall cause the Purchaser Parties, to (A) cooperate with and assist the Seller Parties in their review of the Closing Statement and (B) make available to the Seller Parties, upon reasonable notice and during regular business hours, all books, records and work papers of the Company and the Company’s subsidiaries related to the preparation of the Closing Statement that are reasonably requested by the Seller Parties. If the Seller objects to any item on the Closing Statement, then, prior to the expiration of the Review Period, the Seller shall deliver to the Purchaser written notice stating, in reasonable detail, the Seller’s objections, the basis for such objections, the amounts in dispute and the Seller’s alternative computation of each such item and amount (the “Notice of Dispute”). If the Seller fails to deliver a Notice of Dispute prior to the expiration of the Review Period, then the Closing Statement as delivered by the Purchaser, and the items and amounts therein, shall be final and binding on the Parties. If the Seller delivers a Notice of Dispute, then the Purchaser and the Seller shall attempt to resolve the disputed matters as promptly as reasonably possible.

(iii) Dispute Resolution. If the Purchaser and the Seller are unable to resolve all disputed items set forth in the Notice of Dispute (if any) within thirty (30) days after delivery of the Notice of Dispute to the Purchaser (or such longer period as they may agree upon), then either the Purchaser or the Seller may submit the remaining disputed matters to the Accounting Firm for resolution. The Purchaser and the Seller shall, and shall cause their respective Affiliates, to provide to the Accounting Firm such support and cooperation as is necessary for it to perform its function. The Accounting Firm shall deliver to the Purchaser and the Seller, as promptly as practicable and in any event within thirty (30) days after its appointment, a written decision setting forth its determination of the remaining disputed items in the Notice of Dispute. In rendering its determination, the Accounting Firm (A) shall act as an expert and not as an arbitrator, (B) shall limit its determination only to the remaining items in dispute set forth in the Notice of Dispute, (C) shall make all calculations in accordance with the standards and definitions in this Agreement, and (D) with respect to each item in dispute, shall not assign a value to any item in dispute greater than the greatest value for such item assigned to it by the Purchaser, on the one hand, or the Seller, on the other hand, or less than the lowest value for such item assigned to it by the Purchaser, on the one hand, or the Seller, on the other hand. Such determination shall be final, conclusive and binding upon the Parties absent fraud or manifest error. Notwithstanding anything else contained herein, no Party may assert that any award issued by the Accounting Firm is unenforceable because it has not been timely rendered. The terms of appointment and engagement of the Accounting Firm shall be as reasonably agreed upon between the Purchaser and the Seller, and any associated engagement fees shall initially be borne fifty percent (50%) by the Purchaser and fifty percent (50%) by the Seller; provided, that such fees shall ultimately be borne by the Purchaser and the Seller in the same proportion as the aggregate amount of the disputed items that is unsuccessfully disputed by each such Party (as determined by the Accounting Firm) bears to the total amount of the disputed items submitted to the Accounting Firm. Except as provided in the preceding sentence, all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Accounting Firm shall be borne by the Party incurring such cost and expense.

(iv) Adjustment.

(A) If the Target Working Capital exceeds the Final Working Capital by $350,000 or more, then the Seller shall owe to the Purchaser an amount equal to such excess; or

(B) If the Final Working Capital exceeds the Target Working Capital by $350,000 or more, then the Purchaser shall owe to the Seller an amount equal to such excess.

(v) Any amounts which become payable pursuant to this §2(f) will constitute an adjustment to the Purchase Price for all purposes hereunder, and shall be applied to and reduce (in the case of §2(f)(iv)(A)) or increase (in the case of §2(f)(iv)(B)) the aggregate principal amount of the Purchaser Note.

3. Representations and Warranties of the Purchaser.

The Purchaser represents and warrants to the Seller as of the date of this Agreement as follows, except as set forth in the Purchaser Schedules.

(a) Organization of the Purchaser; Authorization of Transaction.

(i) The Purchaser has been duly organized, and is validly existing and in good standing under the Laws of the State of Delaware.

(ii) The Purchaser has full corporate power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party, and to perform its obligations hereunder and thereunder. This Agreement has been, and at or prior to the Closing each other Transaction Document will be, duly executed and delivered by the Purchaser, and assuming due authorization, execution and delivery of the same by each other Person party thereto, constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity, whether considered in a Proceeding at law or in equity. All corporate action required to be taken by the Purchaser in order to authorize the Purchaser to enter into the Transaction Documents and to consummate the Transactions has been taken. The Purchaser need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in order to execute, deliver or perform any Transaction Document or to consummate the Transactions.

(b) Capitalization; Liabilities.

(i) As of the date hereof, the entire authorized capital stock of the Purchaser consists of 1,000 shares of Purchaser Common Stock, of which five (5) shares are issued and outstanding. Spear Point Private Equity LP (the “Partnership”) is the beneficial and record owner of all such shares of issued and outstanding Purchaser Common Stock, free and clear of all Security Interests.

(ii) Upon the Purchaser’s filing of the A&R Charter, and until such time immediately prior to the Closing, the entire authorized capital stock of the Purchaser consists of: (A) 10,000,000 shares of Series A Preferred Stock, none of which shall be issued or outstanding or held in treasury; and (B) 30,000,000 shares of Purchaser Common Stock, five (5) of which shall be issued and outstanding and held of record and owned beneficially by the Partnership. Immediately following the Closing, and after giving effect to the Transactions, the entire authorized capital stock of the Purchaser will consist of: (i) 10,000,000 shares of Series A Preferred Stock, none of which shall be issued or outstanding or held in treasury (provided, however, that to the extent the Purchaser has consummated any issuance and sale of Series A Preferred Stock under the Preferred Stock Purchase Agreement, such number of shares of Series A Preferred Stock shall be issued and outstanding as provided in the Preferred Stock Purchase Agreement); and (ii) 30,000,000 shares of Purchaser Common Stock, ten (10) of which shall be issued and outstanding, with five (5) of such shares held of record and owned beneficially by the Partnership, and five (5) of such shares (representing the Purchaser Shares) held of record and owned beneficially by the Seller.

(iii) The Purchaser Shares, when issued and delivered to Seller in accordance with this Agreement, will be duly authorized and validly issued and fully paid and nonassessable, will be free and clear of all encumbrances, and will not be issued in violation of any preemptive right, right of first refusal or similar right of any Person. The Purchaser is not a party to any option, warrant, purchase right, or other contract or commitment that could require the Purchaser to sell, transfer, or otherwise dispose of any capital stock of the Purchaser (other than sales of Series A Preferred Stock under the Preferred Stock Purchase Agreement, and the conversion of any shares of Series A Preferred Stock into shares of Purchaser Common Stock). The Purchaser is not, and will not be, a party or subject to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock of the Purchaser other than the Stockholders Agreement and there are no outstanding stock appreciation rights, phantom stock, profit participation, or similar rights with respect to the Purchaser, in each case, other than those contemplated by the Transaction Documents. The Purchaser does not (A) have any Subsidiaries or (B) directly or indirectly, own any capital stock or other interest of, or have any obligation to make capital contributions or otherwise provide financial support to, any other Person.

(iv) The Purchaser is a newly formed corporation and has not conducted any material operations and does not have any material liabilities, other than those arising under the Transaction Documents.

(c) Noncontravention. The execution, delivery and performance by the Purchaser and its Affiliates of this Agreement and each other Transaction Document to which they are parties, and the consummation of the Transactions by the Purchaser and its Affiliates, do not and will not (i) violate or conflict with any Law or Order applicable to the Purchaser or its Affiliates or any provision of their respective organizational documents, (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Purchaser or its Affiliates are a party or by which any of their respective assets are bound or subject, or (iii) result in the imposition of any Security Interest upon any of the Purchaser Shares or any assets of the Purchaser.

(d) Brokers’ Fees. The Purchaser has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the Transactions for which the Seller, the Company or any of the Company’s Subsidiaries could become liable or obligated.

(e) Investment. The Purchaser is acquiring the Company Shares for its own account for investment purposes and not with a view to or for offer or sale in connection with any distribution thereof. The Purchaser acknowledges and agrees that (A) the Company Shares are not registered under the Securities Act, or any state securities Laws, and that the Company Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom; (B) it has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and Company’s Subsidiaries; and (C) it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Seller, the Company and the Company’s Subsidiaries for such purpose.

(f) Equity Commitments.

(i) Attached to §3(f)(i) of the Purchaser Schedules are true, correct and complete copies of all executed Equity Commitment Letters and other documents evidencing Funded Equity Commitments. As of the date hereof, there are at least $2,500,000 in Funded Equity Commitments.

(ii) All executed Equity Commitment Letters and other documents evidencing Funded Equity Commitments constitute legal, valid and binding obligations of the Purchaser and each other Person party thereto (assuming such Person’s due authorization, execution and delivery), and remain in full force and effect. No executed Equity Commitment Letter or any other document evidencing a Funded Equity Commitment has been amended or modified and the respective obligations and commitments contained therein have not been withdrawn or rescinded in any respect, and no event has occurred or no fact or circumstance exists which, with or without notice, lapse of time or both, would constitute a default or breach under any executed Equity Commitment Letters or any other document evidencing a Funded Equity Commitment on the part of the Purchaser or, to the knowledge of the Purchaser, any other Person party thereto. There are no side letters, agreements, contracts, arrangements or other terms imposing any conditions or contingencies on the funding of the equity commitments or the release of any funds, other than those expressly set forth in the executed Equity Commitment Letters and any other document evidencing Funded Equity Commitments. Subject to the terms and conditions of all Equity Commitment Letters evidencing Funded Equity Commitments, as of the date hereof, and assuming the conditions set forth in §7(a) are satisfied, the conditions to (A) closing the transactions contemplated under such Equity Commitment Letters, and (B) the release of the funds under each other document evidencing Funded Equity Commitments, in each case, will be satisfied. Notwithstanding the foregoing, as of any date after the date hereof, such Equity Commitment Letters will not be outstanding to the extent such Funded Equity Commitments have been satisfied by the purchase of Series A Preferred Stock under the Preferred Stock Purchase Agreement; provided, that the representations herein shall thereafter apply to the Preferred Stock Purchase Agreement and other documents relating to the Series A Preferred Stock so purchased.

(g) No Other Representations or Warranties; Non-Reliance.

(i) Except for the representations and warranties expressly made by the Purchaser in this §3, none of the Purchaser, the Purchaser’s Affiliates or Representatives, or any other Person has made or is making any oral or written representation or warranty, express or implied, with respect to the Purchaser, its Affiliates or any of its or their respective businesses, assets, liabilities, prospects, results of operations or financial condition.

(ii) Without limiting the generality of the foregoing, the Purchaser acknowledges and agrees that (A) none of the Seller, the Seller’s Affiliates or Representatives or any other Person has made or is making any representation or warranty, express or implied, except for the representations and warranties expressly set forth in §4; (B) none of the Seller, the Seller’s Affiliates or Representatives or any other Person has made or is making any representation or warranty to the Purchaser, Purchaser’s Affiliates or Representatives, or any other Person with respect to any projections, forecasts, estimates, plans or budgets, expenses or expenditures, present or future financial results operations or affairs, or any other information, statements or documents delivered to or made available to Purchaser, Purchaser’s Affiliates or Representatives, or any other Person, with respect to the Seller, Seller’s Affiliates, the Company or the Company’s Subsidiaries or any of their respective businesses, assets, liabilities, prospects, results of operations or financial condition, except as expressly covered by representations and warranties set forth in §4; and (C) in making its decision to enter into this Agreement and to consummate the Transactions, the Purchaser has relied solely upon its own investigation and the express representations and warranties of the Seller set forth in §4.

4. Representations and Warranties of the Seller.

The Seller represents and warrants to the Purchaser as of the date of this Agreement as follows, except as set forth in the Seller Schedules.

(a) Organization, Power and Authorization of the Seller.

(i) The Seller is duly organized, validly existing, and in good standing under the Laws of the State of Delaware.

(ii) The Seller has full corporate power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party, and to perform its obligations hereunder and thereunder, subject to, with respect to the execution and delivery of the other Transaction Documents and consummation of the Transactions, the Requisite Vote. This Agreement has been, and at or prior to the Closing each other Transaction Document will be, duly executed and delivered by the Seller, and, assuming the due execution and delivery of the same by each other Person party thereto, constitutes (or will constitute) a valid and legally binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except that such enforceability (A) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (B) is subject to general principles of equity, whether considered in a Proceeding at law or in equity. All corporate action required to be taken by the Seller’s Board of Directors in order to authorize the Seller to enter into this Agreement has been taken, and all corporate action required to be taken by the Seller’s Board of Directors in order to authorize the Seller to enter into each Transaction Document (other than this Agreement) and to perform its obligations thereunder will be taken prior to the Closing. The Board of Directors of the Seller (and any applicable committee thereof) has adopted resolutions (y) authorizing and approving the Transactions and (z) recommending the adoption of this Agreement and the Transactions to the stockholders of the Seller.

(iii) The Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in order to consummate the Transactions, except for: (A) the filing of the Proxy Statement with the SEC in accordance with the Exchange Act, and such other reports under the Exchange Act as may be required in connection with the Transaction Documents and the Transactions; (B) such Consents as may be required under applicable state securities or “blue sky” Laws and the securities Laws of any foreign country or the rules and regulations of the NYSE; and (C) such other notices, filings, consents and approvals which if not given, made or obtained would not result in a Material Adverse Change.

(iv) The Seller (A) understands that the Purchaser Note has not been, and will not be, registered under the Securities Act, or under any state securities Laws, and is being offered and sold in reliance upon federal and state exemptions for transactions not involving a public offering, (B) is acquiring the Purchaser Note solely for its 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 the Purchaser and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Purchaser Note, (E) is able to bear the economic risk and lack of liquidity inherent in holding the Purchaser Note, and (F) is an Accredited Investor.

(b) Organization, Qualification, Power and Authorization of the Company.

(i) Each of the Company and its Subsidiaries is duly organized, validly existing, and to the extent applicable, in good standing under the Laws of the jurisdiction of its incorporation. Each of the Company and its Subsidiaries is duly authorized to conduct business and to the extent applicable, in good standing under the Laws of each jurisdiction where such qualification is required, and has full corporate power and authority and all licenses, permits, and authorizations necessary to carry on the businesses in which it is presently engaged and to own and use the properties owned and used by it, except for such failures to be so qualified or have such licenses, permits or authorizations as would not result in a Material Adverse Change.

(ii) §4(b)(ii) of the Seller Schedule lists the directors and officers of the Company and each of its Subsidiaries. The Seller has made available to the Purchaser true and correct copies of the organizational documents of the Company and each of its Subsidiaries (as amended to date), and neither the Company nor any of its Subsidiaries is in default under or in violation of, in any material respect, any provision of its organizational documents. The minute books (containing the records of meetings of the stockholders, the board of directors, and any committees of the board of directors), the stock certificate books, and the stock record books of the Company and each of its Subsidiaries are correct and complete, in each case, except as would not result in a Material Adverse Change.

(iii) The Company and each Subsidiary of the Company has full corporate power and authority to execute and deliver each of the Transaction Documents to which it is a party, and to perform its obligations thereunder, subject to the Requisite Vote. All corporate action required on the part of the Company and each Subsidiary to authorize the execution, delivery and performance of the Transaction Documents to which they are parties has been taken or will be taken prior to the Closing. Each of the Transaction Documents to which the Company or any Subsidiary is a party shall, when executed and delivered (and assuming the due execution and delivery of the same by each other Person party thereto), constitute the valid and legally binding obligation of the Company or Subsidiary executing same, enforceable in accordance with its terms and conditions, except that such enforceability (A) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (B) is subject to general principles of equity, whether considered in a Proceeding at law or in equity. None of the Company or any of its Subsidiaries need give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Entity in order to consummate the Transactions.

(c) Capitalization. The Seller holds of record and owns beneficially (A) all of the Company Shares, and such Company Shares represent all of the issued and outstanding capital stock of the Company, and (B) 1,000 shares of common stock of Connected Data, representing all of the issued and outstanding capital stock of Connected Data. The Company Shares and the shares of common stock of Connected Data owned by the Seller are held free and clear of any Security Interest. The Seller is not a party to any option, warrant, purchase right, or other contract or commitment that could require the Seller to sell, transfer, or otherwise dispose of any capital stock of the Company (other than this Agreement) or any capital stock of Connected Data (other than the Contribution Agreement). The Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock of the Company or of Connected Data.

(d) Noncontravention. The execution, delivery and performance by Seller and its Affiliates of each Transaction Document to which they are parties, and the consummation of the Transactions by Seller and its Affiliates, will not (i) subject to the Requisite Vote, violate any Law or Order applicable to the Seller, the Company or any of the Company’s Subsidiaries or any provision of the organizational documents of the Seller, the Company or any of the Company’s Subsidiaries; (ii) subject to the Requisite Vote, conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Company Agreement; or (iii) result in the imposition of any Security Interest upon any assets of the Company or any of the Company’s Subsidiaries, except, in the case of clauses (ii) and (iii) as would not result in a Material Adverse Change.

(e) Brokers’ Fees. None of the Seller, the Company or any of the Company’s Subsidiaries has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the Transactions as a result of any arrangement made by or on behalf of the Seller or its Affiliates.

(f) Title to Assets. The Company and its Subsidiaries have good and marketable title to, or a valid leasehold interest in, the properties and assets reflected on the Reference Balance Sheet or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of the Reference Balance Sheet.

(g) Subsidiaries. §4(g) of the Seller Schedule sets forth for each Subsidiary of the Company (i) its name and jurisdiction of incorporation, (ii) the number of shares of authorized capital stock of each class of its capital stock, (iii) the number of issued and outstanding shares of each class of its capital stock, the names of the holders thereof, and the number of shares held by each such holder, and (iv) the number of shares of its capital stock held in treasury. All of the issued and outstanding shares of capital stock of each Subsidiary of the Company have been duly authorized and are validly issued, fully paid, and nonassessable. The Company and its Subsidiaries hold of record and own beneficially all of the outstanding shares purported to be owned by them on §4(g) of the Seller Schedule free and clear of any Security Interest. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require any of the Company and its Subsidiaries to sell, transfer, or otherwise dispose of any capital stock of any of its Subsidiaries or that could require any Subsidiary of the Company to issue, sell, or otherwise cause to become outstanding any of its own capital stock. There are no outstanding stock appreciation rights, phantom stock, profit participation, or similar rights with respect to any Subsidiary of the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary of the Company. None of the Company and its Subsidiaries controls directly or indirectly or has any direct or indirect equity participation in any corporation, partnership, trust, or other business association which is not a Subsidiary of the Company.

(h) Financial Statements. Attached to §4(h) of the Seller Schedule are the following financial statements of the Company and its Subsidiaries (collectively, the “Financial Statements”): (i) combined unaudited balance sheets of the Company and its Subsidiaries as of December 31, 2015, and the related statements of income, changes in stockholders’ equity, and cash flow as of and for the fiscal years then ended; and (ii) the Reference Balance Sheet and the related statements of income, changes in stockholders’ equity, and cash flow for the nine-month period ended September 30, 2016. The Financial Statements (including the notes thereto) (x) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, (y) present fairly, in all material respects, the financial condition of the Company and its Subsidiaries as of such dates and the results of operations of the Company and its Subsidiaries for such periods stated therein, and are correct and complete in all material respects, and (z) are consistent, in all material respects, with the books and records of the Company and its Subsidiaries (which books and records are correct and complete in all material respects), in each case, subject to the qualifications, statements and notes therein, to normal year-end adjustments, and to the lack of footnotes and other presentation items (none of which are material individually or in the aggregate).

(i) Events Subsequent. Since the date of the Reference Balance Sheet, there has not been any Material Adverse Change. Without limiting the generality of the foregoing, except as contemplated by the Transaction Documents, since the date of the Reference Balance Sheet:

(i) none of the Company or any of its Subsidiaries has sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

(ii) none of the Company or any of its Subsidiaries has entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $200,000 or outside the Ordinary Course of Business;

(iii) no Person (including any of the Company and its Subsidiaries) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $150,000 to which the Company or any of its Subsidiaries is a party or by which any of them is bound;

(iv) none of the Company or any of its Subsidiaries has imposed any Security Interest upon any of its assets, tangible or intangible, except that will be released at or prior to the Closing;

(v) none of the Company or any of its Subsidiaries has made any capital expenditure (in a transaction or series of related transactions) either involving more than $150,000 or outside the Ordinary Course of Business;

(vi) none of the Company or any of its Subsidiaries has made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (in a transaction or series of related transactions);

(vii) none of the Company or any of its Subsidiaries has issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation;

(viii) none of the Company or any of its Subsidiaries has delayed or postponed the payment of accounts payable and other Liabilities outside the Ordinary Course of Business;

(ix) none of the Company or any of its Subsidiaries has cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) either involving more than $50,000 or outside the Ordinary Course of Business;

(x) none of the Company or any of its Subsidiaries has granted any license or sublicense of any rights under or with respect to any Intellectual Property (other than non-exclusive licenses granted to customers in the Ordinary Course of Business);

(xi) there has been no change made or authorized in the organizational documents of the Company or any of its Subsidiaries;

(xii) none of the Company or any of its Subsidiaries has issued, sold, or otherwise disposed of any of its capital stock, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;

(xiii) none of the Company or any of its Subsidiaries has declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its capital stock;

(xiv) none of the Company or any of its Subsidiaries has experienced any damage, destruction, or loss (whether or not covered by insurance) to its property;

(xv) none of the Company or any of its Subsidiaries has made any loan to, or entered into any other transaction with, any of its directors, officers, and employees (excluding the Employment Agreements, employment agreements entered into and listed in §4(i)(xv) of the Seller Schedule, and those employee benefits granted to employees generally and advances for business expenses in each case made in the Ordinary Course of Business);

(xvi) none of the Company or any of its Subsidiaries has entered into any employment contract with any executive officer (excluding the Employment Agreements) or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

(xvii) none of the Company or any of its Subsidiaries has granted any increase in the base compensation of any of its directors, officers, and employees in excess of $50,000 or outside the Ordinary Course of Business;

(xviii) none of the Company or any of its Subsidiaries has adopted, amended, modified, or terminated any bonus, profit sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken any such action with respect to any other Employee Benefit Plan) except for such changes as affect employees generally and made within the Ordinary Course of Business or in accordance with Law; and

(xix) none of the Company or any of its Subsidiaries has committed to any of the foregoing.

(j) Liabilities. None of the Company and its Subsidiaries has any Liability of a type required to be reflected on a balance sheet prepared in accordance with GAAP, except for those Liabilities (i) which are reserved or set forth on the Reference Balance Sheet; (ii) which have arisen after the date of the Reference Balance Sheet in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of Law); (iii) which have been incurred in connection with the Transactions; and (iv) which do not, alone or in the aggregate, result in a Material Adverse Change. None of the Company or any of its Subsidiaries has any Liability to (y) any predecessor or other Person (or any officer, director, employee or Affiliate of any predecessor or other Person) who sold or otherwise transferred any stock in the Company or any Subsidiary, or any assets, Company Agreements or other property to the Company or any Subsidiary (including under any contingent purchase price, earn-out or other arrangement), or (z) any of the Seller, its Subsidiaries or other Affiliates, and their respective officers, directors and employees).

(k) Legal Compliance. During the past two (2) years, (i) the Company and its Subsidiaries, and each of their respective predecessors have complied with all applicable Laws, and (ii) no Proceeding has been filed or commenced against any of them alleging any failure to comply with any applicable Law, except for violations or Proceedings as would not result in a Material Adverse Change.

(l) Tax Matters.

(i) The Company and each of its Subsidiaries has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all material respects. All Taxes owed by any of the Company and its Subsidiaries (whether or not shown on any Tax Return) have been paid. Neither the Company nor any of its Subsidiaries currently is the beneficiary of any extension of time within which to file any Tax Return. No claim has been made in writing in the past five (5) years by an authority in a jurisdiction where either the Company or any of its Subsidiaries does not file Tax Returns that the Company or such Subsidiary is subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of any of the Company and its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax (which, for the avoidance of doubt, shall not include any Security Interests for Taxes not yet due and payable, which are being contested in good faith and disclosed on §4(l)(i) of the Seller Schedule, or for which adequate reserves have been established on the books and records of the Company or applicable Subsidiary).

(ii) Except to the extent it would not result in a Material Adverse Change, the Company and each of its Subsidiaries has withheld and paid all Taxes known to have been required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(iii) No Tax audits or other actions concerning any Tax Liability of the Company or any of its Subsidiaries are pending, or to the Knowledge of the Sellers, the Company or any of its Subsidiaries, threatened in writing with regard to any Tax Returns of the Company or any of its Subsidiaries.

(iv) None of the Seller, the Company or any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, in each case, with respect to the Company or any of its Subsidiaries.

(v) Neither the Company nor any of its Subsidiaries has made any payments that were not deductible as a result of the application of Code §280G, and neither the Company nor any of its Subsidiaries is obligated to make any payments in connection with the transactions contemplated by this Agreement that will not be deductible as a result of the application of Code §280G. Neither of the Company nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Code §897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii). Neither the Company nor any of its Subsidiaries (A) has been a member of an Affiliated Group filing a consolidated federal Income Tax Return (other than a Seller Affiliated Group) or (B) has any Liability for the Taxes of any Person (other than a member of a Seller Affiliated Group) under Reg. §1.1502-6 (or any similar provision of Law), as a transferee or successor, or pursuant to a Tax Sharing Agreement that will not be canceled pursuant to §9(d).

(vi) The unpaid Taxes of the Company and its Subsidiaries (A) did not, as of the date of the Reference Balance Sheet, exceed the reserve for Tax Liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax items) set forth on the face of the Reference Balance Sheet and (B) do not exceed that reserve in accordance with the past custom and practice of the Company and its Subsidiaries in filing their Tax Returns.

(vii) Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Post-Closing Tax Period as a result of any (A) change in method of accounting for a Pre-Closing Tax Period under Code §481(c) (or any corresponding or similar provision of state, local or foreign Income Tax Law); (B) “closing agreement” as described in Code §7121 (or any corresponding or similar provision of state, local or foreign Income Tax Law) executed on or prior to the Closing Date; (C) deferred intercompany gain or any excess loss account described in Treasury Regulations under Code §1502 (or any corresponding or similar provision of state, local or foreign Income Tax Law); (D) installment sale governed by Code §453 (or any corresponding or similar provision of state, local or foreign Income Tax Law) or open transaction disposition, in each case, made on or prior to the Closing Date; or (E) prepaid amount received on or prior to the Closing Date.

(viii) The representations and warranties in this §4(l) (the “Tax Representations”) shall constitute the sole and exclusive representations and warranties regarding any Tax matters relating to the Company or any of its Subsidiaries, including any representations or warranties regarding compliance with Tax Laws, Liability for Taxes, the filing of Tax Returns, and the accrual and reserves for Taxes on any financial statements or books and records of the Company and its Subsidiaries. No Tax Representation shall be with respect to the availability or use of any Tax attribute (including a net operating loss) or Tax credit in any Post-Closing Tax Period (or portion of a Straddle Period beginning after the Closing Date) or otherwise relate to Taxes payable in any Post-Closing Tax Period (or portion of a Straddle Period beginning after the Closing Date).

(m) Real Property. None of the Company or any of its Subsidiaries owns or has owned, during the past two (2) years, any real property. §4(m) of the Seller Schedule sets forth the address of each parcel of Leased Real Property, and a true and complete list of all Leases for each such Leased Real Property and the date and name of the parties to such Lease. The Company and each of its Subsidiaries have made available to the Purchaser a true and complete copy of each such Lease, or in the case of any oral Lease, a written summary of the material terms of such Lease.

(n) Intellectual Property.

(i) The Company and its Subsidiaries own or have the right to use pursuant to a license, sublicense, agreement, or permission all Intellectual Property necessary for the operation of the businesses of the Company and its Subsidiaries in the Ordinary Course of Business. Subject to any consents under §4(d), each item of material Intellectual Property owned or used by any of the Company and its Subsidiaries immediately prior to the Closing hereunder will be owned or available for use by the Company or the Subsidiary on substantially identical terms and conditions immediately subsequent to the Closing hereunder. Each of the Company and its Subsidiaries has taken commercially reasonable action to maintain and protect each item of material Intellectual Property that it owns.

(ii) To the Knowledge of the Seller, none of the Company and its Subsidiaries has interfered with, infringed upon, misappropriated, or otherwise violated any Intellectual Property rights of third parties, and in the last two (2) years, none of the Seller, the Company and its Subsidiaries has ever received any written charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation by the Company or any of its Subsidiaries (including any claim that any of the Company and its Subsidiaries must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of the Seller, no third party has interfered with, infringed upon, misappropriated, or otherwise violated any Intellectual Property rights of any of the Company and its Subsidiaries.

(iii) §4(n)(iii) of the Seller Schedule identifies each patent or registration which has been issued to any of the Company and its Subsidiaries with respect to any of its Intellectual Property, and identifies each pending patent application or application for registration which any of the Company and its Subsidiaries has made with respect to any of its Intellectual Property. The Seller has made available to the Purchaser copies of all such patents, registrations, and applications. §4(n)(iii) of the Seller Schedule also identifies each material trade name or material unregistered trademark used by any of the Company and its Subsidiaries in connection with any of its businesses. With respect to each item of Intellectual Property required to be identified in §4(n)(iii) of the Seller Schedule, and to the Knowledge of the Seller with respect to any unregistered trade name or trademark:

(A) the Company and its Subsidiaries possess all right, title, and interest in and to the item, free and clear of any Security Interest, license, or other restriction (other than licenses for commercially available off-the-shelf software and software-as-a-service and nonexclusive licenses granted in the Ordinary Course of Business);

(B) the item is not subject to any outstanding Order; and

(C) no Proceeding is pending or, to the Knowledge of the Seller, is threatened which challenges the legality, validity, enforceability, use, or ownership of the item.

(o) Tangible Assets. The Company and its Subsidiaries own or lease all buildings, machinery, equipment, and other tangible assets necessary for the conduct of their respective businesses as presently conducted. Each such tangible asset has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear), and is suitable for the purposes for which it presently is used.

(p) Inventory. The inventory of the Company and its Subsidiaries consists of raw materials and supplies, manufactured and purchased parts, goods in process, and finished goods, all of which is merchantable and fit for the purpose for which it was procured or manufactured, and none of which is slow moving, obsolete, damaged, or defective, subject only to the reserve for inventory write-down set forth on the Reference Balance Sheet in accordance with the past custom and practice of the Company and its Subsidiaries.

(q) Company Agreements. §4(q) of the Seller Schedule lists the following contracts to which the Company or any of its Subsidiaries are parties or by which their respective assets or properties are bound (including any groups of related agreements):

(i) contracts for the lease of personal property to or from any Person providing for lease payments in excess of $150,000 per annum;

(ii) contracts for the purchase or sale of raw materials, commodities, supplies, products, or other personal property, or for the furnishing or receipt of services, the performance of which will extend over a period of more than one year, result in a loss to any of the Company and its Subsidiaries, or involve consideration in excess of $150,000 per annum;

(iii) contracts concerning a partnership or joint venture;

(iv) contracts under which any of the Company and its Subsidiaries has created, incurred, assumed, or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation, or under which it has imposed a Security Interest on any of its assets, tangible or intangible;

(v) contracts concerning confidentiality or noncompetition;

(vi) contracts with the Seller and its Affiliates (other than the Company and its Subsidiaries);

(vii) contracts concerning any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other plan or arrangement for the benefit of any current or former directors, officers, and employees of any of the Company and its Subsidiaries;

(viii) contracts concerning any collective bargaining agreement;

(ix) contracts for the employment of any individual on a full-time, part-time, consulting, or other basis providing annual compensation in excess of $100,000 or providing severance benefits;

(x) contracts under which any of the Company and its Subsidiaries has advanced or loaned any amount to any of its directors, officers, and employees outside advances for business travel or similar expenses in the Ordinary Course of Business;

(xi) contracts under which any of the Company and its Subsidiaries (A) has granted any license or other right to any material Intellectual Property owned by any of the Company and its Subsidiaries (excluding nonexclusive licenses granted in the Ordinary Course of Business) or (B) is granted any license or other right to any material Intellectual Property owned by any third party (excluding commercially available off-the-shelf software and software-as-a-service);

(xii) contracts for which a default or termination would reasonably be expected to result in a Material Adverse Change; or

(xiii) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $150,000 per annum.

The Seller has made available to the Purchaser a copy of each written Company Agreement listed in §4(q) of the Seller Schedule and a written summary setting forth the terms and conditions of each oral Company Agreement referred to in §4(q) of the Seller Schedule. Each Company Agreement constitutes a legal, valid, binding and enforceable obligation of the Company or Subsidiary of the Company party thereto, and to the Knowledge of the Seller, each other party thereto, and is in full force and effect. None of the Company, any Subsidiary of the Company, or to the Knowledge of the Seller, any other party thereto is in breach of or default under any Company Agreement, except for breaches, defaults, terminations or modifications that would not result in a Material Adverse Change. To the Knowledge of the Seller, no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification, or acceleration, under any Company Agreement.

(r) Notes and Accounts Receivable. All notes and accounts receivable of the Company and its Subsidiaries reflected on the Reference Balance Sheet (i) are reflected properly, in all material respects, on their respective books and records, (ii) are valid receivables and, to the Knowledge of Seller, not subject to setoffs or counterclaims (other than normal cash discounts and rebates accrued in the Ordinary Course of Business), (iii) are current and collectible, and (iv) to the Knowledge of the Seller, will be collected in accordance with their terms at their recorded amounts, subject only to the reserve for bad debts set forth on the Reference Balance Sheet in accordance with the past custom and practice of the Company and its Subsidiaries.

(s) Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company or any of its Subsidiaries.

(t) Insurance. §4(t) of the Seller Schedule sets forth the following information with respect to each insurance policy (including policies providing property, casualty, liability, and workers’ compensation coverage and bond and surety arrangements) to which the Company or any of its Subsidiaries has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past two (2) years: (i) the name, address, and telephone number of the agent; (ii) the name of the insurer, the name of the policyholder, and the name of each covered insured; (iii) the policy number and the period of coverage; (iv) a brief description of the type of insurance and amount (including deductibles and ceilings) of coverage provided by each policy; and (v) a description of any premium adjustments or other loss-sharing arrangements. Each insurance policy set forth in §4(t) of the Seller Schedule is in full force and effect, and to the Knowledge of the Seller, will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the Transactions. None of the Company or any of its Subsidiary of the Company, nor to the Knowledge of the Seller, any other party thereto, is in breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination, modification, or acceleration, under the policy, except for breaches, defaults, terminations or modifications that would not result in a Material Adverse Change. Each of the Company and its Subsidiaries has been covered during the past two (2) years by insurance in scope and amount customary and reasonable for the businesses in which it has engaged during the aforementioned period. §4(t) of the Seller Schedule describes any self-insurance arrangements affecting the Company or any of its Subsidiaries.

(u) Litigation. §4(u) of the Seller Schedule sets forth (i) each material outstanding Order to which the Company or any of its Subsidiaries is subject, other than Orders of general applicability to Persons or businesses engaged in similar businesses, and (ii) each Proceeding that is pending, or to the Knowledge of the Seller, threatened in writing against the Company, the Company’s Subsidiaries or any of their respective officers, directors or employees. None of the Proceedings set forth in §4(u) of the Seller Schedule could reasonably be expected to result in any Material Adverse Change.

(v) Product Warranty. Each product manufactured, sold, leased, or delivered by the Company and its Subsidiaries has been manufactured, sold, leased, or delivered in conformity, in all material respects, with all applicable contractual commitments and all express and implied warranties, and none of the Company or any of its Subsidiaries has any material Liability for replacement or repair thereof or other damages in connection therewith, subject only to the reserve for product warranty claims set forth on the Reference Balance Sheet. No product manufactured, sold, leased, or delivered by the Company or any of its Subsidiaries is subject to any material guaranty, warranty, or indemnity that is not set forth in any Company Agreement or the Company’s or such Subsidiaries’ applicable standard terms and conditions of sale or lease. The Seller has made available to the Purchaser copies of the standard terms and conditions of sale or lease of the Company and each of its Subsidiaries containing applicable guaranty, warranty, and indemnity provisions.

(w) Employees. To the Knowledge of the Seller, no executive, key employee, or group of employees has any plans to terminate employment with any of the Company and its Subsidiaries. None of the Company and its Subsidiaries is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. To the Knowledge of the Seller, none of the Company and its Subsidiaries has committed any unfair labor practice. None of the Seller and the directors and officers (and employees with responsibility for employment matters) of the Company and its Subsidiaries has any Knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to employees of any of the Company and its Subsidiaries.

(x) Employee Benefits.

(i) §4(x) of the Seller Schedule lists each Employee Benefit Plan that any of the Company and its Subsidiaries maintains, to which any of the Company and its Subsidiaries contributes or has any obligation to contribute, or with respect to which any of the Company and its Subsidiaries has any material Liability or potential Liability.

(A) Each such Employee Benefit Plan (and each related trust, insurance contract, or fund) has been maintained, funded and administered in accordance in all material respects with the terms of such Employee Benefit Plan and the terms of any applicable collective bargaining agreement and complies in form and in operation in all material respects with the applicable requirements of ERISA, the Code, and other applicable Laws.

(B) All required reports and descriptions (including annual reports (IRS Form 5500), summary annual reports, and summary plan descriptions) have been timely filed and/or distributed in accordance in all material respects with the applicable requirements of ERISA and the Code with respect to each such Employee Benefit Plan. The requirements of COBRA have been met in all material respects with respect to each such Employee Benefit Plan which is an Employee Welfare Benefit Plan subject to COBRA.

(C) Except as would not reasonably be likely to result in material Liability to the Company and its Subsidiaries, taken as a whole, (x) all contributions (including all employer contributions and employee salary reduction contributions) which are due have been made within the time periods prescribed by ERISA and the Code to each such Employee Benefit Plan which is an Employee Pension Benefit Plan and (y) all contributions for any period ending on or before the Closing Date which are not yet due have been made to each such Employee Pension Benefit Plan or accrued in accordance with the past custom and practice of the Company and its Subsidiaries. All material premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such Employee Benefit Plan which is an Employee Welfare Benefit Plan.

(D) Each such Employee Benefit Plan which is intended to meet the requirements of a “qualified plan” under Code §401(a) has received a determination from the Internal Revenue Service that such Employee Benefit Plan is so qualified, and, to the Knowledge of the Seller, nothing has occurred since the date of such determination that could adversely affect the qualified status of any such Employee Benefit Plan.

(E) The market value of assets under each such Employee Benefit Plan which is an Employee Pension Benefit Plan (other than any Multiemployer Plan) equals or exceeds the present value of all vested and nonvested Liabilities thereunder determined in accordance with PBGC methods, factors, and assumptions applicable to an Employee Pension Benefit Plan terminating on the date for determination.

(F) The Seller has delivered to the Purchaser correct and complete copies of the plan documents and summary plan descriptions, the most recent determination letter received from the Internal Revenue Service, the most recent annual report (IRS Form 5500, with all applicable attachments), and all related trust agreements, insurance contracts, and other funding arrangements which implement each such Employee Benefit Plan.

(ii) With respect to each Employee Benefit Plan that any of the Company, its Subsidiaries, and any ERISA Affiliate maintains, to which any of them contributes or has any obligation to contribute, or with respect to which any of them has any material Liability or potential Liability:

(A) No such Employee Benefit Plan which is an Employee Pension Benefit Plan (other than any Multiemployer Plan) has been completely or partially terminated or been the subject of a Reportable Event. No Proceeding by the PBGC to terminate any such Employee Pension Benefit Plan (other than any Multiemployer Plan) has been instituted or, to the Knowledge of the Seller, threatened.

(B) Except as would not reasonably be likely to result in material Liability to the Company and its Subsidiaries, taken as a whole, (x) there have been no Prohibited Transactions with respect to any such Employee Benefit Plan; and (y) no Fiduciary has any Liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Employee Benefit Plan. No Proceeding with respect to the administration or the investment of the assets of any such Employee Benefit Plan (other than routine claims for benefits) is pending or, to the Knowledge of the Seller, threatened. The Seller has no Knowledge of any basis for any such Proceeding.

(C) None of the Company and its Subsidiaries has incurred, and none of the Seller and the directors and officers (and employees with responsibility for employee benefits matters) of the Company and its Subsidiaries has any reason to expect that any of the Company and its Subsidiaries will incur, any Liability to the PBGC (other than with respect to PBGC premium payments not yet due) or otherwise under Title IV of ERISA (including any withdrawal Liability as defined in ERISA §4201) or under the Code with respect to any such Employee Benefit Plan which is an Employee Pension Benefit Plan, or under COBRA with respect to any such Employee Benefit Plan which is an Employee Welfare Benefit Plan.

(iii) (A) None of the Company, its Subsidiaries, and any ERISA Affiliate has incurred any Liability on account of a “partial withdrawal” or a “complete withdrawal” (within the meaning of ERISA §§4205 and 4203, respectively) from any Multiemployer Plan, no such Liability has been asserted, and there are no events or circumstances which could result in any such partial or complete withdrawal; (B) none of the Company, its Subsidiaries, or any ERISA Affiliate is bound by any contract or agreement or has any obligation or Liability described in ERISA §4204; and (C) none of the Company, its Subsidiaries or any ERISA Affiliate sponsors or contributes to, or is required to sponsor or contribute to, any Multiemployer Plan.

(iv) None of the Company and its Subsidiaries maintains, contributes to or has an obligation to contribute to, or has any Liability or potential Liability with respect to, any Employee Welfare Benefit Plan providing medical, health, or life insurance or other welfare-type benefits for current or future retired or terminated directors, officers or employees of the Company or any of its Subsidiaries (or any spouse or other dependent thereof) other than in accordance with COBRA.

(y) Guaranties. None of the Company or any of its Subsidiaries is a guarantor or otherwise is liable for any indebtedness of any other Person.

(z) Environmental, Health, and Safety Matters.

(i) The Company and its Subsidiaries have complied, within the past five (5) years and is in compliance with, in all material respects, all Environmental, Health, and Safety Requirements.

(ii) Neither the Company nor any of its Subsidiaries has received from any Governmental Entity, within the past five (5) years any written notice or report regarding any actual or alleged violation of Environmental, Health, and Safety Requirements or any investigation with respect thereto, except for such matters as have been resolved or which are not result in a Company Material Adverse Change.

(iii) Neither this Agreement nor the consummation of the Transaction are reasonably be expected to result in any obligations for site investigation or cleanup pursuant to any of the so-called “transaction-triggered” or “responsible property transfer” Environmental, Health, and Safety Requirements.

(iv) Neither the Company nor any of its Subsidiaries has, either expressly or by operation of law, assumed or undertaken any Liability, including without limitation any obligation for corrective or remedial action, of any other Person relating to Environmental, Health, and Safety Requirements.

(v) To the Knowledge of the Seller, no facts, events or conditions relating to the past or present facilities, properties or operations of the Company, its Subsidiaries, or any of their respective predecessors or Affiliates could reasonably be expected to (A) prevent, hinder or limit continued compliance with Environmental, Health, and Safety Requirements, (B) give rise to any initial investigatory, remedial or corrective obligations pursuant to Environmental, Health, and Safety Requirements, or (C) give rise to any material Liability pursuant to Environmental, Health, and Safety Requirements, including without limitation any relating to onsite or offsite releases or threatened releases of hazardous materials, substances or wastes, personal injury, property damage or natural resources damage.

(aa) Certain Business Relationships. None of the Seller, Seller’s Affiliates (other than the Company and the Company’s Subsidiaries) or their respective officers and directors have been involved in any material business arrangement or relationship with the Company or any of its Subsidiaries within the past twelve (12) months, excluding those business arrangements or relationships relating to (a) any intercompany indebtedness that will be extinguished at or prior to the Closing, (b) employment agreements entered into in the Ordinary Course of Business, or (c) employee benefits granted and advances for business expenses made in the Ordinary Course of Business. None of the Seller, Seller’s Affiliates (other than the Company and the Company’s Subsidiaries) or any of their respective officers and directors own any material asset, tangible or intangible, which is used in the business of the Company or its Subsidiaries.

(bb) No Other Representations or Warranties.

(i) Except for the representations and warranties expressly made by the Seller in this §4, none of the Seller, the Seller’s Affiliates (including the Company and the Company’s Subsidiaries) or Representatives, or any other Person has made or is making any oral or written representation or warranty, express or implied, with respect to the Seller or the Seller’s Affiliates (including the Company and the Company’s Subsidiaries) or any of its or their respective businesses, assets, liabilities, prospects, results of operations or financial condition.

(ii) Without limiting the generality of the foregoing, the Seller acknowledges and agrees that (A) none of the Purchaser, the Purchaser’s Affiliates or Representatives or any other Person has made or is making any representation or warranty, express or implied, except for the representations and warranties expressly set forth in §3; (B) none of the Purchaser, the Purchaser’s Affiliates or Representatives or any other Person has made or is making any representation or warranty to the Seller, the Seller’s Affiliates or Representatives, or any other Person with respect to any projections, forecasts, estimates, plans or budgets, expenses or expenditures, present or future financial results operations or affairs, or any other information, statements or documents delivered to or made available to the Seller, the Seller’s Affiliates or Representatives, or any other Person, with respect to the Purchaser or Purchaser’s Affiliates or any of their respective businesses, assets, liabilities, prospects, results of operations or financial condition, except as expressly covered by representations and warranties set forth in §3; and (C) in making its decision to enter into this Agreement and to consummate the Transactions, the Seller has relied solely upon its own investigation and the express representations and warranties of the Purchaser set forth in §3.

5. Pre-Closing Covenants.

The Parties agree as follows with respect to the period between the execution of this Agreement and the earlier of (y) Closing and (z) the termination of this Agreement in accordance with §10.

(a) General. Subject to the other terms and conditions of this Agreement, each of the Parties will use its reasonable best efforts to take all actions, to do, and to assist and cooperate with the other Party in doing, all things necessary, proper, or advisable in order to consummate and make effective the Transactions, including satisfaction, but not waiver, of the closing conditions set forth in §7 below.

(b) Notices, Consents and Filings. Each of the Parties will use, and will cause its respective Affiliates to, give all notices to, make any filings with, and use its commercially reasonable best efforts to obtain all authorizations, consents, waivers and approvals of all Persons that are required to be given, made or obtained in connection with the execution, delivery and performance of the Transaction Documents and consummation of the Transactions; provided, however, that the foregoing shall not require the Purchaser, the Seller, the Company or any of their respective Affiliates to (i) make any payment or undertake any obligation to any Person in order to obtain such consent, approval or waiver; and (ii) defend or contest any Proceeding challenging any Transaction Document or that may otherwise prevent, materially impede, interfere with, hinder or delay the consummation of the Transactions, including seeking to have any stay or temporary restraining Order entered by any Governmental Entity vacated or reversed.

(c) Operation of Business. Except as otherwise contemplated by this Agreement or any other Transaction Document, as required by applicable Law or as the Purchaser shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Seller will not cause or permit the Company or any of its Subsidiaries to (i) engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business, or (ii) otherwise engage in any practice, take any action, or enter into any transaction of the sort described in §4(i).

(d) Preservation of Business. The Seller will cause the Company and each of its Subsidiaries to keep their respective business and properties substantially intact, including its present operations, physical facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees.

(e) Full Access. The Seller will permit, and will cause each of the Company and its Subsidiaries to permit, Representatives of the Purchaser to have reasonable access at reasonable times, upon reasonable notice and in a manner so as not to interfere with the normal operations of the Seller’s, or its Affiliates’ businesses or personnel, to all premises, properties, personnel, books, records (including Tax records, but excluding confidential portions of personnel records and medical records), contracts, and documents of or pertaining to the Company and its Subsidiaries; provided, that that in any case, such access and requests for access shall (i) be reasonable and serve legitimate business purposes, (ii) not reasonably be expected to cause significant competitive harm to the Seller or its Affiliates if the Transaction is not consummated, (iii) be subject to any limitations that are imposed by Law or reasonably required to preserve any applicable attorney-client privilege or other legally recognized privilege, (iv) be subject to the Confidentiality Agreements, and (v) be made to such Persons identified by the Seller. Notwithstanding the foregoing, none of the Purchaser or its Affiliates or Representatives shall communicate with, question or attempt to gain access to any employee, customer or supplier of the Seller or its Affiliates (including the Company and the Company’s Subsidiaries) without the prior consent, approval and coordination of the Seller.

(f) Notice of Developments. The Parties shall keep each other reasonably apprised of the status of matters relating to the consummation of the Transaction, including, subject to applicable Laws, confidentiality restrictions, contractual obligations or other legally binding requirements, (i) promptly furnishing the other Party with copies of all notices or other communications received from any Person, (ii) any failure to comply with or satisfy, in any material respect, any covenant, condition or agreement hereunder, (iii) the prompt written notice to the other Party of any material adverse development or any Material Adverse Change with respect to Seller or material adverse effect on the Purchaser’s financial condition or ability to consummate the Transaction, and (iv) any event, fact or circumstance that gives such Party any reason to believe that any of conditions set forth in §7 will not be expected to be satisfied. The Purchaser and the Seller shall have the right (but not the obligation) to supplement or amend the Purchaser Schedules and the Seller Schedules, respectively, with respect to any matter hereafter arising or of which it becomes aware after the date hereof (each, a “Schedule Supplement”). To the extent that a Schedule Supplement relates to an event, fact or circumstance that occurred prior to the date of this Agreement, then such Schedule Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation contained in this Agreement, including for purposes of indemnification pursuant to §8. To the extent that a Schedule Supplement relates to an event, fact or circumstance occurring on or after the date of this Agreement, then to the extent that such event, fact or circumstance set forth in such Schedule Supplement amends or supplements a representation or warranty, such Schedule Supplement shall not give rise to, or form the basis of, a claim for a breach of a representation or warranty with respect to any indemnity claim pursuant to §8 (except to the extent caused by the Seller’s breach of §5(c)). All Schedule Supplements may be considered for purposes of determining the satisfaction of the conditions in §7, except as provided in §7(a)(ii) and §7(b)(ii).

(g) Company Acquisition Proposals.

(i) Exclusivity. Subject to §5(g)(ii), from and after the date of this Agreement until the Closing or the earlier termination of this Agreement in accordance with its terms, the Seller, the Company and its Subsidiaries will not, and will not permit their respective Affiliates or Representatives to, (A) solicit, initiate, or encourage (including by way of furnishing information), or take any other action to facilitate, any inquiries or proposals that constitute, or could reasonably be expected to lead to, any Company Acquisition Proposal, or (B) engage in, or enter into, any negotiations or discussions concerning any Company Acquisition Proposal. Notwithstanding the foregoing, in the event that, notwithstanding compliance with the preceding sentence, the Seller or its Affiliates or Representatives receives a Company Acquisition Proposal that constitutes, or that the Board of Directors of the Seller determines in good faith (in consultation with outside counsel) is reasonably likely to lead to, a Company Superior Proposal, the Seller and the Company may, to the extent that the Board of Directors of the Seller determines in good faith (in consultation with outside counsel) that a failure to do so would, in the absence of the foregoing prohibitions, be inconsistent with its fiduciary duties, participate in discussions regarding any Company Superior Proposal in order to be informed and make a determination with respect thereto. In such event, the Seller and the Company shall, (y) no less than twenty-four (24) hours prior to participating in any such discussions, inform the Purchaser of the material terms and conditions of such Company Acquisition Proposal, including the identity of the Person making such Company Acquisition Proposal and (z) promptly keep the Purchaser informed of the status including any material change to the terms of any such Company Acquisition Proposal.

(ii) Go-Shop Period. During the period commencing on the date hereof and ending on the date which is forty-five (45) days hereafter (the “Go-Shop Period”), the Seller and Seller’s Affiliates and Representatives will not be restricted from engaging in any of the activities otherwise proscribed in §5(g)(i) above. During the Go-Shop Period, the Seller and its Affiliates and Representatives shall take commercially reasonable efforts to obtain a Company Superior Proposal in order for the Board of Directors of the Seller to be informed and make a determination with respect thereto. In the event the Seller or the Company receives any Company Superior Proposal, the Seller shall, (A) no less than twenty-four (24) hours prior to participating in any substantive discussions regarding such Company Superior Proposal, inform the Purchaser of the material terms and conditions thereof, including the identity of the Person making such Company Superior Proposal and (B) promptly keep the Purchaser informed of the status, including any material change to the terms of such Company Superior Proposal. Notwithstanding the foregoing or anything in §5(g)(i) to the contrary, with respect to each Company Acquisition Proposal received by the Company during the Go-Shop Period that constitutes, or that the Board of Directors of the Seller determines in good faith (in consultation with outside counsel) is reasonably likely to lead to, a Company Superior Proposal, the Seller and its Affiliates and Representatives may, to the extent that the Board of Directors of the Seller determines in good faith (in consultation with outside counsel) that a failure to do so would, in the absence of the prohibitions in this §5(g)(ii) and in §5(g)(i), be inconsistent with its fiduciary duties, participate in discussions regarding any Company Superior Proposal despite the expiration of the Go-Shop Period in order to be informed and make a determination with respect thereto; provided, that Seller and the Company shall comply with the last sentence of §5(g)(i).

(iii) Company Acquisition Proposal. As used herein, the term “Company Acquisition Proposal” shall mean any bona fide proposal or offer relating to any (A) merger, consolidation, business combination, or similar transaction involving the Seller or any of its Affiliates, (B) sale, lease or other disposition, directly or indirectly, by merger, consolidation, share exchange or otherwise, of any assets of the Seller or any of its Affiliates in one or more transactions, (C) issuance, sale, or other disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants to purchase such securities, or securities convertible into such securities) of the Seller or any Affiliate of the Seller, (D) liquidation, dissolution, recapitalization or other similar type of transaction involving the Seller or any Affiliate of the Seller, (E) tender offer or exchange offer for the securities of the Seller or any of its Affiliates, which transaction, in the case of (A), (B), (C), (D) or (E) above, would result in a third party (or its shareholders) acquiring directly or indirectly more than twenty percent (20%) of the voting power of the Company and the Company’s Subsidiaries or the assets representing more than twenty percent (20%) of the net income, net revenue or assets of the Company and the Company’s Subsidiaries on a consolidated basis, (F) transaction which is similar in form, substance or purpose to any of the foregoing transactions, or (G) public announcement of an agreement, proposal, plan or intention to do any of the foregoing; provided, however, that the term “Company Acquisition Proposal” shall not include the Transactions.

(iv) Company Superior Proposal. For purposes of this Agreement, “Company Superior Proposal” means any Company Acquisition Proposal that (A) is not solicited by the Seller, or by other Persons in violation of the first sentence of §5(g)(i), and (B) the Board of Directors of the Seller determines in good faith would, if consummated, result in a transaction more favorable to the Seller’s stockholders than the Transactions and that the Persons making such Company Acquisition Proposal have the financial means (including third-party financing) to conclude such Company Acquisition Proposal.

(h) Seller Board Approval and Recommendation. Neither the Board of Directors of the Seller nor any committee thereof shall, except to the extent that the failure to do so would be inconsistent with their fiduciary duties as determined in good faith in consultation with outside counsel, (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to the Purchaser, the approval or recommendation by the Board of Directors of the Seller or such committee of this Agreement or the Transactions, (ii) approve, recommend, or otherwise support or endorse any Company Acquisition Proposal, or (iii) cause the Company or the Seller or any Subsidiary to enter into any letter of intent, agreement in principle, acquisition agreement or similar agreement (each a “Company Acquisition Agreement”) with respect to any Company Acquisition Proposal (any such action, “Recommendation Change”). Nothing contained in this §5(h) shall prohibit the Seller from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or 14e-2 promulgated under the Securities Exchange Act or from making any disclosure to the Seller’s stockholders if, in the good faith judgment of the Board of Directors of the Seller, in consultation with outside counsel, such disclosure is necessary for the Board of Directors to comply with its fiduciary duties under applicable Law.

(i) Notification of Proposals. In addition to the obligations of the Company set forth in §5(g) and §5(h), the Seller and the Company will promptly (and in any event within twenty-four (24) hours) advise the Purchaser, orally and in writing, if any Company Acquisition Proposal is made or proposed to be made or any information or access to properties, books or records of the Company is requested in connection with a Company Acquisition Proposal, the principal terms and conditions of any such Company Acquisition Proposal or potential Company Acquisition Proposal or inquiry (and will disclose any written materials received by the Company in connection with such Company Acquisition Proposal, potential Company Acquisition Proposal or inquiry) and the identity of the Person making such Company Acquisition Proposal, potential Company Acquisition Proposal or inquiry. The Seller Company will keep the Purchaser advised of the status and details (including amendments and proposed amendments) of any such request or Company Acquisition Proposal.

(j) Opportunity to Enhance Terms. Notwithstanding any provision hereof to the contrary, prior to taking any action permitted by §5(h), (i) the Seller shall give to the Purchaser at least three (3) business days’ prior written notice of its intention to take such action (which notice shall specify the reasons for any Recommendation Change or the material terms and conditions of any such Company Acquisition Agreement, as applicable) and, no later than the time of such notice, provide the Purchaser an unredacted copy of the relevant proposed transaction agreement and other material documents contemplated with or by the party making any such Company Acquisition Proposal, (ii) if requested by the Purchaser, the Seller and its representatives shall negotiate in good faith with the Purchaser during such notice period to enable the Purchaser to propose changes to the terms of this Agreement intended to eliminate the need for the Board of Directors of the Seller to effect a Recommendation Change or to cause such Company Acquisition Proposal to no longer constitute a Company Superior Proposal, (iii) the Board of Directors of the Seller shall have considered in good faith (after consultation with its financial advisors and outside legal counsel) any changes to this Agreement proposed in writing by the Purchaser and determined that a Recommendation Change would still be required if such changes were to be given effect or that the Company Acquisition Proposal would continue to constitute a Company Superior Proposal if such changes were to be given effect, as applicable, and (iv) in the event of any change to the material facts and circumstances relating to such Recommendation Change or in any change to the form or amount of consideration or any material terms of the transaction in the case of a Company Acquisition Agreement involving a potential transaction or any change to any of the financial terms (including the form or amount of consideration) or any material terms of such Company Acquisition Proposal, the Seller shall, in each case, have delivered to the Purchaser an additional notice and a summary of the relevant proposed transaction agreement and other material documents and a new three (3) Business Day notice period shall commence during which time this §5(j) shall apply.

(k) Meeting of Seller Stockholders. As promptly as practicable after the date hereof, and in no event later than the date which is forty-five (45) days after the date hereof, the Seller shall take all action necessary in accordance with the DGCL and its Certificate of Incorporation and bylaws to convene a meeting of its stockholders (“Seller Stockholders Meeting”) for the purposes of voting upon this Agreement and the Transactions and shall use its commercially reasonable best efforts to hold such Seller Stockholders Meeting as soon as practicable after the date hereof.

(l) SEC Matters.

(i) As promptly as practicable after execution of this Agreement, the Seller shall prepare and file a Current Report on Form 8-K pursuant to the Securities Exchange Act to report the execution of this Agreement, and the Parties shall issue a mutually agreeable press release announcing the execution of this Agreement.

(ii) As promptly as practicable after execution of this Agreement, the Seller will prepare and file with the SEC, in consultation with the Purchaser and its Affiliates, a proxy statement/prospectus and a form of proxy, in connection with the vote of the Seller’s stockholders with respect to the Transactions (such proxy statement/prospectus, together with any amendments thereof or supplements thereto, in each case in the form or forms mailed to the Seller’s stockholders, is herein called the “Proxy Statement”). Each Party will use, and will cause its respective Affiliates to use, commercially reasonable best efforts to have the Proxy Statement approved by the SEC as promptly as practicable after such filing, and the Seller shall thereafter, in compliance with the relevant requirements of the Securities Exchange Act, cause the Proxy Statement to be filed and mailed to its stockholders at the earliest practicable date. The Purchaser acknowledges that the Proxy Statement and certain other forms, reports and other filings required to be made by the Seller under the Securities Exchange Act in connection with the Transaction (collectively, “Additional Proxy Materials”) may require certain disclosures regarding the Purchaser and its Affiliates. Accordingly, the Purchaser covenants and agrees (A) to provide to Seller promptly all information concerning the Purchaser and its Affiliates that is reasonably required to be included in the Proxy Statement and Additional Proxy Materials, (B) to make their respective Representatives available to the Seller and its counsel in connection with the drafting of the Proxy Statement and responding in a timely manner to comments from the SEC, (C) the Proxy Statement, the Additional Proxy Materials and any supplements thereto, or provided by the Seller for inclusion in the Proxy Statement, the Additional Proxy Materials or any supplements thereto or any other document filed with any other regulatory agency in connection herewith, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. If, at any time prior to the Closing, the Purchaser or any of its Affiliates or Representatives becomes aware of any event, fact or circumstance relating to matter which should be set forth in an amendment or a supplement to the Proxy Statement so that such documents would not contain any untrue statement of a material fact or failure to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading, then the Purchaser shall promptly inform the Seller and its Affiliates and Representatives of such event, fact or circumstance and shall cooperate with the Seller in preparing and disseminating any such required amendment or supplement.

(iii) Prior to the Closing, the Parties shall prepare a mutually agreeable press release announcing the consummation of the Transaction.

(iv) The Purchaser acknowledges and agrees that the Purchaser, its Affiliates and Representatives and its and their respective Affiliates and Representatives may be exposed to material nonpublic information regarding the Seller and its Affiliates during the course of the Transaction, and aware of the restrictions imposed by United States federal securities and other Laws applicable to Persons possessing material nonpublic information about a public company. The Purchaser agrees, for itself and on behalf of its Affiliates and Representatives and their respective Affiliates and Representatives, that, while any of them are in possession of such material nonpublic information, none of such Persons shall (A) purchase or sell any securities of the Seller, (B) communicate such information to any other Person, (C) take any other action with respect to the Seller or its securities in violation of such Laws, or (D) cause or encourage any other Person to do any of the foregoing.

(m) Financing; Cooperation with Financing.

(i) The Purchaser shall use its commercially reasonable best efforts to (A) cause the financing contemplated by the executed Equity Commitment Letters and the other documents evidencing Funded Equity Commitments, subject to the terms and conditions set forth therein, to be available at Closing, and (B) solicit additional commitments to purchase shares of Series A Preferred Stock pursuant to the Preferred Stock Purchase Agreement up to an aggregate amount (together with the Funded Equity Commitments) of $10,000,000. Without limiting the generality of the foregoing, the Purchaser shall use, and shall cause its Affiliates to use, commercially reasonable best efforts to (v) satisfy on a timely basis all conditions under all Equity Commitment Letters and all other documents evidencing Funded Equity Commitments and comply with its obligations thereunder; (w) not terminate, amend or modify or waive any remedy any Equity Commitment Letter or any other document evidencing a Funded Equity Commitment; (x) not take any other action that would reasonably be expected to adversely affect the ability of the Purchaser or the Purchaser’s Affiliates (or any beneficiary thereof) to enforce any Equity Commitment Letter or any other document evidencing a Funded Equity Commitment (in each case, subject to the Purchaser’s power to control such events); (y) not take any other action that would reasonably be expected to prevent, impede or delay the consummation of the Transactions or make the satisfaction of the conditions to obtaining the financing contemplated by any executed Equity Commitment Letters less likely to occur; and (z) promptly notify the Seller of any breach or default by any party to any executed Equity Commitment Letter or any other document evidencing a Funded Equity Commitment or the receipt of any written notice or other written communication from any Equity Investor or other financing source with respect to any breach, default, termination or repudiation by any party to any executed Equity Commitment Letter or any other document evidencing a Funded Equity Commitment of any provision thereof.

(ii) If funds in the amount set forth in the executed Equity Commitment Letters as of the date hereof become unavailable to the Purchaser, the Purchaser and its Affiliates shall use its commercially reasonable best efforts to obtain such funds to the extent available on terms no less favorable (and conditions no less onerous) in the aggregate to the Purchaser than as set forth in the Equity Commitment Letters. If prior to the Closing, the Purchaser consummates an issuance or sale of any shares of Series A Preferred Stock, then the Purchaser (A) shall deposit the proceeds thereof in the operating account of the Purchaser; (B) shall not use any of the proceeds thereof to make investments in any Person or for any purpose; (C) shall have complied with is obligations under §5(n) prior to the consummation of any such issuance or sale, and (D) shall cause each of the purchasers of Series A Preferred Stock to enter into the Stockholders Agreement.

(iii) Notwithstanding the foregoing, in the event that the Purchaser enters into Equity Commitment Letters with Equity Investors which provide for at least $2,500,000 in Funded Equity Commitments after the date hereof, the Purchaser and the Partnership may terminate the Equity Commitment Letter with the Equity Investor that has been executed as of the date hereof with the prior written consent of the Seller (not to be unreasonably withheld); provided, that the Purchaser shall require the terminating party to covenant and agree to re-execute an Equity Commitment Letter on the same terms, if at any time following such termination the aggregate Funded Equity Commitments are less than $2,500,000.

(iv) The Seller agrees to provide, and to cause the Company and its Subsidiaries to provide, all reasonable cooperation in connection with the arrangement of the Financing as may be reasonably requested by the Purchaser, including participation in meetings, telephone conferences, due diligence sessions, and furnishing financial, operational, and other pertinent information concerning the Company and its Subsidiaries.

(n) The Purchaser shall (i) file with the Secretary of State of the State of Delaware the A&R Charter, and (ii) amend and restate its bylaws in their entirety, in a form and substance mutually agreeable to the Parties (the “Bylaws”). Following the filing of such A&R Charter and the amendment and restatement of the Bylaws, the Purchaser and its Affiliates shall not take any action to amend, restate, repeal, supplement, terminate, or otherwise modify the A&R Charter or the Bylaws without the Seller’s prior written consent.

6. Post-Closing Covenants.

The Parties agree as follows with respect to the period following the Closing:

(a) Post-Closing Transactions. Contemporaneously with or immediately (but in no event more than three (3) Business Days) following the Closing. The Seller shall make commercially reasonable efforts to cause the Board of Directors of Seller (A) to appoint Rodney Bienvenu as a member of the Board of Directors of Seller, to serve in such capacity until the first annual meeting of the Stockholders of the Seller following the Closing, and (B) subject to his prior resignation, removal or death, to include in the definitive proxy statement for the purpose of soliciting proxies from the Stockholders in connection with the first annual meeting of the Stockholders following the Closing the election of Rodney Bienvenu as a Class III member of the Board of Directors of the Seller.

(b) General. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each Party will take, or will cause to be taken, such further actions and do, or will cause to be done, all such further things (including the execution and delivery of such further instruments and documents) as may be necessary, desirable or appropriate to carry out the provisions of each Transaction Document and to give full effect to the Transactions, or as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under §8 below).

(c) Books and Records. The Seller acknowledges and agrees that from and after the Closing the Purchaser will be entitled to possession of all documents, books, records (including Tax records), agreements, and financial data of the Company and its Subsidiaries; provided, that the Seller and its Affiliates and Representatives shall be entitled to retain originals (and only required to provide the Purchaser and Purchaser’s Affiliates copies) of all documents, books, records, data and other information that are primarily related to the businesses and operations of the Seller and its Affiliates; and provided, further, that all information of or relating to the business and operations of the Seller or its Affiliates (other than the Company and the Company’s Subsidiaries) that is contained or incorporated into the documents, books, records, data and other information delivered to the Purchaser following the Closing shall be deemed Confidential Information of the Seller and its Affiliates and subject to the restrictions set forth herein, including §11(q). For a period of five (5) years following the Closing Date (or such longer period as required by applicable Laws), the Purchaser shall, and shall cause its Affiliates and Representatives to (i) hold all documents, books, records (including Tax records), agreements, and financial data pertaining to the operations of the Company and the Company’s Subsidiaries prior to the Closing in accordance with standard record retention policies and the relevant Tax Laws of each jurisdiction in which the Company and the Company’s Subsidiaries are situated or operate, and (ii) afford to the Seller and Seller’s Affiliates and Representatives, upon reasonable notice and without undue interruption to Purchasers’ business, reasonable access during normal business hours to all such documents, records and information in connection with any applicable filing or reporting obligations and other reasonable business purposes; provided, that nothing herein shall limit the Seller’s rights of discovery; and provided, further, that the Purchaser and the Purchaser’s Affiliates shall not prior to the destruction, alterations or disposal of any of such documents, records or information without providing to Seller written notice and an opportunity to repossess such documents, records and information at Sellers’ expense.

(d) Litigation Support. In the event and for so long as any Party actively is contesting or defending against any Proceeding in connection with (i) the Transactions or (ii) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving any of the Company and its Subsidiaries, the other Party will, and will cause its respective Affiliates to, cooperate with such contesting Party and its Representatives in the contest or defense of such Proceeding, make available their personnel, and provide such testimony and access to their books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or contesting Party (unless the contesting Party is entitled to indemnification therefor under §8 below).

(e) Transition. The Seller shall not take any action that is designed or intended to have the effect of discouraging any lessor, licensor, customer, supplier, or other business associate of any of the Company and its Subsidiaries from maintaining the same business relationships with the Company and its Subsidiaries after the Closing as it maintained with the Company and its Subsidiaries prior to the Closing. The Seller will refer all customer inquiries relating to the businesses of the Company and its Subsidiaries to the Purchaser from and after the Closing.

(f) Confidentiality. Each Party shall, and shall cause its Affiliates and Representatives to, treat and hold in confidence all the Confidential Information of the other Party and its Affiliates, and refrain from disclosing or using any of the Confidential Information of the other Party and its Affiliates except as permitted by this Agreement. In the event that any Party is requested or required (by oral question or request for information or documents in any Proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of the other Party or such other Party’s Affiliates, then such Party will notify the other Party promptly of the request or requirement so that the other Party may seek an appropriate protective Order or waive compliance with the provisions of this §6(f). If, in the absence of a protective Order or the receipt of a waiver hereunder, the disclosing Party or its Affiliates are, on the advice of counsel, compelled to disclose any Confidential Information of the other Party or its Affiliates to any tribunal or else stand liable for contempt, then the disclosing Party may disclose the Confidential Information to the tribunal; provided, however, that the disclosing Party and its Affiliates shall cooperate with the other Party and its Affiliates to obtain, at the reasonable request and sole expense of the other Party, an Order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed.

(g) Covenant Not to Compete. Until the earlier of (y) the third anniversary of the Closing Date, and (z) a default by the Purchaser under the Purchaser Note (which is not cured in accordance with the terms thereof), none of the Seller or its Subsidiaries will engage directly or indirectly in any business that the Company or any of its Subsidiaries conducts as of the Closing Date (each such business, a “Competitive Business”); provided, however, that the foregoing shall not restrict or prohibit the Seller or any of Seller’s Affiliates from:

(i) owning five percent (5%) of the outstanding voting securities of any publicly-traded Person engaged in any Competitive Businesses;

(ii) holding or acquiring interests in or securities of any Person as an investment by its pension funds or other benefit plan funds whether or not such Person is engaged in a Competitive Businesses;

(iii) holding or acquiring interests in or securities of any Person or business that derived, in the aggregate (on a consolidated basis), no more than thirty-five percent (35%) of its total annual revenues in its most recent full fiscal year from a Competitive Business; provided, that following such acquisition, the Seller and its Affiliates shall, within eighteen (18) months thereafter, divest, discontinue or take such other similar actions to cause such acquired Person or business to derive, in the aggregate (on a consolidated basis), no more than five percent (5%) of its total annual revenues for any fiscal year after such eighteen (18) months from the Competitive Business;

(iv) owning or holding any indebtedness or securities of, or participating in the management of, the Purchaser, the Company or any of their respective Affiliates;

(v) performing any obligation or exercising any right under any Transaction Document; or

(vi) engaging in any other business, other than a Competitive Businesses.

If the final judgment of a court of competent jurisdiction declares that any term or provision of this §6(g) is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall 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 shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

(h) D&O Matters.

(i) The Parties agree that all rights to indemnification, advancement of expenses and exculpation by the Company and its Subsidiaries now existing in favor of each Person who is now, or has been prior to the date hereof an officer or director of the Company as provided in the Company’s certificate of incorporation as in effect on the date of this Agreement shall remain in full force and effect in accordance with their terms, and, in the event that any Proceeding is pending or asserted or any claim made during such period, until the final disposition of such Proceeding.

(ii) With respect to any Subsidiaries of the Company, after the Closing Date the Purchaser shall require each such Subsidiary to continue to provide all rights to indemnification, advancement of expenses and exculpation by the Subsidiaries now existing in favor of each Person who is now, or has been prior to the date hereof an officer or director of a Company Subsidiary as provided in the Subsidiary’s organizational documents as in effect on the date of this Agreement.

(iii) Immediately following the Closing, the Purchaser shall obtain and keep in effect appropriate insurance policies with customary coverage and amounts covering the directors and officers of the Company and its Subsidiaries.

(i) Employee Matters.

(i) For a period of at least one (1) year following the Closing, the Purchaser shall provide, or cause its Subsidiaries (including the Company and its Subsidiaries) to provide, to each continuing employee of the Company and its Subsidiaries with (A) base salary (or base wages) that is at least equal to the base salary (or base wages) in effect for such employee immediately prior to the Closing; (B) annual cash bonus opportunities that are at least equal to the annual cash bonus opportunities in effect for such employee immediately prior to the Closing, (C) employee benefits that are at least substantially similar, in the aggregate, to the employee benefits provided by the Seller, the Company or their respective Subsidiaries immediately prior to the Closing, and (D) severance benefits that are at least equal to the severance benefits provided to such employee by the Seller, the Company or their respective Subsidiaries immediately prior to the Closing; provided, however, that the Purchaser shall have the discretion to amend or modify the employee benefits provided pursuant to clauses (C) and (D) of this §6(i)(i) in the Ordinary Course of Business in accordance with the terms of the applicable employee benefit or severance plans.

(ii) From and after the Closing, the Purchaser shall, and shall cause its Subsidiaries (including the Company and its Subsidiaries) to, honor all obligations of the Company and its Subsidiaries to provide employee benefits to continuing employees of the Company and its Subsidiaries, whether under an individual agreement or under an Employee Benefit Plan of the Company or any of its Subsidiaries, in accordance with their terms as in effect immediately prior to the Closing.

(iii) Purchaser will use its commercially reasonable best efforts to enter into an agreement with Insperity, no later than the Closing, on terms substantially similar to the Insperity Agreement (as such term is defined in the Seller Schedules) and if Purchaser enters into such an agreement, to keep such agreement in full force and effect for a period of at least one (1) year following the Closing.

(iv) From and after the Closing, the Purchaser must, and must cause its Subsidiaries (including the Company and its Subsidiaries) and any third-party insurance providers or third-party administrators to, (A) waive all limitations as to any pre-existing condition or waiting periods under the applicable Employee Benefit Plans of the Purchaser or its Subsidiaries with respect to participation and coverage requirements applicable to each continuing employee of the Company and its Subsidiaries under any such Employee Benefit Plans of Purchaser or its Subsidiaries that such employee may be eligible to participate in from and after the Closing, other than limitations or waiting periods that are already in effect with respect to such employee and that have not been satisfied as of the Closing under any comparable Employee Benefit Plan of the Seller, the Company or their respective Subsidiaries; (B) give each continuing employee full credit for purposes of eligibility, vesting and accrual of benefits under any Employee Benefit Plans of Purchaser or its Subsidiaries that such employee may be eligible to participate in from and after the Closing for such employee’s service with the Company and any of its Subsidiaries to the same extent that such service was credited for purposes of any comparable Employee Benefit Plan of the Seller, the Company or their respective Subsidiaries immediately prior to the Closing (except to the extent that such credit would result in the duplication of benefits); and (C) recognize the dollar amount of all co-payments, deductibles and similar expenses incurred by each continuing employee (and his or her eligible dependents) during the calendar year in which the Closing occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare Employee Benefit Plan of Purchaser or its Subsidiaries in which such employee (and dependents) will be eligible to participate from and after the Closing.

(v) Nothing herein shall be construed to create any third-party beneficiary rights in any employee, or any right of any employee to employment or continued employment for any specified period or to a particular term or condition of employment.

7. Conditions to Obligation to Close.

(a) Conditions to Obligation of the Purchaser. The obligation of the Purchaser to consummate the Transactions is subject to satisfaction of the following conditions at or prior to the Closing:

(i) the Requisite Vote shall have been obtained;

(ii) the representations and warranties of the Seller set forth in §4 shall be true and correct in all respects at and as of the Closing Date (except to the extent any such representation or warranty speaks as of a specific date, in which case such representation or warranty shall be true and correct as of such specific date), except where the failure of such representations and warranties to be true and correct at and as of the Closing Date would not constitute a Material Adverse Change; provided, that for purposes of determining whether the foregoing closing condition has been satisfied and the certifications to be made pursuant to §7(a)(xii), the representations and warranties of the Seller in §4 shall be considered without regard to any matter set forth in any Schedule Supplement to the Seller Schedules;

(iii) the Seller shall have performed and complied with, in all material respects, all covenants, agreements, and obligations contained in this Agreement required to be performed or complied with by the Seller through the Closing;

(iv) the Seller shall have delivered to the Purchaser (A) a duly executed counterpart to the Security Agreement; (B) a duly executed counterpart to the Stockholders Agreement; and (C) a duly executed counterpart to each other Transaction Document to which the Seller or its Affiliates are a party;

(v) the Seller shall have delivered to the Purchaser stock certificates representing all of the Company Shares, duly endorsed in blank (or affidavits of lost certificates in lieu thereof) or accompanied by duly executed assignment documents in either case satisfactory in form and substance to the Purchaser;

(vi) the Seller shall have delivered to the Purchaser a fully executed copy of the Contribution Agreement, and such other documents and instruments reasonably requested by the Purchaser evidencing the consummation of the transactions contemplated thereby;

(vii) the Seller, the Company and its Subsidiaries shall have given the notices and received all authorizations, consents, and approvals set forth in §7(a)(vii) of the General Schedules;

(viii) no Proceeding shall be pending before any Governmental Entity of competent jurisdiction seeking a preliminary or permanent injunction with respect to the consummation of the Transactions, and Order or Law of any Governmental Entity of competent jurisdiction prohibiting or restraining the consummation of the Transactions shall be in effect;

(ix) the Seller shall have delivered to the Purchaser duly executed resignations, effective as of the Closing, of each director and officer of the Company and its Subsidiaries other than those whom the Purchaser shall have specified in writing at least five (5) business days prior to the Closing, and duly executed agreements with those Persons specified in §7(a)(ix) of the General Schedules;

(x) the Seller shall have delivered to the Purchaser duly executed agreements, releases or other instruments, in form and substance reasonably satisfactory to the Purchaser, acknowledging the satisfaction in full by the Company and its Subsidiaries of all liabilities and obligations owed to the Seller prior to the Closing Date (other than those obligations and liabilities arising out of the Transaction Documents), including any liabilities described as or otherwise included as intercompany liabilities or payables on the Financial Statements;

(xi) the Seller shall have delivered to the Purchaser a fully executed license, in in form and substance reasonably satisfactory to the Purchaser, granting to the Company and its Subsidiaries (without further consideration) a perpetual, irrevocable, royalty-free, fully paid-up, worldwide right and license to utilize the Intellectual Property set forth in §7(a)(xi) of the General Schedules; and

(xii) the Seller shall have delivered to the Purchaser a duly executed certificate to the effect that each of the conditions specified above in §7(a)(ii), §7(a)(iii), §7(a)(vii) and §7(a)(viii) have been satisfied in all respects.

The Purchaser may waive any condition specified in this §7(a) if the Purchaser executes a writing so stating at or prior to the Closing.

(b) Conditions to Obligation of the Seller. The obligation of the Seller to consummate the Transactions at the Closing is subject to satisfaction of the following conditions at or prior to the Closing:

(i) the Requisite Vote shall have been obtained;

(ii) the representations and warranties of the Purchaser set forth in §3 shall be true and correct in all respects at and as of the Closing Date (except to the extent any such representation or warranty speaks as of a specific date, in which case such representation or warranty shall be true and correct as of such specific date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on the Purchaser’s financial condition or ability to consummate the Transaction; provided, that for purposes of determining whether the foregoing closing condition has been satisfied and the certifications to be made pursuant to §7(b)(x), the representations and warranties of the Purchaser in §3 shall be considered without regard to any matter set forth in any Schedule Supplement to the Purchaser Schedules;

(iii) the Purchaser and its Affiliates shall have performed and complied with, in all material respects, all covenants, agreements and obligations contained in this Agreement required to be performed or complied with by the Purchaser and its Affiliates through at or prior to Closing;

(iv) the Purchaser shall have delivered to the Seller (A) a duly executed counterpart to the Security Agreement; (B) a duly executed counterpart to the Stockholders Agreement; (C) a duly executed counterpart to each other Transaction Document to which the Purchaser or its Affiliates are a party; and (D) a copy of the A&R Charter certified by the Secretary of State of the State of Delaware;

(v) the Purchaser shall have (A) delivered to the Seller a duly executed Purchaser Note, and (B) issued and delivered to the Seller stock certificates representing all of the Purchaser Shares;

(vi) no Proceeding shall be pending before any Governmental Entity of competent jurisdiction seeking a preliminary or permanent injunction with respect to the consummation of the Transactions, and Order or Law of any Governmental Entity of competent jurisdiction prohibiting or restraining the consummation of the Transactions shall be in effect;

(vii) the Purchaser and its Affiliates shall have given the notices and received the other authorizations, consents, and approvals set forth in §7(b)(vii) of the General Schedule;

(viii) the A&R Charter and the Bylaws, in each case, shall be in full force and effect, and no Proceeding for the amendment, restatement, repeal, termination or other modification thereof shall be proposed or pending;

(ix) the Purchaser has consummated (or simultaneously with the Closing will consummate) the issuance and sale of Series A Preferred Stock under the Preferred Stock Purchase Agreement, and the Purchaser and its Affiliates shall have delivered to the Seller such other documents and instruments reasonably requested by the Seller evidencing that proceeds of such issuance and sale were not less than $2,500,000 and all such proceeds have been deposited in the operating account of the Purchaser;

(x) the Purchaser shall have delivered to the Seller a duly executed certificate to the effect that each of the conditions specified above in §7(b)(ii), §7(b)(iii), §7(b)(vi), §7(b)(vii), §7(b)(viii), and §7(b)(ix) has been satisfied in all respects.

The Seller may waive any condition specified in this §7(b) if it executes a writing so stating at or prior to the Closing.

8. Remedies for Breaches of This Agreement.

(a) Survival. Subject to the other provisions of this Agreement, (i) each of the representations and warranties (A) of the Purchaser set forth in §3, (B) of the Seller set forth in §4, and (C) of the Parties set forth in any other Transaction Document (other than this Agreement) shall survive the Closing until 12:01 a.m. New York City time on the nine (9) month anniversary of the Closing Date; (ii) each obligation, covenant and agreement of the Parties in this Agreement or in any other Transaction Document which by its terms is to be performed at or prior to the Closing shall survive the Closing for a period of ninety (90) days; and (iii) each obligation, covenant and agreement of the Parties in this Agreement or in any other Transaction Document which by its terms is to be performed after the Closing shall survive the Closing in accordance with its terms or until it is fully performed; provided, that the Tax Representations shall survive until thirty (30) days after the expiration of the applicable statute of limitations. No Party shall have any obligation to indemnify or hold harmless the other Party pursuant to this §8 unless notice of a claim is given to such Party prior to the expiration of the applicable survival period set forth above; provided, that if a Party is given notice of a claim before the end of the applicable survival period above, such survival period shall continue as to such claim until such claim is finally resolved.

(b) Indemnification for the Benefit of the Purchaser. Subject to the limitations set forth herein, from and after the Closing:

(i) Generally. The Seller agrees to indemnify and hold harmless the Purchaser Parties from and against any Adverse Consequences actually suffered by the Purchaser Parties resulting from, arising out of, relating to, in the nature of, or caused by (A) any inaccuracy in or breach of any representation or warranty of the Seller in §4 made on the date hereof and as though such representations or warranties were made on the Closing Date and as though the Closing Date were substituted for the date of this Agreement throughout §4, or of any Seller Party in any other Transaction Document (other than the Note and the Security Agreement); and (B) the failure by the Seller Parties to perform or satisfy any obligation, covenant or agreement in this Agreement or in any other Transaction Document (other than the Note and the Security Agreement).

(ii) Taxes. The Seller agrees to indemnify and hold harmless the Purchaser Parties from and against any Purchaser Tax Loss; provided, that, notwithstanding anything else in this Agreement to the contrary, no Seller Party shall be liable for any Adverse Consequences related to Taxes except for Purchaser Tax Losses. Purchaser Tax Losses shall be computed taking into account Tax Benefits as provided in §8(d)(v).

(c) Indemnification for the Benefit of the Seller. Subject to the limitations set forth herein, from and after the Closing:

(i) Generally. The Purchaser agrees to indemnify and hold harmless the Seller Parties from and against any Adverse Consequences actually suffered by the Seller Parties resulting from, arising out of, relating to, in the nature of, or caused by (A) any inaccuracy in or breach of any representation or warranty of the Purchaser in §3 made on the date hereof and as though such representations or warranties were made on the Closing Date and as though the Closing Date were substituted for the date of this Agreement throughout §3, or of any Purchaser Party in any other Transaction Document (other than the Note and the Security Agreement); and (B) the failure by the Purchaser Parties to perform or satisfy any obligation, covenant, or agreement in this Agreement or in any other Transaction Document (other than the Note and the Security Agreement).

(ii) Taxes. The Purchaser agrees to indemnify and hold harmless the Seller Parties from and against any Seller Tax Loss; provided, that, notwithstanding anything else in this Agreement to the contrary, no Purchaser Party shall be liable for any Adverse Consequences related to Taxes except for Seller Tax Losses. Seller Tax Losses shall be computed taking into account Tax Benefits as provided in §8(d)(v).

(d) Certain Limitations.

(i) Specified Matters. Notwithstanding anything in this §8 to the contrary, the rights, remedies, and obligations of the Seller Parties and Purchaser Parties with respect to the Note, the Security Agreement and the matters set forth in §8(d)(i) of the General Schedules, and any Adverse Consequences relating to any breach thereof or otherwise arising therefrom, shall be governed exclusively by the terms and conditions set forth in the Note, the Security Agreement and §8(d)(i) of the General Schedules, respectively, and shall not be subject to this §8 unless provided otherwise.

(ii) De Minimis. No Adverse Consequences may be claimed by the Purchaser Parties pursuant to §8(b), or by the Seller Parties pursuant to §8(c), unless the amount of such Adverse Consequences, together with all other Adverse Consequences arising out of the same facts and circumstances, exceeds $10,000; provided, that the foregoing limitation shall not Adverse Consequences resulting from, arising out of, relating to, in the nature of, or caused by any Fraud on the part of the Seller, Purchaser or any of their respective Affiliates.

(iii) Deductible. The Seller shall not be liable to any Purchaser Party pursuant to §8(b), unless and until the aggregate Adverse Consequences incurred by the Purchaser Parties exceeds $250,000 (the “Deductible”), in which case, the Purchaser Parties shall only be entitled to recover Adverse Consequences in excess of the Deductible; provided, that the foregoing limitation shall not apply to any Adverse Consequences resulting from, arising out of, relating to, in the nature of, or caused by any Fraud on the part of the Seller or its Affiliates. Purchaser shall not be liable to any Seller Party under §8(c), unless and until the aggregate Adverse Consequences incurred by the Seller Parties exceeds the Deductible, in which case the Seller Parties shall only be entitled to recover Adverse Consequences in excess of the Deductible; provided, that the foregoing limitation shall not apply to any Adverse Consequences resulting from, arising out of, relating to, in the nature of, or caused by any Fraud on the part of the Purchaser or its Affiliates.

(iv) Cap. The aggregate liability of the Seller pursuant to §8(b) shall not exceed $2,500,000. Notwithstanding the foregoing, (A) to the extent that a Purchaser Party realizes any Adverse Consequences arising out of, relating to, in the nature of, or caused by any failure by the Seller Parties to perform or satisfy any of their respective obligations, covenants or agreements in this Agreement or in any other Transaction Document following the Closing for which it is entitled to indemnification pursuant to §8(b)(i)(B), the maximum aggregate liability of the Seller pursuant to §8 shall be the aggregate amount of principal and accrued but unpaid interest outstanding under the Purchaser Note at the time the first claim for indemnification is made, but in no event shall exceed the Purchase Price as adjusted pursuant to the terms hereof; and (B) the limitations in this §8(d)(iv) shall not apply to any (1) indemnity under §8(b)(ii) or §8(c)(ii), or (2) Adverse Consequences resulting from, arising out of, relating to, in the nature of, or caused by any Fraud on the part of the Seller or its Affiliates.

(v) Mitigation; Other Sources. Each Indemnified Party shall take reasonable steps to mitigate any Adverse Consequences upon becoming aware of any events, facts, or circumstances that would be reasonably expected to give rise to such Adverse Consequences. The amount of Adverse Consequences payable by an Indemnifying Party under this §8 shall be (A) reduced by any insurance proceeds received by the Indemnified Party (which the Indemnified Party shall use commercially reasonable efforts to recover) with respect to the claim for which indemnification is sought; (B) reduced by any amounts, when and as, recovered from any third parties, by way of indemnification or otherwise, with respect to the claim for which indemnification is sought; and (C) reduced by the amount of any Tax Benefit realized or realizable by the Indemnified Party (in cash or as a reduction in Taxes otherwise due) arising from the incurrence or payment of any such Adverse Consequences. In computing the amount of any such Tax Benefit, the Indemnified Party shall be deemed to fully utilize, at the highest applicable marginal Tax rate then in effect, all Tax items arising from the incurrence or payment of any indemnified Adverse Consequences. If an indemnification payment is received by an Indemnified Party in respect of any Adverse Consequences, and such Indemnified Party later receives insurance recoveries or third-party indemnity payment or realizes any Tax Benefit in respect of all or a portion of such Adverse Consequences, then the Indemnified Party shall promptly notify the Indemnifying Party, and within five (5) Business Days thereafter, deliver to the Indemnifying Party the amount of the indemnification payments previously paid to the Indemnified Party with respect to such Adverse Consequences.

(vi) Single Recovery. Notwithstanding anything contained in this Agreement to the contrary, any amounts payable pursuant to the indemnification obligations under §8 shall be paid without duplication, and in no event shall any Indemnified Party be entitled to recover indemnification payments under different provisions of this Agreement or other Transaction Documents for the same Adverse Consequences, including any Adverse Consequences that are expressly taken into account and reflected in working capital or other similar post-closing adjustment provided for in any Transaction Document.

(e) Matters Involving Third Parties.

(i) If any Indemnified Party receives notice of a claim or Proceeding from any third party with respect to any matter which may give rise to a claim for indemnification against any Indemnifying Party under this §8 (a “Third Party Claim”), then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

(ii) Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice satisfactory to the Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within fifteen (15) days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will assume the defense of such Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations (if any) hereunder, (C) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, (D) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice adverse to the continuing business interests of the Indemnified Party, and (E) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.

(iii) So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with §8(e)(ii) above, (A) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably).

(iv) In the event any of the conditions in §8(e)(ii) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith), (B) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including attorneys’ fees and expenses), and (C) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this §8.

(f) Certain Tax Matters. Notwithstanding the foregoing, to the extent that there is any conflict between the provisions of this §8 and §9, the provisions of §9 shall control.

(g) Recoupment Under Purchaser Note. The Purchaser Parties shall have the option of recouping all or any part of any amounts owing by the Seller under this §8 (as determined by the agreement of the Parties or a final non-appealable Order of a court of competent jurisdiction) by notifying the Seller (i) that the principal amount outstanding under the Purchaser Note is being reduced by such amount (which shall affect the timing and amount of payments required under the Purchaser Note in the same manner as if the Purchaser had made a permitted prepayment without premium or penalty), or (ii) that the number of shares of Purchaser Common Stock received upon conversion of a portion of the Purchaser Note are being cancelled (the number of such shares of Purchaser Common Stock being cancelled shall equal the number of shares received by the Seller for conversion of an amount of the Purchaser Note equal to the amount so satisfied).

(h) Exclusive Remedy. The Parties acknowledge and agree, for themselves and on behalf of their respective Affiliates and Representatives, that the sole and exclusive remedy of each Indemnified Party with respect to any and all Adverse Consequences arising out of, resulting from or for any inaccuracy in or breach of any representation, warranty, covenant, agreement or obligation set forth in this Agreement or any other Transaction Document (other than the Note and Security Agreement), shall be pursuant to the indemnification provisions set forth in this §8; provided, however, that nothing in this §8(h) shall (i) operate to interfere with or impede the operation of the provisions of any this Agreement or Transaction Document expressly providing for the resolution of certain disputes by any independent third party, including the Accounting Firm, (ii) operate to interfere with or impede the operation of the provisions of this Agreement or any other Transaction Document providing for, or otherwise limit the rights of any Party to seek or obtain, any equitable remedy, including specific performance or injunctive relief, whether instead of or in addition any other rights such Party may have hereunder, (iii) limit the liability of any Party or limit the remedies available to any Party with respect to any Fraud or criminal misconduct, and (iv) operate to interfere with or impede the operation of §8(d)(i) of this Agreement.

(i) Tax Treatment of Indemnification Payments. Any indemnification payment made pursuant to this Agreement shall be treated by Purchaser and Seller as an adjustment to the Purchase Price for Tax purposes.

9. Tax Matters.

The following provisions shall govern the allocation of responsibility as between the Purchaser, the Company and the Seller for certain Tax matters following the Closing Date:

(a) Tax Returns.

(i) Seller shall (A) prepare and file (or cause to be prepared and filed) all Tax Returns with respect to the Company or any of its Subsidiaries that are required to be filed on or prior to the Closing Date (taking into account any extension of a required filing date), (B) prepare (or cause to be prepared) all Income Tax Returns of the Company or any of its Subsidiaries for any Pre-Closing Tax Period that are required to be filed after the Closing Date (taking into account any extensions of a required filing date), and (C) prepare and file (or cause to be prepared and filed) all Tax Returns that relate to any Seller Affiliated Group (each a “Seller-Filed Tax Return”). Seller shall deliver to Purchaser each Seller-Filed Tax Return due after the Closing Date. Purchaser shall cooperate with Seller regarding the preparation and filing of any Seller-Filed Tax Returns, including causing the Company or applicable Subsidiary to promptly file, in the manner prepared by Seller, any Seller-Filed Tax Return that needs to be filed after the Closing Date by such Company or Subsidiary.

(ii) Purchaser, at its sole cost and expense, shall cause the Company and each Subsidiary of the Company to file (taking into account any extensions of a required filing date) all Tax Returns of the Company or any of its Subsidiaries that are not Seller-Filed Tax Returns (each a “Purchaser-Filed Tax Return”). Any Purchaser-Filed Tax Return relating to a Pre-Closing Tax Period or Straddle Period shall be prepared in a manner consistent with past practice and without a change of any election or any accounting method and shall be submitted by Purchaser to Seller (together with schedules, statements and, to the extent reasonably requested by Seller, supporting documentation) at least 30 business days prior to the due date (including any applicable extension) of such return (or, if earlier, 30 days prior to the intended filing date). Seller shall have the right to review and comment on such Purchaser-Filed Tax Return. If Seller, within 10 business days after review of any such Purchaser-Filed Tax Return, notifies Purchaser in writing that it objects to any items in such return, the disputed item shall be resolved in a manner mutually agreeable to both Parties within 10 business days, and if not so resolved, then by the Accounting Firm within a reasonable time, taking into account the deadline for filing such return. Upon resolution of all such items, the relevant Purchaser-Filed Tax Return shall be adjusted to reflect such resolution and shall be binding upon the Parties without further adjustment. The costs, fees and expenses of such Independent Accountant shall be borne equally by Purchaser and Seller.

(iii) Except to the extent otherwise required pursuant to a “determination” within the meaning of Code §1313(a) (or any comparable provision of Law), neither the Company nor any of its Subsidiaries shall amend any Tax Return with respect to a Pre-Closing Tax Period or a Straddle Period or otherwise initiate (or agree to) any other Seller Tax Matter without the prior written consent of Seller, such consent not to be unreasonably withheld, conditioned or delayed.

(iv) With respect to certain Tax matters, the Seller and the Purchaser agree as follows:

(v) The Company’s and its Subsidiaries’ year end for U.S. federal Income Tax purposes shall end as of the end of the Closing Date.

(A) That no election shall be made to waive the carry back of any net operating loss or other Tax attribute or Tax credit incurred or realized in a Pre-Closing Tax Period by the Company or any Subsidiary of the Company.

(B) That no election shall be made by any party (or the Company or any Subsidiary of the Company) under Treasury Regulation Section 1.1502-76(b)(2) (or any similar provision of state, local, or non-U.S. Law) to ratably allocate items incurred by the Company or any Subsidiary of the Company.

(C) That Seller shall include the Company and its Subsidiaries on the U.S. federal Income Tax Return for the Seller Affiliated Group, as applicable, through the close of business on the Closing Date and, to the extent permitted by applicable Law, all deductions relating to the Transaction Costs and other amounts the Seller is incurring shall (to the extent paid) be claimed on the Tax Returns of the Seller Affiliated Group (or, for applicable state and local purposes, a Pre-Closing Tax Period or Straddle Period Tax Return of the Company or the applicable Subsidiary that incurred the Transaction Cost).

(D) That Purchaser and Seller shall treat the payments to the Seller with respect to the Tax refunds and Tax Benefits under §9(i) as payments of additional Purchase Price for all relevant Tax purposes, provided that Seller and the Purchaser shall treat such payments as interest to the extent required Code Section 483 or any other analogous provision of the Code or under state or local Tax Law.

(b) Allocation of Taxes. To the extent permissible under applicable Laws, the Parties agree to elect (and have the Company and each of its Subsidiaries elect) to have each Tax year of the Company and each of its Subsidiaries end on the Closing Date and, if such election is not permitted or required in a jurisdiction with respect to a specific Tax such that the Company or any of its Subsidiaries is required to file a Tax Return for a Straddle Period, to utilize the following conventions for determining the amount of Taxes attributable to the portion of the Straddle Period ending on the Closing Date: (i) in the case of property Taxes and other similar Taxes imposed on a periodic basis, the amount attributable to the portion of the Straddle Period ending on the Closing Date shall equal the Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of calendar days in the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period; and (ii) in the case of all other Taxes (including but not limited to Income Taxes, sales Taxes, employment Taxes, and withholding Taxes), the amount attributable to the portion of the Straddle Period ending on the Closing Date shall be determined as if the Company or applicable Subsidiary filed a separate Tax Return with respect to such Taxes for the portion of the Straddle Period ending as of the end of the day on the Closing Date using a “closing of the books methodology.” For purposes of applying the foregoing, (A) any item determined on an annual or periodic basis (including amortization and depreciation deductions) for Income Tax purposes shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period; (B) any Tax or item of income, gain, loss, deduction or credit from a transaction contemplated by §9(h) shall be allocated to the portion of the Straddle Period beginning on the day after the Closing Date; and (C) any item of deduction attributable to any Transaction Costs shall (to the extent paid by Seller and its Affiliates) be allocated to the portion of the Straddle Period ending on the Closing Date.

(c) Tax Periods Beginning After the Closing Date. The Company and its Subsidiaries shall prepare or cause to be prepared and file or cause to be timely filed all Tax Returns for the Company and its Subsidiaries for all periods which begin after the Closing Date and the Company and its Subsidiaries shall pay all Taxes shown on such Tax Returns. The Seller shall not have responsibility for any Tax Returns for the Company and its Subsidiaries for any periods beginning after the Closing Date.

(d) Cooperation on Tax Matters.

(i) The Purchaser, the Company and its Subsidiaries and the Seller shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this §9 and any Proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information which are reasonably relevant to any such Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Company and its Subsidiaries and the Seller agree (A) to retain all books and records with respect to Tax matters pertinent to the Company and its Subsidiaries relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other Party so requests, and at such Party’s sole cost and expense, the Company and its Subsidiaries or the Seller, as the case may be, shall allow the other Party to take possession of such books and records.

(ii) Notwithstanding anything to the contrary herein, except to the extent solely relating to the Company or its Subsidiaries, Seller and its Affiliates shall not be required at any time to provide to Purchaser any right to access or to review any Tax Return or Tax work papers of Seller, any Seller Affiliated Group, or any Affiliate of Seller.

(e) Tax Sharing Agreements. The Seller shall cause all Tax Sharing Agreements with respect to or involving the Company and its Subsidiaries to be terminated as of the Closing Date and, after the Closing Date, the Company and its Subsidiaries shall not be bound thereby or have any Liability thereunder.

(f) Certain Taxes and Fees. All transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the Transactions (“Transfer Taxes”), shall be paid by the Purchaser when due, and Purchaser will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, and, if required by applicable Law, the Seller will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.

(g) Connected Data. For the avoidance of doubt, Connected Data shall be included within the meaning of Subsidiaries for all purposes in this §9.

(h) Purchaser Covenants. Purchaser covenants that it shall not (and that it shall not cause or permit the Company, any Subsidiary of the Company or any Affiliate of Purchaser), if doing so could result in an increase of any Taxes of the Seller, an increase for any Tax that could constitute a Seller Indemnified Tax, or a decrease (or deferral) of any refund that is payable to the Seller under §9, (a) take any action on the Closing Date but after the Closing other than in the Ordinary Course of Business, (b) pay any dividend or redeem any shares of stock or (c) enter into any transaction, merger or restructuring, liquidate, or convert to another type of entity under state Law. Purchaser further covenants that it shall not (and that it shall not cause or permit the Company, any Subsidiary of the Company or any Affiliate of the Purchaser to) (i) extend or waive the statute of limitations for the assessment or collection of any Seller Indemnified Tax (without the prior written consent of the Seller, such consent not to be unreasonably withheld, conditioned, or delayed); (ii) file for a private letter ruling or other ruling from a Governmental Entity that relates to Taxes or Tax Returns of a Purchased Entity for a Pre-Closing Tax Period or Straddle Period; or (iii) make or change or revoke any Tax election, amend any Tax Return, take any Tax position on any Tax Return, or pursue (or agree to) any voluntary disclosure with respect to (or that otherwise affects) Taxes or Tax Returns of the Company or any of its Subsidiaries for a Pre-Closing Tax Period or Straddle Period.

(i) Tax Refunds; Tax Benefits. From and after the Closing, Purchaser shall pay to Seller the amount of any refunds, credits, or offsets received by any Purchaser Party in respect of Taxes of the Company or any of its Subsidiaries for a Pre-Closing Tax Period (or portion of a Straddle Period ending on or prior to the Closing Date as determined pursuant to §9(b)) (net of any reasonable third-party out-of-pocket expenses incurred by the Purchaser Parties in obtaining such refund or credit). Any amount due under this §9(i) shall be paid ten (10) days after receiving the refund from the Governmental Entity (or, in the case of a credit or offset, ten (10) days after filing the Tax Return claiming such credit or offset). Notwithstanding the foregoing, no amount shall be due under this §9(i) to the extent such amount is included in the Final Working Capital.

(j) Tax Claims; Tax Controversy.

(i) If any Governmental Entity makes a claim or demand for a Tax that is a Purchaser Tax Loss or Seller Tax Loss against an Indemnified Party for such Tax (any such claim or demand, a “Tax Claim”), the party that has the right to be indemnified (the “Tax Indemnified Party”) shall notify the party from which such indemnification would be sought (the “Tax Indemnifying Party”) of such Tax Claim within 10 days of receipt thereof, and shall give the Tax Indemnifying Party such information with respect thereto as the Tax Indemnifying Party may reasonably request. The Tax Indemnifying Party may discharge, at any time, its indemnification obligation with respect to any Tax Claim by paying to the Tax Indemnified Party the amount payable pursuant to §8, calculated on the date of such payment. The Tax Indemnifying Party shall have the right, at its own expense, to participate in and, upon notice to the Tax Indemnified Party, to assume the defense of any Proceeding (including any Tax audit) relating to a Tax Claim (a “Tax Controversy”). If the Tax Indemnifying Party assumes such defense, the Tax Indemnifying Party shall have the sole discretion as to the conduct of such defense and the Tax Indemnified Party shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Tax Indemnifying Party. Whether or not the Tax Indemnifying Party chooses to assume the defense of any Tax Claim, the Parties hereto shall cooperate and shall cause their Affiliates to cooperate in the defense or prosecution thereof.

(ii) Notwithstanding the foregoing, Seller shall control any Tax Controversy relating to any Taxes or Tax Return of any Seller Affiliated Group.

(iii) The Tax Indemnifying Party shall not be liable for any Tax (i) the payment of which was made without the Tax Indemnifying Party’s prior written consent, unless the Tax Indemnified Party has complied with the provisions set forth in this §9(j) and a final “determination” within the meaning of the Code (or comparable provisions of Law) of the amount of Tax has been made, (ii) resulting from a settlement effected without the prior written consent of the Tax Indemnifying Party, or (iii) resulting from any Tax Controversy with respect to which the Tax Indemnified Party has not complied with the provisions set forth in this §9(j) (including affording the Tax Indemnifying Party with the right, in accordance with this §9(j), to participate in or control the defense of a Tax Controversy that could result in a Tax for which the Tax Indemnifying Party is responsible under §8).

10. Termination.

(a) Termination of Agreement. Certain of the Parties may terminate this Agreement as provided below:

(i) the Purchaser and the Seller may terminate this Agreement by mutual written consent at any time prior to the Closing;

(ii) the Purchaser may terminate this Agreement by giving written notice to the Seller at any time prior to the Closing (A) in the event the Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Purchaser has notified the Seller of the breach, and the breach has continued without cure for a period of 30 days after the written notice of such breach has been delivered to the Seller, or (B) if the Closing shall not have occurred on or before January 31, 2017, by reason of the failure of any condition precedent under §7(a) hereof (unless the failure results primarily from the Purchaser breaching any material representation, warranty, or covenant contained in this Agreement);

(iii) the Purchaser may terminate this Agreement by giving written notice to the Seller at any time prior to the Closing in the event (A) the Board of Directors of the Seller or any committee thereof, shall have withdrawn or modified in a manner adverse to the Purchaser its approval or recommendation of the Transactions or this Agreement, (B) the Seller shall have failed to include in the Proxy Statement the recommendation of the Board of Directors of the Seller in favor of approval of the Transactions or this Agreement, (C) in connection with a Rule 14d-9 disclosure, the Board of Directors of the Seller shall have taken any action other than a rejection of a Rule 14d-9 proposal, (D) the Board of Directors of the Seller or any committee thereof shall have recommended any Company Acquisition Proposal, (E) the Seller or any of its officers or directors or other Persons shall have entered into discussions or negotiations in violation of §5(g)(i) or the Seller shall have otherwise breached §5(g) through §5(l), (F) the Board of Directors of the Seller or any committee thereof shall have resolved to do any of the foregoing or (G) any Company Acquisition Proposal is consummated or an agreement with respect to any Company Acquisition Proposal is signed; and

(iv) the Seller may terminate this Agreement by giving written notice to the Purchaser at any time prior to the Closing (A) in the event the Purchaser has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Seller has notified the Purchaser of the breach, and the breach has continued without cure for a period of 30 days after written notice of such breach has been delivered to the Purchaser, or (B) if the Closing shall not have occurred on or before January 31, 2017, by reason of the failure of any condition precedent under §7(b) hereof (unless the failure results primarily from the Seller breaching any material representation, warranty, or covenant contained in this Agreement).

(b) Termination Fee.

(i) If this Agreement is terminated by the Seller pursuant to §10(a)(iv)(B) or the Purchaser pursuant to §10(a)(ii)(B), in either case, due to a failure to obtain the Requisite Vote, then the Seller shall promptly, but in no event later than the fifth business day after such termination, pay to the Purchaser a termination fee equal to (A) $375,000, multiplied by (B) a fraction, the numerator of which is the aggregate Funded Equity Commitments as of the close of business on the fourteenth day of the Go-Shop Period, and the denominator of which is $10,000,000.

(ii) If this Agreement is terminated by the Purchaser pursuant to §10(a)(iii) as a result of any Company Acquisition Proposal, then the Seller shall pay to the Purchaser promptly, upon the closing of the transactions contemplated by the Company Acquisition Proposal, a termination fee equal to (A) $750,000, multiplied by (B) a fraction, the numerator of which is the aggregate Funded Equity Commitments as of the close of business on the fourteenth day of the Go Shop Period, and the denominator of which is $10,000,000.

(iii) The fee (if any) payable pursuant to §10(b)(i) and §10(b)(ii) is referred to herein as the “Termination Fee.” The Seller acknowledges that the agreements contained in this §10 are an integral part of the Transactions, and that, without these agreements, Purchaser would not enter into this Agreement, and accordingly, if the Seller fails promptly to pay the amount due pursuant to this §10(b), and, in order to obtain such payment, Purchaser commences a Proceeding which results in a judgment against the Seller, the Seller shall pay to the Purchaser its costs and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of the fee at the Applicable Rate in effect on the date such payment was required to be made.

(c) Effect of Termination. Subject to §10(b) above and §10(d) below, if any Party terminates this Agreement pursuant to §10(a) above, all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party; provided, that notwithstanding the foregoing, (a) the confidentiality obligations of the Parties set forth in §6(f), the defined terms §1, and provisions set forth in §11 shall survive the termination; and (b) no Party shall be excused or relieved of from any liability arising out of, relating to or resulting from any breach of this Agreement prior to such termination.

(d) Effect of Termination Fee. If this Agreement is terminated under circumstances in which the Purchaser is entitled to receive the Termination Fee, the payment of such Termination Fee shall be the sole and exclusive remedy available to the Purchaser; provided, that the foregoing shall not limit the liability of any Party or limit the remedies available to any Party with respect to any Fraud or criminal misconduct.

11. Miscellaneous.

(a) Press Releases and Public Announcements. Except as provided herein, no Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the Purchaser and the Seller; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable Law or any listing or trading agreement concerning its publicly traded securities (in which case the disclosing Party will use its commercially reasonable best efforts to advise the other Parties prior to making the disclosure).

(b) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns, except as provided herein (including pursuant to §6(h), §8, and §11(q)).

(c) Entire Agreement. This Agreement and the Transaction Documents constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof.

(d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties; provided, however, that the Purchaser may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases the Purchaser nonetheless shall remain responsible for the performance of all of its obligations hereunder), and (iii) assign any or all of its rights and interests hereunder and delegate any or all of its obligations hereunder to a transferee in connection with a transfer of the Company Shares.

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

(f) Interpretation and Usage. The section captions or headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Each reference to a designated section (or §), Schedule, or an Exhibit is, unless otherwise specified, to a section (or §), Schedule or an Exhibit to this Agreement. Unless the context of this Agreement clearly requires otherwise: (i) all nouns and pronouns stated in either the singular or the plural will include the singular and the plural, and pronouns stated in the masculine, the feminine or neuter gender will include the masculine, the feminine, and the neuter, (ii) the words “including” and “includes” shall be deemed to be followed by “without limitation” and “but is not limited to,” respectively; (iii) the words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section (or §) or other subdivision; (iv) “or” is not exclusive; (v) the word “will” shall have the same meaning as the word “shall”; (vi) the word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends and shall not simply mean “if”; (vii) references to “day” or “days” in the lower case means calendar days; and (viii) references to a particular Person include such Person’s successors and assigns to the extent not prohibited by this Agreement.

(g) Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (a) when delivered personally, with written confirmation of receipt; (b) when received by the addressee if sent by a nationally recognized overnight courier; (c) on the date sent by facsimile or email (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail (in each case, return receipt requested, postage pre-paid), and addressed to the intended recipient as set forth below:

If to the Seller:		With a copy to:

Chairman, Imation Corp.		Joel L. Rubinstein
Joseph A. De Perio		Partner
Clinton Group, Inc.		Winston & Strawn LLP
510 Madison Avenue, 9th Floor		200 Park Avenue
New York, NY 10022		New York, NY 10166-4193
jad@clinton.com		JRubinstein@winston.com
(212) 377-4252		(212) 294-5336

If to the Purchaser:		With a copy to:

NXSN Acquisition Corp.		Ernest (JR) Mysogland
c/o Rodney A. Bienvenu, Jr.		Managing Member
Managing Member		Spear Point Capital Management LLC
Spear Point Capital Management LLC		191 Post Road West
400 Poydras St., Suite 2100		Westport, CT 06880
New Orleans, LA 70130		jr@spearpointllc.com
ron@spearpointllc.com		(203) 221-2641
(504) 252-1369

Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

(h) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic Laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware.

(i) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Purchaser and the Seller. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

(j) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(k) Expenses. Except as otherwise provided in §10 concerning the Termination Fee, each of the Purchaser and the Seller will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the Transactions; provided, however, that the Seller will also bear the costs and expenses of the Company and its Subsidiaries (including all of their legal fees and expenses) in connection with this Agreement and the Transactions in the event that the Transactions are consummated.

(l) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties 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. Any reference to any statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant. The Exhibits, Annexes, and Schedules identified in this Agreement are incorporated herein by reference shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

(m) Schedules. Any item disclosed in any Schedule referenced by a particular section (or §) in this Agreement shall be deemed to have been disclosed with respect to every other section (or §) in this Agreement if the relevance of such disclosure to such other sections is reasonably apparent on its face. The specification of any dollar amount in the representations or warranties contained in this Agreement or the inclusion of any specific item in any Schedule is not intended to imply that such amounts, or higher or lower amounts or the items so included or other items, are or are not material, and no Party shall use the fact of the setting of such amounts or the inclusion of any such item in any dispute or controversy as to whether any obligation, item or matter not described herein or included in a Schedule is or is not material for purposes of this Agreement. The inclusion of information in any Schedule shall not be construed as an admission that such information is material. Capitalized terms set forth in the Schedules attached shall have the same meanings as set forth in this Agreement, unless defined otherwise in such Schedule.

(n) Specific Performance. Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to an injunction, specific performance or other equitable relief in the event of any breach or threatened breach of this Agreement of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter (subject to the provisions set forth in §11(o) below), in addition to any other remedy to which they may be entitled, at law or in equity.

(o) Submission to Jurisdiction. Each of the Parties submits to the jurisdiction of any state or federal court sitting in the City of Wilmington and the County of New Castle, Delaware, in any action or Proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or Proceeding may be heard and determined in any such court. Each Party also agrees not to bring any action or Proceeding arising out of or relating to this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or Proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto. Any Party may make service on any other Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in §11(g) above. Nothing in this §11(o), however, shall affect the right of any Party to bring any action or Proceeding arising out of or relating to this Agreement to serve legal process in any other manner permitted by Law.

(p) Remedies Cumulative. Except as otherwise provided, all rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any such right, power or remedy by any Party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such Party.

(q) Conflict Waiver; Attorney-Client Privilege.

(i) Each of the Parties acknowledges and agrees, on its own behalf and on behalf of its directors, members, shareholders, partners, officers, employees and Affiliates, that:

(A) The Firm has acted as counsel to the Seller and its Affiliates (including the Company and the Company’s Subsidiaries), and the Company in connection with the negotiation, preparation, execution and delivery of the Transaction Documents and the consummation of the Transactions. The Purchaser agrees, and shall cause its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) to agree, that, following consummation of the Transactions, such representation and any prior representation of the Seller and its Affiliates (including the Company and the Company’s Subsidiaries) by the Firm shall not preclude the Seller and its Affiliates from serving as counsel to the Seller or Seller’s Affiliates or Representatives, in connection with any liability, obligation, dispute or Proceeding arising out of or relating to the Transaction Documents or the Transactions.

(B) The Purchaser shall not, and shall cause its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) not to, seek or have the Firm disqualified from any such representation based upon the prior representation of the Seller and its Affiliates (including the Company and the Company’s Subsidiaries). The Purchaser hereby consents, and shall cause its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) to consent, to such representation by the Firm, and waives, and shall cause its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) to waive, any conflict of interest arising from such prior representation. The Purchaser acknowledges that such consent and waiver is voluntary, that it has been carefully considered, and that it has consulted with counsel or have been advised it should do so in connection with the Transaction Documents and the Transactions. The covenants, consents, and waiver contained in this §11(q) shall not be deemed exclusive of any other rights to which the Firm is entitled whether pursuant to Law, contract or otherwise.

(ii) All communications between the Seller and its Affiliates (including the Company and the Company’s Subsidiaries, on the one hand, and the Firm, on the other hand, relating to the negotiation, preparation, execution and delivery of the Transaction Documents and the Transactions (the “Privileged Communications”) shall be deemed to be attorney-client privileged and the expectation of client confidence relating thereto shall belong solely to the Seller Parties and shall not pass to or be claimed by the Purchaser or its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries). Accordingly, neither Purchaser nor any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) shall have access to any Privileged Communications or to the files of the Firm relating to such engagement from and after Closing. Without limiting the generality of the foregoing, from and after the Closing, (A) the Seller Parties shall be the sole holders of the attorney-client privilege with respect to such engagement, and none of the Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) shall be a holder thereof, (B) to the extent that files of the Firm in respect of such engagement constitute property of the client, only the Seller Parties (and not the Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) shall hold such property rights, and (C) the Firm shall have no duty whatsoever to reveal or disclose any such attorney-client communications or files to Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) by reason of any attorney-client relationship between the Firm and the Company or otherwise. Notwithstanding the foregoing, in the event that a dispute or Proceeding arises between Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries), on the one hand, and a Person other than any of Seller Party, on the other hand, Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) may assert the attorney-client privilege to prevent disclosure of confidential communications to such third party; provided, however, that neither Purchaser nor any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) may waive such privilege without the prior written consent of the Seller Parties, which consent shall not be unreasonably withheld, conditioned, or delayed. In the event that Purchaser or any of its Affiliates (including, from and after the Closing, the Company and the Company’s Subsidiaries) is legally required by Order or otherwise legally required to access or obtain a copy of all or a portion of the Privileged Communications, to the extent (x) permitted by applicable Law, and (y) advisable in the opinion of the Purchaser’s counsel, then the Purchaser shall immediately (and, in any event, within fifteen (15) Business Days) notify the Seller in writing so that Seller can seek a protective Order.

(iii) This §11(q) is intended for the benefit of, and shall be enforceable by, the Firm. This §11(q) is irrevocable, and no term of this Section may be amended, waived, or modified, without the prior written consent of the Firm.

*****

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the date first above written.

	SELLER

	By:	/s/ Joseph A. De Perio

	Name:	Joseph A. De Perio

	Its:	Non-Executive Chairman

	PURCHASER

	By:	/s/ Trevor L. Colhoun

	Name:	Trevor L. Colhoun

	Its:	Chairman

Signature Page

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH THE TERMS HEREOF AND REGISTRATION UNDER THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM.

PAYMENTS THAT BECOME DUE AND PAYABLE UNDER THIS NOTE SHALL BE ADJUSTED PURSUANT TO THE PROVISIONS OF SECTION 25(a).

NXSN Acquisition Corp.

Senior Secured Convertible Note

Issuance Date: [Closing Date under the Stock Purchase Agreement]

Original Principal Amount as of

the Issuance Date: U.S. $25,000,000.00¹

FOR VALUE RECEIVED, NXSN Acquisition Corp., a Delaware corporation (the “Company”), hereby promises to pay to the order of Imation Corp. or registered assigns (“Holder”) the amount set out above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at a rate per annum set forth below (the “Interest Rate”), from the date of this Senior Secured Convertible Note (this “Note”) set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon an Interest Date (as defined below), the Maturity Date, acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof), as adjusted pursuant to Section 25(a). For purposes of the table below, the word “from” means “from and including” and the word “to” means “to but excluding.” In addition, the Original Principal Amount shall be adjusted pursuant to the Stock Purchase Agreement. Furthermore, the Principal and Interest are subject to set-off and recoupment under the Stock Purchase Agreement. Notwithstanding the above, Interest on $_______, which is the additional Principal added to this Note pursuant to Section (2)(e)(i)(C) of the Stock Purchase Agreement, will not begin to accrue until the date that is six months after the Issuance Date, at which point, Interest shall begin to accrue and be payable on each Interest Date at the Interest Rate set forth below and on the same terms and conditions as the rest of the Principal hereunder.

¹ Original Principal Amount to be adjusted pursuant to the terms of the Stock Purchase Agreement.

Year		Interest Rate²
From the Issuance Date to the 1st anniversary of the Issuance Date		5%
From the 1st anniversary of the Issuance Date to the 2nd anniversary of the Issuance Date		5%
From the 2nd anniversary of the Issuance Date to the 3rd anniversary of the Issuance Date		8%

(1) MATURITY. On the Maturity Date, the Holder shall surrender this Note to the Company and the Company shall pay to the Holder an amount, as adjusted pursuant to Section 25(a), in cash, representing all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges, if any. The “Maturity Date” shall be the date which is the third anniversary of the Issuance Date, or otherwise as provided herein.

(2) INTEREST; INTEREST RATE. Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 365-day year and actual days elapsed and shall be payable, as adjusted pursuant to Section 25(a), in arrears on (i) the last day of each Quarterly Period from the Issuance Date to the 1st anniversary of the Issuance Date, (ii) the last day of each Monthly Period from the 1st anniversary of the Issuance Date thereafter to the Maturity Date, and (iii) on the Maturity Date (each, an “Interest Date”) with the first Interest Date being __________, 2016. Interest shall be payable on each Interest Date in cash, to the record holder of this Note on the applicable Interest Date. Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion of the Interest in the Conversion Amount (as defined below) in accordance with Section 3(b)(i). From and after the occurrence of an Event of Default, the Interest Rate shall be increased by four percent (4%) per annum. In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided that the Interest as calculated at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure of such Event of Default.

(3) CONVERSION OF NOTES. This Note shall be convertible into shares of common stock of the Company, par value $_____ per share (the “Common Stock”), on the terms and conditions set forth in this Section 3.

² Interest Rate to be increased by 1% in all years if Funded Equity Commitments are less than $10M on the Closing Date pursuant to the terms of the Stock Purchase Agreement.

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(a) Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall be entitled to convert (the “Conversion Right”) any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all taxes (other than Incomes Taxes) that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.

(b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

(i) “Conversion Amount” means the sum of (A) the portion of the Principal to be converted, redeemed or otherwise with respect to which this determination is being made up to a maximum Principal amount of $10,000,000, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid Late Charges with respect to such Principal and Interest.

(c) “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, $[____]³, subject to adjustment as provided herein (as adjusted for stock splits, stock dividends, reverse stock splits, reclassification, recapitalization and similar events).

(d) Mechanics of Conversion.

(i) Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (A) transmit by facsimile or other electronic transmission (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the “Conversion Notice”) to the Company and (B) if required by Section 3(c)(iii), surrender this Note to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction). On or before the first (1^st) Business Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile a confirmation of receipt of such Conversion Notice to the Holder. On or before the second (2^nd) Business Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall issue and deliver to the address as specified in the Conversion Notice, a [certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled]⁴. If this Note is physically surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the holder a new Note (in accordance with Section 19(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

³ NTD – Insert price equal to 120% of the purchase price per common stock share on an as converted basis paid in the Transaction by the Buyers.

⁴ NTD – Confirm shares of NXSN Acquisition Corp. to be certificated.

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(ii) Company’s Failure to Timely Convert. If the Company shall fail to issue a certificate to the Holder for the number of shares of Common Stock to which the Holder is entitled upon conversion of any Conversion Amount on or prior to the date which is five (5) Business Days after the Conversion Date (a “Conversion Failure”), then (A) the Company shall pay damages to the Holder for each date of such Conversion Failure in an amount equal to 1.5% of the product of (I) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled and (II) the Conversion Price and (B) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise.

(iii) Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and addresses of the holders of the Note and the principal amount of the Note (the “Registered Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holder of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes, including, without limitation, the right to receive payments of Principal and Interest hereunder, notwithstanding notice to the contrary. A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a request to assign or sell all or part of any Registered Note by a Holder, the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 19. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting physical surrender and reissue of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon conversion.

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(4) RIGHTS UPON EVENT OF DEFAULT.

(a) Event of Default. Each of the following events shall constitute an “Event of Default”:

(i) the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within ten (10) Business Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Note, including by way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion of the Note into shares of Common Stock that is tendered for conversion in accordance with the provisions of the Note;

(ii) the Company’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts when and as due under this Note, Guaranty and Security Agreement or Control Agreement (as defined in the Guaranty and Security Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby to which the Holder is a party (collectively, the “Loan Documents”), except, in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure continues for a period of at least three (3) Business Days;

(iii) any default under, redemption of or acceleration prior to maturity of any material Indebtedness of the Company or any of its Subsidiaries as a whole;

(iv) the Company or any of its Subsidiaries, pursuant to or within the meaning of title 11 of the United States Code, or any existing or future similar Federal, foreign or state law relating to bankruptcy, insolvency, reorganization or relief of debtors, (collectively, “Bankruptcy Law”), (A) commences a voluntary case or proceeding or otherwise seeks to have an order for relief entered with respect to it, or seeks to adjudicate it a bankrupt or insolvent, or seeks reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, (B) has commenced against it any case, proceeding or other action of the type nature referred to in clause (A) above that (1) results in the entry of an order for relief or any such adjudication or appointment or (2) remains undismissed, undischarged or unbonded for a period of thirty (30) days, or consents to the entry of an order for relief against it in such an involuntary case or proceeding, (C) consents to the appointment of a receiver, administrator, manager, trustee, assignee, liquidator, custodian, conservator, or similar official (a “Custodian”) for, or entry of an attachment order (an “Attachment Order”) with respect to, it or all or any substantial portion of its revenue or assets, (D) makes a general assignment for the benefit of its creditors or (E) admits in writing that it is generally unable to pay its debts as they become due;

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(v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or any of its Subsidiaries in an involuntary case or proceeding of the type referred to in clause (iv) above, (B) appoints a Custodian for, or enters an Attachment Order with respect to, the Company or any of its Subsidiaries, or all or any substantial portion of the revenue or assets of any of them, or (C) orders the dissolution, liquidation, or winding-up of the Company or any of its Subsidiaries, and such order or decree is not discharged or stayed within thirty (30) days;

(vi) a distress, attachment, execution or other legal process is levied, enforced or sued out on or against any material part of the property, assets or revenues of the Company or any of its Subsidiaries, which is material to the Company and its Subsidiaries as a whole, and is not discharged or stayed within thirty (30) days;

(vii) any step is taken by any Person that could reasonably be expected to result in the seizure, compulsory acquisition, expropriation or nationalization of all or a material part of the assets of the Company or any of its Subsidiaries, which is material to the Company and its Subsidiaries as a whole, and such step is not reversed within thirty (30) days;;

(viii) a final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company or any of its Subsidiaries and which judgments are not, within ninety (90) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within ninety (90) days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $500,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;

(ix) the Company or any Subsidiary breaches any representation, warranty, covenant or other term or condition of any Loan Document, except, in the case of a breach of a covenant which is curable, only if such breach continues for a period of at least five (5) consecutive Business Days after receipt of notice thereof;

(x) any breach or failure in any respect to comply with Section 9 or Section 15 of this Note;

(xi) the Company or any Subsidiary shall fail to perform or comply with any covenant or agreement contained in the Guaranty and Security Agreement or any other Loan Document to which it is a party;

(xii) any material provision of the Guaranty and Security Agreement or any other Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the Company or any Subsidiary intended to be a party thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under the Guaranty and Security Agreement or any other Loan Document;

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(xiii) the merger between Nexsan Corporation and the Company as contemplated by the Stock Purchase Agreement is rejected for filing by the Delaware Secretary of State or otherwise does not become or no longer is effective, and such rejection or lack of effectiveness is not cured within five days; and

(xiv) the Guaranty and Security Agreement or any other Loan Document, after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien in favor of the Holder on any material portion of the collateral purported to be covered thereby, and such failure is not cured within five days.

(b) Remedies. Upon the occurrence of any Event of Default, the then unpaid principal and accrued but unpaid interest shall, at the election of the Holder, be immediately due and payable, all without demand, presentment or notice, each of which is hereby waived by the Company, and Holder shall have all other rights accorded under this Note by law; provided, that upon the occurrence of the Event of Default specified in Section 4(a)(iv) or Section 4(a)(v) above, the entire principal amount of this Note and unpaid interest, and/or other amounts payable by the Company hereunder shall automatically be due and payable without any declaration, notice, presentment or demand of any kind (all of which are hereby waived). All sums remaining unpaid upon the occurrence of any Event of Default, on the Maturity Date or the accelerated maturity date shall bear interest at the rate specified above, plus four percent (4%).

(c) Exception. Notwithstanding anything in this Note or any other Loan Document to the contrary, no misrepresentation or breach of any representation or warranty made by the Company, Nexsan or a Subsidiary of either the Company or Nexsan in any of the Loan Documents shall constitute an Event of Default if such misrepresentation or breach was due to (in whole or in part) a misrepresentation or breach of any representation or warranty made by Imation Corp. (the initial Holder hereunder) in the Stock Purchase Agreement.

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(5) RIGHTS UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

(a) Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) Holder consents in writing to such Fundamental Transaction and (ii) the Successor Entity assumes in writing all of the obligations of the Company under this Note and the other Loan Documents in accordance with the provisions of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to Holder in exchange for the Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Note, including, without limitation, having a principal amount and interest rate equal to the principal amounts and the interest rates of the Note held by such holder and having similar ranking to the Note, and satisfactory to the Holder. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this Note at any time after the consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the conversion or redemption of the Notes prior to such Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity as adjusted in accordance with the provisions of this Note. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion or redemption of this Note.

(b) Fundamental Transaction Prepayment. No sooner than fifteen (15) days nor later than ten (10) days prior to the consummation of a Fundamental Transaction, the Company shall deliver written notice thereof via facsimile or other electronic transmission and overnight courier to the Holder (a “Change of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and ending on the date of the consummation of such Change of Control (or, in the event a Change of Control Notice is not delivered at least ten (10) days prior to a Change of Control, at any time on or after the date which is ten (10) days prior to a Change of Control and ending ten (10) days after the consummation of such Change of Control), the Holder may require the Company to prepay all or any portion of this Note by delivering written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the portion of the Principal the Holder is electing to have the Company prepay. The portion of this Note subject to prepayment pursuant to this Section 5 (the “Prepayment Portion”) shall include a prepayment premium equal to 1% of the aggregate amount of the outstanding Principal so prepaid, plus the amount of any accrued and unpaid Interest on the Prepayment Portion through the date of such redemption payment together with the amount of any accrued and unpaid Late Charges on such Prepayment Portion and Interest. Prepayments required by this Section 5 shall have priority to payments to shareholders in connection with a Fundamental Transaction. The parties hereto agree that in the event of the Company’s prepayment of any portion of the Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.

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(6) RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

(a) Purchase Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of the convertible portion of this Note immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(b) Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.

(7) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

(a) Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Issuance Date, the Company issues or sells, or in accordance with this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have been issued or sold by the Company in connection with any Excluded Security) for a consideration per share (the “New Issuance Price”) less than a price (the “Applicable Price”) equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to a price determined in accordance with the following formula:

CP₂ = CP₁* (A + B) ÷ (A + C).

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For purposes of the foregoing formula, the following definitions shall apply:

“CP₂” shall mean the Conversion Price in effect immediately after such Dilutive Issuance.

“CP₁” shall mean the Conversion Price in effect immediately prior to such Dilutive Issuance;

“A” shall mean the number of shares of Common Stock outstanding immediately prior to such Dilutive Issuance (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or upon conversion or exchange of Convertible Securities (including the Series A Preferred Stock) outstanding immediately prior to such issuance);

“B” shall mean the number of shares of Common Stock that would have been issued if the shares of Common Stock issued in the Dilutive Issuance had been issued at a price per share equal to CP₁ (determined by dividing the aggregate consideration received by the Company in respect of such issue by CP₁); and

“C” shall mean the number of shares of Common Stock issued in the Dilutive Issuance.

(b) For purposes of determining the adjusted Conversion Price under Section 7(a), the following shall be applicable:

(i) Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 7(a)(i), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion or exchange or exercise of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities.

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(ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance of sale of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii), the “price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise of such Convertible Security. No further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price had been or are to be made pursuant to other provisions of this Section 7(a), no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

(iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Issuance Date are changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

(iv) Calculation of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, (x) the Options will be deemed to have been issued for a value determined by use of the Black Scholes Option Pricing Model (the “Option Value”) and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I) the aggregate consideration received by the Company, less (II) the Option Value. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such securities on the date of receipt. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5) Business Days after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

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(v) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(c) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date undertakes any action (whether by way of subdivision, stock split, stock dividend, recapitalization or otherwise) that increases any one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after the Issuance Date undertakes any action (by combination, reverse stock split or otherwise) that reduces any one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

(d) Other Events. If any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder under this Note; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 7.

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(e) Rights Upon Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the Issuance Date, then, in each such case any Conversion Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Conversion Price by a fraction of which (i) the numerator shall be the Fair Market Value of the shares of Common Stock on the Business Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the Fair Market Value of the shares of Common Stock on the Business Day immediately preceding such record date.

(8) SECURITY. This Note is secured to the extent and in the manner set forth in the Guaranty and Security Agreement.

(9) NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note or otherwise amend or modify the rights, privileges or preference of the Common Stock in a manner that adversely affects the conversion rights of the Holder, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note.

(10) RESERVATION OF AUTHORIZED SHARES.

(a) Reservation. The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for the Note equal to 130% of the Conversion Rate with respect to the Conversion Amount of the Note as of the Issuance Date. So long as the Note is outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Note, 130% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of the Note then outstanding; provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved by the previous sentence (without regard to any limitations on conversions) (the “Required Reserve Amount”).

(b) Insufficient Authorized Shares. If at any time while the Note remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of the Note at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Note then outstanding.

(11) RESTRICTION ON REDEMPTION AND CASH DIVIDENDS. Until the Note has been converted, redeemed or otherwise satisfied in accordance with its terms, the Company shall not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on its capital stock without the prior express written consent of the Holder.

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(12) PREPAYMENT. Subject to Holder’s Conversion Right, the Company may at any time and from time to time prepay the Note, in whole or in part (other than any Conversion Amount, if the Conversion Right is exercised by Holder), upon irrevocable notice delivered to the Holder by not later than 11:00 a.m. at least five Business Days prior thereto, which notice shall specify the date of such prepayment. If any such notice is given, all outstanding Principal (other than any Principal related to the Conversion Amount, if the Conversion Right is exercised by Holder) shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid and all Late Fees, if any. If this Note is prepaid through any prepayments, Holder shall be paid a prepayment premium equal to 1% of the aggregate amount of the outstanding Principal so prepaid. The parties hereto agree that in the event of the Company’s prepayment of any portion of the Note under this Section 12, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 12 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Notwithstanding the foregoing, in the event that pursuant to the Stock Purchase Agreement, the Original Principal Amount is reduced, but such reduction is determined after the Company has made payments of Principal or Interest hereunder, the amounts due hereunder by the Company shall be recalculated taking into account the reduction in the Original Principal Amount, and in the event Company has made any payments in excess of the amounts which would have been required hereunder had the Original Principal Amount been so reduced prior to making such payments, the amount of such excess shall be treated as prepayments, and no penalties or premiums shall be due or charged with respect to such prepayments.

(13) VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law, including but not limited to the General Corporation Law of the State of Delaware, and as expressly provided in this Note. Notwithstanding the above, for so long as the obligations of the Company under this Note are outstanding, the Holder shall have the right to appoint two directors to the Company’s Board of Directors in its sole discretion and shall have the right to appoint, with the consent of [the Preferred Stockholder] a third director to the Company’s Board of Directors. The Company shall have no more than five directors on the Board of Directors unless the Holder consents in writing to an increase in the number of members of the Board of Directors. The Company’s Certificate of Incorporation shall provide Holder the Board of Director appointment rights set out in this Section 13 and the Company shall not amend the Company’s Certificate of Incorporation to remove such appointment rights for so long as the obligations of the Company under this Note are outstanding. In the event there are more than one Holder, such designation rights shall be subject to the determination of a majority in interest of the Holders.

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(14) REGISTRATION RIGHTS. At any time after an IPO, Holder, to the extent it has exercised its conversion right under Section 3, may request registration under the Securities Act of all or any portion of the Common Stock it received in such conversion pursuant to a registration statement on Form S-1 or any successor form thereto, pursuant to a form of registration rights agreement reasonably acceptable to Holder.

(15) COVENANTS. So long as this Note is outstanding:

(a) Rank. All payments due under this Note shall be senior to all other Indebtedness of the Company.

(b) Incurrence of Indebtedness. The Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness, other than (i) the Indebtedness evidenced by this Note and (ii) other Permitted Indebtedness.

(c) Issuance of Preferred Stock. Other than the shares of preferred stock set forth on Schedule 15(c) attached hereto, the Company shall not issue any shares of preferred stock or other equity securities that rank senior or that have any priority over the Common Stock.

(d) Existence of Liens. The Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.

(e) Restricted Payments. The Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Permitted Indebtedness (other than this Note), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, an event constituting, or that with the passage of time and without being cured would constitute, an Event of Default has occurred and is continuing.

(f) Loans, Advances, Investments, Etc. The Company shall not, and the Company shall not permit any of its Subsidiaries to, make or commit or agree to make any loan, advance, guarantee of obligations, other extension of credit or capital contributions to, or hold or invest in or commit or agree to hold or invest in, or purchase or otherwise acquire or commit or agree to purchase or otherwise acquire any shares of the capital stock, bonds, notes, debentures or other securities of, or make or commit or agree to make any other investment in, any other Person, or purchase or own any futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or permit any of its Subsidiaries to do any of the foregoing, except for: (i) investments existing on the date hereof, as set forth on Schedule 13(e) hereto, but not any increase in the amount thereof as set forth in such Schedule or any other modification of the terms thereof, (ii) temporary loans and advances by it to its Subsidiaries and by such Subsidiaries to it, made in the ordinary course of business consistent with past practice, and (iii) Permitted Investments.

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(g) Fundamental Changes; Dispositions. Other than in accordance with Section 5(a), the Company shall not, and the Company shall not permit any of its Subsidiaries to, wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell, lease or sublease, transfer or otherwise dispose of, whether in one transaction or a series of related transactions, all or any part of its business, property or assets (including by way of spin-off, slit-off or business separation), whether now owned or hereafter acquired (or agree to do any of the foregoing), or purchase or otherwise acquire, whether in one transaction or a series of related transactions, all or substantially all of the assets of any Person (or any division thereof) (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the foregoing; provided, however, that the Company and its Subsidiaries may (A) sell Inventory in the ordinary course of business consistent with past practices, (B) dispose of obsolete or worn-out equipment in the ordinary course of business consistent with past practices and (C) sell or otherwise dispose of other property or assets for cash in an aggregate amount not less than the fair market value of such property or assets provided that the proceeds of such dispositions in the case of clauses (B) and (C) above, do not exceed $500,000 in the aggregate in any twelve-month period.

(h) Change in Nature of Business. The Company shall not, and the Company shall not permit any of its Subsidiaries to, (i) make any change in the nature of its business as described in Schedule 13(g) hereto or (ii) cease conducting any such business.

(i) Stock Option Plans. Without the prior written consent of the Holder, the Company shall not, and the Company shall not permit any of its Subsidiaries to, maintain or adopt any stock option plan, stock appreciation plan or any similar plan, or to amend or modify any such plan in any material respect.

(j) Accounting Methods; Auditors. Without the prior written consent of the Holder, the Company shall not, and the Company shall not permit any of its Subsidiaries to, (i) modify or change its Fiscal Year, (ii) change or make material modifications to its billing systems and accounting practices, (iii) change or modify its method of accounting (other than as may be required to conform to GAAP) or (iv) change its independent certified public accounts or registered public accountants, as applicable, that review, audit and/or certify its respective financial statements.

(k) Creation of New Subsidiaries. So long as the obligations of the Company under this Note are outstanding, if the Company shall create or acquire any Subsidiary, simultaneous with the creation or acquisition of such Subsidiary, the Company shall (1) promptly cause such Subsidiary to become a guarantor by executing a guaranty in favor of the Holder in form and substance reasonably acceptable to the Company, the Subsidiary and the Holder, (ii) promptly cause such Subsidiary to become a grantor under the Guaranty and Security Agreement by executing a joinder to the Guaranty and Security Agreement in form and substance reasonably acceptable to the Company, the Subsidiary and the Holder, (iii) promptly cause such Subsidiary to become a pledgor by the Company and such Subsidiary executing a pledge agreement in form and substance reasonably acceptable to the Company, the Subsidiary and the Holder, and (iv) promptly cause such Subsidiary to duly execute and/or deliver such opinions of counsel and other documents, in form and substance reasonable acceptable to the Holder, as the Holder shall reasonably request with respect thereto.

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(l) Intellectual Property. So long as the obligations of the Company under this Note are outstanding, the Company shall not, and shall not permit any Subsidiary to, directly or indirectly, (i) assign, transfer or otherwise encumber or allow any other Person to have any rights or license to any of the intellectual property rights of the Company or its Subsidiaries, except in the ordinary course of business, or (ii) knowingly take any action or inaction to impair the value of their intellectual property rights.

(m) Change in Collateral; Collateral Records. The Company shall (i) advise the Holder promptly, in sufficient detail, of any material adverse change relating to the type, quantity or quality of the Collateral (as defined in the Guaranty and Security Agreement) or the Lien granted thereon and (ii) execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Holder, solely for the Holder’s convenience in maintaining a record of Collateral, such written statements and schedules as the Holder may reasonably require, designating, identifying or describing the Collateral.

(n) Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) in the ordinary course of business in a manner and to an extent consistent with past practice or (ii) necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.

(o) Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

(p) Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any material loss or forfeiture thereof or thereunder.

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(q) Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and in any event in amount, adequacy and scope reasonably satisfactory to the Holder. All policies covering the Collateral are to be made payable to the Holder as a co-payee with the Company, as its interests may appear, in case of loss, under a standard non-contributory “lender” or “secured party” clause and are to contain such other provisions as the Holder may reasonably require to fully protect the interest of the Holder in the Collateral and to any payments to be made under such policies. All certificates of insurance are to be delivered to the Holder and the policies are to be premium prepaid, with the loss payable and additional insured endorsement in favor of the Holder and such other Persons as the Holder may designate from time to time, and shall provide for not less than 30 days’ prior written notice to the Holder of the exercise of any right of cancellation. If the Company or any of its Subsidiaries fails to maintain such insurance, the Holder may arrange for such insurance, but at the Company’s expense and without any responsibility on the Holder’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, the Holder shall have the sole right, in the name of the Holder, the Company and its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

(16) PARTICIPATION. The Holder, as the holder of this Note, shall be entitled to such dividends paid and distributions made to the holders of Common Stock to the same extent as if the Holder had converted the convertible portion of this Note into Common Stock and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.

(17) CONSENT TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative consent of the Holder shall be required for any change or amendment to this Note.

(18) TRANSFER. This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject to compliance with all applicable securities laws (provided that any assignee or transferee seeking to exercise any conversion rights shall be required to enter into the Stockholders Agreement (as defined under the Stock Purchase Agreement).

(19) REISSUANCE OF THIS NOTE.

(a) Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 19(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section 19(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) and this Section 19(a), following conversion, exchange or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.

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(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 19(d)) representing the outstanding Principal.

(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 19(d) and in principal amounts of at least $250,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

(d) Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 19(a) or Section 19(c), the Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued Interest and Late Charges on the Principal and Interest of this Note, from the Issuance Date.

(20) REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and the other Loan Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

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(21) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the Holder for the valid collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

(22) CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

(23) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

(24) DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Fair Market Value or the arithmetic calculation of the Conversion Rate, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or other electronic transmission within one (1) Business Day of receipt of the Conversion Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within one (1) Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one Business Day submit via facsimile or other electronic transmission (a) the disputed determination of the Fair Market Value to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate to the Company’s independent, outside accountant. The Company, at the Company’s expense, shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

(25) NOTICES; PAYMENTS.

(a) Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the Guaranty and Security Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least twenty (20) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

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(b) Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing; provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of Interest due on such date. Any amount of Principal or other amounts due under the Loan Documents, other than Interest, which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of ten percent (10%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).

(i) If the transactions contemplated in this Note or by any other Loan Document would be usurious as to the Holder under laws applicable to it (including the laws of the United States of America and the State of Delaware or any other jurisdiction whose laws may be mandatorily applicable to the Holder notwithstanding the other provisions of this Note), then, in that event, notwithstanding anything to the contrary in this Note or any other Loan Document, it is agreed as follows: the aggregate of all consideration which constitutes Interest under law applicable to the Holder that is contracted for, taken, reserved, charged or received by the Holder under this Note or any other Loan Document shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by the Holder on the Principal amount of this Note (or, to the extent that the Principal amount of this Note shall have been or would thereby be paid in full, refunded by the Holder to the Company). If at any time and from time to time (1) the amount of Interest payable to the Holder on any date shall be computed at the Highest Lawful Rate applicable to the Holder pursuant to this Section 25(c) and (2) in respect of any subsequent interest computation period the amount of Interest otherwise payable to the Holder would be less than the amount of Interest payable to the Holder computed at the Highest Lawful Rate applicable to the Holder, then the amount of Interest payable to the Holder in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to the Holder until the total amount of Interest payable to the Holder shall equal the total amount of Interest which would have been payable to the Holder if the total amount of Interest had been computed without giving effect to this Section 25(c).

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(ii) For purposes of this Section 25(c), the term “applicable law” shall mean that law in effect from time to time and applicable to the transaction between the Company, on the one hand, and the Holder, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Note, including laws of the State of Delaware and, to the extent controlling, laws of the United States of America.

(26) CANCELLATION. After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

(27) SET-OFF AND RECOUPMENT. This Note, and the Principal and Interest hereunder, is subject to set-off and recoupment by the Company as set forth in the Stock Purchase Agreement.

(28) WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.

(29) COUNTERPARTS. This Note may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

(30) No Effect on Stock Purchase Agreement. Notwithstanding anything in this Agreement or any other Loan Document to the contrary, no term or provision of this Note or any other Loan Document shall have the effect of modifying or amending any of the rights of the Company (as Purchaser) under the Stock Purchase Agreement, including, without limitation, any rights to set-off or recoup amounts under this Note or any of the obligations, including, without limitation, the indemnity obligations, of Imation Corp. (the initial Holder) (as Seller) under the Stock Purchase Agreement.

(31) GOVERNING LAW; JURISDICTION; SEVERABILITY; JURY TRIAL. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. The Company irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY AND HOLDER EACH HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

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(32) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

(a) “Account Receivable” means, with respect to any Person, any and all rights of such Person to payment for goods sold and/or services rendered, including accounts, general intangibles and any and all such rights evidenced by chattel paper, instruments or documents, whether due or to become due and whether or not earned by performance, and whether now or hereafter acquired or arising in the future, and any proceeds arising therefrom or relating thereto.

(b) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 50% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

(c) “Approved Stock Plan” means any employee benefit plan which has been approved by the Board of Directors of the Company and, if required, by the Holder in accordance with Section 15(i), pursuant to which the Company’s securities may be issued to any employee, consultant, officer or director for services provided to the Company.

(d) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the State of Delaware are authorized or required by law to remain closed.

(e) “Change of Control” means any Fundamental Transaction other than (A) a Fundamental Transaction in which holders of the Company’s voting power immediately prior to the Fundamental Transaction continue after the Fundamental Transaction to hold, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

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(f) “Contingent Obligations” means, with respect to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

(g) “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable for Common Stock.

(h) “Disposition” means any transaction, or series of related transactions, pursuant to which the Company or any of its Subsidiaries sells, assigns, transfers or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person, excluding any sales of Inventory in the ordinary course of business on ordinary business terms.

(i) “Excluded Securities” means any Common Stock issued or issuable: (i) in connection with any Approved Stock Plan; (ii) upon conversion of the Note; and (iii) upon conversion of any Options or Convertible Securities which are outstanding prior to or as of the Issuance Date (including, without limitation, the shares of the Company’s Series A Preferred Stock), provided that the terms of such Options or Convertible Securities are not amended, modified or changed on or after the Issuance Date other than antidilution adjustments pursuant to the terms thereof in existence as of the Issuance Date.

(j) “Fair Market Value”, with respect to securities for which there is no established trading market shall be made by reference to prevailing conditions in capital markets generally, including (to such extent, if any, as the Company’s Board of Directors in good faith deems relevant): (a) the possibility of a public offering for such securities or a private sale of such securities; (b) the financial statements of the issuer thereof prepared on a pro forma basis after giving effect to the events in question and considering, among other factors: (i) the price per security paid by a bona fide, unaffiliated purchaser in an arms’-length transaction; (ii) the existence and nature of any recent or pending transactions or transaction proposals; (iii) book value; (iv) replacement value; (v) earnings; and (vi) the value of future cash flows of such issuer as an ongoing enterprise; and (c) both the sale of various combinations of the individual assets of such issuer as well as a sale of such issuer as a whole; and shall make no deduction, discount or other subtraction whatsoever for the possible minority status of the holder of such security or for any lack of marketability of such security (other than by virtue of conditions in capital markets generally) or any restrictions on the transfer thereof. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 24. All such determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

(k) “Fiscal Year” means the Company’s fiscal year that ends on December 31, or such other fiscal year adopted by the Company for the financial reporting purposes in accordance with GAAP.

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(l) “Fundamental Transaction” means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) enter into or consummate any Deemed Liquidation Event (as defined in the Certificate of Incorporation), or (vi) reorganize, recapitalize or reclassify its Common Stock, or (B) any “person” or “group” (as these terms are used for purposes of Section 13(d) and 14(d) of the 1934 Act) (not including any Persons or groups holding any stock of the Company as of the Issuance Date) shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock or any preferred stock; provided, however, that none of the transactions contemplated under the Stock Purchase Agreement, including, without limitation, the Company’s acquisition of all of the stock of Nexsan, the Company’s issuance of Series A Preferred Stock to Equity Investors (as defined therein), and the merger of the Company and Nexsan, shall be considered or treated as Fundamental Transactions hereunder.

(m) “GAAP” means United States generally accepted accounting principles, consistently applied.

(n) “Guaranty and Security Agreement” means that certain guaranty and security agreement provided by Company, Nexsan Corporation and their Subsidiaries for the benefit of Holder dated as of even date herewith.

(o) “Highest Lawful Rate” means the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Indebtedness obligations and liability of the Company under this Note under laws applicable to the Holder which are currently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.

(p) “Income Tax” means any tax that is based on, or computed with respect to, net income or earnings (and any franchise tax or tax on doing business imposed in lieu thereof) and all related interest and penalties.

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(q) “Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business and not outstanding for more than 120 days after the date such payable was created), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in accordance with GAAP consistently applied for the periods covered thereby, is classified as a “capital lease”, (vii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above.

(r) “Inventory” means, with respect to any Person, all goods and merchandise of such Person, including, without limitation, all raw materials, work-in-process, packaging, supplies, materials and finished goods of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to an Account Receivable or cash.

(s) “IPO” means an initial offering of the Common Stock or any other equity securities of the Company pursuant to an effective registration statement filed under the Securities Act.

(t) “Monthly Period” means each of: the period beginning on and including the first day of each month and ending on and including the last day of each month.

(u) “Nexsan” means Nexsan Corporation.

(v) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

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(w) “Permitted Indebtedness” means (A) the principal of (and premium, if any), interest on, and all fees and other amounts (including, without limitation, any reasonable out-of-pocket costs, enforcement expenses (including reasonable out-of-pocket legal fees and disbursements), collateral protection expenses and other reimbursement or indemnity obligations relating thereto) payable by Company and/or its Subsidiaries under or in connection with any Indebtedness entered into by the Company and/or its Subsidiaries with one or more financial institutions, in form and substance reasonably satisfactory to the Holder, including, without limitation, the terms and conditions of any intercreditor arrangements relating to any Collateral securing both the Note and such Indebtedness; provided, however, that (1) the aggregate outstanding amount of such Indebtedness permitted hereunder (taking into account the maximum amounts which may be advanced under the loan documents evidencing such Indebtedness) does not at any time exceed US $500,000, (2) such Indebtedness does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after the Maturity Date (as may be extended pursuant to Section 1) or later and (3) to the extent such Indebtedness is secured by any assets or equity interests held by the Company, such security interest shall be a second priority (or more junior priority) security interest, (B) unsecured Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note, as reflected in a written agreement acceptable to the Holder and approved by the Holder in writing, and which Indebtedness does not provide at any time for the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after the Maturity Date (as may be extended pursuant to Section 1) or later, (C) Indebtedness secured by Permitted Liens, (D) Contingent Obligations of the Company and/or its Subsidiaries consisting of guarantees or indemnities within the ordinary course of business of such Person or otherwise within the scope of the business plan of the Company (which business plan shall have been approved by the Holder in writing), (E) the Note, and (F) extensions, refinancings and renewals of items of Permitted Indebtedness set forth in clauses (A), (B) and (C), provided that the principal amount thereof is not increased or the terms thereof modified to impose more burdensome terms upon the Company or its Subsidiary, as the case may be.

(x) “Permitted Investments” means marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within six months from the date of acquisition thereof; provided, however, that, for avoidance of doubt, Permitted Investments shall not include any securities or other obligations issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation or any successors thereto.

(y) “Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, (v) Liens securing obligations arising under the Note, (vi) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) and (iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vii) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company’s business, not interfering in any material respect with the business of the Company and its Subsidiaries taken as a whole, (viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods and (ix) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(ix).

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(z) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

(aa) “Quarterly Period” means each of: the period beginning on and including January 1 and ending on and including March 31, the period beginning on and including April 1 and ending on and including June 30, the period beginning on and including July 1 and ending on September 30 and the period beginning on and including October 1 and ending on and including December 31.

(bb) “Stock Purchase Agreement” means that certain Stock Purchase Agreement entered into as of November ___, 2016, by and between Imation Corp. (as Seller thereunder) and the Company (as Purchaser thereunder), pursuant to which this Note was issued.

(cc) “Subsidiary” means any entity in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest of such entity.

(dd) “Successor Entity” means the Person, which may be the Company, formed by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been made.

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.

	NXSN Acquisition Corp.

	By:
		Name:
		Title:

AGREED AND ACCEPTED

as of the ____ day of [ ], 2017

IMATION CORP.

By:
	Name:
	Title:

SCHEDULE 13(e)

Investments

SCHEDULE 13(g)

Nature of Business

EXHIBIT A

NXSN ACQUISITION CORP.

CONVERSION NOTICE

Reference is made to the Senior Secured Convertible Note (the “Note”) issued to the undersigned by [NXSN Acquisition Corp.] (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of common stock, par value $0.001 per share (the “Common Stock”), as of the date specified below.

Date of Conversion:

Aggregate Conversion Amount to be converted:

Please confirm the following information:

Conversion Price:

Number of shares of Common Stock to be issued:

Please issue the Common Stock into which the Note is being converted in the following name and to the following address:

Issue to:

Facsimile Number:

Authorization:

By:

Title:

Dated:

Account Number:

(if electronic book entry transfer)

Transaction Code Number:

(if electronic book entry transfer)

GUARANTY AND SECURITY AGREEMENT

Dated as of [Closing Date under SPA]

by and among

NxSN Acquisition Corp.

and

Nexsan corporation

and

Each Other Grantor
From Time to Time Party Hereto

and

IMATION CORP.,
as Lender

TABLE OF CONTENTS

		Page

ARTICLE I DEFINED TERMS		1
Section 1.1	Definitions	1
Section 1.2	Certain Other Terms	8

ARTICLE II GUARANTY		9
Section 2.1	Guaranty	9
Section 2.2	Limitation of Guaranty	9
Section 2.3	Contribution	9
Section 2.4	Authorization; Other Agreements	10
Section 2.5	Guaranty Absolute and Unconditional	10
Section 2.6	Waivers	11
Section 2.7	Reliance	11

ARTICLE III GRANT OF SECURITY INTEREST		12
Section 3.1	Collateral	12
Section 3.2	Grant of Security Interest in Collateral	12

ARTICLE IV Representations and Warranties		13
Section 4.1	Title; No Other Liens	13
Section 4.2	Perfection and Priority	13
Section 4.3	Locations of Inventory, Equipment and Books and Records	14
Section 4.4	Pledged Collateral	14
Section 4.5	Instruments and Tangible Chattel Paper Formerly Accounts	14
Section 4.6	Intellectual Property	14
Section 4.7	Commercial Tort Claims	16
Section 4.8	Specific Collateral	16
Section 4.9	Enforcement	16

ARTICLE V Covenants		16
Section 5.1	Maintenance of Perfected Security Interest; Further Documentation and Consents	16
Section 5.2	Changes in Locations, Name, Etc.	17
Section 5.3	Pledged Collateral	18
Section 5.4	Accounts	20
Section 5.5	Commodity Contracts	20
Section 5.6	Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper	20
Section 5.7	Intellectual Property	21
Section 5.8	Notices	22
Section 5.9	Notice of Commercial Tort Claims	23
Section 5.10	Controlled Securities Account	23

ARTICLE VI Remedial Provisions		23
Section 6.1	Code and Other Remedies	23
Section 6.2	Accounts and Payments in Respect of General Intangibles	26
Section 6.3	Pledged Collateral	27
Section 6.4	Proceeds to be Turned over to and Held by Lender	28
Section 6.5	Sale of Pledged Collateral	28
Section 6.6	Deficiency	29

ARTICLE VII Agent		29
Section 7.1	Lender’s Appointment as Attorney-in-Fact	29
Section 7.2	Authorization to File Financing Statements	30
Section 7.3	Authority of Lender	31
Section 7.4	Duty; Obligations and Liabilities	31

ARTICLE VIII Miscellaneous		31
Section 8.1	Reinstatement	31
Section 8.2	Release of Collateral	32
Section 8.3	Independent Obligations	32
Section 8.4	No Waiver by Course of Conduct	32
Section 8.5	Amendments in Writing	33
Section 8.6	Additional Grantors; Additional Pledged Collateral	33
Section 8.7	Notices	33
Section 8.8	Successors and Assigns	33
Section 8.9	Counterparts	33
Section 8.10	Severability	33
Section 8.11	Governing Law	34
Section 8.12	Waiver of Jury Trial	34

ANNEXES AND SCHEDULES

Annex 1	Form of Pledge Amendment
Annex 2	Form of Joinder Agreement
Annex 3	Form of Intellectual Property Security Agreement

Schedule 1	Commercial Tort Claims
Schedule 2	Filings
Schedule 3	Location of Inventory, Equipment, Books and Records
Schedule 4	Pledged Collateral
Schedule 5	Intellectual Property

iii

GUARANTY AND SECURITY AGREEMENT, dated as of [Closing Date under SPA], by NXSN Acquisition Corp., a Delaware corporation (“Borrower”), and Nexsan Corporation, a Delaware corporation ( “Nexsan”), and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 8.6 (together with Nexsan and the Borrower, the “Grantors” and each, a “Grantor”), Imation Corp., a Delaware corporation ( “Lender” or “Secured Party”).

WITNESSETH:

WHEREAS, pursuant to the Senior Secured Convertible Note dated as of the date hereof (as the same may be amended, restated, supplemented and/or modified from time to time, the “Note”) issued by the Borrower in favor of Lender, whereby the Borrower agreed to certain repayment terms for amounts owing to Lender (the “Loan”) upon the terms and subject to the conditions set forth therein;

WHEREAS, each Grantor has agreed to guaranty the obligations of Borrower under the Note (the “Obligations”) and secure all of their Obligations under the Note by granting to Lender a security interest in and lien upon substantially all of their Property;

WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Note; and

WHEREAS, it is a condition precedent to the obligation of the Lender to make its extension of credit to the Borrower under the Note that the Grantors shall have executed and delivered this Agreement to Lender;

NOW, THEREFORE, in consideration of the premises and to induce the Lender to enter into the Loan Documents and to induce the Lender to make its extension of credit to the Borrower thereunder, each Grantor hereby agrees with Lender as follows:

ARTICLE I

DEFINED TERMS

Section 1.1 Definitions. (a) Capitalized terms used herein without definition are used as defined in the Note.

(b) The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): “account”, “account debtor”, “as-extracted collateral”, “certificated security”, “chattel paper”, “commercial tort claim”, “commodity contract”, “deposit account”, “electronic chattel paper”, “equipment”, “farm products”, “fixture”, “general intangible”, “goods”, “health-care-insurance receivable”, “instruments”, “inventory”, “investment property”, “letter-of-credit right”, “proceeds”, “record”, “securities account”, “security”, “supporting obligation” and “tangible chattel paper”.

“Agreement” means this Guaranty and Security Agreement.

“Applicable IP Office” means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.

“Cash Collateral Account” means a deposit account or securities account subject, in each instance, to a Control Agreement.

“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) “adequately capitalized” (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000 and (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for money market funds in the United States; provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) or (d) above shall not exceed 365 days.

“Collateral” has the meaning specified in Section 3.1.

“Contractual Obligations” means, as to any Person, any provision of any security (whether in the nature of Stock, Stock Equivalents or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Loan Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.

“Control Agreement” means each agreement establishing control over such bank accounts and lockboxes of the Grantors with financial institutions reasonably satisfactory to Lender,

“Controlled Securities Account” means each securities account (including all financial assets held therein and all certificates and instruments, if any, representing or evidencing such financial assets) that is the subject of an effective Control Agreement.

“Copyright License” means any agreement now or hereafter in existence, providing for the grant by, or to, any rights (including, without limitation, the grant of rights for a party to be designated as an author or owner and/or to enforce, defend, use, display, copy, manufacture, distribute, exploit and sell, make derivative works, and require joinder in suit and/or receive assistance from another party) covered in whole or in part by a Copyright.

“Copyrights” means, collectively, all of the following of any Grantor: (i) all copyrights, works protectable by copyright, copyright registrations and copyright applications anywhere in the world, (ii) all derivative works, counterparts, extensions and renewals of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past, present and future infringements, violations or misappropriations of any of the foregoing, (iv) the right to sue for past, present and future infringements, violations or misappropriations of any of the foregoing and (v) all rights corresponding to any of the foregoing throughout the world.

“Domestic Subsidiary” means any Subsidiary incorporated, organized or otherwise formed under the laws of the United States, any state thereof or the District of Columbia.

“Excluded Equity” means any voting stock in excess of 65% of the outstanding voting stock of any Excluded Foreign Subsidiary. For the purposes of this definition, “voting stock” means, with respect to any issuer, the issued and outstanding shares of each class of Stock of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).

“Excluded Foreign Subsidiary” means a Foreign Subsidiary which is (a) a controlled foreign corporation (as defined in the Code) that has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two-thirds or more of the voting Stock and Stock Equivalents to secure, any Indebtedness (other than the Loan) of a Grantor or (b) a Foreign Subsidiary owned by a Foreign Subsidiary described in clause (a) of this definition.

“Excluded Property” means, collectively, (i) Excluded Equity, (ii) any permit or license or any Contractual Obligation entered into by any Grantor (A) that prohibits or requires the consent of any Person other than the Borrower and its Affiliates which has not been obtained as a condition to the creation by such Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any Stock or Stock Equivalent related thereto or (B) to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but only, with respect to the prohibition in (A) and (B), to the extent, and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law, (iii) Property owned by any Grantor that is subject to a purchase money Lien or a capital lease permitted under the Note if the Contractual Obligation pursuant to which such Lien is granted (or in the document providing for such capital lease) prohibits or requires the consent of any Person other than the Borrower and its Affiliates which has not been obtained as a condition to the creation of any other Lien on such equipment and (iv) any “intent to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed); provided, however, “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not a Domestic Subsidiary.

“Fraudulent Transfer Laws” has the meaning set forth in Section 2.2.

“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any state attorney general, state Medicaid fraud unit, central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank), any self-regulatory organization (including the National Association of Insurance Commissioners) and any Medicare administrator or other contractor acting on behalf of a Governmental Authority, including any recovery audit contractor or zone program integrity contractor.

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guarantor” means each Grantor.

“Guaranty” means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement.

“Intellectual Property” means, collectively, all of the following of any Grantor: (i) all systems software and applications software (including source code and object code), all documentation for such software, including, without limitation, user manuals, flowcharts, functional specifications, operations manuals, and all formulas, processes, ideas and know-how embodied in any of the foregoing, (ii) concepts, discoveries, improvements and ideas, know-how, technology, reports, design information, Trade Secrets, practices, specifications, test procedures, maintenance manuals, research and development, inventions (whether or not patentable), blueprints, drawings, data, customer lists, catalogs, and all physical embodiments of any of the foregoing, (iii) Patents and Patent Licenses, Copyrights and Copyright Licenses, Trademarks and Trademark Licenses and (iv) other agreements with respect to any rights in any of the items described in the foregoing clauses (i), (ii), and (iii).

“Internet Domain Name” means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating to Internet domain names.

“IP Agreement” means any license or other written agreement under which any Grantor’s right to use any Material Intellectual Property arose or pursuant to which such Grantor licenses or otherwise distributes any Material Intellectual Property to any third party, including, without limitation, all Copyright Licenses, Patent Licenses and Trademark Licenses.

“Loan Documents” means this Agreement, the Note, the Control Agreement and any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby to which the Lender is a party.

“Material Intellectual Property” means (i) all Intellectual Property consisting of patents and related items listed in Schedule 5 hereto and (ii) all Intellectual Property that is owned by or licensed to a Grantor and used in the Grantor’s business.

“Ordinary Course of Business” means, in respect of any transaction involving any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

“Organization Documents” means, (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, and any shareholder rights agreement, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership, (c) for any limited liability company, the operating agreement and articles or certificate of formation or (d) any other document setting forth the manner of election or duties of the officers, directors, managers or other similar persons, or the designation, amount or relative rights, limitations and preference of the Stock of a Person.

“Patent License” means any agreement, now or hereafter in existence, providing for the grant by, or to, any Grantor of any rights (including, without limitation, the right for a party to be designated as an owner and/or to enforce, defend, make, have made, make improvements, manufacture, use, sell, import, export, and require joinder in suit and/or receive assistance from another party) covered in whole or in part by a Patent.

“Patents” means collectively, all of the following of any Grantor: (i) all patents, all inventions and patent applications anywhere in the world, (ii) all improvements, counterparts, reissues, divisional, re-examinations, extensions, continuations (in whole or in part) and renewals of any of the foregoing and improvements thereon, (iii) all income, royalties, damages or payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past, present or future infringements, violations or misappropriations of any of the foregoing, (iv) the right to sue for past, present and future infringements, violations or misappropriations of any of the foregoing and (v) all rights corresponding to any of the foregoing throughout the world.

“Person” means any individual, partnership, corporation (including a business trust and a public benefit corporation), professional corporation or association, joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority.

“Pledged Certificated Stock” means all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by a certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Stock and Stock Equivalents listed on Schedule 4. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.10 hereof.

“Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt Instruments.

“Pledged Debt Instruments” means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations owed to such Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Indebtedness described on Schedule 4, issued by the obligors named therein. Pledged Debt Instruments excludes any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.10 hereof.

“Pledged Investment Property” means any investment property of any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment Property excludes any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.10 hereof.

“Pledged Stock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.

“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock, including all right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right, title and interest of any Grantor in, to and under any Organization Document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 4, to the extent such interests are not certificated. Pledged Uncertificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by Section 5.10 hereof.

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

“Requirement of Law” means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

“Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, sub-agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in Article III) and other consultants and agents of or to such Person or any of its Affiliates.

“Secured Obligations” has the meaning set forth in Section 3.2.

“Securities Act” means the Securities Act of 1933 (as amended).

“Software” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.

“Stock” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.

“Stock Equivalents” means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable.

“Stock Purchase Agreement” means that certain Stock Purchase Agreement entered into as of November ___, 2016, by and between the Lender (as Seller thereunder) and the Borrower (as Purchaser thereunder), pursuant to which the Note was issued.

“Trademark License” means any agreement, now or hereafter in existence, providing for the grant by, or to, any Grantor of any rights in (including, without limitation, the right for a party to be designated as an owner and/or to enforce, defend, use, mark, police, and require joinder in suit and/or receive assistance from another party) covered in whole, or in part, by a Trademark.

“Trademarks” means, collectively, all of the following of any Grantor: (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, other business identifiers, whether registered or unregistered, all registrations and recordings thereof, and all applications in connection therewith (other than each United States application to register any trademark or service mark prior to the filing under applicable Law of a verified statement of use for such trademark or service mark) anywhere in the world, (ii) all counterparts, extensions and renewals of any of the foregoing, (iii) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past, present or future infringements, violations, dilutions or misappropriations of any of the foregoing, (iv) the right to sue for past, present or future infringements, violations, dilutions or misappropriations of any of the foregoing and (v) all rights corresponding to any of the foregoing (including the goodwill) throughout the world.

“Trade Secret License” means any agreement, now or hereafter in existence, providing for the grant by, or to, any Grantor of any rights in (including without limitation, the right for a party to be designated as an owner and/or to enforce, defend, use, mark, police, and require joinder in suit and/or receive assistance from another party) covered in whole, or in part, by a Trade Secret.

“Trade Secrets” mean all confidential and proprietary information, including, without limitation, know-how, trade secrets, manufacturing and production processes and techniques, inventions, research and development information, databases and data, including, without limitation, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information.

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of Delaware; provided, however, that, in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of Lender’s security interest in any Collateral is governed by the Uniform Commercial Code of a jurisdiction other than the State of Delaware, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.

“Vehicles” means all vehicles covered by a certificate of title law of any state.

Section 1.2 Certain Other Terms.

(a) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. References herein to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor’s Collateral or any relevant part thereof.

(b) Other Interpretive Provisions.

(i) Defined Terms. Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.

(ii) The Agreement. The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(iii) Certain Common Terms. The term “including” is not limiting and means “including without limitation.”

(iv) Performance; Time. Whenever any performance obligation hereunder shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.” If any provision of this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.

(v) Contracts. Unless otherwise expressly provided herein, references to agreements and other contractual instruments, including this Agreement, the Note and any other Loan Documents, shall be deemed to include all subsequent amendments, thereto, restatements and substitutions thereof and other modifications and supplements thereto which are in effect from time to time, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document.

(vi) Laws. References to any statute or regulation are to be construed as including all statutory and regulatory provisions related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

ARTICLE II

GUARANTY

Section 2.1 Guaranty. To induce the Lender to enter into the Loan Documents and to make the Loan to or for the benefit of one or more Grantors, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.

Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”).Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 2.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty.

Section 2.3 Contribution. To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Loan and other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower that received the benefit of the funds advanced that constituted Guaranteed Obligations) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.

Section 2.4 Authorization; Other Agreements. Lender is hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following:

(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan Document (to the extent the Lender may do so under the Note);

(b) apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Loan Documents;

(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Borrower or any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and

(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.

Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor (other than the Borrower) hereby waives and agrees not to assert any defense, whether arising in connection with or in respect of any of the following or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by Lender):

(a) the invalidity or unenforceability of any obligation of the Borrower or any other Guarantor under any Loan Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof; provided, however, that none of the Borrower’s rights of set-off or recoupment under the Stock Purchase Agreement are hereby waived;

(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from the Borrower or any other Guarantor or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;

(c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;

(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Borrower, any other Guarantor or any of the Borrower’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;

(e) any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any election following the occurrence of an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such Secured Party’s rights under any applicable Requirement of Law; or

(f) any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Borrower, any other Guarantor or any other Subsidiary of the Borrower, in each case other than the payment in full of the Guaranteed Obligations.

Section 2.6 Waivers. Each Guarantor (other than the Borrower) hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder including any of the following: (a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Borrower or any other Guarantor. Each Guarantor (other than the Borrower) further unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Borrower or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other Grantor or set off any of its obligations to such other Grantor against obligations of such Grantor to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance. Each Guarantor further waives any right such Guarantor may have under any applicable Requirement of Law to require any Secured Party to seek recourse first against the Borrower or any other Person, or to realize upon any Collateral for any of the Obligations, as a condition precedent to enforcing such Guarantor’s liability and obligations under this Guaranty.

Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that such Secured Party, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.

ARTICLE III

GRANT OF SECURITY INTEREST

Section 3.1 Collateral. For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests is collectively referred to as the “Collateral”:

(a) all accounts, chattel paper, deposit accounts, documents (as defined in the UCC), equipment, goods, money, general intangibles, instruments, Intellectual Property, inventory, investment property, letter of credit rights, Software, all insurance policies covering the Collateral, and any supporting obligations related to any of the foregoing;

(b) the commercial tort claims described on Schedule 1 and on any supplement thereto received by Lender pursuant to Section 5.9;

(d) all property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash;

(e) all other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and wherever located; and

(f) to the extent not otherwise included, all proceeds of the foregoing;

Section 3.2 Grant of Security Interest in Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations (the “Secured Obligations”), hereby mortgages, pledges and hypothecates to Lender, for the benefit of the Lender, and grants to Lender, for the benefit of the Lender, a Lien on and security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor; provided, however, notwithstanding the foregoing, no Lien or security interest is hereby granted on any Excluded Property; provided, further, that if and when any property shall cease to be Excluded Property, a Lien on and security interest in such property shall be deemed granted therein. Each Grantor hereby represents and warrants that the Excluded Property, when taken as a whole, is not material to the business operations or financial condition of the Grantors, taken as a whole.

ARTICLE IV

Representations and Warranties

To induce the Lender to enter into the Loan Documents, each Grantor hereby represents and warrants each of the following to Lender:

Section 4.1 Title; No Other Liens. Except for the Lien granted to Lender pursuant to this Agreement and other Permitted Liens (except for those Permitted Liens not permitted to exist on any Collateral) under any Loan Document (including Section 4.2), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the sole, record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien other than Permitted Liens. Such Grantor is the sole and exclusive owner of all Intellectual Property pledged by it hereunder and no Intellectual Property pledged by such Grantor is jointly owned.

Section 4.2 Perfection and Priority. The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of Lender in all Collateral subject, for the following Collateral, to the occurrence of the following: (a) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 2 (which, in the case of all filings and other documents referred to on such schedule, have been delivered to Lender in completed and duly authorized form), (b) with respect to any deposit account, the execution of Control Agreements, (c) in the case of all Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, and all required fees and taxes to maintain and protect such Grantor’s interest in the Intellectual Property having been paid, (d) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual Obligation granting control to Lender over such letter-of-credit rights, (e) in the case of electronic chattel paper, the completion of all steps necessary to grant control to Lender over such electronic chattel paper and (f) in the case of Vehicles, the actions required under Section 5.1(e). Such security interest shall be prior to all other Liens on the Collateral except for Permitted Liens having priority over Lender’s Lien by operation of law upon (i) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, the delivery thereof to Lender of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of instruments and certificates, in each case properly endorsed for transfer to Lender or in blank, (ii) in the case of all Pledged Investment Property not in certificated form, the execution of Control Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to Lender of such instruments and tangible chattel paper. Except as set forth in this Section 4.2, all actions by each Grantor necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.

Section 4.3 Locations of Inventory, Equipment and Books and Records. On the date hereof, such Grantor’s inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral are kept at the locations listed on Schedule 3.

Section 4.4 Pledged Collateral. (a) The Pledged Stock pledged by such Grantor hereunder (i) is listed on Schedule 4 and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 4, (ii) has been duly authorized, validly issued and is fully paid and non-assessable (other than Pledged Stock in limited liability companies and partnerships) and (iii) constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms.

(b) As of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates has been delivered to Lender in accordance with Section 5.3(a).

(c) Upon the occurrence and during the continuance of an Event of Default, Lender shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and be entitled to participate in the management of the issuer of such Pledged Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

Section 4.5 Instruments and Tangible Chattel Paper Formerly Accounts. No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper that has not been delivered to Lender, properly endorsed for transfer, to the extent delivery is required by Section 5.6(a).

Section 4.6 Intellectual Property

(a) Schedule 5 sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) Material Intellectual Property and Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Agreements or other rights (including franchises) granted by the Grantor with respect thereto.

(b) On the Closing Date, all Material Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Material Intellectual Property has been abandoned.

(c) No breach or default of any IP Agreement shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor in, any Intellectual Property: (i) the consummation of the transactions contemplated by any Loan Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority.

(d) There are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor’s rights in, any Material Intellectual Property of such Grantor.

(e) To such Grantor’s knowledge, no Person has been or is infringing, misappropriating, diluting, violating, conflicting with or otherwise impairing any Intellectual Property of such Grantor.

(f) Such Grantor, and to such Grantor’s knowledge each other party thereto, is not in breach or default of any IP Agreement.

(g) All applications pertaining to the Copyrights, Patents and Trademarks of each Grantor have been duly and properly filed, and all registrations or letters pertaining to such Copyrights, Patents and Trademarks have been duly and properly filed and issued.

(h) No Grantor has made an assignment or agreement in conflict with the security interest in the Intellectual Property of any Grantor hereunder.

(i) Each Grantor and each of its Subsidiaries, own, or possess the right to use, all of the Intellectual Property that is reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person.

(j) No slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed by any Grantor or any of its Subsidiaries infringes upon any rights held by any other Person.

(k) With respect to each IP Agreement, (i) such IP Agreement is valid and binding and in full force and effect and represents the entire agreement between such Grantor and, to such Grantor’s knowledge, the other parties thereto with respect to the subject matter thereof, (ii) such IP Agreement will not cease to be valid and binding and in full force and effect on terms identical to those currently in effect as a result of the rights and interest granted herein, nor will the grant of such rights and interest constitute a breach or default under such IP Agreement or otherwise give any party thereto a right to terminate such IP Agreement, (iii) such Grantor has not received any written notice of termination or cancellation under such IP Agreement, (iv) such Grantor has not received any notice of a breach or default under such IP Agreement, which breach or default has not been cured, (v) such Grantor has not granted to any other third party any rights, adverse or otherwise, under such IP Agreement, except duly authorized licenses and sublicenses and as permitted under the Loan Documents, and (vii) neither such Grantor nor, to such Grantor’s knowledge, any other party to such IP Agreement is in breach or default thereof in any respect, and no event has occurred that, with notice or lapse of time or both, would constitute such a breach or default or permit termination, modification or acceleration under such IP Agreement. Except as set forth in Schedule 5, none of the Intellectual Property owned or used by such Grantor in the operation of such Grantor’s business as presently conducted or intended to be conducted is the subject of any IP Agreement.

Section 4.7 Commercial Tort Claims. The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 1, which sets forth such information separately for each Grantor.

Section 4.8 Specific Collateral. None of the Collateral is or is proceeds or products of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.

Section 4.9 Enforcement. No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by Lender of its rights (including voting rights) provided for in this Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except (i) as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral, and (ii) any restrictions on foreclosure and transfer of any IP Agreements under which Grantors are licensees or any other Contractual Obligations of Grantors (not in any event applying to Intellectual Property owned by any Grantor) which require third party consents for transfer of Grantors’ rights and obligations thereunder.

Section 4.10 Exception. Notwithstanding anything in this Agreement or any other Loan Document to the contrary, no misrepresentation or breach of any representation or warranty made by the Borrower, or any other Grantor in this Agreement or in any of the other Loan Documents shall constitute an Event of Default if such misrepresentation or breach was due to (in whole or in part) a misrepresentation or breach of any representation or warranty made by the Lender in the Stock Purchase Agreement.

ARTICLE V

Covenants

Each Grantor agrees with Lender to the following, as long as any Obligation remains outstanding (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted):

Section 5.1 Maintenance of Perfected Security Interest; Further Documentation and Consents. (a) Generally. Such Grantor shall (i) not use or permit any Collateral to be used unlawfully or in violation of any provision of any Loan Document, any Requirement of Law or any policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or undertaking restricting the right or ability of such Grantor or Lender to sell, assign, convey or transfer any Collateral.

(b) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall defend such security interest and such priority against the claims and demands of all Persons.

(c) Such Grantor shall furnish to Lender from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as Lender may reasonably request, all in reasonable detail and in form and substance satisfactory to Lender.

(d) At any time and from time to time, upon the written request of Lender, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as Lender may reasonably request, including (A) using its commercially reasonable best efforts to secure all approvals necessary or appropriate for the assignment to or for the benefit of Lender of any Contractual Obligation, including any IP Agreement, held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts and securities accounts.

(e) If requested by Lender, the Grantor shall arrange for Lender’s first priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each jurisdiction that Lender shall deem advisable to perfect its security interests in any Vehicle.

(f) To ensure that a Lien and security interest is granted on any of the Excluded Property set forth in clause (ii) of the definition of “Excluded Property”, such Grantor shall use its commercially reasonable best efforts to obtain any required consents from any Person other than the Borrower and its Affiliates with respect to any permit or license or any Contractual Obligation with such Person entered into by such Grantor that requires such consent as a condition to the creation by such Grantor of a Lien on any right, title or interest in such permit, license or Contractual Obligation or any Stock or Stock Equivalent related thereto.

Section 5.2 Changes in Locations, Name, Etc. Except upon 20 days’ prior written notice to Lender and delivery to Lender of (a) all documents reasonably requested by Lender to maintain the validity, perfection and priority of the security interests provided for herein and (b) if applicable, a written supplement to Schedule 3 showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following:

(i) permit any inventory or equipment to be kept at a location other than those listed on Schedule 3, except for inventory or equipment in transit; or

(ii) change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.

Section 5.3 Pledged Collateral. (a) Delivery of Pledged Collateral. Such Grantor shall (i) deliver to Lender, in suitable form for transfer and in form and substance satisfactory to Lender, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all other Pledged Investment Property in a Controlled Securities Account.

(b) Event of Default. During the continuance of an Event of Default, Lender shall have the right, at any time in its discretion and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.

(c) Cash Distributions with respect to Pledged Collateral. Except as provided in Article VI and subject to the limitations set forth in the Note, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged Collateral.

(d) Voting Rights. Except as provided in Article VI, such Grantor shall be entitled to exercise all voting, consent and corporate, membership, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided, however, that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would impair the Collateral or be inconsistent with or result in any violation of any provision of any Loan Document.

(e) UCC Section 8. To the extent any of the Pledged Collateral constitutes an “uncertificated security” (as defined in Section 8-102(a)(18) of the UCC), each Grantor shall cause the issuer thereof to acknowledge to the Lender the registration on the books of such issuer of the pledge and security interest hereby created in the manner required by Section 8-301(b) of the UCC.

(f) Membership Interest.

(i) No Pledged Stock that is Stock or Stock Equivalent in any limited liability company (the “Pledged Membership Interest”) shall be (i) held in a securities account as defined under Article 8 of the Uniform Commercial Code as in effect from time to time in the jurisdiction applicable to such limited liability company, (ii) dealt in or traded on an securities exchange or in a securities market, or (iii) an investment company security as defined under Article 8 of the Uniform Commercial Code as in effect from time to time in the jurisdiction applicable to such limited liability company. The pledge of any Pledged Membership Interest made by a Grantor hereunder shall be a pledge not only of profits and losses of the Person having issued the Pledged Membership Interest (the “Pledged LLC Entity”), but also a pledge of all rights and obligations of the Pledged LLC Entity. Such pledge or assignment shall include all voting, management and control rights and is not limited to economic rights.

(ii) No Pledged Membership Interest by its terms expressly provides that it is a “security” within the meaning of (i) Section 8-102(a)(15) of the Uniform Commercial Code as in effect from time to time in the State of Delaware and (ii) the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

(iii) Notwithstanding anything contained to the contrary in the LLC Agreement, until such time as the Obligations under the Note have been repaid in full:

(1) Lender (or its designee) may, upon a foreclosure, sale or other transfer of any Pledged Membership Interest pursuant to this Agreement, (A) become a substitute member with respect to the Pledged Membership Interest subject to this Agreement, (B) exercise any and all voting rights allowed to the holder of any Pledged Membership Interest subject to this Agreement, (C) transfer its interest in the Pledged LLC Entity, subject to the provisions of this Agreement, and/or (D) succeed to all other rights or interests associated with any Pledged Membership Interest subject to this Agreement, or any part thereof, as may be provided in this Agreement;

(2) no new or additional membership interest shall be created, issued, redeemed, exchanged, diluted or modified;

(3) no Grantor shall sell, convey, transfer, assign, pledge, encumber, grant a security interest in or otherwise dispose of any Pledged Membership Interest, except as permitted by the LLC Agreement subject to the terms of the Loan Documents;

(4) a Grantor shall give Lender not fewer than thirty (30) days prior written notice of any proposed change in the name of the Pledged LLC Entity or such Grantor and any proposed change in the location of any Pledged Membership Interest or of such records, and no Grantor will, without the prior written consent of Lender, move any Pledged Membership Interest or such records to a location not previously identified to Lender or keep duplicate records with respect to any Pledged Membership Interest at any address outside such county; and

(5) except as it relates to Lender and as otherwise may be permitted under the LLC Agreement subject to the terms of the Loan Documents, no Grantor shall consent to or permit to occur the admission of any new member in the Pledged LLC Entity, or the issuance of any additional membership interests or any other equity interest in the Pledged LLC Entity that would have the effect of diluting such Grantor’s interest in the Pledged LLC Entity.

(iv) Without limiting the generality of anything in the LLC Agreement, none of the following types of provisions will be deemed to restrict, or be applicable to, Lender or any other Secured Party in any way:

(1) confidentiality clauses;

(2) transfer restrictions, including without limitation: (A) requirements to offer interests to the Pledged LLC Entity, to other members or to affiliates; (B) provisions that trigger offers or deem offers of interests to have been made; (C) provisions related to the purchase price of interests or the payment terms of a sale of interests; (D) provisions requiring consent from other members or managers to transfer interests; (E) drag along rights and tag along rights; (F) restrictions on transferring only a portion of a member’s interests; and (G) restrictions on transferring voting rights;

(3) provisions waiving rights to maintain an action for dissolution or partition;

(4) provisions requiring the consent of any person other than a member of the Pledged LLC Entity to amend the limited liability company operating agreement of the Pledged LLC Entity; or

(5) clauses that provide: (A) that a creditor will have no rights under such LLC Agreement; or (B) that none of the provisions of such LLC Agreement are for the benefit of creditors or enforceable by a creditor.

Section 5.4 Accounts.

(a) Such Grantor shall not, other than in the Ordinary Course of Business, (i) grant any extension of the time of payment of any account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the value thereof.

(b) So long as an Event of Default is continuing, Lender shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and such Grantor shall furnish all such assistance and information as Lender may reasonably require in connection therewith. Upon Lender’s reasonable request, such Grantor shall cause independent public accountants or others satisfactory to Lender to furnish to Lender reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts.

Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity contract unless subject to a Control Agreement.

Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper. (a) If any amount in excess of $10,000 payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper other than such instrument delivered in accordance with Section 5.3(a) and in the possession of Lender, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of Imation Corp., as Lender” and, at the request of Lender, shall immediately deliver such instrument or tangible chattel paper to Lender, duly indorsed in a manner satisfactory to Lender.

(b) Such Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any investment property to any Person other than Lender.

(c) If such Grantor is or becomes the beneficiary of a letter of credit that is (i) not a supporting obligation of any Collateral and (ii) in excess of $10,000, such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify Lender thereof and enter into a Contractual Obligation with Lender, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to Lender and such assignment shall be sufficient to grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Cash Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to Lender.

(d) If any amount in excess of $10,000 payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all steps necessary to grant Lender control of all such electronic chattel paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.

Section 5.7 Intellectual Property. (a) Within 30 days after any change to Schedule 5 for such Grantor, such Grantor shall provide Lender notification thereof and the short-form intellectual property agreements and assignments as described in this Section 5.7 and any other documents that Lender reasonably requests with respect thereto.

(b) Such Grantor shall (and shall cause all its licensees to): (i) (1) continue to use each Trademark included in the Material Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, (4) not adopt or use any other mark that is confusingly similar or a colorable imitation of such Trademark unless Lender shall obtain a perfected security interest in such mark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby (A) such Trademark (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (B) any Patent included in the Material Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (C) any Trade Secret that is Material Intellectual Property may become publicly available or otherwise unprotectable, or (D) any Copyright may become invalidated, otherwise impaired or injected into the public domain.

(c) Such Grantor shall not make any assignment or agreement in conflict with the security interest in the Intellectual Property of each Grantor hereunder (except as permitted by the Note).

(d) Such Grantor shall notify Lender immediately if it knows, or has reason to know, that any application or registration relating to any Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, injected into the public domain or of any adverse determination or development regarding the validity or enforceability or such Grantor’s ownership of, interest in, right to use, register, own or maintain any Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor, at its own expense, shall take all actions that are necessary or reasonably requested by Lender, including, without limitation, in the Applicable IP Office, to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Material Intellectual Property, including, without limitation, the payment of required fees and taxes, the filing of responses to office actions issued by the Applicable IP Office or other Governmental Authorities, the filing of applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings.

(e) Such Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall notify Lender immediately and take such action as it or the Lender reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor.

(f) Grantor shall not sell or transfer any Intellectual Property.

(g) Such Grantor shall execute and deliver to Lender in form and substance reasonably acceptable to Lender and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Agreements of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by Lender).

(h) Upon the request of Lender, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as Lender may request to evidence Lender’s Lien upon such registered Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby consistent with the terms of this Agreement.

(i) Such Grantor shall promptly notify Lender in writing if any Intellectual Property owned now or in the future ceases to be owned solely and exclusively by such Grantor.

Section 5.8 Notices. Such Grantor shall promptly notify Lender in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation.

Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall, immediately upon such acquisition, deliver to Lender, in each case in form and substance satisfactory to Lender, a notice of the existence and nature of such commercial tort claim and a supplement to Schedule 1 containing a specific description of such commercial tort claim, (ii) Section 3.1 shall apply to such commercial tort claim and (iii) such Grantor shall execute and deliver to Lender, in each case in form and substance satisfactory to Lender, any document, and take all other action, deemed by Lender to be reasonably necessary or appropriate for Lender to obtain a perfected security interest having at least the priority set forth in Section 4.2 in all such commercial tort claims. Any supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the receipt thereof by Lender, become part of Schedule 1 for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.

Section 5.10 Controlled Securities Account. Each Grantor shall deposit all of its Cash Equivalents in securities accounts that are Controlled Securities Accounts except for Cash Equivalents the aggregate value of which does not exceed $10,000.

ARTICLE VI

Remedial Provisions

Section 6.1 Code and Other Remedies. (a) UCC Remedies. During the continuance of an Event of Default, Lender may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.

(b) Disposition of Collateral. Without limiting the generality of the foregoing, Lender may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a hearing on Lender’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral and (iii) sell, assign, convey, transfer, grant option or options to purchase and deliver any Collateral (enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Lender shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.

(c) Management of the Collateral. Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at Lender’s request, it shall assemble the Collateral and make it available to Lender at places that Lender shall reasonably select, whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, Lender also has the right to require that each Grantor store and keep any Collateral pending further action by Lender and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until Lender is able to sell, assign, convey or transfer any Collateral, Lender shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by Lender and (iv) Lender may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of Lender’s remedies, with respect to such appointment without prior notice or hearing as to such appointment. Lender shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of Lender.

(d) Application of Proceeds. Lender shall apply the cash proceeds of any action taken by it pursuant to this Section 6.1, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of Lender and any other Secured Party hereunder, including reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Note, and only after such application and after the payment by Lender of any other amount required by any Requirement of Law, need Lender account for the surplus, if any, to any Grantor.

(e) Direct Obligation. Neither Lender nor any other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of Lender and any other Secured Party under any Loan Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against Lender or any other Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

(f) Commercially Reasonable. To the extent that applicable Requirements of Law impose duties on Lender to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for Lender to do any of the following:

(i) fail to incur significant costs, expenses or other Liabilities reasonably deemed as such by Lender to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;

(ii) fail to obtain Permits, or other consents, for access to any Collateral to sell or for the collection or sale of any Collateral, or, if not required by other Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral;

(iii) fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;

(iv) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature, or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;

(v) exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature, or, to the extent deemed appropriate by Lender, obtain the services of other brokers, investment bankers, consultants and other professionals to assist Lender in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;

(vi) dispose of assets in wholesale rather than retail markets;

(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or

(viii) purchase insurance or credit enhancements to insure Lender against risks of loss, collection or disposition of any Collateral or to provide to Lender a guaranteed return from the collection or disposition of any Collateral.

Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by any Secured Party shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 6.1. Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on Lender that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1.

(g) IP Agreements. For the purpose of enabling Lender to exercise rights and remedies under this Section 6.1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, convey, transfer or grant options to purchase any Collateral) at such time as Lender shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to Lender (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real Property owned, operated, leased, subleased or otherwise occupied by such Grantor.

Section 6.2 Accounts and Payments in Respect of General Intangibles. (a) In addition to, and not in substitution for, any similar requirement in the Note, if required by Lender at any time during the continuance of an Event of Default, any payment of accounts or payment in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to Lender, in a Cash Collateral Account, subject to withdrawal by Lender as provided in Section 6.4. Until so turned over, such payment shall be held by such Grantor in trust for Lender, segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(b) At any time during the continuance of an Event of Default:

(i) each Grantor shall, upon Lender’s request, deliver to Lender all original and other documents evidencing, and relating to, the Contractual Obligations and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to Lender and that payments in respect thereof shall be made directly to Lender;

(ii) Lender may, without notice, at any time, limit or terminate the authority of a Grantor to collect its accounts or amounts due under general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to Lender’s satisfaction the existence, amount and terms of any account or amounts due under any general intangible. In addition, Lender may at any time enforce such Grantor’s rights against such account debtors and obligors of general intangibles; and

(iii) each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by Lender to ensure any Internet Domain Name is registered.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each account and each payment in respect of general intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.

Section 6.3 Pledged Collateral. (a) Voting Rights. During the continuance of an Event of Default, upon notice by Lender to the relevant Grantor or Grantors, Lender or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Lender may determine), all without liability except to account for property actually received by it; provided, however, that Lender shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(b) Proxies. In order to permit Lender to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Lender all such proxies, dividend payment orders and other instruments as Lender may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to Lender an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted).

(c) Authorization of Issuers. Each Grantor hereby expressly and irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from Lender in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise expressly permitted hereby or the Note, pay any dividend or make any other payment with respect to the Pledged Collateral directly to Lender.

Section 6.4 Proceeds to be Turned over to and Held by Lender. Unless otherwise expressly provided in the Note or this Agreement, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for Lender, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to Lender in the exact form received (with any necessary endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by Lender in cash or Cash Equivalents shall be held by Lender in a Cash Collateral Account. All proceeds being held by Lender in a Cash Collateral Account (or by such Grantor in trust for Lender) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Note.

Section 6.5 Sale of Pledged Collateral. (a) Each Grantor recognizes that Lender may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Lender shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.

(b) Each Grantor agrees to use its commercially reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to Section 6.1 and this Section 6.5 valid and binding and in compliance with all applicable Requirements of Law. Each Grantor further agrees that a breach of any covenant contained herein will cause irreparable injury to Lender, that Lender has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained herein shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Note. Each Grantor waives any and all rights of contribution or subrogation upon the sale or disposition of all or any portion of the Pledged Collateral by Lender.

Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by Lender or any other Secured Party to collect such deficiency.

ARTICLE VII

Agent

Section 7.1 Lender’s Appointment as Attorney-in-Fact. (a) Each Grantor hereby irrevocably constitutes and appoints Lender and any Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives Lender and its Related Persons the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:

(i) in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Lender for the purpose of collecting any such moneys due under any account or general intangible or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property owned by or licensed to such Grantor, execute, deliver and have recorded any document that Lender may request to evidence, effect, publicize or record Lender’s security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

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

(iv) execute, in connection with any sale provided for in Section 6.1 or Section 6.5, any document to effect or otherwise necessary or appropriate in relation to evidence the sale of any Collateral; or

(v) (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to Lender or as Lender shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other document in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as Lender may deem appropriate, (G) assign any Intellectual Property owned by such Grantor or any IP Agreements of such Grantor throughout the world on such terms and conditions and in such manner as Lender shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment and (H) generally, sell, assign, convey, transfer or grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though Lender were the absolute owner thereof for all purposes and do, at Lender’s option, at any time or from time to time, all acts and things that Lender deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties’ security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do.

(vi) If any Grantor fails to perform or comply with any Contractual Obligation contained herein, Lender, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation.

(b) The expenses of Lender incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate set forth in the Note, from the date of payment by Lender to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to Lender on demand.

(c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

Section 7.2 Authorization to File Financing Statements. Each Grantor authorizes Lender and its Related Persons, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as Lender reasonably determines appropriate to perfect, or continue or maintain perfection of, the security interests of Lender under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as “all assets of the debtor” or words of similar import. A copy of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction. Such Grantor also hereby ratifies its authorization for Lender to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof. Each Grantor hereby (i) waives any right under the UCC or any other Requirement of Law to receive notice and/or copies of any filed or recorded financing statements, amendments thereto, continuations thereof or termination statements and (ii) releases and excuses each Secured Party from any obligation under the UCC or any other Requirement of Law to provide notice or a copy of any such filed or recorded documents.

Section 7.3 Authority of Lender. Each Grantor acknowledges that the rights and responsibilities of Lender under this Agreement with respect to any action taken by Lender or the exercise or non-exercise by Lender of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between Lender and the other Secured Parties, be governed by the Note and by such other agreements with respect thereto as may exist from time to time among them, but, as between Lender and any Grantor, Lender shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.

Section 7.4 Duty; Obligations and Liabilities. (a) Duty of Lender. Lender’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as Lender deals with similar property for its own account. The powers conferred on Lender hereunder are solely to protect Lender’s interest in the Collateral and shall not impose any duty upon Lender to exercise any such powers. Lender shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Persons shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, Lender shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by Lender in good faith.

(b) Obligations and Liabilities with respect to Collateral. No Secured Party and no Related Person thereof shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on Lender hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.

ARTICLE VIII

Miscellaneous

Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by any Grantor or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Grantor, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, (a) any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.

Section 8.2 Release of Collateral. (a) At the time provided in the Note, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of Lender and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file UCC amendments at such time evidencing the termination of the Liens so released. At the request of any Grantor following any such termination, Lender shall deliver to such Grantor any Collateral of such Grantor held by Lender hereunder and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

(b) If Lender shall be directed or permitted pursuant to the Note to release any Lien or any Collateral, such Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in, such subsection. In connection therewith, Lender, at the request of any Grantor, shall execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such release.

(c) At the time provided in the Note and at the request of the Borrower Representative, a Grantor shall be released from its obligations hereunder in the event that all the Stock and Stock Equivalents of such Grantor shall be sold to any Person that is not an Affiliate of the Borrower or the Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.

Section 8.3 Independent Obligations. The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations and the Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is not paid when due, or upon any Event of Default, Lender may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other Grantor, or any other Collateral and without first joining any other Grantor in any proceeding.

Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any act (except by a written instrument pursuant to Section 8.5 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured Party would otherwise have on any future occasion.

Section 8.5 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with the consent of the Lender and the Borrower; provided, however, that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of Annex 1 and Annex 2, respectively, in each case duly executed by Lender and each Grantor directly affected thereby.

Section 8.6 Additional Grantors; Additional Pledged Collateral. (a) Joinder Agreements. If, at the option of the Borrower or as required pursuant to the Note, the Borrower shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to Lender a Joinder Agreement substantially in the form of Annex 2 (each, a “Joinder Agreement”) and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.

(b) Pledge Amendments. To the extent any Pledged Collateral has not been delivered as of the Closing Date, such Grantor shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 (each, a “Pledge Amendment”). Such Grantor authorizes Lender to attach each Pledge Amendment to this Agreement.

Section 8.7 Notices. All notices, requests and demands to or upon Lender or any Grantor hereunder shall be effected in the manner provided for in the Note; provided, however, that any such notice, request or demand to or upon any Grantor shall be addressed to the Borrower’s notice address set forth in the Note.

Section 8.8 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of Lender.

Section 8.9 Counterparts. This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.

Section 8.10 Severability. Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.

Section 8.11 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Section 8.12 No Effect on Stock Purchase Agreement; No Waiver of Rights. Notwithstanding anything in this Agreement or any other Loan Document to the contrary, no term or provision of this Agreement or any other Loan Document shall have the effect of modifying or amending any of the rights of the Borrower (as Purchaser) under the Stock Purchase Agreement, including, without limitation, any rights to set-off or recoup amounts under the Note or any of the obligations, including, without limitation, the indemnity obligations, of the Lender (as Seller) under the Stock Purchase Agreement.

Section 8.13 Waiver of Jury Trial. THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SECTION (29) OF THE NOTE.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Security Agreement to be duly executed and delivered as of the date first above written.

	BORROWER:

	NXSN ACQUISITION CORP.

	By:
	Name:
	Title:

[Signature Page to Guaranty and Security Agreement – [SP Holdco]]

NEXSAN CORPORATION

	By:
	Name:
	Title:

NEXSAN TECHNOLOGIES, INC.

	By:
	Name:
	Title:

CONNECTED DATA, INC.

	By:
	Name:
	Title:

[Signature Page to Guaranty and Security Agreement –[SP Holdco]]

ACCEPTED AND AGREED

as of the date first above written:

IMATION CORP.,

as Lender

By:
	Name:
	Title:

[Signature Page to Guaranty and Security Agreement –[SP Holdco]]

ANNEX 1

GUARANTY AND SECURITY AGREEMENT¹

FORM OF PLEDGE AMENDMENT

This Pledge Amendment, dated as of __________ __, 201_, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of [Closing Date under SPA] by NXSN Acquisition Corp. and the other Grantors party thereto, the undersigned Grantor and the other Affiliates of the Borrower from time to time party thereto as Grantors in favor of Imation Corp., as Lender (the “Guaranty and Security Agreement”). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.

The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all of the Secured Obligations.

The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 4.1, 4.2, 4.4 and 4.9 of the Guaranty and Security Agreement is true and correct on and as of the date hereof as if made on and as of such date.

[GRANTOR]

	By:
		Name:
		Title:

¹Separate agreements should be executed relating to each Grantor’s respective Copyrights, Patents, and Trademarks.

A1-1

Annex 1-A

PLEDGED STOCK

ISSUER	CLASS	CERTIFICATE NO(S).	PAR VALUE	NO. OF SHARES, UNITS OR INTERESTS

PLEDGED DEBT INSTRUMENTS

ISSUER	DESCRIPTION OF DEBT	CERTIFICATE NO(S).	FINAL MATURITY	PRINCIPAL AMOUNT

A1-2

ACKNOWLEDGED AND AGREED

as of the date first above written:

IMATION CORP.,

as Lender

By:
	Name:
	Title:

A1-3

ANNEX 2

GUARANTY AND SECURITY AGREEMENT

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT, dated as of _________ __, 201_, is delivered pursuant to Section 8.6 of the Guaranty and Security Agreement, dated as of [Closing Date under SPA], by NXSN Acquisition Corp. and the other Persons from time to time party thereto as Grantors in favor of Imation Corp., as Lender (as such agreement may be amended, restated, supplemented and/or otherwise modified from time to time, the “Guaranty and Security Agreement”). Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes a party to the Guaranty and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, hereby mortgages, pledges and hypothecates to Lender and grants to Lender a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Guaranty and Security Agreement.

The information set forth in Annex 1-A is hereby added to the information set forth in Schedules 1 through 5 to the Guaranty and Security Agreement. By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agrees that this Joinder Agreement may be attached to the Guaranty and Security Agreement and that the Collateral listed on Annex 1-A to this Joinder Amendment shall be and become part of the Collateral referred to in the Guaranty and Security Agreement and shall secure all Secured Obligations of the undersigned.

The undersigned hereby represents and warrants that each of the representations and warranties contained in Article IV of the Guaranty and Security Agreement applicable to it is true and correct on and as of the date hereof as if made on and as of such date.

A2-1

In witness whereof, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]

	By:
		Name:
		Title:

A2-2

ACKNOWLEDGED AND AGREED

as of the date first above written:

IMATION CORP.,

as Lender

By:
	Name:
	Title:

A2-3

ANNEX 3

GUARANTY AND SECURITY AGREEMENT

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT¹

THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of _________ __, 201_, is made by each of the entities listed on the signature pages hereof (each a “Grantor” and, collectively, the “Grantors”), in favor of Imation Corp (“Lender”), as lender.

WITNESSETH:

WHEREAS, pursuant to the Senior Secured Convertible Note dated as of [Closing Date under SPA] (as the same may be amended, restated, supplemented and/or modified from time to time, the “Note”) issued by the Borrower for the benefit of the Lender, the Lender has agreed to enter into the Loan Documents and to make a loan to the Borrower upon the terms and subject to the conditions set forth in the Note;

WHEREAS, each Grantor has agreed, pursuant to a Guaranty and Security Agreement dated [Closing Date under SPA], in favor of Lender (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Guaranty and Security Agreement”), to guarantee the Obligations of Borrower;

WHEREAS, all of the Grantors are party to the Guaranty and Security Agreement pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lender to enter into the Loan Documents and make the loan to the Borrower that the Borrower shall have executed and delivered this Agreement to Lender;

NOW, THEREFORE, in consideration of the premises and to induce the Lender and Lender to enter into the Loan Documents and to induce the Lender to make its loan to the Borrower, each Grantor hereby agrees with Lender as follows:

Section 1. Defined Terms. Capitalized terms used herein without definition are used as defined in the Guaranty and Security Agreement.

Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations (as defined in the Guaranty and Security Agreement), hereby mortgages, pledges and hypothecates to Lender and grants to Lender a Lien on and security interest in, all of its right, title and interest in, to and under the following Collateral of such Grantor (the “[Copyright] [Patent] [Trademark] Collateral”):

¹Separate agreements should be executed relating to each Grantor’s respective Copyrights, Patents, and Trademarks.

A3-1

(a) [all of its Copyrights and all IP Agreements providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation, those referred to on Schedule 1 hereto;

(b) all renewals, reversions and extensions of the foregoing; and

(c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]

(a) [all of its Patents and all IP Agreements providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those referred to on Schedule 1 hereto;

(b) all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and

(a) [all of its Trademarks and all IP Agreements providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation, those referred to on Schedule 1 hereto;

(b) all renewals and extensions of the foregoing;

(d) all income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]

Section 3. Guaranty and Security Agreement. The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to Lender pursuant to the Guaranty and Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of Lender with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Guaranty and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.

A3-2

Section 4. Grantor Remains Liable. Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Agreements subject to a security interest hereunder.

Section 5. Counterparts. This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.

Section 6. Governing Law. This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

[SIGNATURE PAGES FOLLOW]

A3-3

IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

	[GRANTOR]
	as Grantor

	By:
		Name:
		Title:

ACCEPTED AND AGREED

as of the date first above written:

imation corp.,

as Lender

By:
	Name:
	Title:

A3-4

SCHEDULE I

[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT

[Copyright] [Patent] [Trademark] Registrations

1. REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]

[Include Registration Number and Date]

2. [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS

[Include Application Number and Date]

3. IP AGREEMENTS

[Include complete legal description of agreement (name of agreement, parties and date)]

Schedule 1 to Guaranty and Security Agreement

Commercial Tort Claims

None.

Schedule 2 to Guaranty and Security Agreement

Filings

ENTITY		JURISDICTIONS
Nexsan Corporation		Delaware
Nexsan Technologies, Inc.		Delaware
Connected Data, Inc.		California

NXSN Acquisition Corp.		Delaware

Schedule 3

Location of Inventory, Equipment, Books and Records

All books and records are located either the locations set forth below or located at ____________. All inventory and equipment is located at the following:

Grantor	Use	Location	Landlord

Schedule 4 to Guaranty and Security Agreement

Pledged Collateral

Entity	Jurisdiction	Stock	Issued Shares/Units	Cert #	Ownership (org chart)

Nexsan Corporation	Delaware

Nexsan Technologies, Inc.	Delaware

Connected Data, Inc.	California

Schedule 5 to Guaranty and Security Agreement

Intellectual Property

Exhibit 10.2

SUBSCRIPTION AGREEMENT

This Subscription Agreement is entered into and dated as of November 22, 2016 (this “Agreement”), by and between Imation Corp., a Delaware corporation with offices located at 1099 Helmo Avenue N, Suite 250, Oakdale, Minnesota 55128 (the “Company”) and Clinton Group, Inc., a Delaware corporation (the “Subscriber”). Capitalized terms not defined below shall have the meaning as set forth in Section 1.1.

RECITALS

A. The Company and the Subscriber are each executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act.

B. On the Initial Closing Date (as defined below), the Company, the Subscriber and North Stars Technologies LLC, a Delaware limited liability company (the “Imation RIA”) shall enter into a Capacity and Services Agreement, in the form attached hereto as Exhibit A (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Capacity and Services Agreement”), pursuant to which the Company together with each of its Affiliates, including without limitation, the Imation RIA, desire to retain the Subscriber to provide certain services and investment capacity in accordance with the terms and conditions set forth therein.

C. To induce the Subscriber to provide the Capacity and the Capacity Expansion (each as defined below), the Company wishes to sell and the Subscriber wishes to purchase, upon the terms and conditions stated in this Agreement, the Capacity Shares (as defined below).

D. In connection with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, in the form attached hereto as Exhibit B (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined below) under the Securities Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Subscriber agree as follows:

ARTICLE I.
DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth in this Section 1.1:

“Affiliate” of a Person means any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the first Person, as such terms are used in and construed under Rule 144 promulgated under the Securities Act.

“Bloomberg” means Bloomberg Financial Markets.

“Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Capacity Expansion” has the meaning as set forth in the Capacity and Services Agreement.

“Capacity Shares” means the Initial Capacity Shares and/or the Subsequent Capacity Shares, as applicable.

“Capacity” has the meaning as set forth in the Capacity and Services Agreement.

“Closing Bid Price” means, for any security as of any date, the last closing bid price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Subscriber. If the Company and the Subscriber are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 6.15. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

“Common Stock” means (a) the Company’s shares of Common Stock, par value $0.01 per share, and (b) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

“Eligible Market” means the Principal Market, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, The NYSE MKT LLC or any OTC listing or quotation.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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“Governmental Authority” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, provincial, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, commissioner, bureau, tribunal, instrumentality, official, ministry, fund, foundation, center, organization, board, unit, body or Person and any court or other tribunal); or (d) regulatory or self-regulatory organization (including the Principal Market or other applicable Eligible Market).

“Imation Board Approval” shall mean the approval of the board of directors of the Company, with any directors who are interested in the Capacity and Services Agreement or the transactions contemplated thereby or otherwise in the matter being approved recusing themselves from the discussion and voting on such matter.

“Initial Capacity Shares” means 12,500,000 shares of Common Stock (as adjusted for any stock split, stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the date hereof) issuable to the Subscriber on the Initial Closing Date.

“Lien” means any mortgage, deed of trust, lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

“Market Value” means the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the applicable date of determination.

“Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions contemplated hereby, by the Capacity and Services Agreement or by the Registration Rights Agreement or (iii) the authority or ability of the Company to perform any of its obligations under this Agreement, the Registration Rights Agreement or the Capacity and Services Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Principal Market” means The New York Stock Exchange.

“Registrable Securities” has the meaning as set forth in the Registration Rights Agreement.

“Services” has the meaning as set forth in the Capacity and Services Agreement.

“Subsequent Capacity Shares” means 2,500,000 shares of Common Stock (as adjusted for any stock split, stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the date hereof) issuable to the Subscriber on the Subsequent Closing Date.

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“Subsidiary” means any joint venture or entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest.

“Superior Agreement” means a written agreement for the provision by a third party registered investment advisor to Imation RIA of services that are comparable, in all material respects, to the Services (as defined in the Capacity and Services Agreement), which the Company determines, upon Imation Board Approval, to be more favorable to Imation RIA than the terms of the Capacity and Services Agreement.

“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

“Transaction Documents” means this Agreement, the Registration Rights Agreement and any other documents, certificates or agreements executed or delivered in connection with the transactions contemplated by this Agreement.

“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Subscriber. If the Company and the Subscriber are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 6.15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

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ARTICLE II.
PURCHASE AND SALE

2.1 Purchase of Capacity Shares. Subject to the satisfaction (or waiver) of the terms and conditions set forth in this Agreement and the Capacity and Services Agreement, the Company shall issue and sell to the Subscriber, and the Subscriber agrees to purchase from the Company on the Initial Closing Date (as defined below), the Initial Capacity Shares (the “Initial Closing”). Subject to the satisfaction (or waiver) of the terms and conditions set forth in this Agreement and the Capacity and Services Agreement, the Company shall issue and sell to the Subscriber, and the Subscriber agrees to purchase from the Company on the Subsequent Closing Date (as defined below), the Subsequent Capacity Shares (the “Subsequent Closing” and together with the Initial Closing, the “Closing”).

2.2 Closings. The date of the Initial Closing (the “Initial Closing Date”) shall be such date as is mutually agreed to by the Company and the Subscriber that is within five (5) Business Days of the Stockholder Approval Date (as defined in Section 4.10) after notification of satisfaction (or waiver) of the conditions to the Initial Closing set forth in this Agreement, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022. The date of the Subsequent Closing (the “Subsequent Closing Date” and together with the Initial Closing Date, the “Closing Date”) shall be the date of the consummation of the Capacity Expansion (as defined in the Capacity and Services Agreement) (or such other date as is mutually agreed to by the Company and the Subscriber) after notification of satisfaction (or waiver) of the conditions to the Subsequent Closing set forth in this Agreement, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.

2.3 Issue Price. The Initial Capacity Shares are being issued to the Subscriber as consideration for the execution and delivery of the Capacity and Services Agreement by the Subscriber, the Capacity provided by the Subscriber to the Company pursuant to the Capacity and Services Agreement, and the performance of all obligations thereunder (including, without limitation, the Services) by the Subscriber. The Subsequent Capacity Shares, if any, are being issued to the Subscriber as consideration for the Capacity Expansion provided by the Subscriber to the Company pursuant to the Capacity and Services Agreement.

2.4 Form of Payment. On the Initial Closing Date, the Company shall deliver to the Subscriber one or more stock certificates, evidencing the Initial Capacity Shares the Subscriber is purchasing, duly executed on behalf of the Company and registered in the name of the Subscriber or its designee. On the Subsequent Closing Date, if any, the Company shall deliver to the Subscriber one or more stock certificates, evidencing the Subsequent Capacity Shares the Subscriber is purchasing, duly executed on behalf of the Company and registered in the name of the Subscriber or its designee.

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ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. The Company hereby represents and warrants as of the date hereof and as of the applicable Closing Date (except for representations and warranties that speak as of a specific date, which shall be made as of such date) to the Subscriber:

(a) Organization and Qualification. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware, and has the requisite power and authorization to own its properties and to carry on its business as now being conducted and as presently proposed to be conducted. The Company is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.

(b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its respective obligations hereunder and thereunder. Other than the Required Approvals (as defined in Section 3.1(d)), the execution and delivery by the Company of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereunder and thereunder have been duly authorized by a committee of independent directors of the Company’s Board of Directors and by all other necessary action on the part of the Company, including, without limitation, by (i) the Company’s Board of Directors determination that the transactions contemplated by the Transaction Documents and the Capacity and Services Agreement constitute an Exempt Transaction (as defined in that certain 382 Rights Agreement, dated as of August 7, 2015, between the Company and Wells Fargo Bank, N.A., a national banking association (the “382 Rights Plan”)) and (ii) the approval of the applicable Capacity Shares pursuant to Rule 16b-3 as an exempt issuance to a director by deputization (the approvals required by the foregoing clauses (i) and (ii) are referred to herein as the “Board Approvals”), and other than the Stockholder Approval, no further consent or action is required by the Company, or its Board of Directors or stockholders. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company, and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company, enforceable against the Company, in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. Assuming, the Subscriber's representations and warranties set forth in Section 3.2(l) hereof are true and correct as of immediately prior to the Initial Closing, the transactions contemplated both by the Initial Closing and the Subsequent Closing do not require the approval of the Continuing Directors (as defined in the Company’s Restated Certificate of Incorporation), and are not deemed a Business Transaction (as defined in the Company’s Restated Certificate of Incorporation) with a Related Person (as defined in the Company’s Restated Certificate of Incorporation).

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(c) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Capacity Shares) do not and will not (i) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or any of its Subsidiaries’ debt or otherwise) or other understanding to which the Company or any of its Subsidiaries is a party or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any Governmental Authority to which the Company or any of its Subsidiaries is subject (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market), or by which any property or asset of the Company or any of its Subsidiaries is bound or affected; except in the case of clause (ii) or (iii) above, as would not, reasonably be expected to result in a Material Adverse Effect.

(d) Filings, Consents and Approvals. Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, authorization, permit or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than the Stockholder Approval, the filing by the Company of a Notice of Sale of Securities on Form D with the SEC under Regulation D and state and applicable Blue Sky (if any) and the filing of any requisite notices and/or applications(s) to the Principal Market for the issuance and sale of the Capacity Shares and the listing of the Capacity Shares for trading thereon (collectively, the “Required Approvals”). All Required Approvals have been obtained or effected on or prior to the Initial Closing Date, and neither the Company or any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company nor any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. Except as set forth in the public filings filed with the SEC that are available to the public through the EDGAR system (the “Public Filings”), the Company is not in violation of the requirements of the Principal Market and has no Knowledge of any facts or circumstances which would reasonably be expected to result in the delisting or suspension of the Common Stock in the foreseeable future. The issuance by the Company of the Capacity Shares shall not have the effect of delisting or suspending the Common Stock from the Principal Market.

(e) Issuance of the Capacity Shares. The issuance of the Capacity Shares is duly authorized and, upon issuance in accordance with the terms of the Transaction Documents. The Capacity Shares will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, Liens and charges with respect to the issue thereof.

(f) Acknowledgment Regarding Subscriber’s Purchase of Securities. The Company acknowledges and agrees that the Subscriber is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Subscriber is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby.

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(g) Equity Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, of which as of the date hereof, 44,438,778 are issued and outstanding, 790,525 shares are reserved for issuance pursuant to the Company’s stock option and purchase plans and no shares are reserved for issuance pursuant to securities (other than the aforementioned options) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 25,000,000 shares of preferred stock, par value $0.01 per share, of which none are issued and outstanding. 7,308,146 shares of Common Stock are held in treasury. As of the date hereof, there are 55,561,222 shares of Common Stock authorized and unissued. No securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Capacity Shares. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

(h) Certain Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by the Subscriber or its investment advisor) to any placement agent, broker, financial advisor or consultant, finder, investment banker, bank or other Person engaged by the Company, the Board of Directors or any committee thereof relating to or arising out of the transactions contemplated hereby. The Subscriber shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by the Subscriber pursuant to written agreements executed by the Subscriber which fees or commissions shall be the sole responsibility of the Subscriber) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement.

(i) Private Placement; No Integrated Offering; No General Solicitation. Assuming in part the accuracy of the Subscriber’s representations and warranties set forth in Section 3.2(c)-(g), (i) no registration under the Securities Act is required for the offer and sale of the Capacity Shares by the Company to the Subscriber under the Transaction Documents, and (ii) the issuance and sale of the Capacity Shares hereunder does not contravene the rules and regulations of the Principal Market. Assuming in part the accuracy of the Subscriber’s representations and warranties set forth in Section 3.2, neither the Company nor any of its Subsidiaries, any of their respective Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Capacity Shares under the Securities Act, whether through integration with prior offerings or otherwise or cause this offering of the Capacity Shares to require approval of stockholders of the Company for purposes of the Securities Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. Neither the Company nor any of its Subsidiaries nor their Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Capacity Shares.

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(j) No Disqualification Events. With respect to the Capacity Shares to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Subscriber a copy of any disclosures provided thereunder.

(k) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including any distribution under a rights agreement, or similar arrangement or plan or other similar anti-takeover provision under the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents or the provisions of the Delaware General Corporation Law (including Section 203 thereof) that is or could become applicable to the Subscriber as a result of the Subscriber and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Capacity Shares and the Subscriber’s ownership of the Capacity Shares. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan, the 382 Rights Plan, or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.

(l) Transfer Taxes. On the applicable Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the Capacity Shares to be sold to the Subscriber hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

(m) Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

(n) Absence of Litigation. Except as disclosed in the Public Filings, there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, that would reasonably be expected to have a Material Adverse Effect.

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(o) Investment Company Status. Neither the Company nor any of its Subsidiaries is, and upon consummation of the sale of the Securities, will not be, an “investment company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

(p) Acknowledgement Regarding the Subscriber’s Trading Activity. The Company acknowledges and agrees that except as set forth in Section 4.11, (i) the Subscriber has not been asked to agree, nor has the Subscriber agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Capacity Shares for any specified term; (ii) the Subscriber, and counter-parties in “derivative” transactions to which any the Subscriber is a party, directly or indirectly, presently may have a “short” position in the Common Stock and (iii) the Subscriber shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that except as set forth in Section 4.11 (a) the Subscriber may engage in hedging and/or trading activities at various times during the period that the Capacity Shares are outstanding and (b) such hedging and/or trading activities, if any, can reduce the value of the existing stockholder’s equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the other Transaction Documents, the Capacity and Services Agreement or any of the documents executed in connection herewith.

(q) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Capacity Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Capacity Shares, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

(r) Transfer Taxes. On the applicable Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Capacity Shares to be sold to the Subscriber hereunder, if any, will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

(s) No Additional Agreements. The Company does not have any agreement or understanding with the Subscriber with respect to the transactions contemplated by the Transaction Documents and the Capacity and Services Agreement other than as specified in the Transaction Documents and the Capacity and Services Agreement.

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(t) Disclosure. Each Public Filing made since January 1, 2012, at the time filed, did not contain any untrue statement of a material fact or omit to state a 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. Since January 1, 2012, no material event or material circumstance has occurred or material information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed in the Public Filings.

(u) No Other Representations or Warranties. The Company makes no representations or warranties to the Subscriber in connection with the transactions contemplated by this Agreement other than those expressly set forth in this Section 3.1. The Company acknowledges and agrees that it is not relying on any oral or written representations or warranties of the Subscriber, express or implied, in connection with the transactions contemplated by this Agreement other than expressly those set forth in this Agreement or in the Capacity and Services Agreement.

3.2 Representations and Warranties of the Subscriber. The Subscriber hereby represents and warrants as of the date hereof and as of the applicable Closing Date (except for representations and warranties that speak as of a specific date, which shall be made as of such date) to the Company as follows:

(a) Organization; Authority. The Subscriber is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by the Subscriber of the Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of the Subscriber. Each of the Transaction Documents to which the Subscriber is a party has been duly executed by the Subscriber and, when delivered by the Subscriber in accordance with terms hereof, will constitute the valid and legally binding obligation of the Subscriber, enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(b) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Subscriber and the consummation by the Subscriber of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Subscriber’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Subscriber is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any Governmental Authority to which the Subscriber is subject (including, without limitation, foreign, federal and state securities laws and regulations); except in the case of clause (ii) or (iii) above, as would not, reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Subscriber to perform its obligations thereunder.

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(c) Investment Intent. The Subscriber is acquiring the Capacity Shares as principal for its own account for investment purposes and not with a view to distributing or reselling such Capacity Shares or any part thereof in violation of applicable securities laws, without prejudice, however, to the Subscriber’s right at all times to sell or otherwise dispose of all or any part of such Capacity Shares in compliance with applicable federal and state securities laws and Section 4.11 hereof. Nothing contained herein shall be deemed a representation or warranty by the Subscriber to hold the Capacity Shares for any period of time. The Subscriber understands that the Capacity Shares have not been registered under the Securities Act, and therefore the Capacity Shares may not be sold, assigned or transferred unless pursuant to (i) an effective registration statement under the Securities Act with respect thereto or (ii) an available exemption from the registration requirements of the Securities Act.

(d) Subscriber Status. At the time the Subscriber was offered the Capacity Shares, it was, and at the date hereof or as of the applicable Closing Date, as applicable, it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

(e) Experience of the Subscriber. The Subscriber, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Capacity Shares, and has so evaluated the merits and risks of such investment. The Subscriber is able to bear the economic risk of an investment in the Capacity Shares and, at the present time, is able to afford a complete loss of such investment.

(f) General Solicitation. The Subscriber is not purchasing the Capacity Shares as a result of any advertisement, article, notice or other communication regarding the Capacity Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the Subscriber’s knowledge, any other general solicitation or general advertisement.

(g) Access to Data. The Subscriber has received and reviewed information about the Company and has had an opportunity to discuss the Company’s business, management and financial affairs with its management and to review the Company’s facilities. The Subscriber acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Capacity Shares and the merits and risks of investing in the Capacity Shares; (ii) access to information about the Company and its respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. The foregoing, however, does not limit or modify the representations and warranties made by the Company in this Agreement or any other provision in this Agreement or the right of the Subscriber to rely thereon. The Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Capacity Shares.

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(h) Transfer or Resale. The Subscriber understands that except as provided in the Registration Rights Agreement: (i) the Capacity Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Subscriber shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Subscriber, in a generally acceptable form, to the effect that such Capacity Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Subscriber provides the Company with reasonable assurance that such Capacity Shares can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Capacity Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144; and (iii) neither the Company nor any other Person is under any obligation to register the Capacity Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

(i) Reliance on Exemptions. The Subscriber understands that the Capacity Shares being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Subscriber’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of the Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of such Subscriber to acquire the Capacity Shares.

(j) No Governmental Review. The Subscriber understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Capacity Shares or the fairness or suitability of the investment in the Capacity Shares nor have such authorities passed upon or endorsed the merits of the offering of the Capacity Shares.

(k) Legends. The Subscriber understands that the certificates or other instruments representing the Capacity Shares, except as set forth below, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP PURSUANT TO THE TERMS OF A SUBSCRIPTION AGREEMENT, DATED AS OF NOVEMBER 22, 2016, BY AND BETWEEN IMATION CORP. AND CLINTON GROUP INC., AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP, EXCEPT IN ACCORDANCE WITH SUCH SUBSCRIPTION AGREEMENT.”

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The legend set forth above shall be removed (in whole or in part, as applicable), and the Company shall issue a certificate or certificates with a legend or without such legend to the holder of the Capacity Shares upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”), if (i) in connection with a sale, assignment or other transfer of such Capacity Shares, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Capacity Shares may be made without registration under the applicable requirements of the Securities Act or (ii) in connection with a sale, assignment or other transfer of such Capacity Shares pursuant to an effective registration statement or Rule 144, in either case so long as the Lockup (as defined herein) has lapsed. If the Company shall fail for any reason or for no reason to issue to the holder of the Capacity Shares within three (3) Trading Days after the occurrence of any of (i) through (ii) above (the initial date of such occurrence, the “Legend Removal Date”), a certificate without such legend or to issue such Capacity Shares to such holder by electronic delivery at the applicable balance account at DTC, and if on or after such Trading Day such holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such holder of such Capacity Shares that the holder anticipated receiving without legend from the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the holder’s request and in the holder’s discretion, either (i) pay cash to the holder in an amount equal to such holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such unlegended Capacity Shares shall terminate, or (ii) promptly honor its obligation to deliver to such holder such unlegended Capacity Shares as provided above and pay cash to such holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price of the Common Stock on the applicable Legend Removal Date. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with such issuance.

(l) Holdings of Subscriber. Assuming the representations and warranties provided by the Company set forth in Section 3.1(g) hereof are true and correct, as of immediately prior to the Initial Closing, the Subscriber and its Affiliates beneficially own no more than 10% of the issued and outstanding Common Stock.

(m) No Other Representations or Warranties. The Subscriber makes no representations or warranties to the Company in connection with the transactions contemplated by this Agreement other than those expressly set forth in this Section 3.2. The Subscriber acknowledges and agrees that it is not relying on any oral or written representations or warranties of the Company, express or implied, in connection with the transactions contemplated by this Agreement other than expressly those set forth in this Agreement or in the Capacity and Services Agreement.

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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1 Register; Pledge.

(a) The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Capacity Shares), a register for the Capacity Shares in which the Company shall record the name and address of the Person in whose name the Capacity Shares have been issued (including the name and address of each transferee). The Company shall keep the register open and available at all times during business hours for inspection of the Subscriber or its legal representatives.

(b) The Company acknowledges and agrees that the Subscriber may from time to time pledge or grant a security interest in some or all of the Capacity Shares in connection with a bona fide loan pursuant to which all of the Subscriber’s assets are pledged to secure such loan and, if required under the terms of such agreement, the Subscriber may transfer pledged or secured Capacity Shares to the pledgees or secured parties, subject to the terms of this Agreement. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the Subscriber’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Capacity Shares may reasonably request in connection with a pledge or transfer of the Capacity Shares.

4.2 Integration. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities under the Securities Act or cause the offering of any of the Securities to be integrated with other offerings for purposes of any such applicable stockholder approval provisions of the Principal Market.

4.3 Reporting Period. Until the date on which the Subscriber shall have sold all of the Capacity Shares (the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.

4.4 Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K (or any analogous reports under the Exchange Act) and any registration statements (other than on Form S-8) or amendments filed pursuant to the Securities Act, (ii) on the same day as the release thereof, facsimile or e-mailed copies of all press releases issued by the Company or any of its Subsidiaries and (iii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders.

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4.5 Listing of Capacity Shares. The Company shall (a) prepare and timely file with the Principal Market an additional shares listing application covering all of the Capacity Shares, (b) cause the Capacity Shares to be approved for listing on the Principal Market as soon as practicable thereafter, (c) provide to the Subscriber evidence of such listing, and (d) maintain the listing of the Common Stock on the Principal Market or another Eligible Market. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4.5.

4.6 Form D and Blue Sky. The Company shall file a Form D with respect to the Capacity Shares as required under Regulation D and to provide a copy thereof to the Subscriber. The Company shall, on or before the Initial Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Capacity Shares for sale to the Subscriber at each Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action (if any) so taken to the Subscriber on or prior to the Initial Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports (if any) relating to the offer and sale of the Capacity Shares required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Capacity Shares to the Subscriber.

4.7 Indemnification. In consideration of the Subscriber’s execution and delivery of the Transaction Documents and acquiring the Capacity Shares thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Subscriber and each other holder of the Capacity Shares and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; provided, that, solely with respect to the Company’s indemnification of the Indemnitees pursuant to the foregoing clause (c), the Company shall not be required to indemnify Indemnitees for the first $400,000 of such Indemnified Liabilities incurred by the Indemnitees and shall not be required to indemnify Indemnitees to the extent such cause of action, suit or claim resulted from the fraud, gross negligence or willful misconduct of any Indemnitee. The Company shall not be obligated to reimburse the Indemnitees under this Section 4.7 for any Indemnified Liabilities that exceed, in the aggregate, the dollar amount equal to the sum of (x)(A) the number of Initial Capacity Shares; multiplied by (B) the Closing Bid Price of the Common Stock on the Initial Closing Date; plus to the extent the Indemnified Liabilities were incurred on or prior to the Subsequent Closing Date, (y), (A) the number of Subsequent Capacity Shares, multiplied by (B) the Closing Bid Price of the Common Stock on the Subsequent Closing Date. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 4.7 shall be the same as those set forth in Section 6 of the Registration Rights Agreement.

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4.8 Stockholders Rights Plan. No claim will be made or enforced by the Company or any other Person that the Subscriber is an “Acquiring Person” or any similar term under any stockholders rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that the Subscriber could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Capacity Shares under the Transaction Documents or under any other agreement between the Company and the Subscriber.

4.9 Public Information. At any time during the period commencing from the six (6) month anniversary of the applicable Closing Date and ending at such time that all of the Capacity Shares, if a registration statement is not available for the resale of all of the Capacity Shares, may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1), if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirements under Rule 144(c) or (ii) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (each, a “Public Information Failure”) then, as partial relief for the damages to any holder of such Capacity Shares by reason of any such delay in or reduction of its ability to sell such Capacity Shares (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each such holder an amount in cash equal to one percent (1.0%) of the aggregate Market Value of such Capacity Shares of such holder on the day of a Public Information Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that such Public Information Failure no longer prevents a holder of such Capacity Shares from selling such Capacity Shares pursuant to Rule 144 without any restrictions or limitations. The payments to which a holder shall be entitled pursuant to this Section 4.9 are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Public Information Failure Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of one percent (1.0%) per month (prorated for partial months) until paid in full. Notwithstanding anything to the contrary herein or in the Registration Rights Agreement, in no event shall (i) the aggregate amount of Public Information Failure Payments to a holder of Capacity Shares exceed, in the aggregate, ten percent (10%) of the aggregate Market Value of such holder’s Capacity Shares on the applicable Closing Date and (ii) the Company be obligated to make both Public Information Failure Payments and Registration Delay Payments (as defined in the Registration Rights Agreement) in respect of the same securities and for any same period of time in which a failure giving rise to such payments is deemed to have occurred. Notwithstanding anything to the contrary herein or in the Registration Rights Agreement, in no event shall the Company be obligated to make a Public Information Failure Payment if such Public Information Failure resulted solely from the fraud, gross negligence or willful misconduct of the Subscriber or its stockholders, partners, members, officers, directors or employees.

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4.10 Stockholder Approval. The Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the Company (the “Stockholder Meeting”), which shall be called as promptly as practicable after the date hereof, but in no event later than February 15, 2017, or such later date as agreed by the Company and the Subscriber (the “Stockholder Meeting Deadline”), a proxy statement (the “Proxy Statement”) at the expense of the Company, which shall be in a form reasonably acceptable to the Subscriber after review by Schulte Roth & Zabel LLP (which fees shall be borne by the Subscriber), soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions (the “Resolutions”) providing for the issuance of all of the Initial Capacity Shares and Subsequent Capacity Shares as described in the Transaction Documents in accordance with applicable law, the provisions of the Company’s certificate of incorporation and bylaws and the rules and regulations of the Principal Market (such affirmative approvals being referred to herein, collectively, as the “Stockholder Approval” and the date such approval is obtained, the “Stockholder Approval Date”), and the Company shall use its reasonable best efforts to solicit its stockholders’ approval of such Resolutions and to cause the Board of Directors of the Company to recommend to the stockholders that they approve the Resolutions. The Company shall be obligated to use its reasonable best efforts to obtain the Stockholder Approval by the Stockholder Meeting Deadline. The Company shall file the Proxy Statement with the SEC on or prior to December 13, 2016.

4.11 Lock-Up. For a period of three (3) years from the applicable Closing Date, the Subscriber shall not (a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Capacity Shares or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Capacity Shares, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Capacity Shares or such other securities, in cash or otherwise (the “Lockup”). Notwithstanding the foregoing, the Subscriber may transfer Capacity Shares to any of its Affiliates, provided that such Affiliate(s) agree to be bound in writing by the restrictions set forth in this Section 4.11. For the avoidance of doubt, any shares of Common Stock held by the Subscriber prior to the date hereof and any shares of Common Stock that the Subscriber may from time to time acquire after the date hereof shall not be subject to the lock-up provisions of this Section 4.11.

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4.12 Notice of Disqualification Events. The Company will notify the Subscriber in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

4.13 Investment Company Status. For so long as the Subscriber holds any Capacity Shares, the Company will not be, an “investment company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

4.14 Break-Up Fee. In the event the Company does not obtain the Stockholder Approval by the Stockholder Meeting Deadline, the Company shall promptly pay the Subscriber, in cash by wire transfer of immediately available funds pursuant to wire instructions delivered by the Subscriber in writing to the Company, a break-up fee equal to $500,000, intended to cover the Subscriber's expenses and the time devoted by the Subscriber's personnel in connection with the negotiation and execution of the Transaction Documents and the Capacity and Services Agreement. In addition, the Company may elect not to consummate the Initial Closing if it enters into a Superior Agreement, provided that in such case the Company shall promptly pay the Subscriber, in cash by wire transfer of immediately available funds pursuant to wire instructions delivered by the Subscriber in writing to the Company, a break-up fee equal to $1,500,000 (and shall not be required to pay any break-up fee pursuant to the immediately preceding sentence or pursuant to Section 7.C of the Capacity and Services Agreement).

4.15 Registration Eligibility. The Company shall be eligible to register the Registrable Securities for resale by the Subscriber using Form S-3 promulgated under the Securities Act on or prior to the Initial Filing Deadline (as defined in the Registration Rights Agreement).

ARTICLE V.
CLOSING CONDITIONS

5.1 Initial Closing.

(a) Conditions to the Subscriber’s Obligation to Close. At the Initial Closing, the following conditions precedent shall have been satisfied in a manner satisfactory to the Subscriber:

(i) Representations and Warranties. The representations and warranties of the Company set forth herein and in the Capacity and Services Agreement shall be true and correct in all respects as of the date when made and as of the Initial Closing Date as though made at that time and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents and the Capacity and Services Agreement to be performed, satisfied or complied with by the Company at or prior to the Initial Closing Date. The Subscriber shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Initial Closing Date, to the foregoing effect in the form attached hereto as Exhibit C.

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(ii) Transaction Documents. The Company shall have duly executed and delivered to the Subscriber (i) each of the Transaction Documents to which it is a party and (ii) the Company shall have duly executed and delivered to the Subscriber the Initial Capacity Shares.

(iii) Legal Opinion. The Subscriber shall have received the opinion of Winston & Strawn LLP, the Company’s outside counsel, dated as of the Initial Closing Date, in substantially the form of Exhibit D attached hereto.

(iv) Secretary’s Certificate. The Company shall have delivered to the Subscriber a certificate, executed by the Secretary of the Company and dated as of the Initial Closing Date, as to (i) the resolutions consistent with Section 3.1(b), including, without limitation, the Board Approvals, as adopted by the Company’s Board of Directors in a form reasonably acceptable to the Subscriber, (ii) the Company’s Restated Certificate of Incorporation and (iii) the Company’s Bylaws, each as in effect at the Initial Closing, in the form attached hereto as Exhibit E.

(v) Capacity and Services Agreement. The Company and the Imation RIA shall have duly executed and delivered to the Subscriber the Capacity and Services Agreement.

(vi) Listing. The Common Stock (i) shall be designated for quotation or listed on an Eligible Market and (ii) shall not have been suspended, as of the Initial Closing Date, by the SEC or the applicable Eligible Market from trading on such Eligible Market nor shall suspension by the SEC have been threatened, as of the Initial Closing Date, in writing by the SEC.

(vii) Listing of Additional Shares. The Company shall have submitted to the Principal Market a Listing of Additional Shares notification or such corresponding notification to such other applicable Eligible Market, if applicable, in connection with the transactions contemplated hereby and the applicable Eligible Market shall have approved, orally or in writing, the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Initial Capacity Shares, if applicable.

(viii) Stockholder Approval. The Company shall have obtained the Stockholder Approval.

(ix) No MAE. No Material Adverse Effect has occurred.

(x) Fairness Opinion. The Company shall have received an opinion as to the fairness to the Company of the transaction contemplated by the Transaction Documents and the Capacity and Services Agreement from a financial point of view, issued by an independent accounting, appraisal or investment banking firm of national standing (the “Fairness Opinion”).

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(xi) Good Standing. The Company shall have delivered to the Subscriber a certificate evidencing the formation and good standing of the Company in the State of Delaware issued by the Secretary of State of such jurisdiction, as of a date within ten (10) days of the Initial Closing Date.

(xii) Consents and Approvals. The Company shall have obtained all governmental, regulatory, corporate or third party consents and approvals, if any, necessary for the consummation of the transactions contemplated by the Transaction Documents and the Capacity and Services Agreement, including, without limitation, the issuance and sale of the Initial Capacity Shares.

(xiii) Payment of Certain Fees. All fees, expenses and other amounts owed pursuant to that certain letter agreement dated as of April 29, 2016 by and between the Company and the Subscriber regarding Clinton Lighthouse Equity Strategies Fund (Offshore), Ltd. shall have been paid and the Company shall no longer owe any compensation to the Subscriber pursuant thereto.

(xiv) Other Documents. The Company shall have delivered to the Subscriber such other documents relating to the transactions contemplated by this Agreement as to the Subscriber or its counsel may reasonably request.

(b) Conditions to the Company’s Obligation to Close. At the Initial Closing, the following conditions precedent shall have been satisfied in a manner satisfactory to the Company:

(i) Representations and Warranties. The representations and warranties of the Subscriber set forth herein and in the Capacity and Services Agreement shall be true and correct in all respects as of the date when made and as of the Initial Closing Date as though made at that time and the Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents and the Capacity and Services Agreement to be performed, satisfied or complied with by the Subscriber at or prior to the Initial Closing Date.

(ii) Transaction Documents. The Subscriber shall have duly executed and delivered to the Company each of the Transaction Documents to which it is a party.

(iii) Stockholder Approval. The Company shall have obtained the Stockholder Approval.

(iv) Fairness Opinion. The Company shall have received the Fairness Opinion.

(v) Capacity and Services Agreement. The Subscriber shall have duly executed and delivered to the Company and the Imation RIA the Capacity and Services Agreement.

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5.2 Subsequent Closing.

(a) Conditions to the Subscriber’s Obligation to Close. At the Subsequent Closing, the following conditions precedent shall have been satisfied in a manner satisfactory to the Subscriber:

(i) Representations and Warranties. The representations and warranties of the Company set forth herein and in the Capacity and Services Agreement shall be true and correct in all respects as of the date when made and as of the Subsequent Closing Date as though made at that time and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents and the Capacity and Services Agreement to be performed, satisfied or complied with by the Company at or prior to the Subsequent Closing Date. The Subscriber shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Subsequent Closing Date, to the foregoing effect in the form attached hereto as Exhibit C.

(iii) Legal Opinion. The Subscriber shall have received the opinion of Winston & Strawn LLP, the Company’s outside counsel, dated as of the Subsequent Closing Date, in substantially the form of Exhibit D attached hereto.

(iv) Secretary’s Certificate. The Company shall have delivered to the Subscriber a certificate, executed by the Secretary of the Company and dated as of the Subsequent Closing Date, as to (i) the resolutions consistent with Section 3.1(b), including, without limitation, the Board Approvals, as adopted by the Company’s Board of Directors in a form reasonably acceptable to the Subscriber, (ii) the Company’s Restated Certificate of Incorporation and (iii) the Company’s Bylaws, each as in effect at the Subsequent Closing, in the form attached hereto as Exhibit E.

(v) Listing. The Common Stock (i) shall be designated for quotation or listed on an Eligible Market and (ii) shall not have been suspended, as of the Subsequent Closing Date, by the SEC or the applicable Eligible Market from trading on such Eligible Market nor shall suspension by the SEC have been threatened, as of the Subsequent Closing Date, in writing by the SEC.

(vi) Listing of Additional Shares. The Company shall have submitted to the Principal Market a Listing of Additional Shares notification or such corresponding notification to such other applicable Eligible Market in connection with the transactions contemplated hereby and the applicable Eligible Market shall have approved, orally or in writing, the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Subsequent Capacity Shares.

(vii) Stockholder Approval. The Company shall have obtained the Stockholder Approval.

(viii) No MAE. No Material Adverse Effect has occurred.

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(ix) Fairness Opinion. The Company shall have received the Fairness Opinion.

(x) Good Standing. The Company shall have delivered to the Subscriber a certificate evidencing the formation and good standing of the Company in the State of Delaware issued by the Secretary of State of such jurisdiction, as of a date within ten (10) days of the Subsequent Closing Date.

(xi) Consents and Approvals. The Company shall have obtained all governmental, regulatory, corporate or third party consents and approvals, if any, necessary for the consummation of the transactions contemplated by the Transaction Documents and the Capacity and Services Agreement, including, without limitation, the issuance and sale of the Subsequent Capacity Shares.

(xii) Other Documents. The Company shall have delivered to the Subscriber such other documents relating to the transactions contemplated by this Agreement as to the Subscriber or its counsel may reasonably request.

(b) Conditions to the Company’s Obligation to Close. At the Subsequent Closing, the following conditions precedent shall have been satisfied in a manner satisfactory to the Company:

(i) Representations and Warranties. The representations and warranties of the Subscriber set forth herein and in the Capacity and Services Agreement shall be true and correct in all respects as of the date when made and as of the Subsequent Closing Date as though made at that time and the Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents and the Capacity and Services Agreement to be performed, satisfied or complied with by the Subscriber at or prior to the Subsequent Closing Date.

(ii) Transaction Documents. The Subscriber shall have duly executed and delivered to the Company each of the Transaction Documents to which it is a party.

(iii) Stockholder Approval. The Company shall have obtained the Stockholder Approval.

(iv) Fairness Opinion. The Company shall have received the Fairness Opinion.

ARTICLE VI.
MISCELLANEOUS

6.1 Fees and Expenses. Each party to this Agreement shall bear its own expenses in connection with the sale of the Capacity Shares to the Subscriber.

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6.2 Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Subscriber, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Subscriber, and any amendment to this Agreement made in conformity with the provisions of this Section 6.2 shall be binding on the Subscriber and all holders of Capacity Shares. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Capacity Shares then outstanding. The Company has not, directly or indirectly, made any agreements with the Subscriber relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement and the Capacity and Services Agreement, the Subscriber has not made any commitment or promise or has any other obligation to the Company. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to the Transaction Documents.

6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided under this Agreement shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (c) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, specifying next Business Day delivery or (d) upon actual receipt by the party to whom such notice is required to be given if delivered by hand, in each case properly addressed to the party to receive the same. The address for such notices and communications shall be as follows:

If to the Company:

Imation Corp.

1099 Helmo Avenue N, Suite 250

Oakdale, Minnesota 55128

Telephone: 651-340-8062

Attention: Tavis Morello, General Counsel

Email: tmorello@imation.com

With copies (for information purposes only) to:

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166-4193

Telephone: (212) 294-5336

Facsimile: (212) 294-4700

Attention: Joel L. Rubinstein, Esq.

Email: jrubinstein@winston.com

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	Weinberg Zareh & Geyerhahn LLP 45 Rockefeller Plaza, Suite 2000 New York, New York 10111 Attention: Seth B. Weinberg, Esq. Email: seth@wzgllp.com

If to the Transfer Agent	Wells Fargo Shareowner Services 1110 Centre Pointe Curve Suite 101 Mendota Heights MN 55120 MAC N9173-010 Telephone: 1-855-217-6361 Attention: Lindsey Fischer Email: wfssrelationshipmanagement@wellsfargo.com

If to the Subscriber:	Clinton Group, Inc. 510 Madison Ave., 9th Floor New York, New York 10022 Attention: George Hall Daniel Strauss Telephone: (212) 825-0400 Facsimile: (646) 346-5650 E-mail: geh@clinton.com dstrauss@clinton.com

With a copy (for information purposes only) to:	Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 Telephone: (212) 756-2000 Facsimile: (212) 593-5955 Attention: David Efron, Esq. Eleazer Klein, Esq. Email: david.efron@srz.com eleazer.klein@srz.com

, or to such other address, facsimile number and/or email address to the attention of such other Person as the recipient party has specified by written notice given to each other party two (2) days prior to the effectiveness of such change in accordance with this Section 6.3. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image of the first page of such transmission or (iii) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (a), (b), (c) or (d) above, respectively.

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6.4 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto.

6.5 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Subscriber. The Subscriber may assign its rights under this Agreement to any Person to whom the Subscriber assigns or transfers any Capacity Shares, provided such transferee agrees in writing to be bound, with respect to the transferred Capacity Shares, by the provisions hereof and of the applicable Transaction Documents that apply to the Subscriber. Notwithstanding anything to the contrary herein, the Capacity Shares may be pledged in accordance with Section 4.1(b) hereof.

6.6 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each Indemnitee is an intended third party beneficiary of Section 4.7 and may enforce the provisions of such Section directly against the parties with obligations thereunder.

6.7 Governing Law; Venue; Waiver of Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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6.8 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Capacity Shares, as applicable.

6.9 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) filed of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature page were an original thereof.

6.10 Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

6.11 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever the Subscriber exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then the Subscriber may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

6.12 Remedies. In addition to being entitled to exercise all rights provided herein, in any of the other Transaction Documents or granted by law, including recovery of damages, the Subscriber and the Company will be entitled to specific performance under the Transaction Documents. Any Person having any rights under any provision of this Agreement or in any of the other Transaction Documents shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement or such other Transaction Documents and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under any of the Transaction Documents, any remedy at law may prove to be inadequate relief to the Subscriber. The Company therefore agrees that the Subscriber shall be entitled to seek specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

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6.13 Payment Set Aside. To the extent that the Company makes a payment or payments to the Subscriber hereunder or pursuant to any of the other Transaction Documents or the Subscriber enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company or any of its Subsidiaries by a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

6.14 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

6.15 Dispute Resolution. In the case of a dispute as to the determination of the Closing Bid Price or Weighted Average Price, the Company shall submit the disputed determinations via facsimile or electronic mail within three (3) Business Days of the event giving rise to such dispute to the Subscriber. If the Subscriber and the Company are unable to agree upon such determination of the Closing Bid Price or Weighted Average Price, within three (3) Business Days of such disputed determination being submitted to the Subscriber, then the Company shall, within three (3) Business Days submit via facsimile or electronic mail the disputed determination of the Closing Bid Price or Weighted Average Price to an independent, reputable investment bank selected by the Subscriber and approved by the Company, such approval not to be unreasonably withheld, conditioned or delayed. The Company shall cause at its expense the investment bank to perform the determinations and notify the Company and the Subscriber of the results no later than five (5) Business Days from the time it receives the disputed determinations. Such investment bank’s determination shall be binding upon all parties absent demonstrable error.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Subscriber and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

			COMPANY:

			IMATION CORP.

			By:	/s/ Robert B. Fernander
				Name: Robert B. Fernander
				Title: Interim Chief Executive Officer

[Signature Page to Subscription Agreement]

IN WITNESS WHEREOF, the Subscriber and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

			SUBSCRIBER:

			CLINTON GROUP, INC.

			By:	/s/ George Hall
				Name: George Hall
				Title: Chief Executive Officer

[Signature Page to Subscription Agreement]

EXHIBITS

Exhibit A	Form of Capacity and Services Agreement
Exhibit B	Form of Registration Rights Agreement
Exhibit C	Form of Officer’s Certificate
Exhibit D	Form of Opinion of Company Counsel
Exhibit E	Form of Secretary’s Certificate

EXHIBIT A

Form of Capacity and Services Agreement

CAPACITY AND SERVICES AGREEMENT

By and Among

CLINTON GROUP, INC., IMATION CORP. AND North Stars Technologies LLC

________________ ____, 2017

CAPACITY AND SERVICES AGREEMENT, dated as of ______________ ____, 2017, by and among:

CLINTON GROUP, INC., a Delaware corporation (the “Service Provider”);

IMATION CORP., a Delaware corporation (“Imation”); and

North Stars Technologies LLC, a Delaware limited liability company (“Imation RIA”).

WITNESSETH:

WHEREAS, Imation RIA intends to manage certain assets of Imation and certain assets of third party clients (“Imation Capital”); and

WHEREAS, Imation RIA desires to retain the Service Provider to provide certain services and investment capacity to Imation RIA, and the Service Provider desires to provide such services and investment capacity to Imation RIA, in accordance with the terms and conditions of the Transaction Documents (as defined below);

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the Service Provider, Imation and Imation RIA (the “Parties” and each a “Party”) agree as follows:

DEFINITIONS.

In this Agreement, the following words and phrases shall have the following respective meanings, unless the context otherwise requires.

“Account” shall have the meaning set forth in Section 10.A.

“Advisers Act” shall mean the Investment Advisers Act of 1940, as amended, and the rules promulgated thereunder.

“Affiliate” shall mean as to any Person, any other Person, that controls, is controlled by, or is under common control with, such Person. For these purposes, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” shall mean this Capacity and Services Agreement, dated as of __________ ____, 2017, by and among the Service Provider, Imation and Imation RIA.

“Bloomberg” means Bloomberg Financial Markets.

“Capacity” shall have the meaning set forth in Section 3.B.

“Capacity Expansion” shall have the meaning set forth in Section 3.B.

“Capacity Extension” shall have the meaning set forth in Section 3.B.

“Capacity-Related Consultation Services” shall have the meaning set forth in Section 4.A.

“Clinton Fund” shall have the meaning set forth in Section 3.B.

“Clinton Indemnified Party” shall have the meaning set forth in Section 11.C.

“Common Stock” means (a) Imation’s shares of Common Stock, par value $0.01 per share, and (b) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

“Confidential Information” shall have the meaning set forth in Section 10.A.

“Designated Persons” shall have the meaning set forth in Section 10.B.

“Disclosing Party” shall have the meaning set forth in Section 10.A.

“Imation” shall have the meaning set forth in the preamble of this Agreement.

“Imation Board Approval” shall mean the approval of the board of directors of Imation, with any directors who are interested in this Agreement or the transactions contemplated hereby or otherwise in the matter being approved recusing themselves from the discussion and voting on such matter.

“Imation Capital” shall have the meaning set forth in the recitals to this Agreement.

“Imation Indemnified Party” shall have the meaning set forth in Section 11.D.

“Imation RIA” shall have the meaning set forth in the preamble of this Agreement.

“Imation RIA Launch-Related Services” shall have the meaning set forth in Section 4.B.

“Initial Closing Date” shall have the meaning set forth in the Subscription Agreement.

“Initial Term” shall have the meaning set forth in Section 3.B.

“Invested Equity” shall mean the aggregate gross asset value of the funds made available to the Service Provider by Imation and Imation RIA for discretionary management by the Service Provider, taking into account net capital appreciation and net capital depreciation thereon, and disregarding any leverage applied to such funds.

“Lien” means any mortgage, deed of trust, lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.

“Losses” shall have the meaning set forth in Section 11.C.

“Party” and “Parties” shall have the meanings set forth in the recitals to this Agreement.

“Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization or association, trust (including the trustees thereof in their capacity as such) or other entity (including any governmental entity) organized under the laws of (or, in the case of individuals, resident in) any jurisdiction.

“Principal Market” means The New York Stock Exchange.

“Proceeding” shall mean an action, claim, suit, inquiry, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or, to the applicable Party’s knowledge, threatened in writing.

“Registration Rights Agreement” means a Registration Rights Agreement between the Service Provider and Imation, in the form attached hereto as Exhibit A to the Subscription Agreement.

“Required Approvals” shall have the meaning set forth in Section 8.A.e.

“Revenue Share Transaction” shall have the meaning set forth in Section 6.

“SEC” shall mean the United States Securities and Exchange Commission.

“Service Provider” shall have the meaning set forth in the preamble of this Agreement.

“Services” means the Investment Management Services, the Capacity-Related Consultation Services and the Imation RIA Launch-Related Services.

“Subscription Agreement” means the subscription agreement between the Service Provider and Imation dated as of November ___, 2016.

“Subsidiary” means any joint venture or entity in which Imation, directly or indirectly, owns any of the capital stock or holds an equity or similar interest.

“Transaction Documents” means this Agreement, the Subscription Agreement, the Registration Rights Agreement and any other documents, certificates or agreements executed or delivered in connection with the transactions contemplated hereby and thereby, including without limitation any further agreements entered into between the Service Provider and Imation RIA pursuant to which Invested Equity is invested in accordance with this Agreement.

APPOINTMENT OF SERVICE PROVIDER; GOVERNANCE AND MANAGEMENT OF IMATION RIA.

Appointment of Service Provider. Imation RIA hereby appoints the Service Provider to provide the Services and the Capacity to Imation RIA, and the Service Provider hereby agrees to provide the Services and the Capacity to Imation RIA, in accordance with this Agreement.

Imation RIA Governance and Management. Upon the Initial Closing Date, Imation RIA’s initial board of directors will be comprised of Joseph De Perio, Daniel Strauss, Donald H. Putnam, Alex Spiro and one additional or substitute director, as shall be mutually agreed upon by the Parties in a separate writing. The Service Provider shall, upon request from Imation RIA, provide reasonable assistance and consultation to Imation RIA regarding the selection and retention of the executive management team for Imation RIA. For the avoidance of doubt, Imation RIA will determine the leverage and underlying strategies in which the Imation Capital is invested, and will have complete discretion over how the Imation Capital will be invested and the structure in which it will be held, provided that the provision of Investment Management Services by the Service Provider shall be subject to the terms of this Agreement, including without limitation Section 3A. The Imation Capital, including the Invested Equity, may be held in one or more private investment funds or similar investment vehicles managed by Imation RIA and/or one or more separately managed accounts managed by Imation RIA. The Imation Capital may utilize a single investment strategy or a combination of investment strategies.

INVESTMENT MANAGEMENT SERVICES; CAPACITY

Investment Management Services. During the Term, Imation RIA may place under the Service Provider’s management from time to time, subject at all times to the supervision of the Service Provider, the Invested Equity which shall be held in a private investment fund or a similar investment vehicle sponsored by Imation RIA or a managed account established by Imation RIA, subject to the terms of this Agreement, with terms not specified in this Agreement to be as mutually agreed in writing by the Parties. The services provided by the Service Provider with respect to such Invested Equity pursuant to this Agreement are referred to herein as the “Investment Management Services.”

If and to the extent Imation RIA requests the Service Provider to provide Investment Management Services for Invested Equity, the Service Provider shall, subject to the supervision of Imation RIA, manage such Invested Equity, on a discretionary basis, using the Service Provider’s quantitative equity strategy, split evenly between long and short, with a leverage ratio not to exceed 5X per side, unless otherwise approved by the Service Provider and Imation RIA in writing (subject to Imation Board Approval).

Imation RIA shall give the Service Provider at least 45 days’ prior written notice of the date that it first allocates Invested Equity to the Service Provider so that the Service Provider may attend to the necessary arrangements to manage the Invested Equity. Imation RIA shall give the Service Provider prior written notice of all additional contributions of Invested Equity to the Service Provider’s management.

The Service Provider agrees that it shall not knowingly accept any investments in any investment vehicle or account managed by the Service Provider or any of its Affiliates directly from Imation RIA’s third party clients with whom the Service Provider does not have a pre-existing relationship, without the prior written consent of Imation RIA.

At all times during the Term, the Service Provider shall maintain sufficient personnel and facilities to perform its obligations under this agreement in accordance with industry standards.

Capacity. Subject to the exceptions set forth below in this paragraph, the Invested Equity shall not exceed $1 billion in the aggregate (the “Capacity”). For the avoidance of doubt, Imation’s current investment in Clinton Lighthouse Equity Strategies Fund (Offshore), Ltd. (the “Clinton Fund”), as the amount of such investment is adjusted to reflect net profits, losses, redemptions and subscriptions, counts towards Imation’s and Imation RIA’s usage of the Capacity.

Imation RIA shall be permitted to cause the Invested Equity to exceed the Capacity by any amount up to an additional $500 million for a maximum Capacity of up to $1.5 billion upon Imation Board Approval and at least 45 days prior written notice to the Service Provider (the “Capacity Expansion”). The Capacity rights shall survive for up to five years from the Initial Closing Date (the “Initial Term”); provided that Imation RIA will have the option to extend the Capacity for two subsequent one-year periods upon Imation Board Approval and at least 45 days’ prior written notice to the Service Provider (individually, each a “Capacity Extension,” collectively, the “Capacity Extensions”; the Initial Term and the Capacity Extensions, to the extent triggered, are collectively referred to as the “Term”).

In the event that the Invested Equity (for the avoidance of doubt, including returns from such investment) must be reduced in order to avoid exceeding the Capacity, (i) Imation’s assets will be withdrawn before the capital of Imation RIA’s third party investors is withdrawn, (ii) the Service Provider shall identify and offer capacity in other strategies managed by the Service Provider at commercially reasonable rates no greater than would be charged another client of Service Provider having the same amount invested as such excess, and (iii) at the election of Imation RIA, its third party clients may continue to invest with the Service Provider such that the Capacity is exceeded, provided only that such excess capacity shall be provided by the Service Provider as needed on commercially reasonable terms at no greater fees and performance compensation than would be charged to another client of the Service Provider having the same amount invested as such excess.

The calculation of the amount of Capacity utilized shall be based on the fair value of the Invested Equity, as calculated by a nationally recognized third-party fund administrator (“Administrator”), in consultation with the Service Provider, and in accordance with the Service Provider’s valuation policies and U.S. generally accepted accounting principles, as issued and amended from time to time. For the avoidance of doubt, the Administrator shall be a third-party service provider to Imation RIA. Imation RIA shall have the right to review (i) the Service Provider’s valuation policies and/or (ii) the valuation of any specific investment. The Service Provider will provide Imation RIA with a written estimate of the amount of Capacity utilized based on the Administrator’s valuation of Invested Equity on a monthly basis, as soon as reasonably practicable following its receipt of the Administrator’s calculation of fair value of the Invested Equity.

SCOPE OF SERVICES.

Capacity-Related Consultation Services. During the Term and for a 3-month transition period thereafter, upon the request of Imation RIA, the Service Provider will consult with Imation RIA regarding operational, management and other matters relating to the enumerated responsibilities of Imation RIA set forth in this Section 4.A, solely to the extent that the following directly relate to Imation RIA’s use of the Capacity. Imation RIA and its third party service providers shall in all cases, remain solely responsible for the following: (i) account reconciliation, (ii) P&L reporting, (iii) position monitoring, (iv) cash management, (v) collateral management, (vi) liaising with the administrator, counsel and auditor engaged by Imation RIA, (vii) fund formation documentation, (viii) regulatory filing assistance, (ix) IT support and maintenance and (x) investor relations (such services, the “Capacity-Related Consultation Services”). For the avoidance of doubt, the Service Provider shall have no responsibility for the management, compliance, operation and administration of Imation RIA.

Imation RIA Launch-Related Services. Upon the request of Imation RIA, the Service Provider will consult with Imation RIA regarding Imation RIA’s management and compliance functions for up to one year commencing no later than 90 days from the date hereof (such services, the “Imation RIA Launch-Related Services”), provided that Imation RIA shall remain solely responsible for such functions.

Meetings with Imation RIA. During the Term, at the request of Imation RIA, the Service Provider shall make one of its representatives available to address questions that Imation RIA may have regarding the Service Provider’s obligations with respect to the Capacity and/or the Services.

Provision of Information. The Service Provider shall furnish such reports, evaluations, certifications, financial statements, information or analyses to Imation RIA with respect to the Invested Equity as Imation RIA and the Service Provider may agree following Imation RIA’s request from time to time. For the avoidance of doubt, the Service Provider is not obligated to provide Imation RIA with any information with respect to any discretionary investment funds or accounts managed by the Service Provider or its Affiliates (whether discretionary or non-discretionary) of the Service Provider’s other individual or institutional clients. Imation RIA acknowledges and agrees that the Service Provider shall provide the types of information described above to Imation RIA only to the extent that such provision does not conflict with confidentiality agreements, confidentiality considerations or privacy requirements.

No Legal Advice. The Parties (i) agree that the Services provided by the Service Provider pursuant to this Agreement shall not constitute legal advice, and (ii) acknowledge that Imation RIA shall consult with its legal, tax or other advisors, as deemed necessary in its discretion.

Exclusivity. During the Initial Term (and any Capacity Extension) the Service Provider will not provide opportunities or services substantially similar to the Capacity-Related Consultation Services (regardless of pricing) to any other publicly traded or quoted entity, or any Affiliate thereof.

COMPENSATION AND EXPENSES.

Compensation.

As consideration for the Capacity and the Services, the Parties shall enter into, and perform their respective obligations set forth in, the other Transaction Documents, which obligations include the obligation for Imation to make the following payments:

(i)

Imation shall issue to the Service Provider 12,500,000 shares of Common Stock (as adjusted for any stock split, stock dividend, stock combination, reclassification or similar transaction occurring after the date hereof) on the Initial Closing Date, pursuant to, and subject to the terms and conditions of, the Subscription Agreement.

(ii)

If Imation RIA triggers the Capacity Expansion, Imation shall issue to the Service Provider 2,500,000 shares of Common Stock (as adjusted for any stock split, stock dividend, stock combination, reclassification or similar transaction occurring after the date hereof) within 10 Business Days of receipt of an invoice from the Service Provider, pursuant to, and subject to the terms and conditions of, the Subscription Agreement.

(iii)

If Imation RIA triggers the first Capacity Extension, Imation shall pay the Service Provider $1.75 million for the first Capacity Extension ($2.5 million if Imation RIA has previously opted for the Capacity Expansion) within 10 Business Days of receipt of an invoice from the Service Provider. Further, if Imation RIA triggers the second Capacity Extension, Imation shall pay the Service Provider an additional $1.75 million for the first Capacity Extension ($2.5 million if Imation RIA has previously opted for the Capacity Expansion) within 10 Business Days of receipt of an invoice from the Service Provider.

No Other Fees. Except as provided in Section 5.A., none of the Service Provider or its Affiliates shall be entitled to any asset-based fee, performance-based fee or any other fee or form of compensation, payable in cash or Common Stock, from Imation, Imation RIA or their Affiliates, for its provision of the Capacity and the Services, nor shall the Invested Equity be subject to any asset-based fee, performance-based fee/allocation or any other fee payable or allocable to the Service Provider or its Affiliate(s) from the Clinton Fund. Nothing in this Agreement shall be construed as prohibiting any Party from pursuing any remedies available at law or in equity for breach or threatened breach, including the recovery of damages.

Expenses. Each of the Parties shall pay its own legal and other expenses relating to the negotiation and execution of this Agreement. The Service Provider shall bear its own operating and overhead expenses, including any expenses attributable to the Capacity and Services provided hereunder (such as salaries, bonuses, rent, office, utilities and administrative expenses, depreciation and amortization, and auditing expenses), and Imation RIA shall not be responsible for such expenses. Except to the extent constituting operating and overhead expenses of the Service Provider, Imation RIA will be responsible for, and will promptly reimburse the Service Provider for, the following reasonable third-party direct expenses borne by the Service Provider attributable to its performance of the Services and provision of the Capacity: legal, marketing, administrative and accounting costs and expenses and research costs and expenses excluding data.

[RESERVED]

TERM AND TERMINATION.

This Agreement shall commence as of the date hereof and, subject to the rights of the Parties to terminate this Agreement as set forth below, shall remain in full force and effect until the termination of the Term; provided that Sections 10 through 14 and 18 through 20 hereof shall survive any termination of this Agreement, including any termination contemplated under Sections 7.B and 7.C below.

Notwithstanding Section 7.A above, Imation and Imation RIA may terminate this Agreement at any time upon 30 days prior written notice to the Service Provider upon the occurrence of any of the following events: (i) if the Service Provider’s registration as an investment adviser with the SEC is revoked, suspended, terminated, or not renewed, or limited or qualified in any respect; (ii) if the Service Provider sells or otherwise transfers its advisory business, or all or a substantial portion of its assets, all or a substantial portion of its trading systems or methods, or its goodwill, to any individual or entity that is not an Affiliate of the Service Provider; (iii) if the Service Provider fails in a material manner to perform any of its obligations under this Agreement or the other Transaction Documents and, after being given written notice thereof by Imation RIA, fails to cure such breach within 30 days of such notice, (iv) if the Service Provider engages in any act of fraud or embezzlement in connection with the Services; (v) the Service Provider’s gross negligence or willful misconduct in connection with the Services; or (vi) the Service Provider makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee, or assignee in bankruptcy or in insolvency; provided that in the event that Imation and Imation RIA terminate this Agreement in accordance with clause (i) or clause (vi) of this paragraph, the Service Provider shall promptly pay to Imation, in cash by wire transfer of immediately available funds pursuant to wire instructions delivered by Imation in writing to the Service Provider, an amount equal to $2,000,000.

Notwithstanding Section 7.A above, the Service Provider may terminate this Agreement at any time upon reasonable prior written notice to Imation RIA upon the occurrence of any of the following events: (i) a breach of Section 8.A.g or 8.A.h; (ii) if, at such time when Imation RIA is required under applicable state law or the Advisers Act to be registered as an investment adviser, Imation RIA is not so registered or, if after and during such time when Imation RIA is required to be registered as an investment adviser, Imation RIA’s registration with the applicable state securities authority or the SEC is revoked, suspended, terminated, or not renewed, or limited or qualified in any respect; (iii) if Imation RIA sells or otherwise transfers its advisory business, or all or a substantial portion of its assets, all or a substantial portion of its trading systems or methods, or its goodwill, to any individual or entity that is not an Affiliate of Imation; (iv) if Imation or Imation RIA fails in a material manner to perform any of its obligations under the Transaction Documents and, after being given written notice thereof by the Service Provider, fails to cure such breach within 30 days of such notice; or (v) Imation or Imation RIA makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee, or assignee in bankruptcy or in insolvency.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS.

A. Each of Imation and Imation RIA, as set forth below, hereby represents, warrants and covenants to the Service Provider that:

	(a)	Imation RIA (i) has the sole discretion and responsibility to direct the allocation of the Invested Equity, and (ii) has received a copy of the Service Provider’s Form ADV Part 2 prior to its execution of this Agreement.

	(b)	Imation RIA has the sole responsibility for all aspects of its business, including management, compliance, operation and administration, and has retained the Service Provider to provide it with the Services as set forth herein.

	(c)	Each of Imation and Imation RIA has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its respective obligations hereunder and thereunder. Other than the Required Approvals, as defined below, the execution and delivery by Imation and Imation RIA of this Agreement and the consummation by it of the transactions contemplated hereunder have been duly authorized by all necessary action on the part of Imation and Imation RIA, and no further consent or action is required by Imation or its board of directors. This Agreement has been duly executed by, and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of, Imation and Imation RIA, enforceable against Imation and Imation RIA, in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.

(d)

The execution, delivery and performance of this Agreement by Imation and Imation RIA and the consummation by Imation and Imation RIA of the transactions contemplated hereby, do not and will not (i) conflict with or violate any provision of Imation’s or Imation RIA’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, indenture or instrument to which Imation or Imation RIA is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any Governmental Authority to which Imation or Imation RIA is subject (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market); except in the case of clause (ii) or (iii) above, as would not, reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Imation or Imation RIA to perform fully on a timely basis its obligations under this Agreement.

	(e)	Neither Imation nor Imation RIA is required to obtain any consent, waiver, authorization, permit or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person in connection with the execution, delivery and performance by Imation and Imation RIA of this Agreement, other than any filings required in connection with Imation RIA’s registration with the SEC or any state securities authority as a registered investment adviser, such filings with the SEC and pursuant to state securities laws as may be required in the determination of its counsel and other than any filings that may be required under the Registration Rights Agreement (collectively, the “Required Approvals”). All Required Approvals have been obtained or effected timely, and neither Imation nor Imation RIA are aware of any facts or circumstances which might prevent Imation or Imation RIA from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. Imation RIA is registered as an investment adviser to the extent required by applicable state law and the Advisers Act and shall remain so registered throughout the Term.

	(f)	To the best of Imation’s and Imation RIA’s knowledge, there has not been and there is not pending any Proceeding to which Imation or Imation RIA is or was a party, or to which any of the assets of Imation or Imation RIA are or were subject and which resulted in or would reasonably be expected to result in a material adverse effect on the condition, financial or otherwise, or business of Imation or Imation RIA.

	(g)	The conduct of the business of Imation RIA, its investment advisory affiliates, and the vehicles and accounts managed by Imation RIA, complies, and shall at all times comply, with applicable law, except where the failure to so comply would not reasonably be expect to have a material adverse effect on the Service Provider, Imation RIA, its investment advisory affiliates, or the vehicles or accounts managed by Imation RIA.

	(h)	Each of Imation and Imation RIA shall inform the Service Provider promptly as soon as Imation or Imation RIA is notified that it has become subject to a Proceeding materially affecting (or which may, with the passage of time, materially affect) the business of Imation or Imation RIA.

	(i)	Imation RIA represents, warrants and covenants that the Invested Equity shall not, and, for the duration of this Agreement, such Invested Equity will not constitute “plan assets” for the purpose of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended and any regulations promulgated thereunder, without the prior written consent of the Service Provider.

(j)

Imation RIA represents, warrants and covenants that the Invested Equity shall not, and, for the duration of this Agreement, such Invested Equity will not constitute assets of an investment company registered under the U.S. Investment Company Act of 1940, as amended, without the prior written consent of the Service Provider.

	(k)	Each of Imation and Imation RIA understands that the representations, warranties, agreements, undertakings and acknowledgments made by Imation and Imation RIA in this Agreement shall be relied upon by the Service Provider for its compliance with various securities laws. If this Agreement or the Services contemplated herein gives rise to any compliance obligations for the Service Provider other than its requirement to be a registered investment adviser, each of Imation and Imation RIA shall upon reasonable request by the Service Provider cooperate with the Service Provider to address and resolve any such issues in good faith.

(l)

Each of Imation and Imation RIA shall inform the Service Provider promptly if Imation, Imation RIA or any of their respective officers becomes aware of any change in the foregoing representations, warranties and covenants, or of any material breach of this Agreement by Imation.

B. The Service Provider hereby represents, warrants and covenants to Imation and Imation RIA that:

	(a)	The Service Provider is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by the Service Provider of this Agreement and the consummation by it of the transactions contemplated hereunder have been duly authorized by all necessary action on the part of the Service Provider. This Agreement has been duly executed by the Service Provider, and, when delivered by the Service Provider in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Service Provider, enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(b)

The execution, delivery and performance of this Agreement by the Service Provider and the consummation by the Service Provider of the transactions contemplated hereby does not and will not (i) conflict with or violate any provision of the Service Provider’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, indenture or instrument to which the Service Provider is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any Governmental Authority to which the Service Provider is subject (including, without limitation, foreign, federal and state securities laws and regulations); except in the case of clause (ii) or (iii) above, as would not, reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Service Provider to perform its obligations thereunder.

	(c)	The Service Provider (i) has all federal, state and foreign governmental, regulatory and exchange licenses, approvals and memberships and has effected all filings and registrations with federal, state and foreign governmental and regulatory agencies required to perform its obligations under this Agreement and to at all times comply in all respects with all applicable laws, rules and regulations, and (ii) shall maintain all such registrations, licenses, approvals and memberships to the extent that the failure to so comply would have a materially adverse effect on the Service Provider’s ability to act as described herein.

	(d)	To the best of the Service Provider’s knowledge, there has not been and there is not pending any Proceeding to which the Service Provider is or was a party, or to which any of the assets of the Service Provider are or were subject and which resulted in or might reasonably be expected to result in any material adverse change in the condition, financial or otherwise, business or prospects of the Service Provider.

	(e)	The Service Provider shall inform Imation and Imation RIA promptly as soon as the Service Provider is notified that it has become subject to a Proceeding materially affecting (or which may, with the passage of time, materially affect) the business of the Service Provider.

	(f)	The Service Provider understands that the representations, warranties, agreements, undertakings and acknowledgments made by the Service Provider in this Agreement shall be relied upon by Imation and Imation RIA for their compliance with various securities laws.

(g)

The Service Provider shall inform Imation or Imation RIA promptly if the Service Provider or any of its officers becomes aware of any change in the foregoing representations, warranties and covenants, or of any material breach of this Agreement by the Service Provider.

INDEPENDENT CONTRACTOR.

For all purposes of this Agreement, the Service Provider shall be an independent contractor and not an employee or dependent agent of Imation RIA; nor shall anything herein be construed as making Imation RIA a partner or co-venturer with the Service Provider or any of its Affiliates or clients. Except as expressly provided in this Agreement, the Service Provider shall have no authority to bind, obligate or represent Imation RIA.

10.

CONFIDENTIALITY AND DATA PROTECTION.

Each Party covenants that, subject to the proviso at the end of this sentence, during the effectiveness of this Agreement and for two (2) years following the termination of this Agreement in accordance with its terms, it will (a) hold in strictest confidence non-public and proprietary information, whether written, oral or otherwise, recorded and transmitted by any means, relating to this Agreement or received by a Party from the Disclosing Party (as defined below) or its Affiliates (whether or not marked as confidential), including, without limitation, the terms hereof; trade secrets of the Disclosing Party; software of the Disclosing Party; proprietary technology of the Disclosing Party; information relating to historical and current performance, investments, processes, procedures, clients, investors, trading positions, models, financial and investment strategies, and other activities of the Disclosing Party or its Affiliates and any accounts or vehicles managed by any Disclosing Party (each, an “Account”); the terms and structure of each Account; the clients of or Accounts managed by any Disclosing Party or its Affiliates; organizational, financial, accounting, operational or other information relating to the Disclosing Party or its Affiliates or its Accounts and their respective directors, officers, members, partners, shareholders, affiliates, employees, agents, representatives or service providers; information relating to transactions hereunder considered and/or effected by either Party; the business, policies, and plans of Imation and/or the Service Provider, and any other aspects of the Parties’ performance or compensation under this Agreement (“Confidential Information”), whether received prior or subsequent to the execution of this Agreement; (b) exercise reasonable care to safeguard the confidentiality of the Confidential Information under all circumstances; (c) not disclose Confidential Information to any third party without the express written consent of the Party that initially disclosed the same (“Disclosing Party”); (d) not use the Confidential Information for any purpose other than to fulfill its obligations pursuant to this Agreement or, with respect to Imation or any of its Designated Persons (as defined below), for evaluation or investment purposes, and (e) not use the Disclosing Party’s Confidential Information to copy or reverse engineer, or attempt to derive the composition or underlying information or structure of the Disclosing Party; provided, that the restriction set forth in this clause (e) shall survive the termination of this Agreement indefinitely. Notwithstanding the foregoing, “Confidential Information” does not include any information which: (i) is in the public domain at the time of disclosure or becomes available thereafter to the public without restriction, and in either case not as a result of the act or omission of the receiving party; (ii) is rightfully obtained by the receiving party from a third party without restriction as to disclosure pursuant to applicable law or written agreement; (iii) is lawfully in the possession of the receiving party at the time of disclosure by the Disclosing Party and not otherwise subject to restriction on disclosure by written agreement; (iv) is approved for disclosure by prior written authorization of the Disclosing Party; or (v) is demonstrated by the receiving party to have been previously developed independently and separately by the receiving party without use of the Disclosing Party’s Confidential Information.

Each Party agrees to restrict the disclosure of Confidential Information to its partners, directors, officers, employees, representatives, advisors or service providers that (a) “need to know” and (b) have an employment, contractual or professional duty to keep Confidential Information confidential (collectively the “Designated Persons”) and to cause the Designated Persons to hold Confidential Information in strictest confidence. Each Party shall be responsible for any breach of this Section 10 by any of its Designated Persons.

When disclosure of Confidential Information of the Disclosing Party is required by law (including legal process), governmental regulation (including, without limitation, any applicable securities exchange regulations), any self-regulatory, regulatory or taxing authority having jurisdiction over either Party, the receiving party required to disclose such Confidential Information shall, to the extent permitted by law or regulation, promptly give the Disclosing Party notice of such requirements and, to the extent reasonable under the circumstances and permitted by law or regulation, (i) consult with the Disclosing Party in advance of disclosure as to the form, nature, and purpose of such disclosure, (ii) only disclose such Confidential Information as is required to be disclosed by applicable laws, (iii) to the extent permissible, request to restrict the further disclosure of the Confidential Information required to be disclosed, and (iv) cooperate in any legal action initiated by the Disclosing Party, provided that such cooperation shall not be unduly burdensome, to seek a protective order to prevent such disclosure.

Each Party shall only use the other Parties’ names, in any written materials or oral discussion (in connection with the Invested Equity or this Agreement) with the other Parties’ prior written consent, which shall not be unreasonably withheld, save for the documentation or other communications which are for the other Parties’ internal purposes only, unless required for legal or regulatory reasons, or required by the other Party’s advisors and/or service providers in order to render service to such Party.

11.

SCOPE OF LIABILITY; INDEMNIFICATION.

No Clinton Indemnified Party (as defined in Section 11.C below) shall be liable, responsible or accountable in damages or otherwise to Imation or its shareholders for any action taken or failure to act on behalf of Imation within the scope of the Services to be provided by the Service Provider pursuant to this Agreement, unless such action or omission was performed or omitted fraudulently, or constituted willful misconduct or gross negligence.

No Imation Indemnified Party (as defined in Section 11.D below) shall be liable, responsible or accountable in damages or otherwise to the Service Provider or its Affiliates for any action taken or failure to act pursuant to this Agreement, unless such action or omission was performed or omitted fraudulently, or constituted willful misconduct or gross negligence.

Imation will, to the maximum extent permitted under applicable law, indemnify and hold harmless the Service Provider, any Person controlling, controlled by or under common control with the Service Provider or any of its Affiliates and each of their respective members, partners, principals, managers, officers, employees, agents, consultants and the legal representatives of any of them (each, a “Clinton Indemnified Party”), from and against any loss or expense suffered or sustained by a Clinton Indemnified Party arising out of the Services and/or Capacity provided hereunder, including, without limitation, any judgment, settlement, attorneys’ fees and other costs or expenses incurred in connection with the defense of any actual or threatened Proceeding (collectively, “Losses”), provided that such Losses did not result from the fraud, gross negligence or willful misconduct of a Clinton Indemnified Party. Clinton Indemnified Parties will be indemnified with respect to gross negligence, dishonesty or bad faith of any broker or agent of such Clinton Indemnified Party, provided that such broker or agent was selected, engaged or retained by such Clinton Indemnified Party in good faith. Imation will advance to any Clinton Indemnified Party attorneys’ fees and other costs and expenses incurred in connection with the defense of any Proceeding for which such Clinton Indemnified Party is entitled to be indemnified by Imation pursuant to this Agreement; provided, that it receive a written acknowledgement in form and substance reasonably acceptable to Imation that such Clinton Indemnified Party shall promptly repay to Imation the amount of any such advance paid to it if it shall be determined by a court order that such Clinton Indemnified Party was not entitled to be indemnified by Imation in connection with such action or proceeding. The Clinton Indemnified Parties may consult with counsel and accountants in respect of the services provided to Imation hereunder, and be fully protected and justified in any action or inaction which is taken in accordance with the advice or opinion of such counsel or accountants, provided that they will have been selected in good faith. The foregoing provisions will survive the termination of this Agreement.

The Service Provider will, to the maximum extent permitted under applicable law, indemnify and hold harmless Imation, Imation RIA, their Affiliates and each of their respective members, partners, principals, managers, officers, employees, agents, consultants and the legal representatives of any of them (each, an “Imation Indemnified Party”), from and against any Losses suffered or sustained by an Imation Indemnified Party arising out of the fraud, gross negligence or willful misconduct of a Clinton Indemnified Party. The Service Provider and/or its Affiliate(s) will advance to any Imation Indemnified Party attorneys’ fees and other costs and expenses incurred in connection with the defense of any Proceeding for which such Imation Indemnified Party is entitled to be indemnified by the Service Provider pursuant to this Agreement; provided, that they/it receive a written acknowledgement in form and substance reasonably acceptable to the Service Provider and/or its Affiliate(s) that such Imation Indemnified Party shall promptly repay to the Service Provider and/or its Affiliate(s) the amount of any such advance paid to it if it shall be determined by a court order that such Imation Indemnified Party was not entitled to be indemnified by the Service Provider in connection with such Proceeding. The Imation Indemnified Parties may consult with counsel and accountants in respect of its obligations under this Agreement, and be fully protected and justified in any action or inaction which is taken in accordance with the advice or opinion of such counsel or accountants, provided that they will have been selected in good faith. The foregoing provisions will survive the termination of this Agreement.

Notwithstanding any of the foregoing to the contrary, the provisions of this Section 11 will not be construed so as to provide for the indemnification of any Clinton Indemnified Party or any Imation Indemnified Party for any liability (including liability under U.S. Federal securities laws which, under certain circumstances, impose liability even on Persons that act in good faith), to the extent (but only to the extent) that such indemnification would be in violation of applicable law, but will be construed so as to effectuate the foregoing provisions to the fullest extent permitted by law.

12.

ENTIRE AGREEMENT; AMENDMENTS.

This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Service Provider, Imation, Imation RIA, their respective Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the Parties with respect to the matters covered herein and therein. There are no representations, promises, warranties or undertakings, other than as set forth or referred to herein and therein. No provision of this Agreement may be amended other than by an instrument in writing signed by Imation, Imation RIA and the Service Provider, and any amendment to this Agreement made in conformity with the provisions of this Section 12 shall be binding on the Service Provider. No provision hereof may be waived other than by an instrument in writing signed by the Party against whom enforcement is sought. Neither Imation nor Imation RIA has, directly or indirectly, made any agreements with the Service Provider relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each of Imation and the Imation RIA confirms that, except as set forth in the Transaction Documents, the Service Provider has not made any commitment or promise or has any other obligation to Imation or the Imation RIA. The only duties and obligations of the Parties are as specifically set forth in the Transaction Documents, and no other duties or obligations shall be implied in fact, law or equity, or under any principle of fiduciary obligation. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the Parties to the Transaction Documents.

13.

ASSIGNMENT.

The rights and obligations hereunder shall not, except as otherwise expressly provided herein, be assignable, transferable or delegable without the written consent of the other Party hereto and any attempted assignment, transfer or delegation thereof without such consent shall be void; provided, that a Party will not unreasonably withhold consent for an assignment by a Party to its Affiliate. For purposes of this Section 13, with respect to the Service Provider, the term “assignment” shall have the meaning defined in Section 202(a)(1) of the Advisers Act.

14.

NOTICES.

Any and all notices or other communications or deliveries required or permitted to be provided under this Agreement shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Section 14 prior to 6:30 p.m. (New York City time) on a Trading Day (as defined in the Subscription Agreement), (b) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (c) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, specifying next Business Day delivery or (d) upon actual receipt by the Party to whom such notice is required to be given if delivered by hand, in each case properly addressed to the Party to receive the same. The address for such notices and communications shall be as follows:

If to Imation:	Imation Corp. 1099 Helmo Avenue N, Suite 250 Oakdale, Minnesota 55128 Telephone: (651) 340-8062 Attention: Tavis Morello, General Counsel Email: tmorello@imation.com

If to Imation RIA:	North Stars Technologies LLC 1099 Helmo Avenue N, Suite 250 Oakdale, Minnesota 55128 Telephone: (651) 340-8062 Attention: Tavis Morello, General Counsel Email: tmorello@imation.com

With copies (for information purposes only) to:	Winston & Strawn LLP 200 Park Avenue New York, New York 10166-4193 Telephone: (212) 294-5336 Facsimile: (212) 294-4700 Attention: Joel L. Rubinstein, Esq. Email: jrubinstein@winston.com Weinberg Zareh & Geyerhahn LLP 45 Rockefeller Plaza, Suite 2000 New York, New York 10111 Attention: Seth B. Weinberg, Esq. Email: seth@wzgllp.com

If to the Service Provider:	Clinton Group, Inc. 510 Madison Ave., 9th Floor New York, New York 10022 Attention: George Hall Daniel Strauss Telephone: (212) 825-0400 Facsimile: (646) 346-5650 E-mail: geh@clinton.com dstrauss@clinton.com

With a copy (for information purposes only) to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Telephone: (212) 756-2000

Facsimile: (212) 593-5955

Attention: David Efron, Esq.

Eleazer Klein, Esq.

Email: david.efron@srz.com

eleazer.klein@srz.com

, or to such other address, facsimile number and/or email address to the attention of such other Person as the recipient party has specified by written notice given to each other party two (2) days prior to the effectiveness of such change in accordance with this Section 14. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image of the first page of such transmission, or (iii) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (a), (b), (c) or (d) above, respectively.

15.

COUNTERPARTS.

This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) filed of an executed signature page, such signature page shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature page were an original thereof.

16.

NO IMPLIED REPRESENTATIONS OR WARRANTIES.

The Service Provider makes no representations or warranties as to the sufficiency of the Capacity or the Services or its investment policies and procedures or their suitability for any particular purpose which Imation may have. No express or implied warranty or representation is given by the Service Provider as to the performance or profitability of any particular investments or other property forming part of, or constituting the Invested Equity or any other investments of Imation with the Service Provider. It is possible that Imation may incur losses at any time with respect to assets invested with the Service Provider. Imation makes no implied representations or warranties except for those expressly provided herein.

17.

DISCLOSURE OF CONFLICT OF INTERESTS.

Imation acknowledges that the Service Provider may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature and description with others, and Imation agrees that no additional disclosure shall be required in that regard, except as may be required by law. The Service Provider and its Affiliates and any of their respective members, partners, officers, employees shall devote so much of their time to the provision of Services hereunder as in the judgment of the Service Provider the provision of such Services shall reasonably require, and none of the Service Provider or its Affiliates shall be obligated to do or perform any act or thing in connection with this Agreement not expressly set forth herein. Nothing herein contained in this Section 17 shall be deemed to preclude the Service Provider or its Affiliates from exercising investment responsibility, from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling, holding or otherwise dealing with any securities and instruments for the account of any such other business, for their own accounts, for any of their family members or for other clients. Persons associated with the Service Provider or its Affiliates have an ownership interest in Imation as well as Accounts managed by the Service Provider. Furthermore, certain Affiliates of the Service Provider may have greater financial interest in the performance of such other Accounts than the performance of the Invested Equity. Imation shall not have any right to participate in any manner in any profits or income earned or derived by or accruing to the Service Provider or any Affiliate thereof from the conduct of any business or from any transaction in securities or instruments effected by the Service Provider or such Affiliate for any Account.

18.

CONSTRUCTION.

The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. The Parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise this Agreement and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto.

19.

NO THIRD-PARTY BENEFICIARIES.

This Agreement is intended for the benefit of the Parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each Clinton Indemnified Party and each Imation Indemnified Party is an intended third party beneficiary of the indemnification provisions hereof and may enforce such provisions directly against the Parties with obligations thereunder.

20.

GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.

All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such Party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

[Signature page follows]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

	CLINTON GROUP, INC. By: Name: George Hall Title: Chief Executive Officer

	IMATION CORP. By: Name: Title:



	NORTH STARS TECHNOLOGIES LLC By: Name: Title:

EXHIBIT B

Form of Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of [●], 2017, by and between Imation Corp., a Delaware corporation with offices located at 1099 Helmo Avenue N, Suite 250, Oakdale, Minnesota 55128 (the "Company"), and Clinton Group, Inc., a Delaware corporation (the "Subscriber").

RECITALS

A. In connection with the Subscription Agreement by and among the parties hereto, dated as of November 22, 2016 (the "Subscription Date") (as amended from time to time. the "Subscription Agreement"), the Company has agreed, upon the terms and subject to the conditions of the Subscription Agreement, to issue and sell to the Subscriber (i) on the Initial Closing Date (as defined below), 12,500,000 shares of the Company's common stock, par value $0.01 per share (the "Common Stock") (as adjusted for any stock split, stock dividend, stock combination, reclassification or similar transaction occurring after the Subscription Date) upon the consummation of the Capacity (as defined below) (the "Initial Capacity Shares") and (ii) on the Subsequent Closing Date (as defined below), if any, an additional 2,500,000 shares of Common Stock (as adjusted for any stock split, stock dividend, stock combination, reclassification or similar transaction occurring after the Subscription Date) upon the consummation of the Capacity Expansion (the "Subsequent Capacity Shares").

B. In accordance with the terms of the Subscription Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the "1933 Act") and the rules and regulations thereunder, or any similar successor statute, and applicable state securities laws.

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Subscriber hereby agree as follows:

1. Definitions.

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Subscription Agreement. As used in this Agreement, the following terms shall have the following meanings:

(a) "Additional Effective Date" means the date the Additional Registration Statement is declared effective by the SEC.

(b) "Additional Effectiveness Deadline" means the date which is the earlier of (x) sixty (60) calendar days after the earlier of the Additional Filing Date and the Additional Filing Deadline and (y) the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Additional Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Additional Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Additional Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

(d) "Additional Filing Deadline" means if Cutback Shares are required to be included in any Additional Registration Statement, the later of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered under the immediately preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date, the Subsequent Effective Date or the most recent Additional Effective Date, as applicable.

(e) "Additional Registrable Securities" means, (i) any Cutback Shares not previously included on a Registration Statement, and (ii) any capital stock of the Company issued or issuable with respect to the Capacity Shares or the Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise.

(f) "Additional Registration Statement" means a registration statement or registration statements of the Company filed under the 1933 Act covering the resale any Additional Registrable Securities.

(g) "Additional Required Registration Amount" means any Cutback Shares not previously included on a Registration Statement, all subject to adjustment as provided in Section 2(g).

(h) "Business Day" means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

(i) "Capacity" has the meaning as set forth in the Capacity and Services Agreement.

(j) "Capacity and Services Agreement" shall have the meaning set forth in the Subscription Agreement.

(k) "Capacity Expansion" has the meaning as set forth in the Capacity and Services Agreement.

(l) "Capacity Shares" means the Initial Capacity Shares and/or the Subsequent Capacity Shares, as applicable.

(m) "Cutback Shares" means any of the Initial Required Registration Amount, the Subsequent Required Registration Amount or the Additional Required Registration Amount of Registrable Securities not included in any Registration Statements previously declared effective hereunder as a result of a limitation on the maximum number of shares of Common Stock permitted to be registered by the staff of the SEC pursuant to Rule 415. The number of Cutback Shares shall be allocated pro rata among the Investors.

(n) "effective" and "effectiveness" refer to a Registration Statement that has been declared effective by the SEC and is available for the resale of the Registrable Securities required to be covered thereby.

(o) "Effective Date" means the Initial Effective Date, the Subsequent Effective Date and the Additional Effective Date, as applicable.

(p) "Effectiveness Deadline" means the Initial Effectiveness Deadline, the Subsequent Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

(q) "Eligible Market" means the Principal Market, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, The NYSE MKT LLC or any OTC listing or quotation.

(r) "Filing Deadline" means the Initial Filing Deadline, the Subsequent Filing Deadline and the Additional Filing Deadline, as applicable.

(s) "Initial Closing Date" shall have the meaning set forth in the Subscription Agreement.

(t) "Initial Effective Date" means the date that the Initial Registration Statement has been declared effective by the SEC.

(u) "Initial Effectiveness Deadline" means the date which is the earlier of (x) the third (3^rd) year anniversary of the Initial Closing Date and (y) the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Initial Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Initial Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

(v) "Initial Filing Date" means the date on which the Initial Registration Statement is filed with the SEC.

(w) "Initial Filing Deadline" means the date which one hundred fifty (150) calendar days immediately preceding the date that is the third (3^rd) year anniversary of the Initial Closing Date.

(x) "Initial Registrable Securities" means (i) the Initial Capacity Shares issued and (ii) any capital stock of the Company issued or issuable with respect to the Initial Capacity Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise.

(y) "Initial Registration Statement" means a registration statement or registration statements of the Company filed under the 1933 Act covering the resale of Initial Registrable Securities.

(z) "Initial Required Registration Amount" means the number of Initial Capacity Shares issued on the Initial Closing Date, subject to adjustment as provided in Section 2(g).

(aa) "Investor" means the Subscriber or any transferee or assignee thereof to whom the Subscriber assigns its rights in accordance with this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

(bb) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(cc) "Principal Market" means The New York Stock Exchange.

(dd) "register," "registered," and "registration" refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415, and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

(ee) "Registrable Securities" means the Initial Registrable Securities, the Subsequent Registrable Securities and the Additional Registrable Securities; provided that Registrable Securities shall not include any securities that (i) have been sold either pursuant to a registration statement or Rule 144, (ii) have been sold or otherwise transferred in a private transaction in which the transferor's rights under this Agreement are not validly assigned in accordance with this Agreement, or (iii) may be sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any similar provisions then in force under the 1933 Act).

(ff) "Registration Statement" means the Initial Registration Statement, the Subsequent Registration Statement and the Additional Registration Statement, as applicable.

(gg) "Required Holders" means the holders of at least a majority of the Registrable Securities then outstanding and shall include the Subscriber so long as the Subscriber or any of its affiliates holds any Registrable Securities.

(hh) "Required Registration Amount" means the Initial Required Registration Amount, the Subsequent Required Registration Amount or the Additional Required Registration Amount, as applicable.

(ii) "Rule 415" means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

(jj) "SEC" means the United States Securities and Exchange Commission.

(kk) "Subsequent Closing Date" shall have the meaning set forth in the Subscription Agreement.

(ll) "Subsequent Effective Date" means the date that the Subsequent Registration Statement has been declared effective by the SEC.

(mm) "Subsequent Effectiveness Deadline" means the date which is the earlier of (x) the third (3^rd) year anniversary of the Subsequent Closing Date and (y) the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Subsequent Registration Statement will not be reviewed or will not be subject to further review; provided, however, that if the Subsequent Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

(nn) "Subsequent Filing Date" means the date on which the Subsequent Registration Statement is filed with the SEC.

(oo) "Subsequent Filing Deadline" means the date which is one hundred fifty (150) calendar days immediately preceding the date that is the third (3^rd) year anniversary of the Subsequent Closing Date.

(pp) "Subsequent Registrable Securities" means (i) the Subsequent Capacity Shares issued and (ii) any capital stock of the Company issued or issuable with respect to the Subsequent Capacity Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise.

(qq) "Subsequent Registration Statement" means a registration statement or registration statements of the Company filed under the 1933 Act covering the Subsequent Registrable Securities, which may be in the form of a pre-effective amendment to the Initial Registration Statement.

(rr) "Subsequent Required Registration Amount" means the number of Subsequent Capacity Shares issued on the Subsequent Closing Date, subject to adjustment as provided in Section 2(g).

(ss) "Trading Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

(tt) "Transaction Documents" shall have the meaning set forth in the Subscription Agreement.

2. Registration.

(a) Initial Mandatory Registration. The Company shall prepare, and, as soon as practicable but in no event later than the Initial Filing Deadline, file with the SEC the Initial Registration Statement on Form S-3 covering the resale of all of the Initial Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(f). The Initial Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Initial Required Registration Amount determined as of the date the Initial Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(g). The Initial Registration Statement shall contain (except if otherwise directed by the Required Holders) the "Plan of Distribution" and "Selling Stockholders" sections in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have the Initial Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Initial Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Initial Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Initial Registration Statement.

(b) Subsequent Mandatory Registration. If Subsequent Capacity Shares have been issued pursuant to the terms of the Capacity and Services Agreement and the Subscription Agreement, then the Company shall prepare, and, as soon as practicable but in no event later than the Subsequent Filing Deadline, file with the SEC the Subsequent Registration Statement on Form S-3 covering the resale of all of the Subsequent Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(f). The Subsequent Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Subsequent Required Registration Amount determined as of the date the Subsequent Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(g). The Subsequent Registration Statement shall contain (except if otherwise directed by the Required Holders) the "Plan of Distribution" and "Selling Stockholders" sections in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have the Subsequent Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Subsequent Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Subsequent Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Subsequent Registration Statement.

(c) Additional Mandatory Registrations. The Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing Deadline, file with the SEC an Additional Registration Statement on Form S-3 covering the resale of all of the Additional Registrable Securities not previously registered on an Additional Registration Statement hereunder. To the extent the staff of the SEC does not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement, the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount has been registered with the SEC. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(f). Each Additional Registration Statement prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the Additional Required Registration Amount determined as of the date such Additional Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section 2(g). Each Additional Registration Statement shall contain (except if otherwise directed by the Required Holders) the "Plan of Distribution" and "Selling Stockholders" sections in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have each Additional Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New York time on the Business Day following the Additional Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Additional Registration Statement.

(d) Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase or decrease in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase or decrease thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor's Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders.

(e) Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review any registration pursuant to this Section 2 ("Legal Counsel"), which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company's obligations under this Agreement.

(f) Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as reasonably practicable after such form is available, provided that the Company shall use reasonable best efforts to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

(g) Sufficient Number of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section 2(a), Section 2(b) or Section 2(c) is insufficient to cover the Required Registration Amount of Registrable Securities required to be covered by such Registration Statement or an Investor's allocated portion of the Registrable Securities pursuant to Section 2(d), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than twenty (20) days after the necessity therefor arises. The Company shall use its reasonable best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed "insufficient to cover all of the applicable Required Registration Amount of Registrable Securities" if at any time the number of shares of Common Stock available for resale under the Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90.

(h) Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. If (i) a Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the applicable Filing Deadline (a "Filing Failure") or (B) not declared effective by the SEC on or before the applicable Effectiveness Deadline, (an "Effectiveness Failure") or (ii) on any day after the applicable Effective Date sales of all of the Registrable Securities required to be included on such Registration Statement cannot be made (other than during an Allowable Grace Period (as defined in Section 3(r)) pursuant to such Registration Statement or otherwise (including, without limitation, because of the suspension of trading or any other limitation imposed by an Eligible Market as a result of the Company’s failure to meet applicable listing requirements, a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a failure to register a sufficient number of shares of Common Stock (other than as a result of a limitation on the maximum number of shares of Common Stock permitted to be registered by the staff of the SEC pursuant to Rule 415) or a failure to maintain the listing of the Common Stock) (a "Maintenance Failure") then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance or the additional obligation of the Company to register any Cutback Shares), the Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to one percent (1.0%) of the aggregate Market Value (as such term is defined in the Subscription Agreement) of such Investor's Registrable Securities whether or not included in such Registration Statement on each of the following dates: (i) the day of a Filing Failure; (ii) the day of an Effectiveness Failure; (iii) the initial day of a Maintenance Failure; (iv) on the thirtieth day after the date of a Filing Failure and every thirtieth day thereafter (in each case, pro rated for periods totaling less than thirty days) until such Filing Failure is cured; (v) on the thirtieth day after the date of an Effectiveness Failure and every thirtieth day thereafter (in each case, pro rated for periods totaling less than thirty days) until such Effectiveness Failure is cured; and (vi) on the thirtieth day after the initial date of a Maintenance Failure and every thirtieth day thereafter (in each case, pro rated for periods totaling less than thirty days) until such Maintenance Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 2(h) are referred to herein as "Registration Delay Payments." Registration Delay Payments shall be paid on the earlier of (I) the dates set forth above and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one percent (1.0%) per month (prorated for partial months) until paid in full. Notwithstanding anything to the contrary herein or in the Subscription Agreement, in no event shall (i) Registration Delay Payments be payable for any period after the expiration of the Registration Period, (ii) the aggregate amount of Registration Delay Payments to an Investor exceed, in the aggregate, ten percent (10%) of the aggregate Market Value of such Investor's Registrable Securities on the applicable Closing Date and (ii) the Company be obligated to make both Public Information Failure Payments (as defined in the Subscription Agreement) and Registration Delay Payments in respect of the same securities and for any same period of time in which a failure giving rise to such payments is deemed to have occurred.

3. Related Obligations.

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b), 2(c), 2(f) or 2(g), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

(a) The Company shall promptly prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use its reasonable best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). The Company shall use reasonable best efforts to keep each Registration Statement effective pursuant to Rule 415 at all times until the earliest of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act, (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement or (iii) the date no Registrable Securities are outstanding (the "Registration Period"). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in light of the circumstances in which they were made) not misleading. The term "reasonable best efforts" shall mean, among other things, that the Company shall submit to the SEC, within two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which approval is immediately sought), a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) Business Days after the submission of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable, but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective. The Company shall include the Legal Counsel on all substantive communications with respect to, and to receive all drafts of the Registration Statement and any amendments and supplements thereto to be filed with the SEC.

(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until the expiration of the Registration Period. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing an Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall, if permissible under applicable securities laws, have incorporated such report by reference into such Registration Statement, provided, that if the foregoing is not permitted by applicable securities laws, the Company shall file such amendments or supplements with the SEC as soon as practicable after the day the Company files the 1934 Act report which created the requirement for the Company to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least four (4) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for amendments and supplements filed solely to include information contained in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge upon written request (including by email), (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company's obligations pursuant to this Section 3.

(d) The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, to the extent requested by an Investor, (i) promptly after the same is filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies (or such other number of copies as Legal Counsel or such Investor may reasonably request) of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

(e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or "blue sky" laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to taxation in any such jurisdiction, or (z) file a consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event but in any event on the same Trading Day as becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile or email on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information and (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. By 9:30 a.m. New York City time on the date following the date any post-effective amendment has become effective, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

(g) The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction. If such an order or suspension is issued, the Company shall use reasonable best efforts to obtain the withdrawal of such order or suspension as promptly as practicable and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

(h) If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an Investor believes that it could reasonably be deemed to be an underwriter of Registrable Securities, at the reasonable request of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company's independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

(i) If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an Investor believes that it could reasonably be deemed to be an underwriter of Registrable Securities, the Company shall make available for inspection by (i) such Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the "Inspectors"), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably deemed necessary by each Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors' ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

(j) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) the Company determines in good faith that disclosure of such information is necessary to comply with federal or state securities laws, (ii) the Company determines in good faith that the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

(k) The Company shall use its reasonable best efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or (ii) if the Company is unsuccessful in satisfying clause (i), secure the inclusion for quotation of all of the Registrable Securities on another Eligible Market for such Registrable Securities and, without limiting the generality of the foregoing, to use its reasonable best efforts to arrange for at least two market makers to register with the Financial Industry Regulatory Authority, Inc. as such with respect to such Registrable Securities. The Company shall pay all fees and expenses (other than the fees of Legal Counsel) in connection with satisfying its obligation under this Section 3(k).

(l) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

(m) If requested by an Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

(n) The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

(o) The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the applicable Effective Date of a Registration Statement.

(p) The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

(q) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.

(r) Notwithstanding anything to the contrary herein, the Company (i) may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company, in the best interest of the Company and, in accordance with advice of counsel to the Company, not otherwise required and may postpone effecting a registration or (ii) may suspend the use of a Registration Statement for periods coinciding with any "blackout" period under the Company's insider trading policy (a "Grace Period"); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information or the "blackout" period giving rise to a Grace Period and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed sixty (60) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of one hundred twenty (180) days and the first day of any Grace Period must be at least five (5) Trading Days after the last day of any prior Grace Period (each, an "Allowable Grace Period"). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Allowable Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, subject to applicable securities laws, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Subscription Agreement in connection with any sale of Registrable Securities pursuant to an effective Registration Statement with respect to which an Investor has entered into a contract for sale, prior to the Investor's receipt of the notice of a Grace Period and for which the Investor has not yet settled.

(s) Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the SEC, the Principal Market or any Eligible Market and any Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document; provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the "Plan of Distribution" section attached hereto as Exhibit B in the Registration Statement.

4. Obligations of the Investors.

(a) At least five (5) Business Days prior to the first anticipated Filing Date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor's Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that: (i) such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and (ii) such Investor shall execute such documents in connection with such registration as the Company may reasonably request.

(b) Each Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor's receipt of copies of the supplemented or amended prospectus as contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything in this Agreement to the contrary, subject to applicable securities laws, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Subscription Agreement in connection with any sale of Registrable Securities pursuant to an effective Registration Statement with respect to which an Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which the Investor has not yet settled.

(d) Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

(e) In connection with any underwritten public offering by the Company for its own account or the account of a security holder or holders, each Investor agrees to execute a market standoff agreement with the underwriters for such offering in customary form covering all Registrable Securities held by such Investor, provided that all executive officers and directors of the Company and all other holders of at least 5% of the Company’s voting securities enter into similar agreements requiring each Investor to be treated no less favorably than any other party to such an agreement as to any releases or modifications. The underwriters in connection with such registration are intended third-party beneficiaries of this Section 4(e) and shall have the right and power to enforce the provisions of this Section 4(e) as though they were a party hereto.

5. Expenses of Registration.

All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall also reimburse the Investors for the fees and disbursements of Legal Counsel in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration, filing or qualification.

6. Indemnification.

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, partners, members, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts paid in settlement or expenses, joint or several (collectively, "Claims"), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, "Violations"). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person or its representatives for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to reimburse the Investors for the expenses of more than one counsel to all Investors.

(b) In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Party"), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor shall promptly reimburse the Indemnified Party for any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party, as the case may be, and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which: (i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation or (ii) includes any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8. Reports Under the 1934 Act.

With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required under the applicable provisions of Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be assignable (but only with all related obligations) by the Subscriber to any transferee of all or any portion of the Subscriber's Registrable Securities if: (i) the Subscriber agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the securities held by the transferee or assignee constitute Registrable Securities; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) the Subscriber demonstrates to the Company's reasonable satisfaction that such transfer has been made in accordance with the applicable requirements of the Subscription Agreement. Upon the Company's receipt of the documents referenced in (i), (ii) and (iv) above, the transferee shall thereafter be deemed to be an "Investor." Except for any assignment in accordance with this Section 9, this Agreement and the rights and obligations hereunder may not be assigned by any party hereto without the prior written consent of each of the other parties hereto.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities, unless all such holders agree in writing. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

11. Miscellaneous.

(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (c) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, specifying next Business Day delivery or (d) upon actual receipt by the party to whom such notice is required to be given if delivered by hand, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be as follows:

If to the Company:

Imation Corp.

1099 Helmo Avenue N, Suite 250

Oakdale, Minnesota 55128

Telephone: 651-340-8062

Attention: Tavis Morello, General Counsel

Email: tmorello@imation.com

With a copy (for informational purposes only) to:

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166

(212) 294-5400

Telephone:

(212) 294-5336

Facsimile:

(212) 294-4700

Attention:

Joel L. Rubinstein, Esq.

Email:

jrubinstein@winston.com

If to the Transfer Agent:

Wells Fargo Shareowner Services

1110 Centre Pointe Curve Suite 101

Mendota Heights MN 55120

MAC N9173-010

Telephone: 1-855-217-6361
Attention: Lindsey Fischer

Email: wfssrelationshipmanagement@wellsfargo.com

If the Subscriber:

Clinton Group, Inc.

510 Madison Ave., 9th Floor

New York, New York 10022

Telephone:

(212) 825-0400

Facsimile:

(646) 346-5650

Attention:

George Hall

Daniel Strauss

E-mail:

geh@clinton.com

dstrauss@clinton.com

With a copy (for informational purposes only) to Legal Counsel (see below)

If to Legal Counsel:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:

(212) 756-2000

Facsimile:

(212) 593-5955

Attention:

Eleazer Klein, Esq.

Email:

eleazer.klein@srz.com

, or to such other address, facsimile number and/or email address to the attention of such other Person as the recipient party has specified by written notice given to each other party two (2) days prior to the effectiveness of such change in accordance with this Section 11(b). Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender's facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image of the first page of such transmission or (iii) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (a), (b), (c) or (d) above, respectively.

(c) In addition to being entitled to exercise all rights provided herein, in any of the other Transaction Documents or granted by law, including recovery of damages, the Investors and the Company will be entitled to specific performance under the Transaction Documents. Any Person having any rights under any provision of this Agreement or in any of the other Transaction Documents shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement or such other Transaction Documents and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under any of the Transaction Documents, any remedy at law may prove to be inadequate relief to the Investors. The Company therefore agrees that the Investors shall be entitled to seek specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e) If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

(f) This Agreement, the other Transaction Documents and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

(g) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders.

(h) The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto.

(i) This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) filed of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature page were an original thereof.

(j) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.

(l) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except that each Indemnified Person and Indemnified Party is an intended third party beneficiary of Section 6 and may enforce the provisions of such Section directly against the parties with obligations thereunder.

(m) The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

(n) To the extent that the Company makes a payment or payments to the Investors hereunder or pursuant to any of the other Transaction Documents or the Investors enforce or exercise their respective rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company or any of its Subsidiaries by a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

* * * * * *

[Signature Page Follows]

IN WITNESS WHEREOF, the Subscriber and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

	COMPANY:

	IMATION CORP.

	By:
		Name:
		Title:

[Signature Page to Registration Rights Agreement]

IN WITNESS WHEREOF, the Subscriber and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

	SUBSCRIBER:

	CLINTON GROUP, INC.

	By:
		Name:
		Title:

[Signature Page to Registration Rights Agreement]

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

Wells Fargo Shareowner Services

1110 Centre Pointe Curve Suite 101

Mendota Heights MN 55120

MAC N9173-010

Telephone: 1-855-217-6361
Attention: Lindsey Fischer

Email: wfssrelationshipmanagement@wellsfargo.com

Re:

Imation Corp.

Ladies and Gentlemen:

Reference is made that certain Subscription Agreement, dated as of November 22, 2016 (the "Subscription Agreement"), entered into by and among Imation Corp., a Delaware corporation (the "Company") and the subscriber named therein (collectively, the "Holders") pursuant to which the Company issued to the Holders shares (the "Capacity Shares") of the Company's common stock, par value $0.01 per share (the "Common Stock"). Pursuant to the Subscription Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the "Registration Rights Agreement") pursuant to which the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in the Registration Rights Agreement), including the Capacity Shares under the Securities Act of 1933, as amended (the "1933 Act"). In connection with the Company's obligations under the Registration Rights Agreement, on ____________ ___, 201_, the Company filed a Registration Statement on Form S-3 (File No. 333-_____________) (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC's staff has advised [us][me] by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

	Very truly yours,

	[ISSUER'S COUNSEL]

	By:

CC:

[LIST NAMES OF HOLDERS]

A-1

EXHIBIT B

SELLING STOCKHOLDER

The common stock being offered by the selling stockholder are those previously issued to the selling stockholder. For additional information regarding the issuances of those shares of common stock, see "Private Placement of Common Shares " above. We are registering the shares of common stock in order to permit the selling stockholder to offer the shares for resale from time to time. The selling stockholder has not had any material relationship with us within the past three years, except for (i) the ownership of the shares of common stock, (ii) the entry into the Capacity and Services Agreement, (iii) the fact that Mr. Joseph A. DePerio, an employee of the Selling Stockholder, serves as a member of our board of directors and (iv) the fact that the selling stockholder manages $35 million of our excess cash for investment in Clinton Lighthouse Equities Strategy Fund (Offshore), a fund managed by the selling stockholder.

The table below lists the selling stockholder and other information regarding the beneficial ownership of the shares of common stock by the selling stockholder. The second column lists the number of shares of common stock beneficially owned by the selling stockholder, based on its ownership of the shares of common stock, as of ________, 201_.

The third column lists the shares of common stock being offered by this prospectus by the selling stockholder.

In accordance with the terms of a registration rights agreement with the selling stockholder, this prospectus generally covers the resale of at least the maximum number of shares of common stock issued as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration right agreement. The fourth column assumes the sale of all of the shares offered by the selling stockholder pursuant to this prospectus.

Annex I-1

Name of Selling Stockholder

Number of shares of
Common Stock Owned
Prior to Offering

Maximum Number of shares
of Common Stock to be Sold
Pursuant to this Prospectus

Number of shares of
Common Stock Owned
After Offering

Clinton Group, Inc. (1)

(1) George Hall, as the President of Clinton Group, Inc. ("CGI"), is deemed to have voting power and dispositive power with respect to all shares as to which CGI has voting power or dispositive power. Accordingly, CGI and Mr. Hall are deemed to have shared voting and shared dispositive power with respect to all of the Company's securities beneficially owned by CGI. Mr. Hall disclaim beneficial ownership of any and all such securities in excess of his actual pecuniary interest therein.

Annex I-2

PLAN OF DISTRIBUTION

We are registering the shares of common stock previously issued to permit the resale of these shares of common stock by the holders thereof and holders of the shares of common stock warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholder of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling stockholder may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholder will be responsible for underwriting discounts or commissions or agent's commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,

on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

in the over-the-counter market;

in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

through the writing of options, whether such options are listed on an options exchange or otherwise;

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

short sales;

sales pursuant to Rule 144;

broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share;

Annex I-3

a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.

If the selling stockholder effects such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholder or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholder may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholder may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

The selling stockholder may pledge or grant a security interest in some or all of the warrants or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholder under this prospectus. The selling stockholder also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling stockholder and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholder and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

Annex I-4

There can be no assurance that the selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.

The selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or "blue sky" laws; provided, however, that the selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholder against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.

Once sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.

Annex I-5

EXHIBIT C

Form of Officer’s Certificate

IMATION CORP.

OFFICER'S CERTIFICATE

The undersigned Chief Executive Officer of Imation Corp., a Delaware corporation (the "Company"), hereby represents, warrants and certifies to the Subscriber, pursuant to Section [5.1(a)(i)] [5.2(a)(i)] of the Subscription Agreement (as defined below), as follows:

The representations and warranties of the Company set forth in Section 3.1 of the Subscription Agreement, dated as of November 22, 2016, by and between the Company and the Subscriber (the "Subscription Agreement") and in Section 8 of the Capacity and Services Agreement, are true and correct in all respects as of the date hereof (except for representations and warranties that speak as of a specific date, which are true and correct as of such specified date).

The Company has performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company as of the date hereof.

Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Subscription Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate this ___ day of _________, 201_.


	Name:
	Title: Chief Executive Officer

EXHIBIT D

Form of Opinion of Company Counsel

EXHIBIT E

Form of Secretary’s Certificate

IMATION CORP.

SECRETARY’S CERTIFICATE

The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of Imation Corp., a Delaware corporation (the "Company"), and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection with the Subscription Agreement, dated as of November 22, 2016, by and among the Company and the Subscriber (the "Subscription Agreement"), and further certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Subscription Agreement.

Attached hereto as Exhibit A is a true, correct and complete copy of the unanimous written consent of the Board of Directors of the Company, dated November __, 2016. The resolutions contained in Exhibit A have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect.

Attached hereto as Exhibit B is a true, correct and complete copy of the Restated Certificate of Incorporation of the Company, together with any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Restated Certificate of Incorporation, the same being in full force and effect in the attached form as of the date hereof.

Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws of the Company and any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Bylaws, the same being in full force and effect in the attached form as of the date hereof.

Each person listed below has been duly elected or appointed to the position(s) indicated opposite his name and is duly authorized to sign the Subscription Agreement and each of the Transaction Documents on behalf of the Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

Name	Position	Signature

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this __ day of ___________ __ 201_.


	[Name]
	Secretary

I, [Name], [Title], hereby certify that [Name] is the duly elected, qualified and acting Secretary of the Company and that the signature set forth above is his true signature.


	[Name]
	[Title]

EXHIBIT A

Resolutions

EXHIBIT B

Restated Certificate of Incorporation

EXHIBIT C

Bylaws

Exhibit 10.3

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT (this “Amendment”) is made and entered into as of November 22, 2016, by and among Imation Corp. (the “Company”) and Robert B. Fernander (“Executive”). Any terms used but not defined herein shall have the same meaning set forth in that certain Employment Agreement, effective as of October 14, 2015, amended as of October 14, 2016, by and between the Company and Executive (the “Employment Agreement”).

RECITALS

WHEREAS, the Company has entered into a Stock Purchase Agreement, dated November 22, 2016, with NXSN Acquisition Corp. (“Purchaser”), pursuant to which the Company will contribute to Nexsan Corporation (“Nexsan”) all of the issued and outstanding capital stock of Connected Data, Inc. and then sell all of the shares of common stock of Nexsan to Purchaser (the “Stock Purchase Agreement”);

WHEREAS, Executive has been employed by the Company as Interim Chief Executive Officer pursuant to the Employment Agreement, and the Company desires to continue to employ Executive as Interim Chief Executive Officer on a month-to-month basis; and

WHEREAS, pursuant to this Amendment, the Company and Executive desire to amend the Employment Agreement and the terms of Executive’s employment from the date hereof through the closing of the transactions contemplated by the Stock Purchase Agreement (the “Closing”) and following the Closing to reflect the arrangement described in the foregoing recitals.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and Executive agree as follows:

AGREEMENT

1. Amendment. The Employment Agreement is hereby amended as follows, effective November 22, 2016:

(a) The last sentence of Section 1 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“Executive shall be employed by the Company at will on a month-to-month basis (the ‘Term’). The Company may terminate the Executive’s employment by providing Executive with thirty (30) days’ advance written notice of intent to terminate.”

(b) Section 2(b) of the Employment Agreement is amended by adding the following last sentence to the end of Section 2(b): “Notwithstanding the foregoing, it shall not be a breach of this Section 2(b) for the Executive to be concurrently employed as the Interim CEO of Nexsan Corporation (‘Nexsan’).”

“Base Salary. As compensation for services rendered to the Company during the Term, the Company shall pay Executive a base salary at the annual rate of $600,000; provided, that from and after the consummation (the ‘Closing’) of the transactions contemplated by that certain Stock Purchase Agreement, dated November 22, 2016, between the Company and NXSN Acquisition Corp. (‘Purchaser’), pursuant to which the Company will contribute to Nexsan all of the issued and outstanding capital stock of Connected Data, Inc. and then sell all of the shares of common stock of Nexsan to Purchaser (the ‘2016 Stock Purchase Agreement’), the Company shall instead pay Executive a base salary at the annual rate of $50,000 (such applicable amount, the ‘Base Salary’). The Base Salary shall be payable in accordance with the Company’s standard payroll schedule and procedures including applicable withholdings or deductions.”

(d) The following new Section 4A is hereby added between Sections 4 and 5 of the Employment Agreement:

“Finder’s Fee.

(a) Executive shall be eligible to receive a fee, equal to one and one-half percent (1.5%) of Total Enterprise Value (as defined below), less applicable withholdings for taxes (the ‘Finder’s Fee’), upon an offer directly secured by Executive and Geoff Barrall for the purchase of Nexsan that is accepted and consummated (the ‘Nexsan Sale’) during the period between (i) the date of execution of the 2016 Stock Purchase Agreement and (ii) the Closing. For the avoidance of doubt, ‘Nexsan Sale’ shall exclude, and Executive shall not be eligible to receive the Finder’s Fee in respect of, any offer that is accepted and consummated for a purchase of Nexsan made by any party that executed a letter of intent with the Company with respect to a Nexsan Sale prior to November 22, 2016 (a ‘Prior Offer’). The Finder’s Fee will be payable to Executive within five (5) days following the consummation of the Nexsan Sale. Notwithstanding anything herein in the contrary, this Section 4A shall become null and void if a Prior Offer is accepted and consummated, or if the Closing occurs, in each case, prior to the date of acceptance and consummation of any Nexsan Sale.

(b) For purposes of this Section 4A, ‘Total Enterprise Value’ shall mean the market value of Nexsan, after taking into account both holders of debt and equity.”

(e) The section heading and first sentence of Section 8 of the Employment Agreement are hereby deleted in their entirety and replaced with the following:

“Termination by the Company for Cause or by Your Resignation Prior to the Closing. In the event that Executive’s employment is terminated for Cause prior to the Closing, the Company shall have no further financial obligations to Executive under this Agreement except for payment to Executive of (a) Executive’s accrued, but unpaid wages or other benefits earned through the date of separation to which Executive is otherwise legally entitled, (b) any accrued but unused paid time off, (c) any unreimbursed expenses in accordance with the Company’s policies, and (d) any matching contributions by the Company into any Company-sponsored 401(k) plan or other retirement or pension plan account benefits on the same basis as those benefits are generally made available to other peer executives of the Company and in accordance with the terms of those plans as may be in existence from time to time (collectively, ‘Accrued Rights’).”

(f) The section heading and introduction to Section 9 of the Employment Agreement are hereby deleted in their entirety and replaced with the following:

“Termination by the Company Without Cause or by Executive for ‘Good Reason’ Prior to the Closing. In the event that Executive’s employment is terminated by the Company without Cause prior to the Closing or by the Executive for ‘Good Reason’ (as defined below) prior to the Closing, the Company shall have no further financial obligations to Executive (or, as the case may be, to Executive’s heirs, devisees or estate) under this Agreement except for payment to Executive of the following as conditioned below:”

(g) Section 10 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

“Termination On or After Closing. In the event that the Company terminates Executive’s employment for any reason or no reason on or after the Closing and fulfillment of all terms supporting the inception of Executive’s Employment Agreement with Nexsan, or Executive voluntarily resigns from the Company on or after the Closing, the Company shall have no further financial obligations to Executive under this Agreement except for payment to Executive of Executive’s Accrued Rights. In addition, upon and concurrently with any termination of Executive’s employment with the Company on or after the Closing, (a) Executive hereby agrees that he shall resign as a member of the Board of Directors of the Company and (b) Executive agrees and acknowledges that all deals with the Company involving Executive shall be eliminated; provided, however, that the first, second and third stock grant tranches set forth in Section 4 hereof shall continue to vest in accordance with their terms, based on the Company’s stock price, for six (6) months after the Closing, notwithstanding the requirement that Executive be employed by the Company at the time the applicable stock price hurdle is achieved.”

2. Effectiveness at Closing. Notwithstanding anything in this Amendment to the contrary, all obligations of the Company and Executive and references in the Amendment that arise from or relate to the Closing shall only be effective as of and contingent upon the Closing of the transactions contemplated by the Stock Purchase Agreement. If the Closing does not occur, such obligations and references herein shall be null and void. For the avoidance of doubt, Executive shall not have any right to a Good Reason termination under the Employment Agreement in the event that the Closing occurs and the Company abides by the terms of this Amendment.

3. Miscellaneous.

(a) Governing Law. This Amendment shall be governed and construed in accordance with the laws of the State of Texas without giving effect to its conflicts of law principles.

(b) Severability. If any provision of this Amendment is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions of this Amendment, which shall be fully severable, and given full force and effect.

(c) Counterparts. This Amendment may be signed in counterparts, each of which shall be deemed an original and all of which together shall be one and the same instrument. A signature sent by facsimile or other electronic means shall be as effective as an original signature.

(d) References to Employment Agreement. All references in any document or agreement to the Employment Agreement shall refer to the Employment Agreement, as amended hereby.

(e) Supersession. To the extent, if any, that a provision of this Amendment conflicts with or differs from any provision of the Employment Agreement, such provision of this Amendment shall prevail and govern for all purposes.

(f) Full Force and Effect. Except as otherwise specifically amended by this Amendment, the Employment Agreement shall remain in full force and effect.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Amendment as of the day and year first set forth above.

	COMPANY:

	Imation Corp.

	By:	/s/ Joseph A. De Perio

	Name:	Joseph A. De Perio

	Title:	Non-Executive Chairman

	EXECUTIVE:

	/s/ Robert B. Fernander
	Robert B. Fernander

[Signature Page to Employment Agreement Amendment]

Exhibit 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this November 22, 2016, by and among Nexsan Corporation (the “Company”), Robert B. Fernander (“Executive”), and, solely as to Sections 3, 4, 9(b) and 10, Imation Corporation (“Imation”), effective as of the consummation (the “Closing”) of the transactions contemplated by that certain Stock Purchase Agreement by and between Imation and NXSN Acquisition Corp. (“Purchaser”) (the “Stock Purchase Agreement”).

RECITALS

WHEREAS, Imation has entered into the Stock Purchase Agreement, pursuant to which Imation will contribute to the Company all of the issued and outstanding capital stock of Connected Data, Inc. and then sell all of the shares of common stock of the Company to Purchaser;

WHEREAS, Executive has substantial business knowledge and expertise in the conduct of the business of the Company, and the Company desires to retain the knowledge, expertise and experience of Executive to assist in the operations and management of the Company; and

WHEREAS, the Company desires to employ Executive, and Executive is willing to be employed by the Company as of the Closing, in each case on the terms and conditions set forth herein, and with both Executive and the Company understanding that this Agreement and the terms and conditions set forth herein are conditioned on the Closing and the full funding of the Severance Payment (as defined below) into escrow immediately upon the Closing in accordance with Section 9(b) hereof, and if the Closing does not occur, or if the full funding into escrow of the Severance Payment immediately upon the Closing does not occur, then this Agreement shall be null and void.

1. Employment; Term. The Company hereby agrees to employ Executive, and Executive hereby accepts such employment with the Company, in each case, on the terms and subject to the conditions hereinafter set forth. Executive’s employment for purposes of this Agreement shall commence on the Closing. Executive shall be employed by the Company at will for a period of six (6) months from the Closing (“Term”), subject to the provisions of Sections 8, 9 and 10 below.

2. Position.

(a) During the Term, Executive shall serve as the Interim Chief Executive Officer of the Company. In such position, Executive shall have such executive duties and authority as shall be determined from time to time by the Board of Directors (the “Board”).

(b) During the Term, Executive will devote his full business time and his best efforts to the performance of Executive’s duties hereunder (except for paid time off provided for hereunder and periods of illness or incapacity) and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services to the Company either directly or indirectly, without the prior written consent of the Board. Notwithstanding the foregoing, it shall not be a breach of this Section 2(b) for the Executive to be concurrently employed as the Interim CEO of Imation.

3. Base Salary. As compensation for services rendered to the Company during the Term, Executive shall receive a base salary at the aggregate annual rate of $600,000, less applicable taxes and withholdings (hereinafter referred to as the “Base Salary”). The Base Salary shall be payable in accordance with the Company’s standard payroll schedule and procedures including applicable withholdings or deductions. The Base Salary will be subject to adjustment pursuant to the Company’s employee compensation policies in effect from time to time or as otherwise determined by the Board. The Base Salary shall be payable one-third (1/3, or $200,000) by Imation and two-thirds (2/3, or $400,000) by the Company. The Base Salary shall be paid through the Company’s payroll, and Imation shall wire its portion to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof; and the Company and its agents shall hold any such wire transfers made to the Company or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s).

4. Change in Control Payment. Upon the consummation of (a) a sale of all or substantially all of the assets of the Company; (b) a transfer, merger, consolidation, or sale in which a majority of the outstanding equity immediately prior to the transaction is held by another person or entity, or group of persons or entities, immediately after the transaction; (c) a refinancing that is a deemed a “Liquidity Event” by the Board; or (d) the first public offering of the equity securities of the Company or a successor thereto for cash pursuant to an effective registration statement under the Securities Act of 1933, as amended, registered on Form S-1 (each, a “Liquidity Event”), in which the amount of the relevant purchase price, investment or transaction or refinancing proceeds is between $7 million and $37 million, Executive shall be entitled to three percent (3%) of the Total Enterprise Value (as defined below) with respect to the Liquidity Event (the “CIC Payment”) as long as Executive (i) is employed by the Company at the time of the Liquidity Event; or (ii) was employed by the Company in the six (6) months preceding the Liquidity Event; provided, however, with respect to the foregoing clause (ii), in the event of a Liquidity Event arising under (c) or (d) above, that Executive shall be entitled to receive the CIC Payment to the extent payment thereof occurs prior to March 15 of the calendar year following the year in which the Liquidity Event occurs, and if payment of the CIC Payment would be made later than such date, Executive shall only be entitled to receive the CIC Payment to the extent payment thereof would not result in the assessment of taxes and/or penalties on Executive pursuant to Section 409A of the Code. For the avoidance of doubt, a Liquidity Event shall not include refinancing through a new debt facility or a new equity investment, unless preferred shareholders of the Company receive liquidation preferences in an event that is deemed a Liquidity Event by the Board. For purposes of this Section 4, “Total Enterprise Value” shall mean the market value of the Company, after taking into account both holders of debt and equity. The CIC Payment shall be payable fifty percent (50%) by Imation and fifty percent (50%) by the Company. Such CIC Payment shall be paid through the Company’s payroll, and Imation shall wire its fifty percent (50%) portion to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof; and the Company and its agents shall hold any such wire transfers made to the Company or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s).

5. Employee Benefits and Paid Time Off. During the Term, Executive shall be entitled to participate in the Company’s employee benefit plans as in effect from time to time, on the same basis as those benefits are generally made available to other peer executives of the Company and in accordance with the terms of those plans as may be in existence from time to time. In addition to those employee benefits, Executive will be entitled to accrue paid time off (“PTO”) in accordance with the Company’s PTO policy. The Company hereby reserves the right to alter its policies and/or amend its employee benefits plans and programs at its sole discretion.

6. Expense Reimbursement. During the Term, reasonable business expenses (including travel expenses) incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies in effect from time to time. Executive will be expected to reimburse the Company for any expenses paid by the Company that would not be eligible for reimbursement if paid by Executive. The Company acknowledges that Executive resides and will primarily perform work in Austin, Texas, and will regularly be travelling on Company business to and from his home base in Austin, Texas, and all travel expense related to such business travel will be reimbursable travel expense.

7. Code Section 409A. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding any other provision herein, if Executive is deemed on the date of termination to be a “Specified Employee,” as that term is defined in Section 409A of the Code, then with regard to any payment or the provision of any benefit under this Agreement that is considered deferred compensation under Section 409A of the Code payable on account of a “separation from service” and that is not exempt from Section 409A of the Code as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (ii) the date that is ten (10) days after the date of Executive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

8. Termination by the Company for Cause or by Your Resignation. In the event that Executive’s employment is terminated for Cause during the Term or by Executive’s resignation during the Term, the Company shall have no further financial obligations to Executive under this Agreement except for payment to Executive of (a) Executive’s accrued, but unpaid wages or other benefits earned through the date of separation to which Executive is otherwise legally entitled, (b) any accrued but unused paid time off, (c) any unreimbursed expenses in accordance with the Company’s policies, and (d) any other vested benefits or vested amounts due and owed to Executive under the terms of any plan, program or arrangement of the Company on the same basis as those benefits are generally made available to other peer executives of the Company and in accordance with the terms of those plans as may be in existence from time to time (collectively, “Accrued Rights”). For purposes of this Agreement, “Cause” shall mean (i) the willful and material failure by Executive to perform Executive’s material duties with respect to the Company or its affiliates following Executive’s failure to correct such failure within thirty (30) days after Executive’s receipt of written notice of breach from the Company specifying the particulars of such breach sufficiently to permit its cure; (ii) the willful or intentional engaging by Executive in conduct within the scope of Executive’s employment that causes material and demonstrable injury, monetarily or otherwise, to the Company; (iii) Executive’s conviction for, or a plea of nolo contendere to, the commission of a felony of any type or any crime related to the Company involving dishonesty, misappropriation, breach of fiduciary duty, or moral turpitude; (iv) Executive obtaining any personal profit not disclosed to and approved by the Board in connection with any transaction entered into by, or on behalf of, or in relation to, the Company; or (v) a material breach of Executive’s covenants set forth in this letter agreement or violating any of the terms of the Company’s established rules or policies which, if curable, is not cured to the Board’s reasonable satisfaction within fifteen (15) days after written notice thereof to Executive, it being agreed and understood that any such notice of material breach or violation shall specify the particulars of any such breach or violation sufficiently to permit its cure.

9. Termination by the Company Without Cause or by Executive for Good Reason. In the event that Executive’s employment is terminated by the Company without Cause during the Term or by the Executive for Good Reason (as defined below) during the Term, the Company shall have no further financial obligations to Executive (or, as the case may be, to Executive’s heirs, devisees or estate) under this Agreement except for payment to Executive of the following as conditioned below:

(a) Executive’s Accrued Rights; and

(b) Subject to (i) the obligations and restrictions set forth in subparagraph (c) below, and (ii) Executive’s execution and return of a severance agreement, which shall, among other things, release the Company (and its officers, directors, employees, agents, parents, affiliated entities, and successors and assigns of any of them) from any and all claims, and which shall be in a form and containing reasonable terms in the reasonable discretion of the Board (the “Severance Agreement”), within twenty-one (21) days following the Company’s presenting Executive with such Severance Agreement; and (iii) Executive’s non-revocation of and continued compliance with the Severance Agreement, Executive shall be entitled to a severance payment equal to $450,000, subject to all applicable taxes and withholdings (“Severance Payment”), payable as a lump sum on the Company’s next normal payroll processing at least five (5) days following the expiration date of any revocation period (if applicable) under the Severance Agreement. The Severance Payment shall be payable fifty percent (50%) by Imation and fifty percent (50%) by the Company. Such Severance Payment shall be paid through the Company’s payroll, and Imation shall wire its fifty percent (50%) portion to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof; and the Company and its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s). Immediately upon Closing, the Company and Imation shall deposit the gross amounts of their respective portions of the Severance Payment with an escrow agent acceptable to Executive; and the escrow agent’s maintaining and disbursement of such monies shall be in accordance with and subject to escrow instructions acceptable to Executive. The parties shall work in good faith to put in place an escrow agreement in connection with the foregoing.

(c) Continuing Obligations. Notwithstanding the termination of Executive’s employment, Executive agrees that the Severance Payment is intended solely to provide a financial cushion while Executive searches for new non-competitive employment and, therefore, Executive’s entitlement to obtain or keep such monies is expressly conditioned upon and limited by the following:

(i) Non-Disparagement. Following Executive’s employment with the Company, Executive agrees not to defame, disparage or criticize the Company, its business plan, procedures, products, services, development, finances, financial condition, capabilities or other aspect of its business, or any of its officers, directors, agents or assigns (and their direct and indirect shareholders, members and partners, and directors and officers) in any medium (whether oral, written, electronic or otherwise, whether currently existing or hereafter created), to any person or entity, without limitation in time. Notwithstanding the foregoing sentence, Executive may confer in confidence with Executive’s advisors and make truthful statements as required by law or to the Board.

(ii) Non-Solicitation and Non-Competition. Any right to receiving or keeping any portion of the Severance Payment is expressly conditioned on Executive refraining from violating any of the restrictive covenants in this Agreement, including, but not limited to Sections 11 (Non-Solicitation) and 12 (Non-Competition) below. Thus, for purposes of clarification and without limitation, if Executive were to violate the non-competition provision below in Section 12 by commencing employment with a direct competitor in the data storage industry in a prohibited geographic area during the Restricted Period, Executive would be required to return any part of the Severance Payment already received (including any lump sum payment) and any right to receiving additional payments toward the maximum Severance Payment shall cease.

(iii) Proprietary and Confidential Information. Any right to receiving or keeping any portion of the Severance Payment is further conditioned on Executive continuing compliance with the Proprietary Information and Inventions Agreement and not otherwise misusing any Company confidential, proprietary or trade secret information.

For purposes of this Agreement, “Termination by the Company Without Cause” shall include but shall not be limited to the following circumstances: (a) Executive’s death; or (b) Executive’s Disability, which shall be deemed to have occurred when in the good faith judgment of the Board, Executive becomes physically or mentally incapacitated and is therefore unable for a period of four (4) consecutive months or for an aggregate of six (6) months in any twelve (12) consecutive month period to perform Executive’s duties (such incapacity is referred to herein as “Disability”). The Company will also comply with any applicable federal and state disability and leave laws.

For purposes of this Section 9 of the Agreement, Executive shall be entitled to terminate employment for “Good Reason” by written notice to the Company of such termination within sixty (60) days after any of the following events occur: (a) a material diminution occurs in the Executive’s title or duties as Interim Chief Executive Officer; (b) the Company requires that the Executive change his primary residence away from Austin, Texas, without giving Executive at least nine (9) months’ advance notice, or without a reasonable increase in Executive’s compensation commensurate with the increased cost of living in the new locale to which the Company has requested the Executive to relocate, or without providing reasonable relocation benefits to make the Executive whole for all reasonable costs relative to the requirement that he relocate his family residence from Austin, Texas to elsewhere; or (c) a Change in Control (as defined below) occurs. If any such events occur, then Executive shall be deemed to have been constructively discharged and Executive shall have the right to terminate his employment for Good Reason and receive the severance benefits described in this Agreement, provided that Executive notifies the Board of his election to terminate employment for Good Reason within sixty (60) days following any such event and the Board has not cured such event within ten (10) business days after the Board receives such notification. Notwithstanding anything herein to the contrary, if Executive’s employment terminates during the Term due to the Good Reason trigger set forth in the foregoing subsection (c), (i) Imation shall be solely responsible for payment of the Severance Payment, (ii) such Severance Payment shall be paid through the Company’s payroll, and Imation shall wire the Severance Payment to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof, and (iii) the Company and its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s).

For purposes of this Section 9 of the Agreement, “Change in Control” means the occurrence of any of the following events that qualifies as a “change in control event” (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i)) with respect to the Company:

(1)

a majority of the members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election;

(2)

any one person, or more than one person acting as a group (as determined under Treasury Regulation Section 1.409A-3(i)(5)(vii)(C)) acquires substantially all of the Company’s assets (an “Asset Sale”), unless the individuals who comprise the Board immediately prior to such Asset Sale constitute a majority of the board of directors or other governing body of either the entity that acquired such assets in such Asset Sale or its parent; or

(3)

any other transaction is consummated with respect to the Company that qualifies as a “change in control event” (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i)).

10. Termination Upon Expiration of Term. Executive’s employment under this Agreement shall automatically expire upon the expiration of the Term. In the event of such termination upon the expiration of the Term, the Company shall have no further financial obligations to Executive (or, as the case may be, to Executive’s heirs, devisees or estate) under this Agreement except for payment to Executive of the Accrued Rights and the Severance Payment described in and pursuant to the terms and conditions of Section 9; provided, that notwithstanding anything herein to the contrary, (i) Imation shall be solely responsible for payment of the Severance Payment in the event of a termination of Executive’s employment upon expiration of the Term, (ii) such Severance Payment shall be paid through the Company’s payroll, and Imation shall wire the Severance Payment to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof, and (iii) the Company and its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s).

11. Non-Solicitation.

(a) During the Restricted Period (as defined below), Executive shall not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly;

(i) solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates;

(ii) hire any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of the Company or its affiliates coincident with, or within one (1) year prior to or after, the termination of Executive’s employment with the Company;

(iii) solicit or encourage any person that serves as a contractor or consultant of the Company or its affiliates to discontinue providing services to the Company or any affiliate of the Company;

(iv) call on, solicit or service any customer or client of the Company or its affiliates with the intent of selling or attempting to sell any service or product the same or substantially similar to the services or products sold by the Company or its affiliates; or

(v) in any way materially interfere with the relationship between the Company or its affiliates and any customer, supplier, licensee or other business relation (or any prospective customer, supplier, licensee or other business relationship) of the Company or any of its affiliates (including, without limitation, by making any negative or disparaging statements or communications regarding the Company, any of its affiliates or any of their operations, officers, directors or investors).

(b) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to be reasonable, if a final judicial determination is made by an arbitrator or court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction or arbitrator finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

(c) For purposes of this Agreement, “Restricted Period” shall mean the period commencing on the Closing and ending twelve (12) months following the conclusion of Executive’s employment or the cessation of severance payments, whichever is shorter, whether such employment ends prior to or at the conclusion of the Term.

(d) The existence of any claim or cause of action by Executive against the Company or any of its affiliates, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by the Company of the provisions of Sections 11, 12 or 13, which Sections will be enforceable notwithstanding the existence of any breach by the Company. Notwithstanding the foregoing, Executive will not be prohibited from pursuing such claims or causes of action against the Company. Executive consents to the Company notifying any future employer of Executive’s obligations under Section 11, 12 and 13 of this Agreement and Company agrees to provide Executive copies of any such written notices contemporaneously with any such transmittal to others.

(e) In the event of any breach or violation by Executive of this Section 11, the Restricted Period will be tolled until such breach or violation has been duly cured.¹

12. Non-Competition.

(a) During the Restricted Period, Executive shall not (without the express written agreement of the Board), whether on Executive’s own behalf or on behalf of or in conjunction with any other person or entity, directly or indirectly whether as owner, partner, investor, consultant, agent, executive, co-venturer or otherwise (other than through ownership of publicly-traded capital stock of a corporation which represents less than two percent (2%) of the outstanding capital stock of such corporation), (i) compete with the Company or any parent, subsidiary or affiliate hereof in any business activities relating to the data storage industry in any state in the United States which the Company or any parent, subsidiary or affiliate thereof conducts business or sells products or services relating to the data storage industry, or (ii) undertake any planning for any business competitive with the Company or any parent, subsidiary or affiliate thereof relating to the data storage industry in any state in the United States which the Company or any parent, subsidiary or affiliate thereof conducts such business or sells such products or services.

¹ The non-prevailing party to any action or proceeding to enforce any provision of this Agreement or to obtain damages as a result of a breach of this Agreement or to enjoin any breach of this Agreement shall reimburse the prevailing party for any and all reasonable costs and expenses (including attorneys’ fees) incurred by the prevailing party in connection with such action or proceeding.

(b) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to be reasonable, if a final judicial determination is made by an arbitrator or court of competent jurisdiction that the time or territory’ or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction or arbitrator finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein or any other provision of this Agreement.

(c) The existence of any claim or cause of action by Executive against the Company or any of its affiliates, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by the Company of the provisions of Sections 11, 12 or 13, which Sections will be enforceable notwithstanding the existence of any breach by the Company. Notwithstanding the foregoing. Executive will not be prohibited from pursuing such claims or causes of action against the Company. Executive consents to the Company notifying any future employer of Executive’s obligations under Sections 11, 12, and 13 of this Agreement and Company agrees to provide Executive copies of any such written notices contemporaneously with any such transmittal to others.

(d) In the event of a breach or violation by Executive of this Section 12 the Restricted Period will be tolled until such breach or violation has been duly cured.

(e) The non-prevailing party to any action or proceeding to enforce any provision of this Agreement or to obtain damages as a result of a breach of this Agreement or to enjoin any breach of this Agreement shall reimburse the prevailing party for any and all reasonable costs and expenses (including attorneys’ fees) incurred by the prevailing party in connection with such action or proceeding.

13. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 11 or 12 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law. the Company shall be entitled to equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy that may then be available under the laws of the State of Texas.

14. Proprietary Information and Inventions Agreement. Executive will be required, as a condition of employment with the Company, to sign the Company’s Proprietary Information and Inventions Agreement, a copy of which is attached hereto as Exhibit A.

(a) For the avoidance of doubt, the Proprietary Information and Inventions Agreement does not prohibit or restrict Executive (or Executive’s attorney) from responding to any inquiry about the Agreement or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or governmental entity, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Executive understands and acknowledges that he does not need the prior authorization of the Company to make any such reports or disclosures and that he is not required to notify the Company that he has made such reports or disclosures.

(b) Executive understands that Executive may, without informing the Company prior to any such disclosure, disclose Proprietary Information, as defined in the Proprietary Information and Inventions Agreement (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, without informing the Company prior to any such disclosure, if Executive files a lawsuit against the Company for retaliation for reporting a suspected violation of law, Executive may disclose Proprietary Information to his attorney and use the Proprietary Information in the court proceeding or arbitration, provided that Executive files any document containing the Proprietary Information under seal and does not otherwise disclose the Proprietary Information, except pursuant to court order. Without prior authorization of the Company, however, the Company does not authorize Executive to disclose to any third party (including any government official or any attorney Executive may retain) any communications that are covered by the Company’s attorney-client privilege.

15. Miscellaneous.

(a) Tax Matters. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. You are encouraged to obtain your own tax advice regarding your compensation from the Company. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation.

(b) Governing Law; Arbitration.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas or applicable federal law, except that the Federal Arbitration Act shall govern the arbitration clauses of this Agreement.

(ii) Arbitration of all Disputes. All complaints, causes of action, disputes, claims or controversies (“claims”) between Executive and Company, including any past, present, or future claims, whether or not arising out of Executive’s employment (or its termination), that the Company may have against Executive or that Executive may have against any the Company or its officers, directors, employees or agents, parent, subsidiary affiliated entities, or successors and assigns of any of them, will be resolved through binding arbitration. The claims covered by this arbitration agreement include all disputes that the Company or Executive could otherwise pursue in state or federal court including, but not limited to, claims based on any state, federal, or local statute, regulation or ordinance (including claims for employment discrimination, retaliation or harassment, claims for unpaid wages or violation of state or federal wage and hour laws), as well as common law claims (including claims for breach of contract or breach of the implied covenant of good faith and fair dealing, wrongful discharge, defamation, misrepresentation, fraud, and infliction of emotional distress).

The following claims are not subject to arbitration under this Agreement: (1) claims for workers’ compensation benefits, state disability benefits, state unemployment benefits; (2) administrative charges filed with a federal, state or local government office or agency, such as the Equal Employment Opportunity Commission (“EEOC”) or any comparable state anti-discrimination agency, or the National Labor Relations Board (“NLRB”); and (3) any claims that, as a matter of law, cannot legally be subject to arbitration. Nothing in these provisions shall preclude either Executive or the Company from seeking temporary or injunctive relief in a court prior to determining the claim in arbitration.

To the maximum extent permitted by law, Executive hereby waives any right to bring on behalf of persons other than Executive, or to otherwise participate with other persons in, any class or collective action (a type of lawsuit in which one or several persons sue on behalf of a larger group of persons).

The arbitration shall be conducted by a single neutral arbitrator in accordance with the then-current Employment Arbitration and Mediation Procedures of the American Arbitration Association (“AAA”), which can be viewed at http://www.adr.org/employment. The Company will provide Executive with a copy of these rules upon request. The arbitration shall take place in the county of the state in which Executive is or was last employed by the Company, with the understanding the such location is currently Austin, Texas. The Company will pay the arbitrator’s fee and will bear all administrative charges by AAA. All parties shall be entitled to engage in reasonable pre-hearing discovery to obtain information to prosecute or defend the asserted claims. Any disputes between the parties regarding the nature or scope of discovery shall be decided by the arbitrator. The arbitrator shall hear and issue a reasoned written ruling upon any dispositive motions brought by either party, including but not limited to, motions for summary judgment or summary adjudication of issues.

After the hearing, the arbitrator shall issue a reasoned written decision setting forth the award, if any, and explaining the basis therefore. The arbitrator shall have the powder to award any type of relief that would be available in court. The arbitrator’s award shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. In the event of any conflict in the arbitration procedures set forth in this Agreement and the AAA rules specified above, the AAA rules shall control.

Notwithstanding the foregoing, and regardless of what is provided by AAA’s rules, to the extent that it is legally permissible to do so, the arbitrator will not have authority or jurisdiction to consolidate claims of different employees into one proceeding, nor shall the arbitrator have authority or jurisdiction to hear the arbitration as a class action. As noted above, Executive has waived any right to bring any class or collective action. To the extent that the class or collective action waiver described above is not enforceable, the issue of whether to certify any alleged or putative class for a class action proceeding must be decided by a court of competent jurisdiction. The arbitrator will not have authority or jurisdiction to decide class certification or collective action issues. Until any class certification or collective action issues are decided by the court, all arbitration proceedings shall be stayed, and the arbitrator shall take no action with respect to the matter. However, once any issues regarding class certification or collective action have been decided by the court, the arbitrator will have authority to decide the substantive claims.

This arbitration provision is governed by the Federal Arbitration Act (9 U.S.C. § 1, et seq.) and evidences a transaction involving commerce. If the Federal Arbitration Act is held not to apply, the arbitration law of the State of Texas shall apply. We intend that this Agreement be limited to those claims that may legally be subject to a pre-dispute arbitration agreement under applicable law. A court or arbitrator construing this Agreement may therefore modify or interpret it to render it enforceable.

(c) Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and those incorporated herein.

(d) No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(e) Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(f) Assignment. This Agreement and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force or effect. This Agreement may be assigned by the Company to a person or entity that, is an affiliate or a successor in interest to substantially all of the business operations of the Company. Any assignment of this Agreement by the Company or Executive shall not release the Company or Executive, respectively, of its or his obligations under this Agreement.

(g) Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees,

(h) Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company or Imation and/or their affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates.

(i) Corporate Opportunities. Executive will submit to the Board all business, commercial and investment opportunities or offers presented to Executive or of which Executive becomes aware which relate to the businesses of the Company or its subsidiaries as such businesses of the Company or its subsidiaries exist at any time during the period in which Executive is employed by the Company (“Corporate Opportunities”). Unless approved by the Board, Executive will not accept or pursue, directly or indirectly, any Corporate Opportunities on Executive’s own behalf.

(j) Counterparts. This Agreement may be executed by facsimile or PDF signature and in two (2) or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(k) Executive’s Representations. Executive hereby represents and warrants to the Company that (i) he has entered into this Agreement of his own free will for no consideration other than as referred to herein, (ii) the execution, delivery and performance of this Agreement by Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which Executive is bound, (iii) Executive is not a party to or bound by any employment, noncompetition, confidentiality or other similar agreement with any other Person except prior employers, and Executive represents and warrants that none of said prior agreements prohibit or in any way interfere with Executive’s performance under this Agreement, and (iv) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that Executive has had the opportunity to consult with independent legal counsel regarding Executive’s rights and obligations under this Agreement and that Executive fully understands the terms and conditions contained herein, and that the parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties 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.

(l) Time of the Essence. Time shall be of the essence in connection with all payments promised in this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

	“COMPANY”

	Nexsan Corporation

	By:	/s/ Danny Zheng
	Name:	Danny Zheng
	Title:	Secretary

	“IMATION” (solely as to Sections 3, 4, 9(b) and 10)

	Imation Corp.

	By:	/s/ Joseph A. De Perio
	Name:	Joseph A. De Perio
	Title:	Non-Executive Chairman

	“EXECUTIVE”

	/s/ Robert B. Fernander
	Robert B. Fernander

Exhibit A

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

The following confirms my agreement with Nexsan Corporation (“Company”) and I, Robert B. Fernander, that is a material part of the consideration for my employment by Company:

1. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement or my employment with Company. I will not violate any agreement with or rights of any third party or. except as expressly authorized by Company in writing hereafter, use or disclose any own or any third party’s confidential information or intellectual property when acting within the scope of my employment or otherwise on behalf of Company. Further, I have not retained anything containing any confidential information of a prior employer or other third party, whether or not created by me.

2. Company shall own all right, title and interest (including all intellectual property rights of any sort throughout the world) relating to any and all inventions, works of authorship, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by me in connection with my employment with Company to and only to the fullest extent allowed by law (“Inventions”) and I will promptly disclose all Inventions to Company. This provisions in this Agreement requiring you to assign, or offer to assign, any of your rights in an Invention shall not apply to an Invention that you developed entirely on your own time without using the Company’s equipment, supplies, facilities, or trade secret information except for those inventions that either (A) Relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated research or development of the Company; or (B) Result from any work performed by the you for Company. Without disclosing any third party confidential information. I will disclose anything I believe is excluded by this Agreement so that the Company can make an independent assessment. I hereby make all assignments necessary to accomplish the foregoing. I shall assist Company, at Company’s expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned. I irrevocably designate and appoint Company as my agent and attorney-in-fact, coupled with an interest and with full power of substitution; to act for and in my behalf to execute and file any document and to do all other lawfully permitted acts to further the purposes of the foregoing. If I wish to clarify anything created by me prior to my employment that relates to Company’s actual or proposed business, I have listed it on the attached disclosure in a manner that does not violate any third party rights or disclose any confidential information. Without limiting the above or Company’s other rights and remedies, if, when acting within the scope of my employment or otherwise on behalf of Company, I use or disclose my own or any third party’s confidential information or intellectual property (or if any Invention cannot be fully made, used, reproduced, or distributed without using or violating the foregoing). Company will have and I hereby grant Company a perpetual, irrevocable, worldwide, royalty-tree, fully paid-up, non-exclusive, sublicensable right and license to exploit and exercise all such confidential information and intellectual property rights.

3. To the extent allowed by law, the foregoing paragraph includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral” or the like (collectively “Moral Rights”). To the extent I retain any such Moral Rights under applicable law, I hereby ratify and consent to any action that may be taken with respect to such Moral Rights by or authorized by Company and agree not to assert any Moral Rights with respect thereto. I will confirm any such ratifications, consents and agreements from time to time as requested by Company.

4. I agree that all Inventions and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees) I develop, learn or obtain during the my employment that relate to Company or the business or demonstrably anticipated business of Company or that are received by or for Company in confidence, constitute “Proprietary Information.” I will hold in confidence and not disclose or. except within the scope of my employment, use any Proprietary Information. Upon termination of my employment, I will promptly return to Company all items containing or embodying Proprietary Information (including all copies), except that I may keep my personal copies of (i) my compensation records, (ii) materials distributed to shareholders or Directors generally (to the extent I remain a Director) and (iii) this Agreement. I also recognize and agree that I have no expectation of privacy with respect to Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice.

5. I agree that my obligations under this Agreement shall continue in effect after termination of my employment, regardless whether such termination is voluntary or involuntary on my part, and that Company is entitled to communicate my obligations under this Agreement to any future employer or potential employer of mine, provided that I receive a copy of such communications in a timely manner.

6. This Agreement is fully assignable and transferable by Company, but any purported assignment or transfer by me is void. I also understand that any breach of this Agreement will cause irreparable harm to Company for which damages would not be an adequate remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other remedies and without any requirement to post bond.

I HAVE READ THIS PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH IT IMPOSES UPON, ME WITHOUT RESERVATION.

November 22, 2016		/s/ Robert B. Fernander
		Robert B. Fernander

Accepted and Agreed to:

/s/ Danny Zheng
By: Danny Zheng
Title: Secretary

Disclosure of Inventions

Title	Date	Identifying Number or Brief Description

Disclosure of Advisory Activities

Title
I-O Switch
SSG
FLM TV

__ No inventions or improvements

__ Additional Sheets Attached

Signature of Employee:

/s/ Robert B. Fernander

Print Name of Employee:

Robert B. Fernander

Date: November 22, 2016

Exhibit 99.1

Strictly Confidential. Not for Distribution. STOCKHOLDER PRESENTATION November 2016 ASSET MANAGEMEN T FinTECH

IMPORTANT DISCLOSURES AND DISCLAIMERS 1 Additional Information About the Transaction and Where to Find It In connection with the proposed issuance of shares of common stock (the “Capacity Shares”) of Imation Corp . (“Imation” or the “Company”) to Clinton Group, Inc . (“ Clinton G roup”) and the proposed sale of equity interests of Nexsan Corporation and its wholly owned subsidiaries and related subsidiary Connected Data, Inc . (collectively, “Nexsan”) ( the “Nexsan Transaction”) , the Company intends to file with the U . S . Securities and Exchange Commission (“SEC”) a preliminary proxy statement . When completed, the Company intends to mail a definitive proxy statement and other relevant documents to its stockholders in connection with its solicitation of proxies for the special meeting of stockholders to be held to approve the proposed issuance of Capacity Shares and the Nexsan Transaction . This presentation does not contain all the information that should be considered concerning the proposed issuance of Capacity Shares and the Nexsan Transaction . It is not intended to provide the basis for any investment decision or any other decision in respect to the proposed issuance of Capacity Shares and the Nexsan Transaction . The Company’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement, the amendments thereto, and definitive proxy statement in connection with the Company’s solicitation of proxies for the special meeting to be held to approve the proposed issuance of Capacity Shares and the Nexsan Transaction, as these materials will contain important information about the Company, the proposed issuance of Capacity Shares and the Nexsan Transaction . The definitive proxy statement will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed issuance of Capacity Shares and the Nexsan Transaction . Stockholders will also be able to obtain copies of the proxy statement and other documents filed with the SEC that will be incorporated by reference in the proxy statement, without charge, once available, at the SEC’s web site at (www . sec . gov), or by directing a request to : Imation Corp . , 1099 Helmo Ave . N . , Suite 250 , Oakdale, Minnesota 55128 , Attn : Corporate Secretary, ( 651 ) 704 - 4000 . Participants in Solicitation The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed issuance of Capacity Shares and the Nexsan Transaction . Information regarding the special interests of these directors and executive officers in the proposed issuance of Capacity Shares and the Nexsan Transaction will be included in the proxy statement referred to above . Additional information regarding the directors and executive officers of the Company is also included in the Company’s Annual Report on Form 10 - K for the year ended December 31 , 2015 , which is available free of charge at the SEC web site (www . sec . gov) and at the address described above and will also be included in the definitive proxy statement for the proposed issuance of Capacity Shares and the Nexsan Transaction when available . Forward Looking Statements This presentation may include “forward looking statements” within the meaning of the “safe harbor” provisions of the United Stated Private Securities Litigation Reform Act of 1995 . Forward - looking statements are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected . Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “seeks” and variations and similar words and expressions are intended to identify such forward - looking statements . Such forward - looking statements with respect to the transactions contemplated by the Subscription Agreement, the Capacity and Services Agreement and the Registration Rights Agreement relating to the issuance of the Capacity Shares and the Stock Purchase Agreement, Note and Stockholder’s Agreement related to the Nexsan Transaction (collectively, the “Transaction Documents”) are based on current expectations that are subject to risks and uncertainties . A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward - looking statements . These factors include, but are not limited to : ( 1 ) the occurrence of any event, change or other circumstances that could give rise to the termination of the Subscription Agreement or the Stock Purchase Agreement, ( 2 ) the outcome of any legal proceedings that may be instituted against the Company or others following announcement of the transactions contemplated by the Transaction Documents ; ( 3 ) the inability to complete the transactions contemplated by the Transaction Documents due to the failure to obtain approval of the stockholders of the Company or other conditions to closing in the Subscription Agreement or the Stock Purchase Agreement, ( 4 ) delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulatory reviews required to complete the transactions contemplated by the Transaction Documents ; ( 5 ) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the transactions described herein ; ( 6 ) the ability to recognize the anticipated benefits of the proposed transactions ; ( 7 ) costs related to the proposed transactions ; ( 8 ) changes in applicable laws or regulations ; ( 9 ) the possibility that Clinton Group may be adversely affected by other economic, business, and/or competitive factors ; and ( 10 ) other risks and uncertainties indicated from time to time in the proxy statement relating to the proposed issuance of Capacity Shares and the Nexsan Transaction, including those under “Risk Factors” therein, and other filings with the SEC by the Company . Readers are cautioned not to place undue reliance upon any forward - looking statements, which speak only as of the date made, and the Company undertakes no obligation to update or revise any forward - looking statements whether as a result of new information, future events or otherwise, except as required by law . Disclaimers This communication shall not constitute an offer to sell or the solicitation of an offer to buy the Capacity Shares or any other security . The Capacity Shares have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements . Statements contained in this presentation relate to the historical experience of Clinton Group . An investment in the Company is not an investment in Clinton Group . The historical results of Clinton Group are not necessarily indicative of future performance of the Company or its subsidiaries

2015 2016 2017 RE - BIRTH OF IMATION | 2 Identify Problems Active Restructuring Execution & Growth • Three Directors replaced at 2015 Annual Meeting • CEO resigned in Q3 ‘15 • Profitability and capital requirements of all business lines were examined • Executive bonus compensation was frozen and board compensation was significantly reduced • Company began examining strategic alternatives for excess capital • Legacy businesses wound down • Sold non - core assets (IronKey, HQ real estate, Memorex trademarks) • Significantly reduced cash burn and staved off potential future insolvency • Actively manage cash and investment securities (including liquidation of Sphere3D shares) • Capital deployed to purchase Connected Data to give Nexsan “on - trend,” disruptive technology, and Nexsan positioned for growth and profitability • Imation consummates Nexsan Transaction while preserving potential equity value upside from their ongoing development and market penetration • Pre - money valuation of $25 million versus current market capitalization of Imation at $23 million • Nexsan’s UNITY ™ product line combines performance, scalability and value with private cloud file system synchronization and mobile data support and is the driver of future equity value • Imation enters into agreement with Clinton Group, Inc. (“ Clinton Group”) to jumpstart asset management business • Furthers the stated goal of developing a publicly traded asset management firm poised for long - term growth and capital appreciation • Previously established investment advisor will manage third party capital at closing Evolution of Imation over the Last 15 Months Phase 1 Eliminated money losing businesses, and harvested capital from non - core assets Investment in enhanced technology with Nexsan to create a disruptive product line Imation consummates Nexsan Transaction to sell Nexsan equity while maintaining upside Phase 2 Path Forward – Two Corporate Transactions Launch asset management business and further corporate vision

THE VISION | 3 Providing Financial Solutions Through Financial Technology THE ASSET MANAGEMENT WORLD CAN BENEFIT FROM INNOVATIVE THINKING Goal is to develop an in - house asset management business focused on financial technology Initially, “Newco,” Imation's subsidiary and an investment adviser, will innovate with proven strategies such as technology - driven trading Newco will be renamed and rebranded at closing Business plan contemplates multi - year growth through identified business models within asset management Numerous growth avenues going forward provide opportunities for sustained performance Business plan has a 3 year target for assets under management of $500 million and which we expect will result in profitability MULTIPLE AVENUES FOR GROWTH AND SUCCESS The company would act as both a principal (investing its own capital) to seed new investment programs, funds and products and as an asset manager for third - party investor capital “Alternative asset” classes include hedge funds and other non - traditional investment programs There is a significant amount of investment management talent seeking robust infrastructure and centralized services Recent regulatory changes, reporting requirements and demand for transparency make now an opportune time for launch PUBLIC COMPANY FORMAT AFFORDS NUMEROUS ADVANTAGES The visibility and scrutiny of a public company will give clients additional confidence The ability to use the public currency to attract managers or acquire firms is powerful Valuation of these firms – given the visible, recurring revenue – provides an attractive liquidity option for successful managers Imation will transition and become a publicly traded alternative asset manager and proprietary investor with financial technology at its core.

EXECUTIVE SUMMARY – NEXSAN TRANSACTION | 4 Transaction with Spear Point provides Nexsan additional runway for growth and puts Imation in a senior secured position in the capital structure with a conversion feature KEY TERMS FOR IMATION Pre - money valuation of $25 million NXSN Acquisition Corp. (“NXSN”), an affiliate of Spear Point Capital Management LLC, will purchase from Imation all of the common stock of Nexsan and its subsidiaries (including Connected Data) and thereafter will issue up to $10 million of convertible preferred equity, the proceeds of which will be used to provide additional capital to Nexsan. • PIK dividends at a rate of 5% per annum for the first two years and 8% per annum thereafter • Participating preferred equity with convertible feature at 120% of par In exchange for its Nexsan common stock, Imation will receive a $ 25 million senior secured convertible promissory note maturing three years from closing (the “Note”) • The Note will bear cash interest at a rate of 5% per annum for the first two years and 8% per annum thereafter • $10 million of the Note is convertible into common equity of NXSN at a premium of 25% 45 Day “Go Shop” to secure a superior proposal Board received financial advice from Cypress Associates, LLC IMPACT TO IMATION Transaction provides Nexsan with the additional capital necessary to continue its trajectory of value creation with its emerging technology in enterprise file, synch and share Transaction eliminates Imation’s need to fund Nexsan's ongoing requirements New equity holders may want the opportunity to enhance growth through additional capital investments or other bolt - on acquisitions Imation preserves potential upside from equity value creation at Nexsan and the growth of UNITY™ Transaction eliminates Imation’s need to fund Nexsan's ongoing requirements while preserving potential upside from equity value creation at Nexsan and the growth of UNITY™

EXECUTIVE SUMMARY – NEWCO TRANSACTION | 5 STRATEGIC AGREEMENT WITH CLINTON GROUP Imation has entered into a strategic agreement with Clinton Group Newco bypasses traditional seeding models with typical long roll out, by instantly operating with Clinton Group’s quantitative equity strategy (the “Strategy”) and assistance with certain services This transaction leverages Clinton Group’s infrastructure and intellectual property and will minimize the time to deliver profitability. Infrastructure includes select trading systems, fund raising and operations teams Clinton Group will reserve exclusive capacity for Imation within its Strategy Newco will work to deliver third - party investors in Newco’s offering at closing Transaction Milestones: • August 2015: Strategic Alternatives Committee formed to develop strategic value creation initiatives and make recommendations to the Board regarding the Company’s use of excess capital • July 2016: Board received a formal transaction proposal from Clinton Group and subsequently formed a ‘Special Committee’ of independent directors not directly or indirectly affiliated with Clinton Group and who are not members of Imation's management. Committee explored and retained advisors to independently review the transaction • Board received financial advice from Stifel Financial Corp. and Cypress Associates, LLC Transaction jumpstarts Imation’s transition into a diversified asset management firm Newco intends to provide solutions for institutional and retail investors that address the failure of most current hedge fund platforms to live up to the expectation of enhanced risk adjusted returns. Fixed and variable portions of revenue and expenses will match up well, and we expect a consistently profitable business. JUMPSTART ASSET MANAGEMENT The proposed structure will assist Imation in overseeing the assets currently on the Company’s balance sheet to build a sustainable, profitable business Newco will be able to disrupt conventional money management by using algorithms and other quant strategies designed with the goal of outperforming financial markets Start building its own track record with a combination of proprietary and strategic seed capital The Board believes the transaction will provide an attractive risk - adjusted return on capital for Newco Proven leadership team in place

Strictly Confidential. Not for Distribution. February 2016 August 2015 April 2016 October 2015 Imation employed best practices throughout the most recent joint venture. • Board of Imation forms a ‘Strategic Alternatives Committee’ • Goal is to develop strategic value creation initiatives and make recommendations to the Board regarding the Company’s use of excess capital • Company announces initiative to explore alternative uses of excess capital. • The Company amended its cash investment policy to permit investments into stocks, index funds, mutual funds and other investment funds. • Board approved plan to establish a Registered Investment Advisor. • The Board receives a formal transaction proposal from Clinton Group. • The Board forms a ‘Special Committee’ of independent directors to represent Imation. • The Company explores and retains advisors and consultant to independently review the transaction. • Imation enters into a term sheet with Clinton Group detailing the terms of a proposed transaction. • The Board, in conjunction with management, continued to explore and develop initiatives relating to developing revenue generating product offerings. • The Board is introduced to Robert Picard, a 25 Year Hedge Fund Industry Veteran who has built 4 separate multi - billion alternative investment platforms. • The Company evaluates several business opportunities. July 2016 - November 2016 • Imation Special Committee engages Weinberg, Zareh and Geyerhahn LLP as Counsel to the Special Committee in addition to Winston and Strawn who serves as counsel to Imation. • Special Committee engages Stifel Financial Corp. and Cypress Associates LLC as financial advisors. • Imation consultants perform independent reviews and due diligence on alternatives. • Imation sends feedback to Clinton Group and receives a revised transaction proposal • Term Sheet between Clinton Group and Imation is executed. TRANSACTION TIMELINE | 6

TRANSACTION: IMATION RECEIVES INVESTMENT CAPACITY AND SERVICES | 7 IMATION TRADING CAPACITY • Imation will receive $ 500 million long and $ 500 million short of investment capacity within Clinton Group’s Strategy • Clinton Group has historically experienced attractive returns with its use of the Strategy • The Strategy is market neutral and designed to provide returns that are not correlated to those of the overall stock market • The Strategy combines multiple layers of quantitative models and sophisticated risk management oversight that provides investors with consistent long term performance • Flexibility allows for optimal capital allocation as the Company can deploy capital as opportunities present themselves • In addition to investing its own capital, Imation will have the opportunity to raise additional third party capital to invest, thereby dramatically increasing its revenue potential • For the duration of the relationship, Clinton Group will provide administrative, marketing and support services CONSIDERATION TO CLINTON GROUP • Imation will issue 12 . 5 million primary common shares to Clinton Group upon the closing of the transaction, valued at approximately $ 7 . 8 million • In exchange for the shares, Imation will receive gross capacity within the Strategy of $ 1 billion - or $ 500 million long and $ 500 short – for five years (the “Capacity ”) which it can adapt or modify at its discretion • The Capacity is available for Imation to utilize at its discretion, with the intention of Imation launching and operating its own self - branded multi - strategy fund • At Imation’s option, it may expand its access to capacity at Clinton Group up to a total of $ 1 . 5 billion ( $ 750 million long and $ 750 million short) for an additional 2 . 5 million shares (the “Capacity Expansion”) • Following the fifth anniversary of the transaction, Imation will have the option to extend the term of the Capacity for two one - year periods in exchange for $ 1 . 75 million per year ( $ 2 . 5 million per year in each case if Imation has previously opted for the Capacity Expansion )

NEWCO: ASSET MANAGEMENT BUSINESS | 8 ASSET MANAGEMENT ▪ Manage capital for pension plan sponsors, institutional investors and high net worth individuals – Investment managers with strong, risk - adjusted returns and robust infrastructure are in demand ▪ Business model consists of a management fee tied to the amount of capital under management and a performance fee that rewards the manager for investment returns – Once gathered, assets are “sticky” and provide long - term, recurring revenue – At scale, fixed operating expenses are easily covered by management fees – Most of the expense – compensation for professionals – varies with performance, as does the performance - fee revenue, providing a good revenue - expense match ▪ Recurring revenue and profit visibility are attractive to public market investors ▪ Opportunistically execute acquisitions of other emerging managers or joint ventures or strategic partnerships PRINCIPAL INVESTING ▪ Invest off the Company’s balance sheet to enhance returns and aid in launching new strategies – With intimate knowledge of the investment strategies and their risk, the Company becomes the “best investor” in the strategies – Little to no additional cost associated with putting the Company’s own capital to work ▪ With Imation’s financial attributes, short - term investment strategies are very attractive ▪ As a result of new regulations, banks are being forced to exit proprietary investing, which has been a source of large profits – Investors who sought exposure to alternative investment classes through public stock have fewer choices – Proprietary investing aligns the interest of the company with its investment management clients

NEWCO: STRATEGY AT LAUNCH | 9 DAY 1: LAUNCH THE NEWCO MULTI - STRATEGY FUND • Will provide investors with Day 1 investment solution by launching multi - strategy fund with first allocation to a Clinton Group quantitative equity sub - advisory relationship during Q1 2017 • Goal of achieving consistent competitive risk - adjusted returns and structural flexibility to add new strategies over time • Newco will build its own independent organizational foundation, while still leveraging Clinton Group’s capabilities and infrastructure • Will work between signing and closing to deliver Day 1 investors NEAR - TERM DEVELOPMENT STRATEGY • Newco would act as both a principal (investing its own capital) and as a manager for third - party capital • Onboard investment talent under its umbrella • Opportunistically execute acquisitions of other emerging managers or joint venture deals • “Raise Third Party Capital, Expand Multi - Strategy Fund and Launch New Products” Newco will be able to provide solutions that can be tailored to the unique needs of individual investors

NEWCO: ACTIVITIES TO DATE | 10 INSTITUTIONAL POLICIES AND PROCESSES • Institutional quality investment policies and processes, including Investment Committees (portfolio management, investment policy, and risk management committees) have been established • Institutional asset management policies on asset allocation, strategy allocation, and portfolio construction • Risk management including guidelines for portfolio risk monitoring, portfolio risk corrective action and compliance monitoring • Detailed talent a cquisition road map developed to maintain constant pipeline of talented portfolio managers and analysts FUND GOVERNANCE • Newco will employ institutional policies and processes for fund set up and oversight • Newco will have an independent board of directors FRONT – MIDDLE – BACK - OFFICE ARCHITECTURE • Combine the latest technology for financial servicing with the experience of our investment and risk professionals to build, hedge and operate all strategies • Strategically acquire the technology for in - house FinTech and outsource systems for middle and back office activities • Outlined sub - advisor infrastructure architecture Newco endeavors to establish “best - in - class” policies and processes. Efficient administrative support architecture has been designed to provide flexibility.

IMATION: AUTHORIZED SHARE REPURCHASE PROGRAM | 11 SHARE REPURCHASE PROGRAM • Board recently authorized a share repurchase program • Up to 5 million shares of common stock approved to be repurchased • Authorization replaces the Board's previous share repurchase authorization from May 2, 2012 • To the extent Imation repurchases shares, the timing and manner of such repurchases, will depend on a variety of factors including market conditions, regulatory requirements and other corporate considerations, as determined by Imation’s Audit and Finance Committee • Imation is not obligated to repurchase any specific number of shares under the repurchase program, and repurchases may be suspended or discontinued at any time without prior notice • Imation expects to finance the repurchases with existing cash balances Imation’s Board of Directors authorized a share repurchase program under which Imation may repurchase up to 5 million of its outstanding shares of common stock Under the share repurchase program, Imation may repurchase shares from time to time using a variety of methods, which may include open market transactions and privately negotiated transactions

| 12 ATTRACTIVE STOCK We expect that the stock will be attractive to public market investors, providing current shareholders a solid return: - Will benefit from scarcity value as one of the only public alternative asset management firms - Stock can provide investors with a better liquidity option (and better financing) than a fund participation (LP) interest for investors seeking exposure to alternative investment strategies TRANSPARENCY Potential clients of the Company will take comfort in the scrutiny and published financials of a public company BUYING POWER The Company’s cash and assets can be used to promote economies of scale and growth through seeding new investment programs, building or buying new investment teams and making select proprietary investments FUNDRAISING BENEFITS The Company’s ability to raise additional investor capital for its fund family should serve as a natural accelerant to earnings TURNKEY Focused on establishing a business which can launch immediately with access to a robust infrastructure and improved capital allocation decisions INDUSTRY GROWTH Interest in quantitatively managed assets is growing and will provide a substantive tailwind VALUE CREATION FOR IMATION STOCKHOLDERS

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