Exhibit 10.1

 

BARCLAYS

745 Seventh Avenue

New York, New York 10019

  

JPMORGAN CHASE BANK, N.A.

383 Madison Avenue

New York, New York 10179

January 30, 2018

Seattle Genetics, Inc.

21823 30th Drive SE

Bothell, WA 98021

Project Valley

Commitment Letter

$400,000,000 364-Day Term Loan Facility

Ladies and Gentlemen:

You have advised Barclays Bank PLC (“Barclays”) and JPMorgan Chase Bank, N.A.
(“JPMCB” and, together with Barclays, the “Commitment Parties” or “we” or “us”)
that Seattle Genetics, Inc., a Delaware corporation (the “Borrower” or “you”),
seeks financing to consummate the Transactions (such term and each other
capitalized term used but not defined herein having the meanings assigned to
them in Annex A hereto and the Term Sheet referred to below). This letter,
including the Term Sheet, the Transaction Description attached hereto as Annex A
and the Conditions Annex attached hereto as Annex C (the “Conditions Annex”), is
hereinafter referred to as the “Commitment Letter”.

1.    Commitments. Upon the terms set forth in this Commitment Letter and
subject to satisfaction or waiver of the conditions expressly set forth in the
Conditions Annex, each of Barclays and JPMCB (in such capacities, the “Initial
Lenders”) is pleased to advise you of its commitment to provide to the Borrower,
on a several and not joint basis, 50% and 50%, respectively, of the aggregate
principal amount of the Term Facility (the “Commitment”).

2.    Titles and Roles. Barclays and JPMCB, in each case acting alone or through
or with affiliates selected by it, will act as bookrunner, lead arranger and
syndication agent (in such capacities, collectively, the “Lead Arrangers”) in
arranging the Term Facility. Barclays will act as the sole administrative agent
(in such capacity, the “Administrative Agent”) for the Term Facility. No
additional agents, co-agents, arrangers or bookrunners will be appointed and no
other titles will be awarded and no other compensation will be paid (other than
compensation expressly contemplated by this Commitment Letter and the fee letter
dated the date hereof among the Commitment Parties and you (the “Fee Letter”))
unless you and the Lead Arrangers shall agree in writing. It is understood and
agreed that Barclays will have the “left” and “highest” placement in any and all
marketing materials or other documentation used in connection with the Term
Facility and shall hold the leading role and responsibilities conventionally
associated with such placement, including maintaining sole physical books for
the Term Facility. You agree that JPMCB may perform its responsibilities
hereunder through its affiliate, J.P. Morgan Securities LLC.

3.    Conditions to Commitment. The Commitment and undertakings of the
Commitment Parties hereunder are subject solely to the satisfaction or waiver of
the conditions precedent set forth in the Conditions Annex.

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Notwithstanding anything in this Commitment Letter, the Fee Letter or the
Financing Documentation (as defined in the Conditions Annex) or any other letter
agreement or other undertaking concerning the financing of the Transactions to
the contrary, (a) the only representations and warranties the accuracy of which
shall be a condition to the availability of the Term Facility on the Closing
Date, shall be (i) such of the representations made by the Target with respect
to the Target or its businesses in the Acquisition Agreement as are material to
the interests of the Lenders, but only to the extent that you or any of your
affiliates have the right (taking into account any applicable cure periods) to
terminate your or such affiliate’s obligations under the Acquisition Agreement
or otherwise decline to close the Acquisition (in each case, in accordance with
the terms of the Acquisition Agreement) as a result of a breach of any such
representations and warranties in the Acquisition Agreement or any such
representation or warranty not being accurate (the “Specified Acquisition
Agreement Representations”) and (ii) the Specified Representations (as defined
below) and (b) the terms of the Financing Documentation shall be in a form such
that they do not impair the availability of the Term Facility on the Closing
Date if the conditions set forth in Annex B are satisfied or waived by the
Lenders (it is understood that, to the extent any guaranty or lien search or
security interest in the intended Collateral (other than (x) in the certificated
equity securities of any material wholly owned U.S. domestic subsidiaries of the
Borrower (other than the Target and its subsidiaries) and related stock powers
to the extent constituting Collateral, (y) Uniform Commercial Code (“UCC”) lien
searches in an entity’s jurisdiction of organization for entities organized in
the United States and (y) any Collateral the security interest in which may be
perfected by the filing of a UCC financing statement for entities organized in
the United States) is not or cannot be provided or perfected in accordance with
the Term Sheet on the Closing Date after your use of commercially reasonable
efforts to do so or without undue burden or expense, then the provision of any
such guaranty or lien search and/or the perfection of security interests in such
Collateral shall not constitute a condition precedent to the availability of the
Term Loans on the Closing Date, but shall be required to be delivered and/or
perfected within 60 days after the Closing Date (in each case, subject to
extensions to be reasonably agreed upon by the Administrative Agent)). For
purposes hereof, “Specified Representations” means the representations and
warranties of the Loan Parties set forth in the Term Loan Documentation relating
to corporate or other organizational existence and good standing in such Loan
Party’s jurisdiction of organization; power and authority, due authorization,
execution and delivery and enforceability, in each case, relating to the Loan
Parties’ entering into and performance of the Financing Documentation;
enforceability of the Financing Documentation against the Loan Parties; no
conflicts with or consents required under the Loan Parties’ organizational
documents relating to entering into and performance of the Financing
Documentation; solvency as of the Closing Date (after giving effect to the
Transactions, with solvency being determined in a manner consistent with
Exhibit D to this Commitment Letter) of the Loan Parties on a consolidated
basis; Federal Reserve margin regulations; the Investment Company Act; use of
proceeds in violation of the PATRIOT Act, OFAC and FCPA. This paragraph, and the
provisions herein, shall be referred to as the “Limited Conditionality
Provision”.

4.    Syndication.

(a)    The Lead Arrangers reserve the right, both prior to and after the Closing
Date, to secure commitments for the Term Facility from a syndicate of banks,
financial institutions and other entities reasonably acceptable to you (such
financial institutions and other entities committing to the Term Facility,
including the Initial Lenders, the “Lenders”) (it is understood that the Lead
Arrangers will not syndicate to (x) any competitor identified in writing to the
Lead Arrangers or (y) any affiliate of a competitor of the Borrower or the
Target that is either (i) clearly identifiable on the basis of name or
(ii) identified in writing to the Lead Arrangers (other than any such affiliate
that is affiliated with a financial investor in such person and that is not
itself an operating company or otherwise an affiliate of an operating company so
long as such affiliate is a bona fide debt fund (a “Disqualified Lender”);
provided, that no addition to the list of Disqualified Lenders shall apply
retroactively to disqualify any parties that

 

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have previously acquired an assignment or participation interest in the Term
Facility, but such person shall be disqualified from purchasing future
assignments and participations)) upon the terms and subject to the conditions
set forth in this Commitment Letter. Until the date that is 60 days following
the Closing Date (the “Syndication Date”), you agree to assist the Lead
Arrangers actively in achieving a syndication of the Term Facility that is
satisfactory to the Lead Arrangers and you. To assist the Lead Arrangers in
their syndication efforts, you agree that you will, and will use your
commercially reasonable efforts to cause your representatives and advisors to,
(i) provide promptly to the Commitment Parties upon request all customary
information reasonably requested by the Lead Arrangers to assist the Lead
Arrangers to complete the syndication, (ii) make your senior management
available to prospective Lenders at times and places to be mutually agreed that
will not interfere with the normal operation of your business, (iii) host, with
the Lead Arrangers, one or more meetings or calls with prospective Lenders at
mutually agreed times and locations (provided in no event shall you be required
to host more than one bank meeting), (iv) assist, and use your commercially
reasonable efforts to cause your advisors to assist, the Lead Arrangers in the
preparation of one or more customary confidential information memoranda and
other customary marketing materials to be used in connection with the
syndication and (v) your ensuring that prior to the Syndication Date (and using
your commercially reasonable efforts to cause your representatives and advisors
to ensure) there will be no competing issues, offerings, placements,
arrangements or syndications of debt or equity securities or commercial bank or
other credit facilities by or on behalf of you or your subsidiaries or the
Target or its subsidiaries being offered, placed or arranged (other than the
Term Facility, any Securities Issuance and any Refinancing) without the written
consent of the Lead Arrangers, unless such issuance, offering, placement,
arrangement or syndication could not reasonably be expected to materially impair
the primary syndication of the Term Facility (it being understood that
indebtedness incurred in the ordinary course of business of the Borrower and its
subsidiaries for capital expenditures and working capital purposes will not
materially impair the primary syndication of the Term Facility). For the
avoidance of doubt, you will not be required to provide any information to the
extent that the provision thereof would violate any attorney-client privilege,
law, rule or regulation, or any obligation of confidentiality from a third party
binding on you, the Target or any of your or its respective affiliates (so long
as such confidentiality obligation was not entered into in contemplation of the
Transactions); provided that you shall use commercially reasonable efforts to
obtain the relevant consents under such obligations of confidentiality to allow
for the provision of such information to the extent reasonably requested by the
Lead Arrangers; provided, further, that you will inform the Lead Arrangers, in
advance and to the extent legally permitted, that you are withholding any
information pursuant to the foregoing. Your obligations under this Commitment
Letter to use commercially reasonable efforts to cause the Target or members of
its management to take (or to refrain from taking) any action shall be subject
to any applicable limitation on your rights as set forth in the Acquisition
Agreement.

(b)    The Lead Arrangers and/or one or more of their respective affiliates will
manage all aspects of the syndication of the Term Facility (in consultation with
you), including decisions as to the selection and number of potential Lenders to
be approached, when they will be approached, whose commitments will be accepted,
subject to your consent (with your consent not to be unreasonably withheld or
delayed), any titles offered to the Lenders and the final allocations of the
commitments and any related fees among the Lenders, and the Lead Arrangers will
exclusively perform all functions and exercise all authority as is customarily
performed and exercised in such capacities. Notwithstanding the Lead Arrangers’
rights to syndicate the Term Facility and receive commitments with respect
thereto, unless otherwise agreed to by you, (i) none of the Initial Lenders
shall not be relieved or released from its obligations hereunder (including its
obligation to fund the Term Facility on the Closing Date) in connection with any
syndication, assignment or participation in the Term Facility, including its
Commitment, until the funding under the Term Facility has occurred on the
Closing Date, (ii) no assignment by an Initial Lender shall become effective
with respect to all or any portion of such Initial Lender’s Commitment until the
funding of the Term Facility (except to the extent that the Borrower has

 

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consummated a Securities Issuance and/or Refinancing and proceeds thereof are
available on or prior to the Closing Date in lieu of the Term Facility or a
portion thereof), (iii) the Initial Lenders shall, in all cases, retain, in the
aggregate, 50.1% of the Commitment, and (iv) unless you and we agree in writing,
the Initial Lenders shall retain exclusive control over all rights and
obligations with respect to its Commitment in respect of the Term Facility,
including all rights with respect to consents, modifications, supplements,
waivers and amendments, until the Closing Date has occurred. Notwithstanding the
foregoing, the Commitment Parties will not syndicate or otherwise assign, novate
or transfer any portion of a commitment hereunder or under the Term Facility, or
participate or novate any portion of a commitment hereunder or under the Term
Facility, to any Disqualified Lender without the prior written consent of the
Borrower. Without limiting your obligations to assist with the syndication
efforts as set forth herein, it is understood that the Commitment hereunder is
not conditioned upon the commencement or completion of the syndication of, or
receipt of commitments in respect of, the Term Facility and in no event shall
either the successful completion of the syndication of the Term Facility or
compliance with the Commitment Letter constitute a condition to the availability
of the Term Facility on the Closing Date.

5.    Information.

(a)    You represent, warrant and covenant that (to the best of your knowledge,
insofar as it relates to the Target and its subsidiaries) (i) all written
information and written data (other than the Projections, as defined below,
other forward-looking information, estimates and information of a general
economic or general industry nature) concerning the Borrower, its subsidiaries,
the Target, its subsidiaries and any aspect of the Transactions that has been or
will be made available to the Commitment Parties or the Lenders by you or any of
your or their representatives, subsidiaries or affiliates (or on your or their
behalf) (the “Information”), when taken as a whole (after giving effect to any
supplements or updates), (x) is and will be true, complete and correct in all
material respects and (y) does not, and in the case of Information made
available after the date hereof, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not materially misleading and (ii) all financial projections
concerning the Borrower and its subsidiaries or the Target and its subsidiaries,
taking into account the consummation of the Transactions, that have been or will
be made available to any of the Commitment Parties or the Lenders by you or any
of your representatives, subsidiaries or affiliates (or on your or their behalf)
(the “Projections”) have been and will be prepared in good faith with a
reasonable basis for the assumptions and the conclusions reached therein on the
date provided (it being understood that (w) the Projections are as to future
events and are not to be viewed as facts, (x) the Projections are subject to
significant uncertainties and contingencies, many of which are beyond your
control, (y) no assurance can be given that any particular Projections will be
realized and (z) actual results during the period or periods covered by any such
Projections may differ significantly from the projected results and such
differences may be material). You agree that if, at any time prior to the
Syndication Date, you become aware that any of the representations and
warranties contained in the preceding sentence would be incorrect in any
material respect if the Information and Projections were being furnished, and
such representations were being made, at such time, then you will promptly
supplement (or use commercially reasonable efforts to supplement, in the case of
Information relating to the Target, if previously prepared and available) the
Information and the Projections so that such representations are correct in all
material respects under those circumstances. We will be entitled to use and rely
upon, without responsibility to verify independently, the Information and the
Projections. You acknowledge that we may share with any of our affiliates for
purposes of providing services under this Commitment Letter (it being understood
that such affiliates will be subject to the confidentiality agreements between
you and us), and such affiliates may share with the Commitment Parties, any
information related to you, the Target, or any of your or the Target’s
subsidiaries or affiliates (including, without limitation, in each case,
information relating to creditworthiness) and the transactions contemplated
hereby.

 

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(b)    You acknowledge that (i) the Commitment Parties will make available, on
your behalf, the Information, Projections and other marketing materials and
presentations, including the confidential information memoranda (collectively,
the “Informational Materials”), to the potential Lenders by posting the
Informational Materials on SyndTrak Online or by other similar electronic means
(collectively, the “Electronic Means”) and (ii) certain prospective Lenders may
be “public side” (i.e., lenders that have personnel that do not wish to receive
material non-public information (within the meaning of the United States federal
securities laws, “MNPI”) with respect to the Borrower, the Target or your or its
subsidiaries or affiliates or any of your or their respective securities, and
who may be engaged in investment and other market-related activities with
respect to such entities’ securities (such Lenders, “Public Lenders”). At the
request of the Lead Arrangers, (A) you will assist, and use your commercially
reasonable efforts to cause your advisors, and to the extent possible using
commercially reasonable efforts, appropriate representatives of the Target to
assist (to the extent not in contravention of the Acquisition Agreement), the
Lead Arrangers in the preparation of Informational Materials to be used in
connection with the syndication of the Term Facility to Public Lenders, which
will not contain MNPI (the “Public Informational Materials”) and (B) at the
request of the Lead Arrangers you will identify and conspicuously mark any
Public Informational Materials “PUBLIC”. Notwithstanding the foregoing, you
agree that the Commitment Parties may distribute the following documents to all
prospective Lenders (including the Public Lenders) (other than Disqualified
Lenders) on your behalf, unless you advise the Commitment Parties in writing
(including by email) within a reasonable time prior to their intended
distributions that such material should not be distributed to Public Lenders:
(w) administrative materials for prospective Lenders such as lender meeting
invitations and funding and closing memoranda, (x) notifications of changes in
the terms of the Term Facility, (y) historical financial information regarding
the Borrower and its subsidiaries (other than the Projections) and the Target
and its subsidiaries that have been publicly disclosed and (z) drafts and final
versions of the Term Sheet and the Financing Documentation. If you advise us in
writing (including by email) that any of the foregoing items (other than the
Financing Documentation) should not be distributed to Public Lenders, then the
Commitment Parties will not distribute such materials to Public Lenders without
further discussions with you. Before distribution of any Informational Materials
to prospective Lenders, you shall provide us with a customary letter authorizing
the dissemination of the Informational Materials and confirming the accuracy and
completeness in all material respects of the information contained therein and,
in the case of Public Informational Materials, confirming the absence of MNPI
therefrom. In addition, the Information Materials shall (I) exculpate you with
respect to any liability related to the misuse of the contents of such
Information Materials or any related offering and marketing materials by the
recipients thereof and (II) exculpate us with respect to any liability related
to the use or misuse of the contents of such Information Materials or any
related offering and marketing materials by the recipients thereof.

6.    Indemnification. You agree to indemnify and hold harmless each Commitment
Party and each of its affiliates and their respective directors, officers,
employees, partners, representatives, advisors and agents and each of their
respective heirs, successors and assigns (each, an “Indemnified Party”) from and
against any and all actions, suits, losses, claims, damages, penalties,
liabilities and reasonable and documented out-of-pocket expenses of any kind or
nature (including legal expenses), joint or several, to which such Indemnified
Party may become subject or that may be incurred or asserted or awarded against
such Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(a) any matters contemplated by this Commitment Letter, the Transactions or any
related transaction (including, without limitation, the execution and delivery
of this Commitment Letter, the Financing Documentation, or the definitive
documentation for any Securities Issuance and/or Refinancing issued or incurred
for the purpose of refinancing or reducing the Commitment with respect to all or
a portion of the Term Facility and the closing of the Transactions) or (b) the
use or the contemplated use of the proceeds of the Term Facility, and will
reimburse each Indemnified Party for all out-of-pocket expenses (but limited, in
the case of legal fees and expenses, to

 

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the reasonable and documented out-of-pocket fees, disbursements and other
charges of one counsel to all Indemnified Parties (taken as a whole) and, if
reasonably necessary, a single local counsel for all Indemnified Parties (taken
as a whole) in each relevant jurisdiction and with respect to each relevant
specialty, and in the case of an actual or perceived conflict of interest, one
additional counsel in each relevant jurisdiction to the affected Indemnified
Parties similarly situated and taken as a whole) on written demand as they are
incurred in connection with any of the foregoing; provided that you will not
have to indemnify any Indemnified Party against (A) any claim, loss, penalty,
damage, liability or expense to the extent found by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted from (i) the
gross negligence, bad faith or willful misconduct of such Indemnified Party,
(ii) a material breach of obligations under the Commitment Letter or the
Financing Documentation by such Indemnified Party or (iii) any dispute solely
among the Indemnified Parties (not arising as a result of any act or omission by
the Borrower or any of its subsidiaries or affiliates) other than any claim,
action, suit, inquiry, litigation, investigation or other proceeding brought by
or against any such Indemnified Party in its capacity as agent or arranger, or
(B) any settlement entered into by such Indemnified Party without your written
consent, but if settled with your written consent (such consent not to be
unreasonably withheld, conditioned or delayed) or if there is a judgment in any
such action, suit, proceeding or claim, you agree to indemnify and hold harmless
each Indemnified Party from and against any and all losses, claims, damages,
liabilities or expenses by reason of such settlement or judgment in accordance
with the provisions of this paragraph. In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by you, your equity holders or creditors or an Indemnified
Party, whether or not an Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. No
Indemnified Party will be liable to you, your affiliates or any other person for
any damages arising from the use by others of Informational Materials or other
materials obtained by Electronic Means, except to the extent that your damages
are found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Party. You shall not, without the prior written consent of each
Indemnified Party affected thereby (which consent shall not be unreasonably
conditioned, withheld or delayed), settle any threatened or pending claim or
action that would give rise to the right of any Indemnified Party to claim
indemnification hereunder unless such settlement (x) includes a full and
unconditional release of all liabilities arising out of such claim or action
against such Indemnified Party, (y) does not include any statement as to or an
admission of fault, culpability or failure to act by or on behalf of such
Indemnified Party and (z) requires no action on the part of the Indemnified
Party other than its consent (which consent shall not be unreasonably
conditioned, withheld or delayed).

Neither you nor we nor any other Indemnified Party will be responsible or liable
for any indirect, special, punitive or consequential damages which may be
alleged as a result of the Acquisition, this Commitment Letter, the Fee Letter,
the Term Facility, any Securities Issuance, any Refinancing, the Transactions or
any related transaction contemplated hereby or thereby or any use or intended
use of the proceeds of any financing; provided that nothing contained in this
sentence shall limit your indemnity or reimbursement obligations to the extent
set forth above in this Section 6 in respect of any losses, disputes, claims,
damages, liabilities and expenses incurred or paid by an Indemnified Person to a
third party that are otherwise required to be indemnified in accordance with
this Section 6. You also agree that no Indemnified Party will have any liability
(whether direct or indirect, in contract or tort, or otherwise) to you or your
affiliates or to your or their respective equity holders or creditors arising
out of, related to or in connection with any aspect of the transactions
contemplated hereby, except to the extent such liability to you is determined in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from (i) the gross negligence or willful misconduct of such Indemnified
Party or (ii) a material breach of obligations under the Commitment Letter or
the Financing Documentation by such Indemnified Party.

 

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7.    Fees. As consideration for the commitments and agreements of the
Commitment Parties hereunder, you agree to cause to be paid the nonrefundable
fees described in the Fee Letter on the terms and subject to the conditions set
forth therein.

8.    Confidentiality.

(a)    This Commitment Letter and the Fee Letter (collectively, the “Commitment
Documents”) and the existence and contents hereof and thereof are confidential
and may not be disclosed, directly or indirectly, by you in whole or in part to
any person without our prior written consent, except for disclosure (i) hereof
or thereof on a confidential basis to your directors, officers, employees,
accountants, attorneys and other professional advisors who have been advised of
their obligation to maintain the confidentiality of the Commitment Documents for
the purpose of evaluating, negotiating or entering into the Transactions,
(ii) as otherwise required by applicable law, rule or regulation or compulsory
legal process or pursuant to a subpoena (in which case, you agree, to the extent
permitted by law, to inform us promptly in advance thereof), (iii) on a
confidential basis to the Target and its subsidiaries, their respective
officers, directors, employees, independent auditors, legal counsel and other
advisors (provided that any information relating to pricing, fees and expenses
has been redacted in a manner reasonably acceptable to us), (iv) of this
Commitment Letter, but not the Fee Letter, in any required filings with the
Securities and Exchange Commission and any other applicable regulatory
authorities and stock exchanges or in any prospectus or other offering
memorandum relating to the Term Facility, any Securities Issuance or any
Refinancing, (v) of the Term Sheet to any ratings agency or any prospective
Lenders in connection with the Transactions, (vi) of the aggregate fee amounts
contained in the Fee Letter as part of projections, pro forma information or as
part of a generic disclosure of aggregate sources and uses related to fee
amounts applicable to the Transactions to the extent customary or required in
offering and marketing materials for the Term Facility and/or any Securities
Issuance and/or any Refinancing or in any public release or filing relating to
the Transactions, (vii) pursuant to the order of any court or administrative
agency in any pending legal, judicial or administrative proceeding, or otherwise
as required by applicable law, compulsory legal process or to the extent
requested or required by governmental and/or regulatory authorities, in each
case, based on the advice of your legal counsel (in which case you agree, to the
extent practicable and not prohibited by applicable law, to inform us promptly
thereof), and (viii) in connection with the exercise of any remedy or
enforcement of any right under this Commitment Letter and the Fee Letter. The
Commitment Parties shall be permitted to use information related to the
syndication and arrangement of the Term Facility (including your name and
company logo) in connection with obtaining a CUSIP number, marketing, press
releases or other transactional announcements or updates provided to investor or
trade publications, subject to (i) confidentiality obligations or disclosure
restrictions reasonably requested by you and (ii) your and the Target’s name and
company logo being used solely in a manner that is not intended to, nor
reasonably likely to, harm or disparage you, the Target or either of your
subsidiaries. The confidentiality provisions of this paragraph (a) with respect
to the Borrower (other than with respect to the Fee Letter) shall automatically
terminate on the date that is two (2) years from the date of this Commitment
Letter.

(b)    We agree to use all non-public information provided to us by or on behalf
of the Borrower hereunder solely for the purpose of providing the services which
are the subject of this Commitment Letter and to treat all such information
confidentially; provided, that nothing herein shall prevent a Commitment Party
from disclosing any such information (i) to any Lenders or participants or
prospective Lenders or participants or any direct or indirect contractual
counterparties (or prospective counterparties) to any swap or derivative
transaction relating to the Borrower and its obligations under the Term
Facility, in each case other than Disqualified Lender, (ii) as otherwise
required by applicable law, rule or regulation or compulsory legal process or
pursuant to a subpoena (in which case, we agree, to the extent permitted by law,
to inform you promptly in advance thereof), (iii) upon the request or demand of
any regulatory authority having jurisdiction over such Commitment Party or its
affiliates (in which case

 

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such Commitment Party shall, except with respect to any audit or examination
conducted by bank accountants or any governmental bank regulatory authority
exercising examination or regulatory authority, promptly notify you, in advance,
to the extent practicably and lawfully permitted to do so), (iv) to the
employees, legal counsel, independent auditors, professionals and other experts
or agents of such Commitment Party who are informed of the confidential nature
of such information and are or have been advised of their obligation to keep
information of this type confidential, (v) to any of its respective affiliates
solely in connection with the Transactions, (vi) to the extent any such
information becomes publicly available other than by reason of disclosure by
such Commitment Party or its affiliates in breach of this Commitment Letter,
(vii) to the extent that such information is received by such Commitment Party
from a third party that is not to such Commitment Party’s knowledge subject to
confidentiality obligations to you or the Borrower, (viii) to the extent that
such information is independently developed by such Commitment Party without the
use of confidential information, (ix) to ratings agencies in connection with the
Transactions and (x) for purposes of establishing a “due diligence” defense;
provided, further that the disclosure of any such information to any Lenders or
prospective Lenders or participants or prospective participants referred to
above shall be made subject to the acknowledgment and acceptance by such Lender
or prospective Lender or participant or prospective participant that such
information is being disseminated on a confidential basis (on substantially the
terms set forth in this paragraph or as is otherwise reasonably acceptable to
you and the Commitment Parties, including, without limitation, as agreed in any
confidential information memorandum or other marketing materials) in accordance
with the standard syndication processes of the Commitment Parties or customary
market standards for dissemination of such type of information. The provisions
of this paragraph (b) with respect to the Commitment Parties shall automatically
be superseded by the confidentiality provisions to the extent covered in the
Financing Documentation and shall in any event automatically terminate two
(2) years following the date of this Commitment Letter.

(c)    The Commitment Parties hereby notify you that pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “PATRIOT Act”), it and each Lender may be required to
obtain, verify and record information that identifies you, which information
includes your name, address, tax identification number and other information
that will allow the Commitment Parties and the other Lenders to identify you in
accordance with the PATRIOT Act. This notice is given in accordance with the
requirements of the PATRIOT Act and is effective for each of us and the Lenders.

9.    Other Services.

(a)    Nothing contained herein shall limit or preclude the Commitment Parties
or any of their respective affiliates from carrying on any business with,
providing banking or other financial services to, or from participating in any
capacity, including as an equity investor, in any party whatsoever, including,
without limitation, any competitor, supplier or customer of you, the Target, or
any of your or its affiliates, or any other party that may have interests
different than or adverse to such parties.

(b)    You acknowledge that the Lead Arrangers and their respective affiliates
(the term “Lead Arranger” as used in this section being understood to include
such affiliates) (i) may be providing debt financing, equity capital or other
services (including financial advisory services) to other entities and persons
with which you, the Target, or your or its affiliates or subsidiaries may have
conflicting interests regarding the Transactions and otherwise, (ii) may act,
without violation of its contractual obligations to you, as it deems appropriate
with respect to such other entities or persons, and (iii) have no obligation in
connection with the Transactions to use, or to furnish to you, the Target, or
your affiliates or subsidiaries, confidential information obtained from other
entities or persons. In particular, you acknowledge that the Lead Arrangers may
possess information about the Target, the Acquisition and other potential
purchasers and their respective strategies and bids, but the Lead Arrangers have
no obligation to furnish to you such information.

 

8

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(c)    In connection with all aspects of the Transactions, you acknowledge and
agree that: (i) the Term Facility and any related arranging or other services
contemplated in this Commitment Letter constitute an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and the Commitment
Parties, on the other hand, and you are capable of evaluating and understanding
and understand and accept the terms, risks and conditions of the Transactions,
(ii) in connection with the process leading to the Transactions, each Commitment
Party is and has been acting solely as a principal and not as a financial
advisor, agent or fiduciary, for you or any of your management, affiliates,
equity holders, directors, officers, employees, creditors or any other party,
(iii) except as described in subsection (d) below, neither of the Commitment
Parties nor any of their respective affiliates thereof has assumed or will
assume an advisory, agency or fiduciary responsibility in your or your
affiliates’ favor with respect to any of the Transactions or the process leading
thereto (irrespective of whether such Commitment Party or any of its affiliates
has advised or is currently advising you or your affiliates on other matters)
and the Commitment Parties have no obligation to you or your affiliates with
respect to the Transactions except those obligations expressly set forth in the
Commitment Documents, (iv) the Commitment Parties and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from yours and those of your affiliates and the Commitment
Parties shall have no obligation to disclose any of such interests, and (v) the
Commitment Parties have not provided any legal, accounting, regulatory or tax
advice with respect to any of the Transactions and you have consulted your own
legal, accounting, regulatory and tax advisors to the extent you have deemed
appropriate. You hereby waive and release, to the fullest extent permitted by
law, any claims that you may have against the Commitment Parties or any of their
respective affiliates with respect to any breach or alleged breach of agency or
fiduciary duty.

(d)    In addition, please note that each of Barclays Capital Inc. and J.P.
Morgan Securities LLC has been retained by you as financial advisor (in such
capacity each, the “M&A Advisor”) in connection with the Acquisition. You agree
to such retention, and further agree not to assert any claim you might allege
based on any actual or potential conflicts of interest that might be asserted to
arise or result from, on the one hand, the engagement of the M&A Advisor, and on
the other hand, our and our affiliates’ relationships with you as described and
referred to herein.

10.    Acceptance/Expiration/Termination of Commitments.

(a)    This Commitment Letter and the Commitment of the Initial Lenders and the
undertakings of the Lead Arrangers set forth herein shall automatically
terminate at 11:59 p.m. (Eastern Time) on January 30, 2018 (the “Acceptance
Deadline”), without further action or notice unless signed counterparts of this
Commitment Letter and the Fee Letter shall have been delivered to counsel to the
Lead Arrangers by such time.

(b)    In the event this Commitment Letter is accepted by you as provided above,
the Commitment of the Initial Lenders, the agreements of the Commitment Parties
and the undertakings of the Lead Arrangers set forth herein will automatically
terminate without further action or notice upon the earliest to occur of
(i) consummation of the Acquisition (with or without the use of the Term
Facility), (ii) termination of the Acquisition Agreement in accordance with its
terms, or your written notice of abandonment of the Acquisition, (iii) the
consummation of one or more Securities Issuances and/or Refinancings for net
cash proceeds equal to or in excess of the initial aggregate principal amount of
the Commitment and (iv) June 30, 2018, in each case, unless the closing of the
Term Facility has been consummated on or before such date on the terms and
subject to the conditions set forth herein.

 

9

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(c)    You may terminate this Commitment Letter, the Commitment of the Initial
Lenders, the agreements of the Commitment Parties and the undertakings of the
Lead Arrangers set forth herein in full (but not in part) at any time in your
sole and absolute discretion subject to the survival provisions set forth in
Section 11 below.

11.    Survival. The sections of this Commitment Letter and the Fee Letter
relating to any compensation (if and as applicable), Indemnification, Expenses,
Confidentiality, Other Services, Survival and Governing Law shall survive any
termination or expiration of this Commitment Letter, the Commitment of the
Initial Lenders, the agreement of the Commitment Parties or the undertakings of
the Lead Arrangers set forth herein (regardless of whether definitive Financing
Documentation is executed and delivered), and the sections relating to
Syndication and Information shall survive until the completion of the
syndication of the Term Facility; provided that your obligations under this
Commitment Letter (other than your obligations with respect to the sections of
this Commitment Letter relating to Syndication, Information, Confidentiality,
Other Services, Survival and Governing Law) shall automatically terminate and be
superseded by the provisions of the Financing Documentation upon the funding
thereunder, to the extent covered thereby, and you shall be released from all
liability in connection therewith at such time.

12.    Governing Law. THIS COMMITMENT LETTER AND THE FEE LETTER, AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED THERETO (INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE
SUBJECT MATTER HEREOF OR THEREOF), SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND
SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REFERENCE TO ANY OTHER CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF; PROVIDED
THAT, NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED
THAT ANY DETERMINATIONS AS TO (X) THE ACCURACY OF THE SPECIFIED ACQUISITION
AGREEMENT REPRESENTATIONS AND WHETHER ANY SPECIFIED ACQUISITION AGREEMENT
REPRESENTATIONS HAVE BEEN BREACHED AND WHETHER YOU (OR YOUR AFFILIATES) HAVE THE
RIGHT TO TERMINATE YOUR (OR THEIR) OBLIGATIONS UNDER THE ACQUISITION AGREEMENT
OR TO DECLINE TO CONSUMMATE THE ACQUISITION AND (Y) WHETHER THE ACQUISITION HAS
BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE ACQUISITION AGREEMENT
SHALL, IN EACH CASE BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE. THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR
ACTION ARISING OUT OF THIS COMMITMENT LETTER OR THE FEE LETTER. With respect to
any suit, action or proceeding arising in respect of this Commitment Letter or
the Fee Letter or any of the matters contemplated hereby or thereby, the parties
hereto hereby irrevocably and unconditionally submit to the exclusive
jurisdiction of any state or federal court located in the Borough of Manhattan,
and irrevocably and unconditionally waive any objection to the laying of venue
of such suit, action or proceeding brought in such court and any claim that such
suit, action or proceeding has been brought in an inconvenient forum. The
parties hereto hereby agree that service of any process, summons, notice or
document by registered mail addressed to you or the Commitment Parties will be
effective service of process against such party for any action or proceeding
relating to any such dispute. A final judgment in any such action or proceeding
may be enforced in any other courts with jurisdiction over you or the Commitment
Parties.

 

10

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13.    Miscellaneous. This Commitment Letter and the Fee Letter embody the
entire agreement among the Commitment Parties and you and your affiliates with
respect to the specific matters set forth above and supersede all prior
agreements and understandings relating to the subject matter hereof. No person
has been authorized by the Commitment Parties to make any oral or written
statements inconsistent with this Commitment Letter or the Fee Letter. This
Commitment Letter and the Fee Letter shall not be assignable by (x) you without
the prior written consent of the Commitment Parties or (y) the Commitment
Parties (except as provided in Section 4(b)) without your prior written consent,
and any purported assignment without such consent shall be void. This Commitment
Letter and the Fee Letter are not intended to benefit or create any rights in
favor of any person other than the parties hereto and thereto, the Lenders and,
with respect to indemnification, each Indemnified Party. This Commitment Letter
and the Fee Letter may be executed in separate counterparts and delivery of an
executed signature page of this Commitment Letter and the Fee Letter by
facsimile or electronic mail shall be effective as delivery of manually executed
counterpart hereof; provided that, upon the request of any party hereto or
thereto, such facsimile transmission or electronic mail transmission shall be
promptly followed by the original thereof. This Commitment Letter and the Fee
Letter may only be amended, modified or superseded by an agreement in writing
signed by each of you and the Commitment Parties.

14.    Binding Agreement. Each of the parties agrees that this Commitment Letter
and the Fee Letter, if accepted by you as provided above, are binding and
enforceable agreements with respect to the subject matter contained herein and
therein, including an agreement by the parties hereto to negotiate in good faith
the Financing Documentation in a manner consistent with this Commitment Letter,
it being acknowledged and agreed that the effectiveness and funding of the Term
Facility is subject to the conditions precedent set forth in the Conditions
Annex; provided, that nothing contained in this Commitment Letter or the Fee
Letter obligates you or any of your affiliates to consummate the Transactions or
to draw upon all or any portion of the Term Facility.

[Signature Pages Follow]

 

11

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If you are in agreement with the foregoing, please indicate acceptance of the
terms hereof by signing the enclosed counterpart of this Commitment Letter and
returning it to counsel to the Lead Arrangers, together with an executed
counterpart of the Fee Letter, by no later than the Acceptance Deadline.

 

Sincerely, BARCLAYS BANK PLC

By:  

/s/ Benjamin J. Burton

Name:   Benjamin J. Burton Title:   Managing Director

JPMORGAN CHASE BANK, N.A.

By:  

/s/ Barry K. Bergman

Name:   Barry K. Bergman Title:   Managing Director

[Commitment Letter Signature Page]

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Agreed to and accepted as of the date first

above written:

 

SEATTLE GENETICS, INC.

By:  

/s/ Clay B. Siegall, Ph.D.

Name:   Clay B. Siegall, Ph.D. Title:   President and Chief Executive Officer

[Commitment Letter Signature Page]

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Annex A

$400,000,000 364-DAY TERM LOAN FACILITY

TRANSACTION DESCRIPTION

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Commitment Letter to which this Transaction Description is
attached.

The Borrower, directly or through one or more wholly owned subsidiaries, intends
to acquire (the “Acquisition”) all of the equity interests of Cascadian
Therapeutics, Inc. a Delaware corporation (the “Target”), pursuant to that
certain Agreement and Plan of Merger dated as of January 30, 2018 by and among
the Borrower, Valley Acquisition Sub, Inc., Delaware corporation and a
wholly-owned subsidiary of the Borrower, and the Target (including all schedules
and exhibits thereto, the “Acquisition Agreement”).

In connection with the foregoing, it is intended that:

(a)    The Acquisition will be consummated in all material respects pursuant to
the terms and conditions of the Acquisition Agreement. The date on which the
Acquisition is consummated is referred to as the “Closing Date”.

(b)    The Borrower will borrow on the Closing Date under a 364-day Term Loan
Facility (the “Term Facility”) up to an aggregate principal amount of the lesser
of (x) $400,000,000 and (y) 1.3333 multiplied by the Minimum Liquidity Amount
(as defined in the Summary of Proposed Terms and Conditions attached to the
Commitment Letter as Annex B (the “Term Sheet”)) to fund the Acquisition and pay
related fees and expenses, which amounts shall be reduced on or prior to the
Closing Date, by the net cash proceeds from (i) any public or private issuance
and/or sale of shares of the Borrower or one of its subsidiaries (including, but
not limited to, common equity, preferred equity, securities convertible or
exchangeable into or exercisable for equity securities, other equity-linked
securities or hybrid debt-equity securities or similar instruments or
transactions) or debt securities (any of the foregoing items, the “Takeout
Securities”; the issuance by the Borrower or one of its subsidiaries of any such
Takeout Securities, a “Securities Issuance”) and/or (ii) borrowings under bank
or other debt facilities (including, but not limited to, term loans, mezzanine
debt or other subordinated debt) (any of the foregoing items, the “Takeout Debt
Facilities”; the incurrence by the Borrower or one of its subsidiaries of any
such Takeout Debt Facilities, a “Refinancing”), in each case of the foregoing
clauses (i) and (ii), issued or incurred after the date hereof and on or prior
to the Closing Date and excluding (A) indebtedness incurred in the ordinary
course of business for working capital and capital expenditures purposes and
(B) issuances pursuant to employee compensation plans, employee benefit plans,
employee incentive plans and retirement plans or issued as compensation to
officers and/or non-employee directors.

(c)    Fees, commissions and expenses in connection with the foregoing (the
“Transaction Costs”) will be paid.

The transactions described above are collectively referred to herein as the
“Transactions”. Except as the context otherwise requires, references to the
“Borrower and its subsidiaries” will include any entity formed by the Borrower
for purposes of acquiring the Target and shall give effect to the Transactions.

 

1

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ANNEX B

$400,000,000

364-DAY TERM LOAN FACILITY

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Commitment Letter to which this Summary of Proposed Terms and
Conditions is attached.

 

Borrower:    Seattle Genetics, Inc. (the “Borrower”). Lead Arrangers and
Bookrunning Managers:    Each of Barclays Bank PLC (“Barclays”) and JPMorgan
Chase Bank, N.A. (“JPMCB”), acting alone or through or with its affiliates, will
act as joint bookrunning managers, joint lead arrangers and joint syndication
agents (in such capacities, the “Lead Arrangers”). Lenders:    Barclays (or one
or more of its affiliates), JPMCB and a syndicate of financial institutions and
other entities arranged by the Lead Arrangers in consultation with you
(excluding any Disqualified Lenders).

Administrative Agent and

Collateral Agent:

   Barclays (in such capacities, the “Administrative Agent”). Term Loans:   
364-day Term Loan Facility (the “Term Facility”) consisting of term loans (the
“Term Loans”) in an aggregate principal amount of up to (i) the lesser of (x)
$400,000,000 and (y) 1.3333 multiplied by the Minimum Liquidity Amount (as
defined herein) less (ii) the aggregate net cash proceeds of any Securities
Issuance and/or Refinancing, if any, issued after the date hereof. Use of
Proceeds:    The proceeds of the Term Loans will be used to (a) finance the
Acquisition and pay fees and expenses incurred in connection therewith and
(b) pay the Transaction Costs. Availability:    The Term Facility will be
available only in a single draw of up to the full amount of the Term Facility on
the Closing Date to be used by the Borrower on or after the Closing Date as
described in “Use of Proceeds” above. If less than the full amount of the Term
Facility is borrowed on the Closing Date, any remaining commitments in respect
thereof shall be automatically terminated on such date. Amounts borrowed under
the Term Facility that are repaid or prepaid may not be reborrowed.
Documentation:    The documentation for the Term Loans (the “Term Loan
Documentation”) will be in the form of a senior secured credit agreement based
on the Amended and Restated First Lien Credit and Guaranty Agreements, dated as
of July 1, 2016, among Radnet Management, Inc., as borrower, Radnet, Inc.,
certain subsidiaries and affiliates of Radnet Management, Inc., as guarantors,
the several lenders from time to time parties thereto, Barclays Bank PLC, as

 

Annex B – Term Facility Term Sheet

1

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     administrative agent and collateral agent, and the other agents party
thereto, and will include
related guarantee and security agreements and instruments based upon the
documentation
usual and customary for senior secured financings of this type for similarly
situated
borrowers, as modified (a) taking into account the operational and strategic
requirements of
Borrower and its subsidiaries in light of their industries, businesses, business
practices and
financial accounting, (b) in light of the size, cash flows, results of
operations, and leverage of
Borrower and its subsidiaries (including as to materiality thresholds, baskets
and other
limitations and exceptions) and the need for the Borrower and its subsidiaries
to operate in the
ordinary course of business including with respect to licensing and
joint-marketing
agreements, (c) in a manner to reflect the terms of this Term Sheet, the other
Annexes to the
Commitment Letter and the Fee Letter and (d) in any event, including customary
EU Bail-In
provisions, and modifications to reflect administrative and operational
requirements of the
Administrative Agent (such provisions being referred to collectively as the
“Term Loan
Documentation Principles”). Ranking:    The Term Loans will be senior secured
debt of the Borrower. Guarantors:    Each of the Borrower’s existing and
subsequently acquired or organized domestic subsidiaries (including, without
limitation, the Target) of the Borrower (collectively, the “Guarantors”; and
together with the Borrower, the “Loan Parties”) will guarantee (the “Guarantee”)
all obligations under the Term Facility, subject to certain exceptions usual and
customary for facilities of this type to be agreed. Security:    Subject to
certain exceptions and qualifications usual and customary for facilities of this
type to be agreed, the Term Loan Facility, each Guarantee will be secured by
first priority security interests in (i) all assets, including without
limitation, all personal, real and mixed property of the Borrower and the
Guarantors (including, without limitation, all of the IMMU Common Stock (as
defined below) owned by any of the Borrower and the Guarantors) and (ii) 100% of
the capital stock of the Borrower and each domestic subsidiary of the Borrower,
65% of the capital stock of each foreign subsidiary of the Borrower and all
intercompany debt, excluding the Excluded Assets and limited by the Required
Perfection Actions (as defined below) (collectively, the “Collateral”). The
Borrower and the Guarantors shall be required to maintain springing account
control agreements (which shall be required to be put in place within 45 days of
the Closing Date (or such later date(s) as is agreed by the Lead Arrangers in
their sole discretion)) with respect to all deposit and securities accounts,
excluding zero-balance (so long as, except for disbursement accounts,
zero-balancing into an account subject to a control agreement would not be
terminated upon the exercise of rights under any control agreement), payroll,
withholding and trust

 

Annex B – Term Facility Term Sheet

2

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accounts and other accounts, including accounts containing less than a to be
determined average daily amount for all such accounts in the aggregate.

 

Notwithstanding anything to the contrary, (a) not more than 65% of the voting
(and 100% of any non-voting) capital stock of (x) any first-tier non-U.S.
subsidiary of the Borrower or a U.S. subsidiary of the Borrower that is a CFC or
(y) any first-tier subsidiary of the Borrower or of any U.S. subsidiary of the
Borrower that is a FSHCO (i.e., a subsidiary of the Borrower that has no
material assets other than capital stock of one or more CFCs) shall be required
to be pledged, (b) no capital stock of any U.S. subsidiary that is a subsidiary
of a CFC shall be required to be pledged and (c) the Collateral shall exclude
certain customary assets (collectively, the “Excluded Assets”).

 

In addition, (a) no perfection steps shall be required by any means other than
(i) filings pursuant to the UCC of the relevant jurisdiction, real property
mortgages and fixture filings, (ii) filings in the United States Patent and
Trademark Office and the United States Copyright Office with respect to
intellectual property, (iii) delivery of Collateral consisting of instruments,
notes and debt securities in a principal amount in excess of an amount to be
mutually agreed upon; provided that such delivery shall not be required with
respect to (x) instruments, notes and debt securities that are promptly
deposited into an investment or securities account, (y) checks received in the
ordinary course of business and (z) notes and debt securities issued in
connection with the extension of trade credit by the grantor of a security
interest, (iv) delivery of Collateral consisting of certificated capital stock
and (v) control agreements required by the second preceding paragraph, (b) no
security shall be taken or perfected over movable plant or equipment to the
extent requiring any labeling or segregation of such plant or equipment, (c) no
security shall be taken or perfected over any stock in trade to the extent it
would require any item specific or periodic listing of stock in trade or any
segregation thereof, (d) no actions shall be required outside of the United
States in order to create any security interests in assets located or titled
outside of the United States or to perfect or make enforceable any such security
interests (it is understood that, except in connection with pledges of no more
than 65% of the voting (and 100% of any non-voting) capital stock of each
first-tier foreign subsidiary of Borrower, there shall be no security agreements
or pledge agreements governed under the laws of any foreign jurisdiction) and
(e) no actions shall be required to perfect a security interest in letter of
credit rights below an agreed threshold other than the filing of a UCC financing
statement. The perfection steps required by this Summary of Terms, the “Required
Perfection Actions”.

 

Notwithstanding the foregoing, the requirements of the preceding paragraphs of
this “Security” section shall be subject to and limited and qualified by the
Limited Conditionality Provision.

 

Annex B – Term Facility Term Sheet

3

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Interest:    Interest rates and fees in connection with the Term Loans will be
as specified on Schedule I attached hereto. Maturity:    The Term Loans will
mature on the date (the “Maturity Date”) that is 364 days after the Closing Date
and will amortize (a) on the three-month anniversary of the Closing Date, in an
aggregate amount equal to 25.0% of the original principal amount of the Term
Facility and (b) on the six-month anniversary of the Closing Date in an
aggregate amount equal to 50.0% of the original principal amount of the Term
Facility, in each case of foregoing clauses (a) and (b), less the aggregate
amount of any Term Loans mandatorily prepaid pursuant to clause (a) of
“Mandatory Prepayment” below; with the balance payable on the Maturity Date.
Mandatory Prepayment:    The Borrower will be required to prepay the Term Loans
on a pro rata basis, at par plus accrued and unpaid interest with:

 

  (a) 100% of the net cash proceeds from any Securities Issuance and/or
Refinancing and/or other issuances of indebtedness by the Borrower or any of its
subsidiaries, other than (x) issuances pursuant to employee compensation plans,
employee benefit plans, employee incentive plans and retirement plans or issued
as compensation to officers and/or non-employee directors and (y) indebtedness
incurred in the ordinary course of business for working capital purposes and
capital expenditure purposes;

 

  (b) 100% of the net cash proceeds of all non-ordinary course asset sales
(including the sale of marketable securities owned by the Borrower and its
subsidiaries but excluding any exclusive licensing transactions and joint
marketing arrangements consistent with past practice), insurance and
condemnation recoveries and other asset dispositions by the Borrower or any of
its subsidiaries (with customary rights of reinvestment and thresholds to be
agreed); and

 

  (c) to the extent that the Minimum Liquidity Ratio is greater than 1.3333:1.00
as of any monthly testing date, the Borrower will be required to prepay a
principal amount of the Term Loans at par on a pro rata basis, in an amount
equal to the principal amount of Term Loans that when subtracted from the
numerator of the Minimum Liquidity Ratio would result in the Minimum Liquidity
Ratio not being greater than 1:3333:1.00.

Each such prepayment will be made together with accrued and unpaid interest to
the date of prepayment, but without premium or penalty (except breakage costs
related to prepayments not made on the last day of the relevant interest
period).

 

Annex B – Term Facility Term Sheet

4

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Voluntary Prepayment:    The Term Loans may be prepaid at any time, in whole or
in part, at the option of the Borrower, upon notice and in a minimum principal
amount and in multiples to be agreed upon, at 100% of the principal amount of
the Term Loans prepaid, plus all accrued and unpaid interest and fees (including
any breakage costs) to the date of the repayment. Conditions Precedent to
Funding:    The funding of the Term Loans will be subject solely to satisfaction
or waiver of the conditions precedent set forth in the Conditions Annex.
Representations and Warranties:    Representations and warranties shall be
customary for facilities of this type, consistent with Term Loan Documentation
Principles, subject to exceptions and thresholds and limited to the following:
(i) corporate existence and status; (ii) corporate power and authority;
(iii) legality, validity, binding effect and enforceability of the loan
documents; (iv) execution, delivery and performance of loan documents do not
violate or contravene organizational documents, applicable law or material
contractual restrictions binding on or affecting the Borrower; (v) no
governmental or regulatory approvals required; (vi) accuracy of financial
statements; (vii) no litigation that would result in a material adverse effect;
(viii) ERISA matters; (ix) real property; (x) federal margin regulations;
(xi) Investment Company Act; (xii) taxes; (xiii) intellectual property,
licenses, etc.; (xiv) accuracy of disclosure; (xv) solvency of each of the
Borrower and its subsidiaries taken as a whole (with solvency to be defined in a
manner consistent with the certificate set out as Annex D); (xvi) environmental
laws; (xvii) labor; (xviii) ownership of properties; and (xix) compliance with
Patriot Act, OFAC, FCPA and anti-money laundering laws. Affirmative Covenants:
   Affirmative covenants shall be limited to the following (to be applicable to
the Borrower and its subsidiaries and subject to exceptions and thresholds): (i)
delivery of financial statements (accompanied by a customary management’s
discussion and analysis); provided that filing of financial statements on form
10-K and form 10-Q by the Borrower with the U.S. Securities and Exchange
Commission through the “Electronic Data Gathering, Analysis and Retrieval”
system in the time period required by the Securities Act of 1933, as amended,
shall satisfy the foregoing requirement; (ii) delivery of customary notices and
a requirement that the Borrower will use its reasonable best efforts (a) to be
prepared with a prospectus that is compliant with the current SEC requirements
to allow the offer and sale of public equity securities in the United States and
(b) to market a follow-on equity offering or Securities Issuance;
(iii) maintenance of existence subject to customary qualifications; (iv)
payments of taxes except where the failure to so pay would not reasonably be
expected to have a material

 

Annex B – Term Facility Term Sheet

5

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     adverse effect; (v) maintenance of properties; (vi) maintenance of
insurance;
(vii) maintenance of books and records in all material respects in accordance
with GAAP
(other than for foreign subsidiaries in which case in accordance with applicable
accounting
requirements in their respective jurisdictions); (viii) customary inspection
rights;
(ix) compliance with laws; (x) environmental matters; (xi) additional collateral
and
guarantors; and (xii) subject, in the case of each of the foregoing, to
materiality thresholds,
exceptions and qualifications to be mutually agreed. Negative Covenants:   

Negative covenants shall be subject, in each case, to materiality thresholds,
exceptions and qualifications to be mutually agreed and shall be limited to the
following (to be applicable to the Borrower and its restricted subsidiaries):

 

(a)   limitations with respect to incurrence of other indebtedness for borrowed
money (other than, among other exceptions for the normal operations of the
business, (i) indebtedness in the ordinary course of business for working
capital and capital expenditures purposes, in each case, up to a cap to be
agreed; (ii) intercompany indebtedness subject to customary terms and conditions
to be agreed; (iii) indebtedness with respect to capital leases and purchase
money indebtedness, in each case, up to a cap to be agreed; (iv) indebtedness
consisting of reimbursement obligations related to bank guarantees in the
ordinary course of business; and (v) indebtedness in respect of any Securities
Issuance and/or Refinancing);

 

(b)   limitations with respect to liens (other than ordinary course liens);

 

(c)   limitations with respect to restricted payments (other than (i) restricted
payments consisting of the cashless exercise of options and warrants of the
equity interests of the Borrower or any of the restricted subsidiaries;
(ii) restricted payments to former officers or employees of the Borrower or any
of the restricted subsidiaries upon such person’s death, disability, retirement
or termination of employment or under the terms of any benefit plan or agreement
relating to such shares of stock or related rights; and (iii) repurchases of
stock held by directors, officers and employees, in an amount not to exceed a
cap to be agreed);

 

(d)   limitations with respect to investments (except for (i) investments in
cash and Cash Equivalents; (ii) customary loans and advances to employees,
directors and consultants of Borrower and its subsidiaries, up to a cap to be
agreed; (iii) investments in joint ventures up to a cap to be agreed; and
(iv) investments consisting of the licensing or contribution of intellectual
property rights pursuant to joint marketing or joint development arrangements
with other persons);

 

Annex B – Term Facility Term Sheet

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(e)   limitations with respect to mergers, consolidations and acquisitions,
subject to customary exceptions to be agreed;

 

(f)   limitations with respect to sales of assets (including exceptions for
(i) the sale, transfer or other disposition of used, obsolete, damaged, worn out
or surplus assets or other property that is no longer used or useful;
(ii) dispositions of investments in joint ventures to the extent required by, or
made pursuant to, contractual buy/sell arrangements between the joint venture
parties set forth in joint venture arrangements and similar binding
arrangements, subject in all cases to the mandatory prepayment described in
clause (b) above under “Mandatory Prepayment”; (iii) licensing, cross-licensing,
sale, disposal, abandonment, cancellation or lapse of intellectual property
rights; and (iv) sales in connection with licensing agreements;

 

(g)   limitations with respect to transactions with affiliates;

 

(h)   limitations with respect to conduct of business;

 

(i) limitations with respect to burdensome agreements; and

 

(j) limitations with respect to accounting changes and changes to fiscal year.

Financial Covenant:   

To be tested monthly, and subject to cure rights to be agreed, maintenance of a
“Minimum Liquidity Ratio” not greater than 1.3333:1.00 Loan to Minimum Liquidity
Amount.

 

“Loan” means the aggregate principal amount of the then outstanding Term Loans
on any date of determination.

 

“Minimum Liquidity Amount” means the sum of (i) cash, (ii) Cash Equivalents,
(iii) 50% of the book value of the receivables, but in no event to exceed
$50 million, and (iv) the Average Share Value, each as of any date of
determination.

 

“Average Share Value” means 80% of the product of the Thirty Day Average Trading
Value of the Immunomedics, Inc. common stock, par value $0.01 per share (the
“IMMU Common Stock”) multiplied by the number of shares of IMMU Common Stock
beneficially owned and validly pledged (or on the Closing Date to be pledged
simultaneously with funding) to Administrative Agent by the Company on any date
of determination.

 

Annex B – Term Facility Term Sheet

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“Thirty Day Average Trading Value” means with respect to any period of the
thirty consecutive Trading Days, the quotient of (i) the sum of Closing Price
for each Trading Day during such period, and (ii) 30.

 

“Trading Day” means any day on which the Nasdaq Global Market is open for
business.

 

“Closing Price” means the Closing Price (to be determined by reference to the
per share closing price on Bloomberg page IMMU US<Equity>HP; provided, however,
that if such Bloomberg page is for any reason unavailable or in the case of
manifest error with respect to the per share closing price indicated on such
Bloomberg page, the Closing Price shall be determined by the Administrative
Agent in good faith which determination shall be conclusive) for the IMMU Common
Stock on any applicable Trading Day.

 

“Cash Equivalents” means the following, subject to the qualifications
hereinafter set forth:

 

(i) all direct obligations of the U.S. government, and all obligations that are
fully guaranteed by the U.S. government, that in each case have maturities not
in excess of one year;

 

(ii) federal funds, unsecured certificates of deposit, time deposits, banker’s
acceptances, and repurchase agreements, each having maturities of not more than
90 days, of any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, the short-term debt
obligations of which are rated A-1+ by S&P, F1+ by Fitch and P-1 by Moody’s (and
if the term is between one and three months, a long-term, rating of A1 and a
short-term rating of P-1 by Moody’s) and, if it has a term in excess of three
months, the long-term debt obligations of which are rated AAA (or the
equivalent) by each of S&P, Fitch and Moody’s, and that (a) is at least
“adequately capitalized” (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $1,000,000,000;

 

(iii) deposits that are fully insured by the Federal Deposit Insurance Corp.
(FDIC);

 

(iv) commercial paper rated A–1+ by S&P, F1+ by Fitch and P-1 by Moody’s (and if
the term is between one and three months, a long-term, rating of A1 and a
short-term rating of P-1 by Moody’s) and having a maturity of not more than 90
days; and

 

(v) any money market fund that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clause (i) above, (b)
has net assets of not less than $5,000,000,000, and (c) has a rating of AAA from
S&P, Aaa by Moody’s and the highest rating obtainable from Fitch.

 

Annex B – Term Facility Term Sheet

8

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Notwithstanding the foregoing, “Cash Equivalents” (i) shall exclude any security
with the
Standard & Poor’s “r” symbol (or any other corresponding symbol of Fitch and
Moody’s)
(indicating high volatility or dramatic fluctuations in their expected returns
because of market
risk) or any other qualifying suffix attached to the rating (with the exception
of ratings with
regulatory indicators, such as the (sf) subscript, and unsolicited ratings), as
well as any
mortgage-backed securities and any security of the type commonly known as
“strips”; (ii)
shall not have maturities that exceed the time periods set forth above;
(iii) shall be limited to
those instruments that have a predetermined fixed dollar of principal due at
maturity that
cannot vary or change; and (iv) shall exclude any investment where the right to
receive
principal and interest derived from the underlying investment provides a yield
to maturity in
excess of 120% of the yield to maturity at par of such underlying investment.
Interest on Cash
Equivalents may either be fixed or variable, and any variable interest must be
tied to a single
interest rate index plus a single fixed spread (if any), and move
proportionately with that
index. No Cash Equivalents shall require a payment above par for an obligation
if the
obligation may be prepaid at the option of the issuer thereof prior to its
maturity. Except as
expressly provided for above, all Cash Equivalents shall mature or be redeemable
upon the
option of the holder thereof on or prior to the earlier of (x) three months from
the date of their
purchase or (y) the business day preceding the day before the date such amounts
are required
to be applied hereunder.

 

Notwithstanding the foregoing, to the extent the Minimum Liquidity Ratio is
being required
to be complied with, all such items comprising the Minimum Liquidity Amount
shall be
included, regardless whether perfection has been accomplished during the period
set forth in
the Limited Conditionality Provision.

Events of Default:    Events of Default shall be subject to qualifications,
exceptions, thresholds, baskets and limitations and, unless specified below,
grace periods to be mutually agreed, consistent with the Term Loan Documentation
Principles and limited to the following (and applicable to the Borrower and its
restricted subsidiaries): nonpayment of principal, interest, fees or other
amounts after a five business day grace period (other than in the case of a
nonpayment of principal); violation of covenants (with no grace period for
negative covenants and certain, other material covenants); incorrectness of
representations and warranties in any material respect; bankruptcy or other
insolvency events of the Borrower or its material restricted subsidiaries (with
a 60-day grace period for involuntary events); material monetary judgments in an
amount in excess of $15 million (to the extent not covered by insurance, and
which are final and non-appealable and which, after becoming due and payable,
remain undischarged for 60 days); ERISA events that would reasonably be

 

Annex B – Term Facility Term Sheet

9

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     expected to result in a material adverse effect; invalidity of material
guarantees or security
interests in a material portion of the Collateral (other than in accordance with
the terms of the
applicable Term Loan Documentation); and change of control. Yield Protection and
Increased Costs:    Usual for facilities and transactions of this type
(including mitigation provisions, tax gross up provisions and to include
Dodd-Frank and Basel III as changes in law). Assignments and Participations:   

Subject to the prior approval of the Administrative Agent (such approval not to
be unreasonably withheld, delayed or conditioned) and compliance with applicable
securities laws, the Term Lenders will have the right to assign Term Loans
(other than to any natural person or Disqualified Lender); provided, however,
that prior to the Maturity Date and so long as no event of default is
continuing, the consent of the Borrower (not to be unreasonably withheld,
conditioned or delayed) shall be required with respect to any assignment if,
subsequent thereto, the Initial Lenders would hold, in the aggregate, less than
50.1% of the outstanding Term Loans. The Borrower shall be deemed to have
consented to an assignment request if the Borrower has not objected thereto
within ten business days after written notice thereof.

 

The Term Loan Documentation will provide that, so long as no default or event of
default is continuing, Term Loans may be purchased by and assigned to the
Borrower or any of its subsidiaries through any offer to purchase or take by
assignment open to all Term Lenders on a pro rata basis in accordance with
customary procedures to be agreed; provided that Term Loans owned or held by the
Borrower or any of its subsidiaries will be cancelled for all purposes.

 

The Term Lenders will have the right to participate their Term Loans (other than
to any natural person or Disqualified Lender) without restriction, other than
customary voting limitations. Participants will have the same benefits as the
selling Term Lenders would have (and will be limited to the amount of such
benefits) with regard to yield protection and increased costs, subject to
customary limitations and restrictions.

Required Lenders:    On any date of determination, the Administrative Agent plus
those Term Lenders who collectively hold more than 50% of the aggregate
outstanding Term Loans (the “Required Lenders”). Amendments and Waivers:   
Amendments and waivers of the provisions of the Term Loan Documentation will
require the approval of the Required Lenders, except that (a) the consent of all
Term Lenders directly adversely affected thereby will be required with respect
to: (i) reductions of principal, interest, fees or other amounts,
(ii) extensions of scheduled maturities or times for payment (other than for
purposes of administrative convenience), (iii) increases in the amount of any

 

Annex B – Term Facility Term Sheet

10

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     Term Lender’s commitment, and (iv) changes in pro rata sharing provisions,
and (b) the
consent of 100% of the Term Lenders (not to be unreasonably withheld, delayed or
conditioned) will be required with respect to customary matters, including
(i) to permit the
Borrower to assign its rights under the Term Loan Documentation and (ii) to
modify any
voting percentages, and (c) the consent of the Administrative Agent (not to be
unreasonably
withheld, delayed or conditioned) will be required to amend, modify or otherwise
affect its
rights and duties. Indemnification:    The Borrower and the Guarantors will
indemnify the Administrative Agent, the Lead Arrangers and the Lenders and their
respective affiliates, and the officers, directors, employees, affiliates,
agents and controlling persons of the foregoing, and hold them harmless from and
against all costs, expenses (including, without limitation, reasonable fees,
disbursements and other charges of counsel) and liabilities of any such
indemnified person arising out of or relating to any claim or any litigation or
other proceedings (regardless of whether any such indemnified person is a party
thereto or whether such claim, litigation, or other proceeding is brought by a
third party or by the Borrower or any of their respective affiliates, creditors
or shareholders) that relate to the Term Loan Documentation, except to the
extent that it is found by a final, non-appealable judgment of a court of
competent jurisdiction that such loss, claim, penalty, damage, liability or
expense resulted from the gross negligence, bad faith or willful misconduct of
the indemnified party or any of its Related Parties or any claim, action, suit,
inquiry, litigation, investigation, or other proceeding that does not involve an
act or omission of any of the Borrower or the Guarantors or any of their
affiliates and that is brought by an indemnified party against another
indemnified party (other than any claim, action, suit, inquiry, litigation,
investigation or other proceeding brought by or against Barclays in its capacity
as Administrative Agent or in its capacity as a Lead Arranger or against JPMCB
in its capacity as a Lead Arranger). For purposes hereof, “Related Party” and
“Related Parties” of an indemnified person mean any (or all, as the context may
require) of such indemnified persons and its (or their) respective affiliates
and controlling persons and its or their respective directors, officers,
employees, partners, agents, advisors and other representatives thereof.
Expenses:    The Borrower shall pay (a) all reasonable and documented
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of one counsel to the Administrative Agent (and up to one local counsel
in each applicable jurisdiction and regulatory counsel)) of the Administrative
Agent (promptly following demand therefore) associated with the syndication of
the Term Facility and the preparation, negotiation, execution, delivery and
administration of the Term Loan Documentation and any amendment or waiver with
respect thereto and (b) all reasonable and documented out-of-pocket

 

Annex B – Term Facility Term Sheet

11

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     expenses (including, without limitation, reasonable fees and expenses of
one counsel to the
Administrative Agent and the Term Lenders together (and up to one local counsel
in each
applicable jurisdiction and regulatory counsel)) of the Administrative Agent and
each of the
Term Lenders promptly following demand therefore in connection with the
enforcement of
the Term Loan Documentation or protection of rights. Governing Law and Forum:   
New York. Counsel for the Lead Arrangers and the Administrative Agent:    Paul
Hastings LLP. Counsel for the Borrower    Sullivan & Cromwell LLP.

Annex B – Term Facility Term Sheet

 

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SCHEDULE I TO ANNEX B

INTEREST RATES ON THE 364-DAY TERM LOANS

 

Interest Rate:   

The Borrower may elect that the Term Loans bear interest at a rate per annum
equal to (a) the ABR (as defined below) plus the Applicable Margin (as defined
below) or (b) the Eurocurrency Rate (as defined below) plus the Applicable
Margin.

 

As used herein:

 

“ABR” means the highest of (a) the prime commercial lending rate published by
The Wall Street Journal as the “prime rate” (the “Prime Rate”), (b) the federal
funds effective rate from time to time plus 0.50% per annum and (c) the 1-month
Published LIBOR Rate (as defined below) plus 1.00% per annum.

 

“ABR Loans” means Term Loans bearing interest based upon the ABR. ABR Loans will
be made available on same day notice.

 

“Eurocurrency Rate” means the rate for deposits in the applicable currency for a
period equal to 1, 2, or 3, months or a shorter period (as selected by the
Borrower) appearing on the applicable Bloomberg screen; provided that if such
rate does not exceed 0%, such rate shall be deemed to be 0% (the “Published
LIBOR Rate”) (as adjusted for statutory reserve requirements for eurocurrency
liabilities); provided further that at no time will the Eurocurrency Rate be
deemed to be less than 1.00% per annum.

 

“Eurocurrency Loans” means Term Loans bearing interest based upon the
Eurocurrency Rate.

 

“Applicable Margin” means (i) in the case of ABR Loans, 5.00% and (ii) in the
case of Eurocurrency Loans, 6.00%; provided that the Applicable Margin for each
ABR Loans and Eurocurrency Loans shall increase by an additional 0.50% following
each three-month period after the Closing Date.

Default Rate:    At any time when a payment event of default (with respect to
any principal, interest or fees) under the Term Facility exists, the relevant
overdue amounts shall bear interest, to the fullest extent permitted by law, at
(i) in the case of principal or interest, 2.00% per annum above the rate then
borne by (in the case of principal) such borrowings or (in the case of interest)
the borrowings to which such overdue amount relates or (ii) in the case of fees,
2.00% per annum in excess of the rate otherwise applicable to Term Loans
maintained as ABR Loans from time to time.

Schedule I to Annex B –Term Facility Term Sheet

 

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ANNEX C

$400,000,000 364-DAY TERM LOAN FACILITY

CONDITIONS ANNEX

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Commitment Letter to which this Annex is attached, or Annex A or
Annex B to the Commitment Letter

Subject in all respects to the Limited Conditionality Provision, the
availability and the making of the extensions of credit under the Facilities
will be subject solely to the satisfaction or waiver of the following conditions
precedent:

1.    Subject to the Limited Conditionality Provision, the execution and
delivery by the Borrower of the Term Loan Documentation (the “Financing
Documentation”), which shall be consistent, in each case, with the Commitment
Documents and the Term Loan Documentation Principles.

2.    Subject to the Limited Conditionality Provision, the Administrative Agent
and the Lead Arrangers shall have received customary legal opinions, evidence of
authorization, organizational documents, good standing certificates (with
respect to the jurisdiction of incorporation of the Borrower), a customary
closing certificate, a customary officer’s certificate and documents and
instruments necessary to establish that the Administrative Agent will have
perfected security interests in the Collateral.

3.    The Acquisition shall be consummated prior to or substantially
concurrently with the initial funding of the Term Facility in all material
respects on the terms set forth in the Acquisition Agreement without giving
effect to any modifications thereunder, or any waiver or consent thereunder by
the Borrower or at the Borrower’s request, in each case, that is materially
adverse to the interests of the Lenders, it being understood that (a) any
reduction in the purchase price set forth in the Acquisition Agreement shall not
be deemed to be materially adverse to the interests of the Lenders so long as
any such reduction is applied to reduce the amount of commitments in respect of
the Term Facility on a dollar-for-dollar basis, (b) any increase in the purchase
price set forth in the Acquisition Agreement shall not be deemed to be
materially adverse to the interests of the Lenders so long as the purchase price
increase is not funded with additional indebtedness, (c) any modification,
amendment, consent, waiver or determination in respect of the definition of
“Company Material Adverse Effect” (as defined in the Acquisition Agreement)
shall be deemed to be materially adverse to the interests of the Lenders unless
approved by the Lead Arrangers and (d) any change in any of the provisions
relating to the Lead Arrangers’ or the Lenders’ liability, consent rights over
certain amendments or waivers or status as a third party beneficiary under the
Acquisition Agreement, shall be deemed to be materially adverse to the interests
of the Lenders unless approved by the Lead Arrangers.

4.    The Lead Arrangers shall have received (a) audited consolidated balance
sheets and related statements of income, changes in stockholders equity and cash
flows of each of the Borrower and of the Target for the three fiscal years ended
at least 90 days prior to the Closing Date and (b) unaudited consolidated
balance sheets and related statements of income, changes in equity and cash
flows of each of the Borrower and of the Target for each subsequent fiscal
quarter following the last fiscal year for which financial statements have been
delivered pursuant to clause (a) above ended at least 45 days

 

Annex C – Conditions Annex

1

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before the Closing Date. The Lead Arrangers hereby acknowledge receipt of the
audited financial statements as at and for the years ended December 31, 2014,
2015 and 2016 for each of the Borrower and the Target and the unaudited
financial statements as at and for the quarters ended March 31, 2017, June 30,
2017 and September 30, 2017 for each of the Borrower and the Target.

5.    The Lead Arrangers shall have received a pro forma consolidated balance
sheet and the related consolidated statement of income of the Borrower as of and
for the twelve-month period ending on the date of the most recent consolidated
balance sheet delivered pursuant to the preceding paragraph, in each case
prepared after giving effect to the Transactions as if the Transactions had
occurred on such date (in the case of such pro forma balance sheet) or on the
first day of such period (in the case of such pro forma statement of income).

6.    The Lead Arrangers shall have received a solvency certificate from the
chief financial officer of the Borrower in the form attached as Annex D hereto.

7.    The Guarantees with respect to the Term Facility shall have been executed
and delivered by the Guarantors and be in full force and effect or substantially
simultaneously with the borrowings under the Term Facility, shall be executed
and become in full force and effect and (b) all documents and instruments
required to perfect the Administrative Agent’s security interest in the
Collateral with respect to the Term Facility shall have been executed and
delivered by the Borrower and the Guarantors or substantially simultaneously
with the borrowings under the Term Facility, shall be executed and delivered by
the Borrower and the Guarantors and, if applicable, be in proper form for
filing, and none of the Collateral shall be subject to any other pledges,
security interest or mortgages, except for the liens permitted under the Term
Loan Documentation, liens permitted under the Acquisition Agreement or to be
released on or prior to the Closing Date.

8.    The Lead Arrangers shall have received, at least three (3) business days
prior to the Closing Date, all documentation and other information regarding the
Borrower required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the PATRIOT
Act, to the extent requested at least ten (10) business days prior to the
Closing Date.

9.    To the extent invoiced at least two (2) business days prior to the Closing
Date, all fees and expenses due to the Lead Arrangers, the Administrative Agent
and the Lenders required to be paid on the Closing Date (including the fees and
expenses of counsel for the Lead Arrangers and the Administrative Agent) will
have been paid.

10.    The Borrower shall have engaged (on or before its execution of the
Commitment Letter) for any Refinancing and/or Securities Issuance one or more
investment and/or commercial banks satisfactory to the Lead Arrangers on terms
and conditions satisfactory to the Lead Arrangers for the Refinancing and/or
Securities Issuance and/or any other equity or debt issuance the proceeds of
which are used to refinance or replace the Term Facility.

11.    The Specified Representations and the Specified Acquisition Agreement
Representations will be true and correct in all material respects (or if already
qualified by materiality or “material adverse effect”, in all respects).

12.    Since the date of the Acquisition Agreement, there shall not have
occurred (and be continuing) a “Company Material Adverse Effect” (as defined in
the Acquisition Agreement).

 

Annex C – Conditions Annex

2

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ANNEX D

FORM OF SOLVENCY CERTIFICATE

[DATE]

This Solvency Certificate is being executed and delivered pursuant to
Section [●] of that certain [●] (the “Credit Agreement”; the terms defined
therein being used herein as therein defined).

I, [●], the Chief Financial Officer of Borrower, in such capacity and not in an
individual capacity, hereby certify as follows:

 

  1. I am generally familiar with the businesses and assets of Borrower and its
Subsidiaries, taken as a whole, and am duly authorized to execute this Solvency
Certificate on behalf of Borrower pursuant to the Credit Agreement; and

 

  2. as of the date hereof and after giving effect to the Transactions and the
incurrence of the indebtedness and obligations being incurred in connection with
the Credit Agreement and the Transactions, that (i) the sum of the debt and
liabilities (subordinated, contingent or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, does not exceed the fair value of the assets (at
a fair valuation) of the Borrower and its Subsidiaries, taken as a whole,
(ii) the present fair saleable value of the assets (at a fair valuation) of the
Borrower and its Subsidiaries, taken as a whole, is greater than the amount that
will be required to pay the probable liabilities of the Borrower and its
Subsidiaries, taken as a whole, on their debts and other liabilities
subordinated, contingent or otherwise as they become absolute and matured;
(iii) the capital of the Borrower and its Subsidiaries, taken as a whole, is not
unreasonably small in relation to the business of the Borrower and its
Subsidiaries, taken as a whole, as conducted or contemplated as of the date
hereof; and (iv) the Borrower and its Subsidiaries, taken as a whole, have not
incurred and do not intend to incur, or believe that they will incur, debts or
other liabilities (including current obligations and contingent liabilities)
beyond their ability to pay such debt or other liabilities as they become due
(whether at maturity or otherwise). For the purposes hereof, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first
written above.

 

By:  

 

Name:   Title:   Chief Financial Officer

Annex D – Form of Solvency Certificate

 

1