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IMATION, EXABYTE ANNOUNCE STRATEGIC AGREEMENT

Imation Corp, a worldwide leader in removable data storage media, and Exabyte Corp, a performance and value leader in tape backup systems, announced an agreement that establishes Imation as the exclusive worldwide distributor of Exabyte brand media products. As part of the agreement, Imation will also make an equity investment in Exabyte, representing less than 5 percent of total equity. The total dollar value of the transaction, when fully completed, is $20 million, the majority of which is for distribution rights.

Under the agreement, Exabyte will sell all of its media products exclusively to Imation. Imation will manage the Exabyte media brand and provide sales, marketing and distribution services for Exabyte media products worldwide -- including VXA and Mammoth technologies. This partnership utilizes Imation's worldwide distribution capabilities and global customer reach to enhance the sales and distribution of Exabyte media products, particularly in Latin America, Europe and Asia, where Imation has a long-established presence and customer base.

"Imation is committed to delivering the broadest portfolio of removable data storage media to the market as we leverage our efficient supply chain and global distribution capabilities. Adding the Exabyte VXA line to our portfolio is a powerful statement of our commitment to invest in profitable growth opportunities, and we expect it to be accretive," said Frank Russomanno, president of Imation's Data Storage and Information Management business. "Leading storage OEMs, end-user customers, and distributors continue to trust Imation's industry leadership -- from technology development and manufacturing know-how to our broad portfolio and extensive customer experience -- to meet their needs for high-quality, reliable removable data storage media."

"Imation is a widely recognized business and technology leader in the data storage media market. Our relationship with Imation represents a major vote of confidence for the exciting opportunity we all see for VXA technology and the future of Exabyte," said Tom Ward, Exabyte president and CEO. "The Imation investment clearly validates the VXA format, provides capital for future product development and will help secure the VXA roadmap."

VXA Packet technology is a powerful solution for the fast growing small and mid-sized server markets that require high-capacity, high-performance data backup and disaster recovery solutions at an affordable price. The growing acceptance of Exabyte's VXA Packet Technology by VARs and major OEMs, such as IBM's selection of VXA-2 Packet Drives for its popular business class eServer lines -- pSeries, iSeries and xSeries -- was a key motivator that brought the companies together. During the last 14 months, Exabyte has signed nine new OEM agreements and enrolled more than 700 new resellers for its VXA products. In the nine months ended Sept. 27, Exabyte reported $32 million in storage media revenues.

"We expect Exabyte media customers will experience little change in their business after a brief conversion period during which we will transition customer accounts to Imation," added Bob Ariniello, vice president of media and Exabyte's team leader of the implementation plan. "Imation will use the same product part numbers previously used by Exabyte, which will help minimize the effort to switch sourcing to Imation. We believe all of our customers will benefit from Imation's proven excellence in distribution and service."

Imation will be equipped to take orders from a select number of United States distributors for Exabyte media beginning Nov. 17, with full transition expected to be complete by end of the year. For more information, visit www.exabyte.com.