EXECUTION VERSION

BARCLAYS 
745 Seventh Avenue
New York, NY 10019
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BANK OF AMERICA, N.A.
One Bryant Park
New York, NY 10036

 

April 5, 2016
Coherent, Inc.
5100 Patrick Henry Drive
Santa Clara, California 95054
Attention: Kevin Palatnik
Project Rembrandt
Amended and Restated Commitment Letter
Ladies and Gentlemen:
Reference is hereby made to the Commitment Letter, dated as of March 16, 2016
(the “Original Commitment Letter”), between Barclays Bank PLC (“Barclays”) and
you (as defined below). The Original Commitment Letter is hereby amended and
restated and superseded in its entirety as follows (and the Original Commitment
Letter shall be of no further force and effect):
Coherent, Inc., a Delaware corporation (“you” or the “US Borrower”) has advised
Barclays, Bank of America, N.A. (“BofA”) and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (“MLPFS”, which term shall include, in each case, MLPFS’s
designated affiliate for any purpose hereunder, and together with BofA and their
respective affiliates, “BAML”) (BAML, together with Barclays, each a “Commitment
Party” and together, the “Commitment Parties”, “we” or “us”) that you intend to
acquire (the “Acquisition”) ROFIN-SINAR Technologies Inc., a Delaware
corporation (the “Acquired Business”). The Acquisition will be effected through
the merger of a newly created wholly-owned subsidiary of yours (“Merger Sub”)
with and into the Acquired Business, with the Acquired Business surviving such
merger as your wholly-owned subsidiary pursuant to the terms of the Agreement
and Plan of Merger, dated as of March 16, 2016 (the “Acquisition Agreement”), by
and among the US Borrower, Merger Sub and the Acquired Business. The US
Borrower, the Euro Borrower (as defined in Annex I), the Acquired Business and
their respective subsidiaries are sometimes collectively referred to herein as
the “Companies.”
You have also advised us that you intend to finance the Acquisition, the
repayment of certain existing indebtedness (to be mutually agreed upon) of the
Companies (the “Refinancing”), the costs and expenses related to the Transaction
(as hereinafter defined) and the ongoing working capital and other general
corporate purposes of the Companies after consummation of the Acquisition from
the following sources (and that no financing other than the financing described
herein will be required in connection with the Transaction): $850,000,000 in
senior secured credit facilities of the Borrowers (collectively, the
“Facilities”), comprised of (i) (a) a term loan B facility of $375,000,000, made
available to the US Borrower (the “US Term Facility”) and (b) a term loan B
facility of the Euro equivalent of $375,000,000, made available to the Euro
Borrower (the “Euro Term Facility” and together with the US Term Facility, the
“Term Facility”) and (ii) a revolving credit facility of $100,000,000 (the
“Revolving Credit Facility”). The Acquisition, the Refinancing, the entering
into and funding of the Facilities and all related transactions are hereinafter
collectively referred to as the “Transaction.” The date of consummation of the
Acquisition is referred to herein as the “Closing Date.”
1.Commitments. In connection with the foregoing, (a)(x) Barclays is pleased to
advise you of its commitments to provide, severally and not jointly, 60% of the
aggregate principal amount of each of the Facilities and (y) BofA is pleased to
advise you of its commitments to provide, severally and not jointly, 40% of the
aggregate principal amount of each of the Facilities (in such capacity, each an
“Initial Lender” and collectively, the “Initial Lenders”), (b) Barclays’
willingness to act as the syndication agent (in such capacity, the “Syndication
Agent”) and sole and exclusive administrative agent (in such capacity, the
“Administrative Agent”) for the Facilities, in each case subject to the
conditions set forth in this letter and in Annexes I and II hereto
(collectively, the “Summary of Terms” and together with this letter, the
“Commitment Letter”) and (c) each of Barclays’ and MLPFS’s willingness, and you
hereby engage each of Barclays and MLPFS, to act as joint lead arrangers and
joint bookrunning managers (each, in such capacity, a “Lead Arranger” and
collectively, the “Lead Arrangers”) for the Facilities, and in connection
therewith to form a syndicate of lenders for the Facilities (collectively, the
“Lenders”) reasonably acceptable to you. Notwithstanding anything to the
contrary contained herein, the commitment of the Initial Lenders with respect to
the initial fundings of the Facilities will be subject only to the satisfaction
(or waiver by the Initial Lenders) of the conditions precedent set forth in
paragraph 5 hereof. All capitalized terms used and not otherwise defined herein
shall have the same meanings as specified therefor in the Summary of Terms.
Except as set forth below, you agree that no other agents, co-agents, arrangers,
co-arrangers, bookrunners, managers or co-managers will be appointed, no other
titles will be awarded and no compensation (other than as expressly contemplated
by this Commitment Letter and the Fee Letters (as hereinafter defined)) will be
paid to any Lender as consideration for its participation in the Facilities
unless you and we shall agree. You agree further that Barclays will have “lead
left” placement on all marketing materials relating to each of the Facilities
and will perform the duties and exercise the authority customarily performed and
exercised by it in such role, including acting as sole manager of the physical
books.
2.    Syndication. The Lead Arrangers intend to commence syndication of the
Facilities promptly after your acceptance of the terms of this Commitment Letter
and the Fee Letters. Without limiting your obligations to assist with
syndication efforts as set forth herein, it is understood that the Initial
Lenders’ commitments hereunder are not conditioned upon the syndication of, or
receipt of commitments or participations in respect of, the Facilities and in no
event shall the commencement or successful completion of syndication of the
Facilities constitute a condition to the availability of the Facilities on the
Closing Date. You agree, prior to the Syndication Date (as hereinafter defined),
to actively assist, and to use your commercially reasonable efforts to cause the
Acquired Business and its subsidiaries to actively assist, the Lead Arrangers in
achieving a syndication of each Facility that is reasonably satisfactory to the
Lead Arrangers and you; provided that, notwithstanding each Lead Arranger’s
right to syndicate the Facilities and receive commitments with respect thereto,
it is agreed that (i) except in the case of an assignment to which you otherwise
agree in writing, (A) no Initial Lender shall be relieved, released or novated
from its obligations hereunder (including its obligation to fund the Facilities
on the Closing Date) in connection with any syndication, assignment or
participation of the Facilities, including its commitments in respect thereof,
until after the initial funding of the Facilities has occurred; and (B) no
assignment or novation shall become effective with respect to all or any portion
of an Initial Lender’s commitments in respect of the Facilities until after the
initial funding of the Facilities; and (ii) each Commitment Party shall retain
exclusive control over all rights and obligations with respect to its
commitments in respect of the Facilities, including all rights with respect to
consents, modifications, supplements, waivers and amendments, until the Closing
Date has occurred and the initial funding under the Facilities has been made.
Notwithstanding anything to the contrary contained herein, any resales or
assignments of the Facilities by any Lender (including any Initial Lender) on or
following the Closing Date shall be governed by the provisions of the Facilities
as set forth in the Summary of Terms. We agree not to syndicate our commitments
to (i) competitors of the Companies specified to us by you in writing from time
to time, (ii) any persons that are engaged as principals primarily in private
equity, mezzanine financing or venture capital and certain banks, financial
institutions, other institutional lenders and other entities, in each case that
have been specified to us by you in writing on or prior to March 16, 2016 and
(iii) as to any entity referenced in each case of clauses (i) and (ii) above
(the “Primary Disqualified Institution”), any of such Primary Disqualified
Institution’s known affiliates readily identifiable by name, but excluding any
affiliate that is primarily engaged in, or that advises funds or other
investment vehicles that are engaged in, making, purchasing, holding or
otherwise investing in commercial loans, bonds and similar extensions of credit
or securities in the ordinary course and with respect to which the Primary
Disqualified Institution does not, directly or indirectly, possess the power to
direct or cause the direction of the investment policies of such entity (clauses
(i), (ii) and (iii) above collectively, the “Disqualified Institutions”) and
that no Disqualified Institutions may become Lenders. Such assistance shall
include (a) your providing, and using your commercially reasonable efforts to
cause your advisors, the Acquired Business, its subsidiaries and its advisors to
provide, the Lead Arrangers and the Lenders promptly upon request with all
customary information reasonably deemed necessary by the Lead Arrangers to
complete such syndication, including, but not limited to (x) information and
evaluations prepared by you, the Acquired Business and your and its advisors, or
on your or its behalf, relating to the Transaction (including the Projections
(as hereinafter defined)) and (y) customary forecasts prepared by management of
the Companies of balance sheets, income statements and cash flow statements for
each fiscal quarter for the first twelve months following the Closing Date and
for each year commencing with the first fiscal year following the Closing Date
and for each of the succeeding seven fiscal years thereafter; (b) your
assistance (including the use of commercially reasonable efforts to cause the
Acquired Business to assist) in the preparation of a customary information
memorandum with respect to each of the Facilities (each, an “Information
Memorandum”) and other customary marketing materials to be used in connection
with the syndication of each Facility (collectively with the Summary of Terms
and any additional summary of terms prepared for distribution to Public Lenders
(as hereinafter defined), the “Information Materials”); (c) using commercially
reasonable efforts to ensure that the syndication efforts of the Lead Arrangers
benefit from your existing lending relationships and, to the extent practical
and appropriate, using commercially reasonable efforts to ensure that the
syndication efforts of the Lead Arrangers benefit from the existing banking
relationships of the Acquired Business and its subsidiaries; (d) using
commercially reasonable efforts to obtain, upon our request, prior to the launch
of primary syndication, monitored public corporate credit or family ratings (but
no specific rating) for you after giving effect to the Transaction and ratings
(but no specific rating) of the Facilities from Moody’s Investors Service, Inc.
(“Moody’s”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.
(“S&P”) (collectively, the “Ratings”); (e) your ensuring, and with respect to
the Acquired Business, using your commercially reasonable efforts to ensure,
that none of the Companies shall syndicate or issue, attempt to syndicate or
issue, announce or authorize the announcement of the syndication or issuance of
any debt of the Companies (other than the Facilities), including any renewals or
refinancings of any existing debt, that, in the reasonable judgment of the Lead
Arrangers, could reasonably be expected to materially and adversely affect the
syndication of the Facilities without the prior written consent of the Lead
Arrangers (such consent not to be unreasonably withheld, delayed or conditioned)
(it being understood and agreed that the following debt may be issued without
the prior written consent of the Lead Arrangers: (i) capital leases and purchase
money and equipment financing indebtedness incurred in the ordinary course of
business, (ii) intercompany indebtedness and (iii) other indebtedness of the
Acquired Business permitted to be incurred or remain outstanding under the
Acquisition Agreement); and (f) your otherwise assisting the Lead Arrangers in
their syndication efforts, including by making your officers and advisors, and,
to the extent practical and appropriate, using your commercially reasonable
efforts to make the officers and advisors of the Acquired Business, available
from time to time upon reasonable advance notice to attend and make
presentations regarding the business and prospects of the Companies and the
Transaction at one or more meetings of prospective Lenders. Notwithstanding
anything to the contrary contained in this Commitment Letter or the Fee Letters
or any other letter agreement or undertaking concerning the financing of the
Transaction to the contrary, neither the obtaining of the Ratings referenced
above nor the compliance with any of the other provisions set forth in clauses
(a) through (f) above or any other provision of this paragraph shall constitute
a condition to the commitments hereunder or the funding of the Facilities on the
Closing Date. For the avoidance of doubt, the Companies 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 binding on the Companies; provided that in the event that the
Companies do not provide information in reliance on this sentence, the Companies
shall provide notice to the Lead Arrangers that such information is being
withheld and shall use their commercially reasonable efforts to communicate, to
the extent feasible, the applicable information in a way that would not violate
the applicable obligation or risk waiver of such privilege.
It is understood and agreed that the Lead Arrangers will manage and control all
aspects of the syndication of the Facilities in consultation with you and, as to
the selection of Lenders, with your approval (such approval not to be
unreasonably withheld or delayed), and, subject to the second paragraph in
Section 1 above, any titles offered to prospective Lenders, when commitments
will be accepted and the final allocations of the commitments among the Lenders.
It is understood that no Lender participating in the Facilities will receive
compensation from you in order to obtain its commitment, except on the terms
contained herein and in the Summary of Terms. It is also understood and agreed
that the amount and distribution of the fees among the Lenders will be at the
sole and absolute discretion of the Lead Arrangers.
3.    Information Requirements. You hereby represent, warrant and covenant (with
respect to information relating to the Acquired Business made available prior to
the Closing Date, to your knowledge) that (a) all written information, other
than Projections (as defined below) forward looking information and information
of a general economic or industry specific nature, that has been or is hereafter
made available to the Lead Arrangers or any of the Lenders by or on behalf of
you or any of your representatives in connection with any aspect of the
Transaction (including such information relating to the Acquired Business) (the
“Information”) did not and will not when furnished, taken as a whole, contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not materially misleading (giving
effect to all supplements and updates provided thereto) and (b) all financial
projections concerning the Companies that have been or are hereafter made
available to the Lead Arrangers or any of the Lenders by or on behalf of you or
any of your representatives (the “Projections”) have been or will be prepared in
good faith based upon reasonable assumptions (it being understood and agreed
that the Projections are not to be viewed as a guarantee of financial
performance or achievement, that the Projections are subject to significant
uncertainties and contingencies, many of which are beyond your control, and that
actual results may differ from the Projections and such differences may be
material). You agree that if at any time prior to the later of (a) the earlier
of (i) the date on which a Successful Syndication (as defined in the Facilities
Fee Letter) is achieved and (ii) 60 days following the Closing Date (such
earlier date, the “Syndication Date”) and (b) the Closing Date any of the
representations 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 (and with respect
to Information and Projections with respect to the Acquired Business you will
use commercially reasonable efforts to cause the Acquired Business to) promptly
supplement, or cause to be supplemented, the Information and Projections so that
such representations will be correct in all material respects (to your knowledge
insofar as it applies to the Information and Projections furnished prior to the
Closing Date concerning the Acquired Business) at such time. In issuing this
commitment and in arranging and syndicating each of the Facilities, the
Commitment Parties are and will be using and relying on the Information and the
Projections without independent verification thereof. For the avoidance of
doubt, nothing in this paragraph will constitute a condition to the availability
of the Facilities on the Closing Date.
You acknowledge that (a) the Lead Arrangers on your behalf will make available
Information Materials to the proposed syndicate of Lenders by posting the
Information Materials on IntraLinks or another similar electronic system (the
“Platform”) and (b) certain prospective Lenders (such Lenders, “Public Lenders”;
all other Lenders, “Private Lenders”) may 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 Companies, their respective
affiliates or any other entity, or the respective securities of any of the
foregoing, and who may be engaged in investment and other market-related
activities with respect to such entities’ securities. If requested, you will
assist the Lead Arrangers in preparing an additional version of the Information
Materials not containing MNPI (the “Public Information Materials”) to be
distributed to prospective Public Lenders.
Before distribution of any Information Materials (a) to prospective Private
Lenders, you shall provide the Lead Arrangers with a customary letter
authorizing the dissemination of the Information Materials; and (b) to
prospective Public Lenders, you shall provide the Lead Arrangers with a
customary letter authorizing the dissemination of the Public Information
Materials and confirming the absence of MNPI therefrom. In addition, you hereby
agree that (x) at the request of the Lead Arrangers (or their respective
affiliates), you shall use commercially reasonable efforts to identify that
portion of the Information Materials that may be distributed to the Public
Lenders by clearly and conspicuously marking the same as “PUBLIC”; (y) all
Information Materials marked “PUBLIC” are permitted to be made available through
a portion of the Platform designated “Public Investor”; and (z) the Lead
Arrangers (and their respective affiliates) shall be entitled to treat any
Information Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”
You agree, subject to the confidentiality and other provisions of this
Commitment Letter, that the Lead Arrangers (and their respective affiliates) on
your behalf may distribute the following documents to all prospective Lenders,
unless you advise the Lead Arrangers in writing (including by email) within a
reasonable time prior to their intended distributions that such material should
only be distributed to prospective Private Lenders: (a) administrative materials
prepared by the Lead Arrangers for prospective Lenders such as lender meeting
invitations and funding and closing memoranda, (b) notifications of changes to
the terms of the Facilities and (c) other materials intended for prospective
Lenders after the initial distribution of the Information Materials, including
drafts approved in writing by you and the Lead Arrangers (or their respective
affiliates) and final versions of definitive documents with respect to the
Facilities. If you advise the Lead Arrangers (or their respective affiliates)
that any of the foregoing items should be distributed only to Private Lenders,
then the Lead Arrangers (and their respective affiliates) will not distribute
such materials to Public Lenders without further discussions with you. You agree
(with respect to Information Materials relating to the Acquired Business made
available prior to the Closing Date, to your knowledge) that Information
Materials made available to prospective Public Lenders in accordance with this
Commitment Letter shall not contain MNPI.
4.    Fees and Indemnities.
(a)    You agree to reimburse the Commitment Parties for all reasonable and
documented out-of-pocket fees and expenses (including, but not limited to, the
reasonable and documented fees, actual disbursements and other out-of-pocket
expenses of one primary counsel to the Commitment Parties (it being understood
and agreed that Weil, Gotshal & Manges LLP shall act as primary counsel to the
Commitment Parties), and of (x) one local counsel in each relevant state and one
local counsel in each Material Jurisdiction, in each case, retained by the Lead
Arrangers (each such counsel shall be subject to your reasonable consent (such
consent not to be unreasonably withheld, delayed or conditioned)) and (y) solely
in the case of a conflict of interest, one additional counsel in each relevant
jurisdiction to the affected Commitment Parties similarly situated and
reasonable due diligence expenses) incurred in connection with the Facilities,
the syndication thereof, the preparation of the Credit Documentation (as defined
below) therefor and the other transactions contemplated hereby, whether or not
the Closing Date occurs or any of the Credit Documentation is executed and
delivered or any extensions of credit are made under either of the Facilities.
Such amounts shall be paid on the earlier of (i) the Closing Date or (ii) three
business days following the termination of this Commitment Letter as provided
below. You agree to pay the fees set forth in (x) the separate fee letter
addressed to you dated the date hereof from the Commitment Parties (the
“Facilities Fee Letter”) and (y) the separate agency fee letter addressed to you
dated March 16, 2016 from the Administrative Agent (the “Agency Fee Letter” and,
together with the Facilities Fee Letter, the “Fee Letters”).
(b)    You also agree to indemnify and hold harmless each of the Commitment
Parties, each other Lender and each of their affiliates, successors and assigns
and their respective partners, officers, directors, employees, trustees and
agents (in each case, except to the extent acting in their capacity as a
financial advisor in connection with the Acquisition) (each, an “Indemnified
Party”) from and against (and will reimburse each Indemnified Party for) any and
all claims, damages, losses, liabilities and expenses (including, without
limitation, the reasonable and documented fees, actual disbursements and other
out-of-pocket expenses of counsel to any Indemnified Party) that may be incurred
by or asserted or awarded against any 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) this Commitment Letter, (b) the Fee
Letters, (c) any aspect of the Transaction or any of the other transactions
contemplated thereby or (d) the Facilities, or any use made or proposed to be
made with the proceeds thereof, except to the extent such claim, damage, loss,
liability or expense (i) is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from (x) such Indemnified Party’s bad
faith, gross negligence or willful misconduct or (y) a material breach of such
Indemnified Party’s obligations hereunder or under the Fee Letters, (ii) arises
from a dispute solely among the Indemnified Parties (other than a dispute
involving claims against us in our capacity as a Lead Arranger, Syndication
Agent, bookrunning manager, co-agent or similar capacity), and in any such event
described in this clause (ii) solely to the extent that the underlying dispute
does not arise as a result of any action, inaction or representation of, or
information provided by or on behalf of, you or any of your subsidiaries or
(iii) resulted from any agreement governing any settlement effected without your
prior written consent (such consent not to be unreasonably withheld or delayed);
provided, however, that the foregoing indemnity will apply to any such
settlement in the event that you were offered the ability to assume the defense
of the action that was the subject matter of such settlement and elected not to
assume such defense. In the case of any claim, litigation, investigation or
proceeding (any of the foregoing, a “Proceeding”) to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
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 any aspect of the Transaction is consummated. You also agree that
no Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to you or your subsidiaries arising out of,
related to or in connection with any aspect of the Transaction, except to the
extent of direct (as opposed to special, indirect, consequential or punitive)
damages determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s bad faith, gross
negligence, willful misconduct or material breach of this Commitment Letter or
the Fee Letters. Notwithstanding any other provision of this Commitment Letter,
no Indemnified Party shall be liable for any damages arising from the use by
others of information or other materials obtained through electronic
telecommunications or other information transmission systems, other than for
direct, actual damages resulting from the bad faith, gross negligence or willful
misconduct of such Indemnified Party as determined by a final non-appealable
judgment of a court of competent jurisdiction. You shall not, without the prior
written consent of an Indemnified Party (which consent shall not be unreasonably
withheld, conditioned or delayed), effect any settlement of any pending or
threatened Proceeding against an Indemnified Party in respect of which indemnity
could have been sought hereunder by such Indemnified Party unless (i) such
settlement includes an unconditional release of such Indemnified Party from all
liability or claims that are the subject matter of such Proceeding and (ii) does
not include any statement as to any admission of liability.
You and each Indemnified Party (in consultation with you) shall take all
reasonable steps to mitigate any losses, claims, damages, liabilities and
expenses and each Indemnified Party shall give such information and assistance
to you as you may reasonably request in connection with any Proceeding.
In addition, please note that Barclays Capital Inc. has been retained by you as
financial advisor (in such capacity, together with any affiliates, the
“Financial Advisor”) to you 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 our and our affiliates’ relationships with you as described and
referred to herein.
5.    Conditions to Financing. The commitment of each Initial Lender with
respect to the initial funding of the Facilities is subject solely to (a) the
satisfaction or waiver by the Commitment Parties of each of the conditions set
forth under Annex II hereto and (b) subject to the Funds Certain Provisions (as
defined below), the execution and delivery of definitive credit documentation
with respect to each Facility consistent with this Commitment Letter and the Fee
Letters and, to the extent terms are not provided in this Commitment Letter or
the Fee Letters, otherwise satisfactory to you and the Lead Arrangers (the
“Credit Documentation”) prior to such initial funding.
Notwithstanding anything in this Commitment Letter, the Fee Letters, the Credit
Documentation or any other letter agreement or other undertaking concerning the
financing of the Transaction to the contrary, (a) the Credit Documentation shall
be in a form such that the terms thereof do not impair availability of the
Facilities on the Closing Date if the conditions in Annex II and paragraph 5
hereof shall have been satisfied, (b) to the extent any security interest in the
Collateral (as defined in Annex I) (other than the Collateral of the Borrowers
and the Guarantors (as defined in Annex I) the security interest in which may be
perfected by the filing of a UCC financing statement, the filing of short-form
security agreements with the United States Patent and Trademark Office or the
United States Copyright Office or the delivery of certificates evidencing equity
interests (other than any certificates evidencing equity interests in the
Acquired Business and its subsidiaries)) is not provided on the Closing Date
after your use of commercially reasonable efforts to do so, the provision and/or
perfection, as applicable, of any such Collateral shall not constitute a
condition precedent to the availability of the Facilities on the Closing Date
(it being understood, however, that the Credit Documentation shall provide that
such provision and/or perfection occurs not later than 90 days, or in the case
of any certificates evidencing equity interests in the Acquired Business and any
of its subsidiaries organized in the United States, 10 days (or, in each case
such later date as reasonably agreed to by the Administrative Agent) after the
Closing Date pursuant to arrangements to be mutually agreed), and (c) subject to
appropriate qualifications to reflect the foregoing clause (b), the only
representations and warranties the accuracy of which shall be a condition to the
availability of the Facilities on the Closing Date shall be those set forth in
paragraph (ii) of Annex II hereto. The provisions of this paragraph are referred
to herein as the “Funds Certain Provisions.”
Each of the parties hereto agrees that this Commitment Letter and the Fee
Letters is a binding and enforceable agreement (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors’ rights generally and general principles
of equity (whether considered in a proceeding in equity or law)) with respect to
the subject matter contained herein, including an agreement to negotiate in good
faith the Credit Documentation by the parties hereto in a manner consistent with
this Commitment Letter and, to the extent applicable, the Fee Letters, it being
acknowledged and agreed that the funding of the Facilities is subject only to
the conditions precedent as provided herein.
6.    Confidentiality and Other Obligations. This Commitment Letter and the Fee
Letters and the contents hereof and thereof are confidential and, may not be
disclosed in whole or in part to any person or entity without the prior written
consent of the Lead Arrangers (not to be unreasonably withheld, conditioned or
delayed) except (i) this Commitment Letter and the Fee Letters may be disclosed
(A) on a confidential basis to your directors, officers, employees, accountants,
attorneys and other representatives and professional advisors and those of your
affiliates who need to know such information in connection with the Transaction
and are informed of the confidential nature of such information, (B) pursuant to
the order of any court or administrative agency in any pending legal or
administrative proceeding, or otherwise as required by applicable law or
compulsory legal process based on the reasonable advice of your legal counsel
(in which case you agree to inform the Lead Arrangers promptly thereof prior to
such disclosure to the extent permitted by applicable law), and (C) on a
confidential basis to the directors, officers, employees, accountants, attorneys
and other representatives and professional advisors of the Acquired Business in
connection with their consideration of the Transaction, provided that the Fee
Letters are redacted in a manner reasonably satisfactory to the Lead Arrangers,
(ii) Annex I and Annex II and the existence of this Commitment Letter and the
Fee Letters (but not the contents of the Commitment Letter and the Fee Letters)
may be disclosed to Moody’s and S&P and any other rating agency on a
confidential basis, (iii) the aggregate amount of the fees (including upfront
fees and original issue discount) payable under the Fee Letters may be disclosed
as part of generic disclosure regarding sources and uses for closing of the
Facilities (but without disclosing any specific fees, market flex or other
economic terms set forth therein or to whom such fees or other amounts are
owed), (iv) the Commitment Letter and the Fee Letters may be disclosed on a
confidential basis to your auditors after the Closing Date for customary
accounting purposes, including accounting for deferred financing costs, (v) you
may disclose the Commitment Letter (but not the Fee Letters) and its contents in
any proxy or other public filing relating to the Acquisition, (vi) the
Commitment Letter and the Fee Letters may be disclosed to a court, tribunal or
any other applicable administrative agency or judicial authority in connection
with the enforcement of your rights hereunder (in which case you agree to inform
the Lead Arrangers promptly thereof prior to such disclosure to the extent
permitted by applicable law), and (v) you many disclose the existence and
contents of the Commitment Letter to potential Lenders and participants in
connection with their consideration of the Transaction. This paragraph shall
terminate on the earlier of (a) execution and delivery of the Credit
Documentation and (b) the date that is twelve months from March 16, 2016.
The Commitment Parties shall use all confidential information provided to them
by or on behalf of you hereunder solely for the purpose of providing the
services which are the subject of this Commitment Letter and otherwise in
connection with the Transaction and shall treat confidentially all such
information; provided, however, that nothing herein shall prevent the Commitment
Parties from disclosing any such information (i) pursuant to the order of any
court or administrative agency or in any pending legal or administrative
proceeding, or otherwise as required by applicable law or compulsory legal
process (in which case the Commitment Parties agree to inform you promptly
thereof to the extent not prohibited by law, rule or regulation), (ii) upon the
request or demand of any regulatory authority having jurisdiction over the
Commitment Parties or any of their respective affiliates, (iii) to the extent
that such information becomes publicly available other than by reason of
disclosure in violation of this agreement by the Commitment Parties, (iv) to the
Commitment Parties’ affiliates, employees, legal counsel, independent auditors
and other experts, professionals or agents who need to know such information in
connection with the Transaction and are informed of the confidential nature of
such information, (v) for purposes of establishing a “due diligence” defense,
(vi) to the extent that such information is received by a Commitment Party from
a third party that is not to the applicable Commitment Party’s knowledge subject
to confidentiality obligations to you, (vii) to the extent that such information
is independently developed by the Commitment Parties, (viii) to potential
Lenders, participants, assignees or any direct or indirect contractual
counterparties to any swap or derivative transaction relating to you or your
obligations under the Facilities (other than Disqualified Institutions), in each
case, who agree to be bound by the terms of this paragraph (or language not less
restrictive than this paragraph or as otherwise reasonably acceptable to you and
each Commitment Party, including as may be agreed in any confidential
information memorandum or other marketing material), (ix) to Moody’s and S&P,
and to Bloomberg, LSTA and similar market data collectors with respect to the
syndicated lending industry; provided that such information is supplied only on
a confidential basis and does not include copies of the Fee Letters, or (x) with
your prior written consent. This paragraph shall terminate on the earlier of (a)
execution and delivery of the Credit Documentation and (b) the date that is
twelve months from March 16, 2016.
You acknowledge that the Commitment Parties or their affiliates may be providing
financing or other services to parties whose interests may conflict with yours.
The Commitment Parties agree that they will not furnish confidential information
obtained from you to any of their other customers and will treat confidential
information relating to the Companies and their respective affiliates with the
same degree of care as they treat their own confidential information. The
Commitment Parties further advise you that they will not make available to you
confidential information that they have obtained or may obtain from any other
customer. In connection with the services and transactions contemplated hereby,
you agree that the Commitment Parties are permitted to access, use and share
with any of their bank or non-bank affiliates, agents, advisors (legal or
otherwise) or representatives any information concerning the Companies or any of
their respective affiliates that is or may come into the possession of the
Commitment Parties or any of their respective affiliates.
In connection with all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (i) each of the Facilities and any related arranging or
other services described in this Commitment Letter is an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and the Commitment
Parties, on the other hand, (ii) the Commitment Parties have not provided any
legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby and you have consulted your own legal,
accounting, regulatory and tax advisors to the extent you have deemed
appropriate, (iii) you are capable of evaluating, and understand and accept, the
terms, risks and conditions of the transactions contemplated hereby, (iv) in
connection with the financing transactions contemplated hereby and the process
leading to such transactions, each of the Commitment Parties has been, is, and
will be acting solely as a principal and has not been, is not, and will not be
acting as an advisor, agent or fiduciary for you or any of your affiliates,
stockholders, creditors or employees or any other party, (v) the Commitment
Parties have not assumed and will not assume an advisory, agency or fiduciary
responsibility in your or your affiliates’ favor with respect to any of the
financing transactions contemplated hereby or the process leading thereto, and
the Commitment Parties have no obligation to you or your affiliates with respect
to the financing transactions contemplated hereby except those obligations
expressly set forth in this Commitment Letter, and (vi) 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 have no obligation to disclose any of such interests to
you or your affiliates. To the fullest extent permitted by law and without
limiting the provisions of paragraph 4(b), you hereby waive and release any
claims that you may have against the Commitment Parties with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any financing transaction contemplated by this Commitment Letter.
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 “U.S.A. Patriot Act”), each of them is required to obtain, verify and
record information that identifies you, the Euro Borrower and the Guarantors,
which information includes the name and address of such person and other
information that will allow the Commitment Parties, as applicable, to identify
such person in accordance with the U.S.A. Patriot Act. This notice is given in
accordance with the requirements of the U.S.A. Patriot Act and is effective for
the Commitment Parties and each prospective Lender.
7.    Survival of Obligations. The provisions of paragraphs 2, 3, 4, 6 and 8
shall remain in full force and effect regardless of whether any Credit
Documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or any commitment or undertaking of the
Commitment Parties hereunder, provided that (i) the provisions of paragraphs 2
and 3 shall not survive if the commitments and undertakings of the Commitment
Parties are terminated by any party hereto prior to the effectiveness of the
Facilities, (ii) if the Facilities close and the Credit Documentation is
executed and delivered (A) the provisions of paragraphs 2 and 3 shall survive
only until the Syndication Date is achieved and (B) the provisions under
paragraph 4 and the second paragraph of Section 6 shall be superseded and deemed
replaced by the terms of the Credit Documentation governing such matters (solely
to the extent such provisions are set forth therein).
8.    Miscellaneous. This Commitment Letter and the Fee Letters may be executed
in multiple counterparts and by different parties hereto in separate
counterparts, all of which, taken together, shall constitute an original.
Delivery of an executed counterpart of a signature page to this Commitment
Letter or the Fee Letters by telecopier, facsimile or other electronic
transmission (e.g., a “pdf” or “tiff”) shall be effective as delivery of a
manually executed counterpart thereof. Headings are for convenience of reference
only and shall not affect the construction of, or be taken into consideration
when interpreting, this Commitment Letter or the Fee Letters.
This Commitment Letter and the Fee Letters shall be governed by, and construed
in accordance with, the laws of the State of New York; provided that (i) the
interpretation of whether a Company Material Adverse Effect (as defined in Annex
II hereto) has occurred, (ii) the accuracy of the Acquisition Agreement
Representations and whether you or any of your affiliates have the right to
terminate your (or its) obligations under the Acquisition Agreement or decline
to consummate the Acquisition as a result of a breach of such Acquisition
Agreement Representations and (iii) whether the Acquisition has been consummated
in accordance with the terms of the Acquisition Agreement shall, in each case,
be construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to any choice or conflict of law provisions
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. Each party hereto hereby irrevocably waives any and all right to trial
by jury in any action, proceeding or counterclaim (whether based on contract,
tort or otherwise) arising out of or relating to this Commitment Letter, the Fee
Letters, the Transaction and the other transactions contemplated hereby and
thereby or the actions of the Commitment Parties in the negotiation, performance
or enforcement hereof. Each party hereto hereby irrevocably and unconditionally
submits to the exclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in the Borough of Manhattan in New
York City in respect of any suit, action or proceeding arising out of or
relating to the provisions of this Commitment Letter, the Fee Letters, the
Transaction and the other transactions contemplated hereby and thereby and
irrevocably agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. The parties hereto
agree that service of any process, summons, notice or document by registered
mail addressed to you shall be effective service of process against you for any
suit, action or proceeding relating to any such dispute. Each party hereto
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such suit, action or
proceedings brought in any such court, and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. A final judgment in any such suit, action or proceeding brought in any
such court may be enforced in any other courts to whose jurisdiction the
applicable party is or may be subject by suit upon judgment.
This Commitment Letter, together with the Fee Letters, embodies the entire
agreement and understanding among the parties hereto and your affiliates with
respect to the Facilities and supersedes all prior agreements and understandings
relating to the subject matter hereof. No party has been authorized by the
Commitment Parties to make any oral or written statements that are inconsistent
with this Commitment Letter. Neither this Commitment Letter (including the
attachments hereto) nor the Fee Letters may be amended or any term or provision
hereof or thereof waived or modified except by an instrument in writing signed
by each of the parties hereto.
This Commitment Letter may not be assigned by you without our prior written
consent (and any purported assignment without such consent will be null and
void), is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto (and the Indemnified Parties).
Notwithstanding the foregoing sentence, (i) each Initial Lender may assign its
commitment hereunder, in whole or in part, to any of its affiliates or to any
Lender (other than to a Disqualified Institution); provided that, other than
with respect to an assignment to which you otherwise agree in writing, such
Initial Lender shall not be released from the portion of its commitment
hereunder so assigned to the extent such assignee fails to fund the portion of
the commitment assigned to it on the Closing Date notwithstanding the
satisfaction of the conditions to funding set forth herein and (ii) MLPFS may,
without notice to you, assign its rights and obligations under this Commitment
Letter to any other registered broker-dealer wholly-owned by Bank of America
Corporation to which all or substantially all of Bank of America Corporation’s
or any of its subsidiaries’ investment banking, commercial lending services or
related business may be transferred following the date hereof.
Please indicate your acceptance of the terms of the Facilities set forth in this
Commitment Letter and the Fee Letters by returning to Barclays executed
counterparts of this Commitment Letter and the Fee Letters not later than 9:00
a.m. (New York City time) on April 6, 2016, whereupon the undertakings of the
parties with respect to the Facilities shall become effective to the extent and
in the manner provided hereby. This offer shall terminate with respect to the
Facilities if not so accepted by you at or prior to that time. Thereafter, all
commitments and undertakings of the Commitment Parties hereunder will expire on
the earliest of (a) 11:59 p.m. (New York City time) on March 16, 2017 (the
“Commitment Termination Date”) (provided that to the extent the Termination Date
(as defined in the Acquisition Agreement in effect on March 16, 2016) is
extended to June 16, 2017 in accordance with the terms of Section 8.1(b) of the
Acquisition Agreement (in accordance with the terms thereof as in effect on the
date hereof), the Commitment Termination Date shall, upon notice of such
extension to the Lead Arrangers from the US Borrower, be automatically extended
to 11:59 p.m. (New York City time) on June 16, 2017), (b) the closing of the
Acquisition without the use of the Facilities, (c) the termination of the
Acquisition Agreement and (d) the public announcement of the abandonment of the
Acquisition by you or any of your affiliates in a public statement or filing
(such earliest time set forth in clause (a), (b), (c) or (d) above, the
“Expiration Date”).
[The remainder of this page intentionally left blank.]

We are pleased to have the opportunity to work with you in connection with this
important financing.
Very truly yours,
BARCLAYS BANK PLC

By:     /s/ Timothy Broadbent    
Name:    Timothy Broadbent
Title:    Managing Director

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:     /s/ Neil Kahrim    
Name:    Neil Kahrim
Title: Director

BANK OF AMERICA, N.A.

By:     /s/ Neil Kahrim    
Name:    Neil Kahrim
Title: Director
  

This Commitment Letter is accepted and agreed
to as of the date first written above:
COHERENT, INC.

By: /s/ Kevin Palatnik
Name: Kevin Palatnik
Title: EVP&CFO

ANNEX I
SUMMARY OF TERMS AND CONDITIONS
FACILITIES
Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex I is attached.
Borrowers:
With respect to the US Term Facility and the Revolving Credit Facility,
Coherent, Inc. (the “US Borrower”).
With respect to the Euro Term Facility and the Revolving Credit Facility,
Coherent Holding GmbH, a German company with limited liability (the “Euro
Borrower” and, together with the US Borrower, the “Borrowers”).
Borrower Representative:
The Credit Documentation (as defined below) will permit the US Borrower to act
as the borrower representative (in such capacity, the “Borrower
Representative”), and to act as agent on behalf of the Borrowers for purposes of
delivering notices, providing consents, receiving notices and taking other
actions permitted or required under the Credit Documentation.
Guarantors:
Subject in all respects to the Security Principles (as defined below), (a) the
obligations of the US Borrower under the US Term Facility, the Revolving Credit
Facility (as defined below) and, at the Borrower Representative’s option, under
any treasury management, interest protection or other hedging arrangements
entered into with a Lender (as defined below) or an affiliate thereof
(collectively, the “US Obligations”) will be guaranteed on a senior basis by
each of the US Borrower’s, direct or indirect, wholly-owned restricted
subsidiaries that are US Subsidiaries (as defined below) (the entities described
in this clause (a), collectively, the “US Guarantors”; the US Guarantors
together with the US Borrower, the “US Loan Parties”) and (b) all obligations of
the Euro Borrower under the Euro Term Facility and the Revolving Credit Facility
(collectively, the “Euro Obligations”) will be unconditionally guaranteed on a
senior basis by each US Loan Party and each of the US Borrower’s wholly-owned
restricted subsidiaries that are Foreign Subsidiaries (as defined below)
(collectively, the “Euro Guarantors”; and the Euro Guarantors, together with the
US Guarantors, collectively, the “Guarantors”; and the Euro Guarantors, together
with the Euro Borrower, collectively, the “Euro Loan Parties”; and the Euro Loan
Parties, together with the US Loan Parties, the “Loan Parties”), subject to
customary exceptions to be agreed (including, without limitation, no guarantee
from (i) with respect to the US Obligations only, any CFC Holdco or Disregarded
Domestic Person (each as defined below) and any US Subsidiary that is a
subsidiary of a Foreign Subsidiary, (ii) any subsidiary whose provision of a
guarantee would (x) be prohibited by applicable law or regulation or any
contractual obligation existing on the Closing Date or at the time of
acquisition thereof after the Closing Date (so long as such prohibition is not
created in contemplation of such transaction) or that would require consent,
approval, license or authorization of a governmental authority (unless such
consent, approval, license or authorization has been received) or (y) otherwise
result in a material adverse tax consequence to either Borrower, in each case,
as reasonably determined by such Borrower, (iii) Immaterial Subsidiaries (as
defined below), (iv) unrestricted subsidiaries, (v) captive insurance companies,
(vi) not-for-profit subsidiaries, (vii) special purpose entities, (viii) any
subsidiary where the Borrower Representative and the Administrative Agent
reasonably determine that the costs of obtaining a guarantee from such
subsidiary are excessive in relation to the value afforded thereby or (ix) other
subsidiaries mutually agreed between the Borrower Representative and the
Administrative Agent. For the avoidance of doubt and notwithstanding anything to
the contrary herein, subsidiaries which are not “eligible contract participants”
shall not guarantee swap obligations to the extent not permitted by the
Commodity Exchange Act, or any regulation thereunder, by virtue of such
subsidiary failing to constitute an “eligible contract participant”.
For purposes of the Credit Documentation, (a) “US Subsidiary” means any direct
or indirect subsidiary of the US Borrower organized under the laws of the United
States, any state thereof or the District of Columbia, (b) “Foreign Subsidiary”
means any direct or indirect subsidiary of the US Borrower organized in a
jurisdiction outside of the United States, any state thereof or the District of
Columbia, (c) “Guarantor Coverage Test” means, as of the last day of the fiscal
quarter of the US Borrower most recently ended for which financial statements
have been (or were required to be) delivered pursuant to the Credit
Documentation, the Consolidated Total Assets (to be defined in a manner
consistent with the Documentation Principles) and Consolidated EBITDA (as
defined below) attributable to the Guarantors only is no less than 80% of
Consolidated Total Assets and Consolidated EBITDA, respectively, of the US
Borrower and its restricted subsidiaries (other than any restricted subsidiaries
located in an Excluded Jurisdiction), in each case as of such date for the test
period most recently ended, (d) “Immaterial Subsidiary” means (i) any Restricted
Subsidiary organized under the law of a Non-Material Jurisdiction and (ii) any
Restricted Subsidiary organized under the laws of a Material Jurisdiction, taken
together with all such Immaterial Subsidiaries organized under the laws of such
Material Jurisdiction as of the last day of the fiscal quarter of the US
Borrower most recently ended for which financial statements have been (or were
required to be) delivered pursuant to the Credit Documentation, did not have
assets with a value in excess of 1.0% of Consolidated Total Assets or contribute
in excess of 1.0% of Consolidated EBITDA, in each case as of such date for the
test period most recently ended; provided, that the Borrower Representative may
elect in its sole discretion to exclude as an Immaterial Subsidiary any
Restricted Subsidiary that would otherwise meet the definition thereof;
provided, further that a Material Subsidiary organized in any Post-Closing
Material Jurisdiction shall not be required to be a Guarantor if the US Borrower
has, as of such date for the test period most recently ended, complied with the
Guarantor Coverage Test, (e) “Material Jurisdiction” means (i) on the Closing
Date, the United States, the United Kingdom, Germany, Spain and the Netherlands
(the “Closing Date Material Jurisdictions”) and (ii) at any time after the
Closing Date, the Closing Date Material Jurisdictions and any other jurisdiction
where any Restricted Subsidiary organized under the laws of such jurisdiction,
taken together with all other Restricted Subsidiaries organized under the laws
of such jurisdiction as of the last day of the fiscal quarter of the US Borrower
most recently ended for which financial statements have been (or were required
to be) delivered pursuant to the Credit Documentation, have assets with a value
in excess of 5.0% of Consolidated Total Assets or contribute in excess of 5.0%
of Consolidated EBITDA of the US Borrower and its restricted subsidiaries, in
each case as of such date for the test period most recently ended (the
“Post-Closing Material Jurisdiction”); provided that in no event shall The
People’s Republic of China, South Korea or Japan be deemed to be a “Material
Jurisdiction” (each such jurisdiction, an “Excluded Jurisdiction”), (f)
“Non-Material Jurisdiction” means any jurisdiction that is not a Material
Jurisdiction and (g) “Material Subsidiary” means any direct or indirect
subsidiary of the US Borrower which is not an Immaterial Subsidiary.
Administrative and Collateral Agent:
Barclays Bank PLC (“Barclays”) will act as sole and exclusive administrative and
collateral agent for the Lenders (the “Administrative Agent”).
Joint Lead Arrangers and Joint Bookrunning Managers:
Barclays and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”, which
term shall include, in each case, MLPFS’s designated affiliate for any purpose
hereunder) will act as joint lead arrangers and joint bookrunning managers for
the Facilities (each, in such capacity, a “Lead Arranger” and collectively, the
“Lead Arrangers”).
Syndication Agent:
Barclays will act as syndication agent for the Facilities (in such capacity, the
“Syndication Agent”).
Lenders:
Banks, financial institutions and institutional lenders selected by the Lead
Arrangers and reasonably acceptable to the Borrower Representative and, after
the initial funding of the Facilities, subject to the restrictions set forth in
the Assignments and Participations section below (the “Lenders”).
Facilities:
An aggregate principal amount of up to $850,000,000 will be available through
the following facilities (such facilities, the “Facilities”):
 
Term Facility: (i) a $375,000,000 (plus, at the election of the Borrower
Representative, an amount sufficient to fund original issue discount (“OID”) or
upfront fees required to be funded in connection with the “market flex”
provisions of the Facilities Fee Letter and not funded under the Revolving
Credit Facility) term loan B facility made available to the US Borrower, all of
which will be drawn on the Closing Date (the “US Term Facility”) and (ii) a term
loan B facility in a principal amount equal to the Euro equivalent of
$375,000,000 made available to the Euro Borrower, all of which will be drawn on
the Closing Date (the “Euro Term Facility” and together with the US Term
Facility, collectively, the “Term Facility”). For the avoidance of doubt, the
Euro equivalent shall be determined by the Administrative Agent on the earlier
of (x) the allocation of the commitments under the Term Facility in connection
with the syndication thereof and (y) the date on which the Borrower
Representative submits the borrowing request to the Administrative Agent in
connection with the initial funding of the Facilities.
 
Revolving Credit Facility: a $100,000,000 revolving credit facility (the
“Revolving Credit Facility” and the loans thereunder, the “Revolving Loans”),
available from time to time on or after the Closing Date until the fifth
anniversary of the Closing Date, which will be available to the US Borrower and
the Euro Borrower in Euros, U.S. dollars and/or such other currencies as the
Administrative Agent and each lender with a commitment under the Revolving
Credit Facility agrees. The Revolving Credit Facility shall include a sublimit
of $30,000,000 for the issuance of standby letters of credit (each, a “Letter of
Credit”) and a sublimit of $10,000,000 for swingline loans (each, a “Swingline
Loan”). Letters of Credit will be initially issued by Barclays and Bank of
America, N.A. on a pro rata basis (in such capacity, the “Issuing Bank”), and
each of the Lenders under the Revolving Credit Facility will purchase an
irrevocable and unconditional participation in each Letter of Credit and each
Swingline Loan.
Swingline Option:
Barclays, in its capacity as the swingline lender (in such capacity, the
“Swingline Lender”), will make Swingline Loans available to the US Borrower in
U.S. dollars on a same day basis. The US Borrower must repay each Swingline Loan
upon demand of the Swingline Lender (and in any event on the fifth anniversary
of the Closing Date).
Purpose:
The proceeds of the borrowings under the Term Facility on the Closing Date and
cash on of the balance sheet of the Borrowers and the Guarantors, shall be used
(i) to finance the Acquisition and the Refinancing and (ii) to pay fees and
expenses incurred in connection with the Transaction. The proceeds of the
Revolving Credit Facility may be used on the Closing Date to fund any additional
upfront fees or OID payable due to an imposition of “market flex” under the
Facilities Fee Letter (to the extent no funded by an increase to the US Term
Facility) and to backstop, cash collateralize or replace letters of credit
outstanding on the Closing Date. The proceeds of the Revolving Credit Facility
shall be used after the Closing Date to provide ongoing working capital and for
other general corporate purposes of the Borrowers and their subsidiaries.
Interest Rates:
The interest rates per annum applicable to the Facilities will be, at the option
of the Borrower Representative (i) LIBOR plus the Applicable Margin (as
hereinafter defined) or (ii) the Base Rate plus the Applicable Margin. The
Applicable Margin means (a) with respect to the Term Facility, (x) 4.75% per
annum, in the case of LIBOR advances, and (y) 3.75% per annum, in the case of
Base Rate advances, and (b) with respect to the Revolving Credit Facility,
(x) 4.25% per annum, in the case of LIBOR advances, and (y) 3.25% per annum, in
the case of Base Rate advances, in each case with two 25 basis point step-downs
if the Secured Net Leverage Ratios (as defined below) are less than 0.75x and
1.25x inside the Secured Net Leverage Ratio on the Closing Date, respectively.
 
Each Swingline Loan shall bear interest at the Base Rate plus the Applicable
Margin for Base Rate Revolving Loans.
 
The Borrower Representative may select interest periods of one, two, three or
six months (and, if agreed to by all relevant Lenders, twelve months) for LIBOR
advances. Interest shall be payable in cash at the end of the selected interest
period, but no less frequently than quarterly.
 
“LIBOR” and “Base Rate” will have meanings customary and appropriate for
financings of this type; provided that (x) LIBOR with respect to (i) the Term
Facility will be deemed to be not less than 1.00% per annum (the “LIBOR Floor”)
and (ii) the Revolving Credit Facility will be deemed to be not less than 0.00%
per annum and (y) the Base Rate will be deemed to be not less than 100 basis
points higher than one-month LIBOR.
 
During the continuance of an event of default for non-payment of principal,
interest or any other amount, interest will accrue on such overdue principal,
interest or other amount at the Default Rate (as defined below). During the
continuance of a bankruptcy event of default, the principal amount of all
outstanding obligations will bear interest at the Default Rate. As used herein,
“Default Rate” means (i) on the principal of any loan at a rate of 2.00% in
excess of the rate otherwise applicable to such loan and (ii) on any other
overdue amount at a rate of 2.00% in excess of the non-default rate of interest
then applicable to Base Rate loans under the Term Facility.
Commitment Fee:
For the period commencing on the Closing Date through the last day of the first
fiscal quarter ending thereafter, a commitment fee of 0.50% per annum, with a
step down to 0.375% per annum for any fiscal quarterly period thereafter for
which the Secured Net Leverage Ratio as of the last day of the most recently
completed fiscal quarter is equal to or less than a Secured Net Leverage Ratio
that is 1.00x inside the Secured Net Leverage Ratio on the Closing Date, shall
be payable on the actual daily unused portions of the Revolving Credit Facility
during each such applicable period, such fee to be payable quarterly in arrears
and on the date of termination or expiration of the commitments under the
Revolving Credit Facility. Swingline Loans will not be considered utilization of
the Revolving Credit Facility for purposes of this calculation. No commitment
fee shall be paid to any defaulting lender.
Calculation of Interest and Fees:
Other than calculations in respect of interest at the Base Rate (which shall be
made on the basis of actual number of days elapsed in a 365/366 day year), all
calculations of interest and fees shall be made on the basis of actual number of
days elapsed in a 360-day year.
Cost and Yield Protection:
Customary for transactions and facilities of this type, including, without
limitation, in respect of breakage or redeployment costs incurred in connection
with prepayments, changes in capital adequacy and capital requirements or their
interpretation, illegality, unavailability, reserves without proration or offset
and payments free and clear of withholding or other taxes, except as required by
applicable law (with appropriate gross-up for withholding taxes, subject to
customary exceptions); provided that for all purposes of the Credit
Documentation, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines and directives promulgated thereunder and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case, pursuant to Basel III, shall be deemed introduced or
adopted after the Closing Date.

Letter of Credit Fees:
Letter of Credit fees equal to the Applicable Margin from time to time on LIBOR
advances under the Revolving Credit Facility on a per annum basis will be
payable quarterly in arrears and shared proportionately by the Lenders under the
Revolving Credit Facility. In addition, a fronting fee equal to 12.5 basis
points per annum will be payable to the Issuing Bank for its own account, as
well as reasonable customary issuance and documentary fees. Both the Letter of
Credit fees and the fronting fees will be calculated on the amount available to
be drawn under each outstanding Letter of Credit.
Maturity:
Term Facility: 7 years after the Closing Date.
 
Revolving Credit Facility: 5 years after the Closing Date.
Amendment and Extension:
The Credit Documentation shall provide the right of individual Lenders to agree
in their sole discretion to extend the maturity of their loans and commitments
under the Facilities upon the request of the Borrower Representative and without
the consent of any other Lender (and as further described under “Waivers and
Amendments” below).
Incremental Facilities:
The Credit Documentation will permit the Borrower Representative to add one or
more incremental term loan facilities to the Facilities (each, an “Incremental
Term Facility”) and/or increase commitments under the Revolving Credit Facility
(any such increase, an “Incremental Revolving Facility”; the Incremental Term
Facilities and the Incremental Revolving Facilities are collectively referred to
as “Incremental Facilities”) in an aggregate amount of up to (a) $150,000,000
plus (b) an additional amount such that, in the case of this clause (b) only,
after giving pro forma effect thereto (including use of proceeds), the Senior
Secured Net Leverage Ratio (as defined below) does not exceed 2.75:1.00 (and,
for purposes of the test in this clause (b) to include all such Incremental
Facilities, assuming they were fully drawn, and whether or not secured and
whether secured on a first-lien or junior basis (without netting the proceeds
thereof), but excluding any substantially simultaneous debt incurrence pursuant
to clause (a)) (it being understood that loans may be incurred under both
clauses (a) and (b) above, and proceeds from any such incurrence under both
clauses (a) and (b) above may be utilized in a single transaction by first
calculating the incurrence under clause (b) above and then calculating the
incurrence under clause (a) above and, for the avoidance of doubt, any such
incurrence under clause (a) shall not be given pro forma effect for purposes of
determining Senior Secured Net Leverage Ratio for purposes of effectuating the
incurrence under clause (b) in such single transaction); provided that (i) no
Lender will be required to participate in any such Incremental Facility, (ii)
(x) no event of default (or, in the case of an Incremental Facility the proceeds
of which will be used to finance a Permitted Acquisition (as defined below), no
payment or bankruptcy event of default) exists or would exist after giving
effect thereto and (y) the representations and warranties in the Credit
Documentation shall be true and correct in all material respects (except to the
extent already qualified by materiality or material adverse effect)
(provided that any bring-down of representations and warranties shall be limited
in the case of any Permitted Acquisition to customary “specified
representations” and “acquisition agreement representations”), (iii) the
maturity date of any such Incremental Term Facility shall be no earlier than the
maturity date for the Term Facility, (iv) the weighted average life to maturity
of any Incremental Term Facility shall be no shorter than the weighted average
life to maturity of the Term Facility, (v) the interest margins for the
Incremental Term Facility shall be determined by the Borrower Representative and
the lenders of the Incremental Term Facility; provided that in the event that
the interest margins for any Incremental Term Facility incurred less than 18
months after the Closing Date are greater than the Applicable Margin for the
Term Facility by more than 50 basis points, then the Applicable Margin for the
Term Facility shall be increased to the extent necessary so that the interest
margins for the Incremental Term Facility are not more than 50 basis points
higher than the Applicable Margin for the Term Facility; provided, further, that
in determining the interest margins applicable to the Term Facility and the
Applicable Margins for the Incremental Term Facility, (x) OID or upfront fees
(which shall be deemed to constitute like amounts of OID) payable by the
applicable Borrower for the account of the Lenders of the Term Facility or the
Incremental Term Facility in the primary syndication thereof shall be included
(with OID being equated to interest based on the shorter of (i) the weighted
average life to maturity of such loans and (ii) an assumed four-year life to
maturity), (y) customary arrangement, structuring, underwriting, amendment or
commitment fees payable solely to the Lead Arrangers (or their respective
affiliates) in connection with the Term Facility or to one or more arrangers (or
their affiliates) of the Incremental Term Facility shall be excluded, and (z) if
the LIBOR or Base Rate floor for the Incremental Term Facility is greater than
the LIBOR or Base Rate floor, respectively, for the existing Term Facility, the
difference between such floor for the Incremental Term Facility and the existing
Term Facility shall be equated to an increase in the Applicable Margin for
purposes of this clause (v), (vi) each Incremental Facility may be secured by
either a pari passu or junior lien on the Collateral (as hereinafter defined)
securing the Facilities in each case on terms and pursuant to documentation
reasonably satisfactory to the Administrative Agent, (vii) any Incremental
Revolving Facility shall be on terms and pursuant to documentation applicable to
the Revolving Credit Facility and any Incremental Term Facility shall be on
terms and pursuant to documentation to be determined by the Borrower
Representative and the lenders providing such Incremental Facility, provided
that, to the extent such terms and documentation are not consistent with the
Term Facility (except to the extent permitted by clause (iii), (iv) or (v)
above), they shall be reasonably satisfactory to the Administrative Agent and
(viii) subject to clause (vii) above, any Incremental Term Facility shall be on
terms and pursuant to documentation to be agreed between the Borrower
Representative and the applicable lenders providing the Incremental Term
Facility; provided that to the extent such terms and documentation are not
consistent with the Term Facility or the Revolving Credit Facility, as the case
may be (except to the extent permitted above), such terms may, at the option of
the Borrower Representative, be incorporated into the Credit Documentation to
the extent all such terms are beneficial to all existing Lenders without further
amendment requirements, including, for the avoidance of doubt, any increase in
the Applicable Margin relating to the existing Term Facility to bring such
Applicable Margin in line with the Incremental Term Facility to achieve
fungibility with such existing Term Facility. The Borrower Representative shall
seek commitments in respect of any Incremental Facility from existing Lenders or
from additional banks, financial institutions and other institutional lenders
reasonably acceptable to the Administrative Agent who will become Lenders in
connection therewith.
 
The Credit Documentation will permit the Borrower Representative to utilize
availability under the Incremental Term Facilities to issue first or junior lien
secured notes or junior lien loans (any such notes or loans (including notes
issued through a private placement), “Incremental Equivalent Debt”), with the
amount of such secured notes or loans reducing the aggregate principal amount
available for the Incremental Term Facilities, subject to customary terms and
conditions to be agreed; provided that, to the extent any Incremental Equivalent
Debt is junior lien indebtedness, such indebtedness shall be permitted to be
incurred as Incremental Equivalent Debt to the extent that after giving pro
forma effect thereto (include use of proceeds) the Total Gross Leverage Ratio
(as defined below) does not exceed 4.50:1.00 regardless of the Senior Secured
Net Leverage Ratio then in effect.
Refinancing Facilities:
The Credit Documentation will permit the Borrower Representative to refinance
loans under the Term Facility or commitments under the Revolving Credit Facility
or loans or commitments under any Incremental Facility (each, “Refinanced Debt”)
from time to time, in whole or part, with (x) one or more new term facilities
(each, a “Refinancing Term Facility”) or new revolving credit facilities (each,
a “Refinancing Revolving Facility”; the Refinancing Term Facilities and the
Refinancing Revolving Facilities are collectively referred to herein as
“Refinancing Facilities”), respectively, under the Credit Documentation with the
consent of the Borrower Representative and the institutions providing such
Refinancing Facility or (y) other than with respect to a refinancing of the
Revolving Credit Facility, one or more series of unsecured notes or loans, notes
secured by the Collateral on a pari passu basis with the Facilities or notes or
loans secured by the Collateral on a subordinated basis to the Facilities, which
will be subject to customary intercreditor terms reasonably acceptable to the
Administrative Agent and the Borrower Representative (any such notes or loans,
“Refinancing Notes” and together with the Refinancing Facilities, the
“Refinancing Indebtedness”); provided that (i) any Refinancing Term Facility or
Refinancing Notes consisting of term loans do not mature prior to the maturity
date of, or have a shorter weighted average life than, the applicable Refinanced
Debt consisting of term loans, (ii) any Refinancing Notes consisting of notes do
not mature prior to the maturity date of the applicable Refinanced Debt or have
any scheduled amortization, (iii) the commitments under any Refinancing
Revolving Facility do not terminate prior to the termination date of the
revolving commitments under the applicable Refinanced Debt, (iv) there shall be
no issuers, borrowers or guarantors in respect of any Refinancing Indebtedness
that are not a Borrower or a Guarantor, (v) any Refinancing Notes shall not
contain any mandatory prepayment provisions (other than related to customary
asset sale and change of control offers or events of default) that could result
in prepayments of such Refinancing Notes prior to the maturity date of the
applicable Refinanced Debt, (vi) the other terms and conditions of such
Refinancing Indebtedness (excluding pricing, interest rate margins, rate floors,
discounts, fees and prepayment or redemption provisions) shall either, at the
option of the Borrower Representative, (x) with respect to Refinancing Notes
only, reflect market terms and conditions (taken as a whole) at the time of
incurrence or issuance (as determined by the Borrower Representative) or (y) not
be materially more favorable (when taken as a whole) to the lenders or investors
providing such Refinancing Indebtedness than the terms of the applicable
Refinanced Debt unless (1) the holders of the Refinanced Debt being replaced
also receive the benefit of such terms or (2) any such provisions apply only
after the maturity date of the Refinanced Debt and (vii) the proceeds of such
Refinancing Facility or Refinancing Notes (a) shall not be in an aggregate
principal amount greater than the aggregate principal amount of the applicable
Refinanced Debt plus any fees, premiums, OID and accrued interest associated
therewith, and costs and expenses related thereto and (b) shall be immediately
applied to permanently prepay (or, in the case of a Refinancing Revolving
Facility, replace) in whole or in part the applicable Refinanced Debt.
Documentation Principles:
The Credit Documentation:
(i)    will be negotiated in good faith within a reasonable time period to be
determined based on the expected Closing Date and taking into account the timing
of the syndication of the Facilities;
(ii)    be in such form that they do not impair the availability of the Term
Facility by the Closing Date if the Funds Certain Provisions are satisfied;
(iii)    will contain only those mandatory prepayments, representations,
warranties, conditions to borrowing, affirmative, negative and financial
covenants and events of defaults set forth herein, in each case applicable to
the Borrowers and their restricted subsidiaries; and
(iv)    will contain other terms and provisions substantially consistent with
those contained in a documentation precedent (the “Documentation Precedent”) to
be mutually agreed (as adjusted pursuant to terms of this section, the
“Documentation Principles”), with such changes and modifications thereto (A)
that reflect the terms and provisions set forth in the Commitment Letter, this
Summary of Terms and Conditions and the “market flex” provisions of the
Facilities Fee Letter, (B) that reflect changes in law or accounting standards
and requirements of local law or to cure mistakes or defects, (C) that are
reasonably agreed to by the Borrower Representative and the Lead Arrangers, (D)
that are reasonably necessary to take into account the operational requirements
and strategic requirements of the Borrowers and their restricted subsidiaries
(after giving effect to the Transaction) in light of their size, industries,
businesses and business practices, geographic location and operations, proposed
business plan and financial model, (E) the jurisdiction of organization of the
Borrowers and their restricted subsidiaries and (F) that reflect the customary
operational and agency provisions of the Administrative Agent. 
For the avoidance of doubt, the Credit Documentation shall include customary EU
bail-in provisions.
Scheduled Amortization:
Term Facility: Subject to quarterly amortization of principal equal to 0.25% per
quarter of the original aggregate principal amount of the Term Facility, with
the balance payable at final maturity of the Term Facility.
 
Revolving Credit Facility: None.
Mandatory Prepayments:
In addition to the amortization set forth above and the next paragraph,
mandatory prepayments shall be required:
(i)    in an amount equal to 100% of the net cash proceeds of non-ordinary
course asset sales or other dispositions (including insurance and condemnation
proceeds) by the Borrowers or any of their restricted subsidiaries (other than a
disposition among the Borrowers and any of their restricted subsidiaries), to
the extent (A) such proceeds are not reinvested or committed to be reinvested in
assets useful in the business of the Borrowers or any of their restricted
subsidiaries within 12 months of receipt (provided that if so committed, such
reinvestment shall in any case occur within 180 days following such twelve-month
period) of the date of such disposition and (B) the aggregate amount of such
proceeds that are not reinvested in accordance with clause (A) hereof exceeds
$10,000,000 in any single transaction or related series of transactions;
(ii)    in an amount equal to 100% of net cash proceeds from the issuance or
incurrence after the Closing Date of additional debt of any of the Borrowers or
any of their restricted subsidiaries (other than (x) the Incremental Facilities
and (y) any other debt permitted under the Credit Documentation other than
Refinancing Indebtedness); and
(iii)    in an amount equal to 50.0% of Excess Cash Flow (to be defined in a
manner consistent with the Documentation Principles) of the US Borrower and its
restricted subsidiaries, on a consolidated basis, with step downs to 25% and 0%
if the Total Net Leverage Ratio is less than 0.50x and 1.00x inside the Total
Net Leverage Ratio on the Closing Date, respectively, in each case of clauses
(i) - (iii), subject to the limitations set forth in the paragraph immediately
following, such amounts shall be applied to scheduled installments of principal
in the direct order of maturity.
Except as set forth in the following paragraph, prepayments of the Term Facility
shall be applied on a pro rata basis across the US Term Facility and the Euro
Term Facility.
All prepayments referred to immediately above are subject to there being no
material adverse tax consequences and to permissibility (i) under local law
(e.g., financial assistance, corporate benefit, restrictions on upstreaming of
cash intra-group and the fiduciary and statutory duties of directors or the
relevant subsidiaries) and (ii) material constituent document restrictions and
other material agreements (so long as any such prohibition is not created in
contemplation of such prepayment), it being understood and agreed that if the
payment of only one tranche of the Term Facility would trigger a material
adverse tax consequence or be subject to a local law restriction then such
payment shall be applied to the other tranche of the Term Facility on a non-pro
rata basis. The non-application of any prepayment amounts as a consequence of
the foregoing provisions will not, for the avoidance of doubt, constitute a
default or event of default, and such amounts shall be available to the
Borrowers and their restricted subsidiaries, subject to terms and conditions
substantially consistent with the Documentation Principles.
Any Lender may elect not to accept its pro rata portion of any mandatory
prepayment as otherwise required by clauses (i), (ii) and (iii) immediately
above (except with respect to the proceeds of Refinancing Facilities and
Refinancing Notes) (each a “Declining Lender”). Any prepayment amount declined
by a Declining Lender (“Declined Proceeds”) may be retained by the Borrowers and
may be used by the Borrowers in any manner not prohibited by the Credit
Documentation and any such retained amounts will not thereafter be counted as
excess cash flow or net cash proceeds in any subsequent measurement period.
Optional Prepayments and Commitment Reductions:
The Facilities may be prepaid at any time in whole or in part without premium or
penalty, upon written notice, at the option of the Borrower Representative,
together with accrued and unpaid interest thereon, to the date of prepayment,
except (x) that any prepayment of LIBOR advances other than at the end of the
applicable interest periods therefor shall be made with reimbursement for any
funding losses and redeployment costs of the Lenders resulting therefrom and (y)
as set forth in “Repayment Premium” below. Each optional prepayment of the Term
Facility shall be applied as directed by the Borrower Representative. The
unutilized portion of any commitment under the Revolving Credit Facilities may
be reduced permanently or terminated by the Borrower Representative at any time
without penalty.
Repayment Premium:
In the event that all or any portion of the Term Facility is (i) repaid,
prepaid, refinanced or replaced or (ii) repriced or effectively refinanced
through any waiver, consent or amendment (in each case, in connection with any
waiver, consent or amendment to the Term Facility directed at, or the result of
which would be, the lowering of the effective interest cost or the weighted
average yield of the Term Facility or the incurrence of any term facility having
an effective interest cost or weighted average yield that is less than the
effective interest cost or weighted average yield of the Term Facility (or
portion thereof) so repaid, prepaid, refinanced, replaced or repriced (other
than a refinancing of the Term Facility in connection with any transaction that
would, if consummated, constitute a change of control) (a “Repricing
Transaction”)) occurring on or prior to the date that is six months after the
Closing Date, such repayment, prepayment, refinancing, replacement or repricing
will be made at 101.0% of the principal amount so repaid, prepaid, refinanced,
replaced or repriced (it being understood and agreed that the US Borrower shall
be responsible for the repayment premium of 1.0%). If all or any portion of the
Term Facility held by any Lender is repaid, prepaid, refinanced or replaced
pursuant to a “yank-a-bank” or similar provision in the Credit Documentation as
a result of, or in connection with, such Lender not agreeing or otherwise
consenting to any waiver, consent or amendment referred to in clause (ii) above
(or otherwise in connection with a Repricing Transaction), such repayment,
prepayment, refinancing or replacement will be made at 101.0% of the principal
amount so repaid, prepaid, refinanced or replaced (it being understood and
agreed that the US Borrower shall be responsible for the repayment premium of
1.0%). Notwithstanding the foregoing, no prepayment premium shall apply in the
case of any repayment, prepayment, refinancing, replacement or amendment if in
connection with a change of control or any acquisition or transaction not
otherwise permitted under the Credit Documentation.
Security:
Subject to the Funds Certain Provisions and the provisions of the immediately
following paragraphs (the provisions set forth in the immediately following
paragraphs, collectively, the “Security Principles”), the obligations of each US
Loan Party and each Euro Loan Party shall be secured by valid and perfected
first priority (subject to certain exceptions to be set forth in the Credit
Documentation) liens on and security interests in all of the following
(collectively, the “Collateral”):
 
•
(i) with respect to the US Obligations, a pledge of the capital stock of the
Material Subsidiaries directly held by each US Loan Party but limited in the
case of (A) capital stock of each Foreign Subsidiary that is a Material
Subsidiary, (B) any direct or indirect subsidiary substantially all the assets
of which consist of the capital stock and, if applicable, indebtedness of one or
more CFCs (as defined below) and/or one or more CFC Holdcos (such entity, a “CFC
Holdco”) and (C) Disregarded Domestic Persons (as defined below), to 65% of the
voting capital stock and 100% of the non-voting capital stock of any such first
tier Foreign Subsidiary, CFC, CFC Holdco or Disregarded Domestic Person, as
applicable, and excluding the capital stock of COHR Int’l Trading C.V. and COHR
Int’l Investment C.V., provided, however, that, as determined by the
Administrative Agent, in lieu of a pledge of the stock of a domestic CFC Holdco
or Disregarded Domestic Person, the Collateral shall include a pledge of the
capital stock of each direct Subsidiary of the CFC Holdco or Disregarded
Domestic Person subject to the limitations of (A), (B) and (C), and (ii) with
respect to the Euro Obligations, a pledge of the capital stock of each
restricted subsidiary (including, in the case of companies organized as a
limited partnership (Kommanditgesellschaft), a pledge of the capital stock of
the respective general partner) organized in a Material Jurisdiction directly
held by each US Loan Party and each Euro Loan Party but limited in the case of
any Foreign Subsidiary, CFC, CFC Holdco or Disregarded Domestic Person directly
held by a US Loan Party, to 65% of the voting capital stock and 100% of the
non-voting capital stock of any such Foreign Subsidiary, CFC, CFC Holdco or
Disregarded Domestic Person, as applicable, it being understood and agreed that
the Collateral with respect to the Euro Obligations shall, in any event, include
a pledge of 100% of the capital stock of the Euro Borrower and each Euro
Guarantor, excluding the U.S. Borrower; Coherent Investments, Inc. (65%); COHR
Int’l Finance C.V. (65%); COHR Int’l Trading C.V. (66% held by COHR Int’l
Finance C.V.); Coherent International LLC (65%); Coherent Canada Inc. (65%);
Coherent (Thailand) Co. Ltd. (65%); Coherent Finland Oy (65%); Coherent Asia,
Inc. (65%); COHR Int’l Investment C.V. (99.9% held by COHR Int’l Trading C.V.);
Corelase Oy (65%); ROFIN-SINAR Technologies Europe S.L. (65%); ROFIN-BAASEL
Canada Ltd. (65%); PRC Europe NV (65%); provided that following implementation
of a post-Acquisition restructuring, the foregoing exclusions from a 100% pledge
of capital stock shall not apply to any Foreign Subsidiary that is 100% owned by
one or more Foreign Subsidiaries that are corporations for US federal income tax
purposes (ignoring any Domestic Subsidiaries that are disregarded for US federal
income tax purposes and owned by a Foreign Subsidiary);
(b)    all present and future debt owed to a Borrower or any Guarantor (other
than debt owed to a US Loan Party by a CFC Holdco, a Disregarded Domestic
Person, any Foreign Subsidiary and any US Subsidiary that is a subsidiary of a
Foreign Subsidiary);
(c)    all of the present and future property and assets, real and personal, of
each Borrower and each Guarantor, including, but not limited to, machinery and
equipment, inventory and other goods, accounts receivable, material fee-owned
real estate, fixtures, bank accounts (subject to certain customary exceptions),
general intangibles, financial assets, investment property, license rights,
patents, trademarks, trade names, copyrights, other intellectual property and
other general intangibles, chattel paper, insurance proceeds, contract rights,
hedge agreements, documents, instruments, indemnification rights, tax refunds
and cash; and
(d)    all proceeds and products of the property and assets described in clauses
(a), (b) and (c) above.
 
For the avoidance of doubt, the pledge of a portion of an entity’s capital stock
with respect to both the US Obligations and the Euro Obligations shall be deemed
to refer to the same capital stock. The parties will cooperate in good faith in
a manner consistent with the Security Principles (taking into account any
applicable tax laws) with respect to any pledges of capital stock. The
Collateral shall ratably secure the relevant party’s obligations in respect of
the Facilities, any interest protection or other hedging arrangements with a
Lender or an affiliate of a Lender and treasury management agreements with a
Lender or an affiliate of a Lender.
 
All the above-described pledges, security interests and mortgages shall be
created on terms, and pursuant to documentation reasonably satisfactory to the
Borrower Representative and the Administrative Agent, and none of the Collateral
shall be subject to any other pledges, security interests or mortgages, subject
to exceptions to be agreed upon. Assets will be excluded from the Collateral in
circumstances to be agreed and in circumstances where the Administrative Agent
reasonably determined in consultation with the Borrower Representative that the
cost of obtaining a security interest in such assets is excessive in relation to
the value afforded thereby. In addition, the Administrative Agent shall not have
any right to require any US Loan Party to take any steps to perfect by control
any security interest noted herein in deposit, securities or commodities
accounts.
Notwithstanding anything to the contrary in the Commitment Letter or any Annex
thereto, the Collateral shall exclude the following:
(i)    (x) motor vehicles and other assets subject to certificates of title, (y)
letter of credit rights and (z) commercial tort claims with a value of less than
an amount to be agreed;
(ii)    pledges and security interests (including in respect of interests in
partnerships, joint ventures and other non-wholly owned entities) to the extent
prohibited by law, rule, regulation or prohibited by agreements containing
anti-assignment clauses not overridden by the Uniform Commercial Code or other
applicable law (such as the German Commercial Code (Handelsgesetzbuch)) other
than proceeds and receivables thereof;
(iii)    all fee owned real property with a fair market value of less than
$5,000,000 and all leasehold interests;
(iv)    intent to use trademark or service mark applications;
(v)    equity interests in any person other than wholly owned subsidiaries to
the extent not permitted by the terms of such subsidiary’s organizational or
joint venture documents;
(vi)    any lease, license or other agreement or any property subject to a
purchase money security interest, capital lease obligation or similar
arrangements, in each case, to the extent permitted under the Credit
Documentation to the extent that a grant of a security interest therein would
violate or invalidate such lease, license or agreement, purchase money, capital
lease or a similar arrangement or create a right of termination in favor of any
other party thereto (other than any Loan Party) or otherwise give rise to any
consent rights of any such other party or result in a default, in each case,
after giving effect to the applicable anti-assignment provisions of the Uniform
Commercial Code or other applicable law, other than proceeds and receivables
thereof, the assignment of which is expressly deemed effective under applicable
law notwithstanding such prohibition;
(vii)    those assets as to which the Borrower Representative and the
Administrative Agent reasonably determine results in a material adverse tax
consequence to the Borrower as reasonably determined by the Borrower;
(viii)    with respect to the US Obligations, any assets owned by a CFC Holdco,
Disregarded Domestic Person, CFC, Foreign Subsidiary or US Subsidiary that is
owned by a Foreign Subsidiary;
(ix)    any governmental licenses or state or local franchises, charters and
authorizations, to the extent security interests in such licenses franchises,
charters or authorizations are prohibited or restricted thereby (in each case,
except to the extent such prohibition is unenforceable after giving effect to
the applicable anti-assignment provisions of the Uniform Commercial Code or
other applicable law)) other than proceeds and receivables thereof, the
assignment of which is expressly deemed effective under the Uniform Commercial
Code or other applicable law notwithstanding such prohibition;
(x)    zero balance accounts, payroll accounts, withholding and trust accounts,
tax accounts, escrow or other fiduciary accounts located in the United States
and other accounts customarily excluded in the other Material Jurisdictions;
(xi)    margin stock;
(xii)    other customary exclusions under applicable local law or in applicable
local jurisdictions;
(xiii)    any intellectual property possessed by a US Loan Party which cannot be
perfected by the filing of a UCC-1 financing statement and/or the filing of a
short form intellectual property security agreement in either the United States
Copyright Office or the United States Patent and Trademark Office;
(xiv)    any assets located in Non-Material Jurisdictions; and
(xv)    other exceptions to be agreed.
For purposes of the Credit Documentation, (a) “CFC” means a “controlled foreign
corporation” within the meaning of Section 957 of the Internal Revenue Code, as
amended and (b) “Disregarded Domestic Person” means any direct or indirect
domestic subsidiary of the US Borrower that (i) is a disregarded entity or
partnership for U.S. federal income tax purposes and (ii) has one or more
directly owned (or owned through another Disregarded Domestic Person) Foreign
Subsidiaries that are CFCs.
Conditions Precedent to Closing:
Limited to those conditions specified in (a) paragraph 5 of the Commitment
Letter and (b) Annex II to the Commitment Letter.
Conditions Precedent to Each Borrowing Under the Facilities following the
Closing Date:
Each borrowing or issuance or renewal of a Letter of Credit under the Facilities
following the Closing Date will be subject to satisfaction of the following
conditions precedent: (i) delivery of prior written notice of borrowing, (ii)
all of the representations and warranties in the Credit Documentation shall be
true and correct in all material respects as of the date of such extension of
credit (except to the extent already qualified by materiality or material
adverse effect and except to the extent such representation and warranty
specifically relates to an earlier date) and (iii) no default or event of
default under the Credit Documentation shall have occurred and be continuing or
would result from such extension of credit.
Representations and Warranties:
Only the following representations and warranties shall apply (to be applicable
to the Borrowers and their restricted subsidiaries), subject to customary and
other exceptions and qualifications to be agreed consistent with the
Documentation Principles: (i) existence, qualification and power; (ii)
authorization, and non-contravention; (iii) government authorization and other
consents; (iv) binding effect; (v) accuracy of financial statements in all
material respects; (vi) no material adverse effect; (vii) litigation; (viii) no
default; (ix) ownership of properties and liens; (x) environmental compliance;
(xi) insurance; (xii) taxes; (xiii) ERISA compliance; (xiv) subsidiaries; (xv)
Federal Reserve margin regulations and Investment Company Act; (xvi) disclosure;
(xvii) compliance with laws (including OFAC, FCPA, U.S.A. PATRIOT Act and other
anti-terrorism laws); (xviii) priority and perfection of security interests in
Collateral (subject to permitted liens and other exceptions to be agreed); (xix)
closing date solvency (defined in a manner consistent with (i) the Solvency
Certificate (as defined in Annex II hereto) and (ii) the German insolvency law
based on sections 17 through 19 of the German Insolvency Code, respectively);
(xx) equity interests and ownership; (xxi) intellectual property (xxii) use of
proceeds; (xxiii) business locations, taxpayer identification number; and (xxiv)
COMI.
Covenants:
Only the following covenants shall apply (to be applicable to the Borrowers and
their restricted subsidiaries), subject to customary and other exceptions,
qualifications, thresholds and baskets to be agreed consistent with the
Documentation Principles:
 
(a)    Affirmative Covenants: (i) delivery of annual consolidated financial
statements within the later of 90 days after the end of each fiscal year and 5
days after the date on which such financial statements are required to be filed
under the rules and regulations of the SEC (after giving effect to any permitted
extensions), delivery of quarterly consolidated financial statements within the
later of 45 days after the end of each of the first three fiscal quarters of
each fiscal year and 5 days after the date on which such financial statements
are required to be filed under the rules and regulations of the SEC (after
giving effect to any permitted extensions); (ii) at the time of delivery of the
financial statements referenced in clause (i) above, compliance certificates;
other reasonably requested information regarding the operations, business
affairs and financial condition of the Borrowers and their restricted
subsidiaries or compliance with the terms of the Credit Documentation; (iii)
delivery of notification of default and material litigation; (iv) payment of
obligations; (v) preservation of existence (subject to merger, acquisition,
consolidation, amalgamation, dissolution and disposition not prohibited by the
Credit Documentation); (vi) maintenance of properties (subject to casualty,
condemnation and normal wear and tear and dispositions not prohibited by the
Credit Documentation); (vii) maintenance of customary insurance (with ability to
self-insure for healthcare matters); (viii) compliance with laws and material
obligations; ERISA compliance; (ix) maintenance of books and records; (x) right
of the Administrative Agent to inspect property, books and records (limited to
once per year, unless an event of default has occurred and is continuing); (xi)
use of proceeds; (xii) joinder of subsidiaries as guarantors (subject to the
limitations set forth under the caption “Guarantors”); (xiii) pledge of capital
stock and other property (subject to the limitations set forth under the caption
“Security”); (xiv) further assurances in respect of collateral matters; (xv)
commercially reasonable efforts to maintain ratings (but not a specific rating);
(xvi) environmental compliance; (xvii) COMI; (xviii) use of proceeds; and (xiv)
entering into and maintain domination and/or profit and loss sharing agreement
(Beherrschungs- und/oder Gewinnabführungsvertrag) with the (i) Euro Borrower by
subsidiaries of the Euro Borrower that are German subsidiaries or (ii) direct
holding companies of such German subsidiaries.
(b)    Negative Covenants: Restrictions on:
•
liens (it being agreed that the negative covenant on liens will permit (A) liens
securing the Facilities and any Incremental Facilities, (B) liens securing
Refinancing Debt, Incremental Equivalent Debt, in each case, subject to an
intercreditor agreement reasonably satisfactory to the Administrative Agent, and
debt incurred pursuant to clauses (iii)(B), (E) and (F) below, (C) liens on
assets of a restricted subsidiary which is not a Loan Party, (D) a general lien
basket in an amount equal to the greater of (i) $50,000,000 and (ii) a
Corresponding Percentage of Consolidated Total Assets (as defined below), (E)
liens on assets existing at the time such assets were acquired to the extent, in
the case of this clause (E), such liens do not extend to assets other than the
assets so acquired and such liens were not effected in contemplation of such
acquisition, (F) liens existing on the Closing Date, (G) liens on the US
Borrower’s Santa Clara, California facility securing debt incurred pursuant to
clause (iii)(I) below; provided that the US Borrower receives net proceeds of
such financing in an amount equal to at least 40% of the fair market value of
such property and all such net proceeds are used to prepay the Term Facility and
(H) permitted refinancing liens of any liens that were permitted when incurred;
(ii)    investments (it being agreed that the negative covenant on investments
will permit (A) investments under the Available Amount Basket (as defined below)
(subject to the restrictions set forth therein), (B) additional investments, so
long as (x) no event of default shall have occurred and be continuing or would
result therefrom and (y) on a pro forma basis, the Total Net Leverage Ratio
shall be equal to or less than 2.50:1.00, (C) Permitted Acquisitions (as defined
below), (D) intercompany investments; provided that (x) in the case of such
investments by US Loan Parties in foreign Loan Parties, such investments do not
exceed $200,000,000 at any time (excluding any such investments in a “Foreign
Loan Party” (defined herein as a Euro Loan Party other than a US Loan Party) to
the extent the proceeds of such investment are invested by such Foreign Loan
Party in a non-Loan Party), and (y) in the case of such investments by Loan
Parties in non-Loan Parties, such investments do not exceed $100,000,000 at any
time, (E) intercompany investments in unrestricted subsidiaries and joint
ventures in an amount equal to the greater of (i) $30,000,000 and (ii) a
Corresponding Percentage of Consolidated Total Assets, (F) re-organizations and
other activities related to tax planning and re-organization set forth in a
schedule to the Credit Documentation to be agreed, so long as, after giving
effect thereto, the Borrower remains in compliance with the Guarantor Coverage
Test, (G) the Transaction, (H) investments existing on the Closing Date, (I) a
general investment basket in an amount equal to the greater of (i) $50,000,000
and (ii) a Corresponding Percentage of Consolidated Total Assets, (J)
investments of a restricted subsidiary acquired after the Closing Date or of an
entity merged into a Borrower or a restricted subsidiary after the Closing Date
to the extent such investments were not made in contemplation of or in
connection with such acquisition, merger, consolidation or amalgamation and were
in existence on the date of such acquisition, merger, consolidation or
amalgamation, (K) investments by any US Loan Party in any other US Loan Party,
by any Euro Loan Party in any other Euro Loan Party and by any Euro Loan Party
in any US Loan Party and (L) investments by any non-Loan Party in any other
non-Loan Party or in any Loan Party;
(iii)    indebtedness (including cash management obligations and hedging
transactions) (it being agreed that the negative covenant on indebtedness will
permit (A) the Facilities, Incremental Facilities, Refinancing Debt and
Incremental Equivalent Debt, (B) additional unsecured debt of Loan Parties and
additional unsecured or secured debt of non-Loan Parties, in each case, in an
unlimited amount so long as the pro forma Total Gross Leverage Ratio does not
exceed 4.50:1.00 and no event of default shall have occurred and be continuing
or would result therefrom; provided that such debt shall not mature prior to
date that is 180 days after the maturity date of, or have a shorter weighted
average life than, the Term Facility, in each case in effect at the time the
indebtedness was incurred, (C) indebtedness existing on the Closing Date and any
permitted refinancing thereof, subject to certain conditions to be agreed, (D)
intercompany indebtedness (subject to the limitations set forth in the
investments covenant), (E) indebtedness of restricted subsidiaries which are not
Loan Parties in an amount equal to the greater of (i) $50,000,000 and (ii) a
Corresponding Percentage of Consolidated Total Assets, (F) a capital lease and
purchase money debt basket in an amount equal to the greater of (i) $50,000,000
and (ii) a Corresponding Percentage of Consolidated Total Assets, (G) a general
unsecured debt basket in an amount equal to the greater of (i) $75,000,000 and
(ii) a Corresponding Percentage of Consolidated Total Assets, (H) any interest
rate hedges consistent with those permitted by the Borrower’s foreign exchange
risks policy delivered to the Lead Arrangers prior to the date of the Commitment
Letter and any amendments thereto reasonably acceptable to the Administrative
Agent), (I) the mortgage financing of the Borrower’s Santa Clara, California
facility, so long as the proceeds of such indebtedness are used to prepay the
Term Facility and (J) permitted refinancing indebtedness; provided that
notwithstanding the forgoing exceptions the aggregate amount of all debt of
non-Loan Parties incurred pursuant to clauses (iii)(B), (E) and (G) above shall
not exceed the greater of (i) $75,000,000 and (ii) a Corresponding Percentage of
Consolidated Total Assets;
(iv)    mergers and dissolutions (it being agreed that the negative covenant on
mergers and dissolutions will permit (A) Permitted Acquisitions and other
permitted investments (including any merger, consolidation or amalgamation in
order to effect such Permitted Acquisition or other permitted investment), (B)
intercompany mergers, consolidations and amalgamations subject to certain
limitations to be agreed, (C) dissolutions or changes in form if the Borrower
Representative determines in good faith that such dissolution or change in form
is in its best interests and is not materially disadvantageous to the Lenders
and (D) certain other transactions to be mutually agreed);
(v)    dispositions of assets (it being agreed that the negative covenant on
dispositions of assets will permit (A) sales of assets in the ordinary course of
business and immaterial assets, (B) asset swaps, (C) dispositions of
non-Collateral assets, subject to certain limitations to be agreed, (D)
dispositions of non-core assets acquired in connection with a Permitted
Acquisition or other permitted investment, (E) dispositions of obsolete, worn
out, uneconomical, negligible or surplus assets or assets no longer useful in
the business, (F) intercompany transfers, (G) dispositions of receivables and
related assets in a factoring, receivables or securitization facility, (H)
dispositions of any other assets on an unlimited basis for fair market value (as
determined by the Borrower Representative in good faith) so long as (x) with
respect to dispositions in excess of $10,000,000, at least 75% of the
consideration consists of cash or Cash Equivalents (as defined below) (subject
to customary and agreed upon exceptions to the cash consideration requirement,
including a basket in an amount to be mutually agreed for non-cash consideration
that may be designated as cash consideration) and, if in excess of $10,000,000,
is subject to the terms set forth in the mandatory prepayment requirements
(including the reinvestment provisions) in the Credit Documentation, (I) sale
and leaseback transactions, (J) dispositions of cash or cash equivalents in the
ordinary course of business, (K) dispositions of defaulted receivables in the
ordinary course of business and not as part of an accounts receivables
financing, (L) dispositions or abandonment of intellectual property of the
Borrowers and their restricted subsidiaries determined in good faith by the
management of the Borrower Representative to be no longer useful or necessary in
the operation of the business of the Borrowers and their restricted subsidiaries
and (M) leases, licenses, or subleases or sublicenses of any real or personal
property in the ordinary course of business;
(vi)    dividends, stock repurchases and redemptions of equity interests
(“Restricted Payments”) (it being agreed that the negative covenant on
Restricted Payments will permit (A) Restricted Payments under the Available
Amount Basket (subject to the restrictions set forth therein), (B) a basket for
stock repurchases and redemptions in a dollar amount to be agreed, (C)
additional Restricted Payments, so long as (x) no event of default shall have
occurred and be continuing or would result therefrom and (y) on a pro forma
basis, the Total Net Leverage Ratio shall be equal to or less than 2.25:1.00),
(D) any Subsidiary of the Borrower Representative to pay dividends and make
distributions to the holders of its equity interests (including any securities
convertible into or exchangeable for equity interests and all warrants, options
or other rights to purchase, subscribe for or otherwise acquire the foregoing or
equity interests), (E) Restricted Payments in connection with the Transaction
and (F) other Restricted Payments in a dollar amount to mutually be agreed;
(vii)    change in nature of business;
(viii)    change in fiscal year;
(ix)    transactions with affiliates;
(x)    use of proceeds;
(xi)    prepaying, redeeming or repurchasing subordinated or junior lien debt
(“Restricted Debt Payments”) (it being agreed that the Credit Documentation will
allow (A) Restricted Debt Payments under the Available Amount Basket (subject to
the restrictions set forth therein), (B) additional Restricted Debt Payments, so
long as (x) no event of default shall have occurred and be continuing or would
result therefrom and (y) on a pro forma basis, the Total Net Leverage Ratio
shall be equal to or less than 2.50:1.00), (C) refinancings with permitted
indebtedness, (D) payment of (x) regularly scheduled interest and fees due and
other non-principal payments and (y) any mandatory prepayment of principal,
interest and fees and principal on the scheduled maturity date (subject, in each
case, to an intercreditor agreement or other applicable subordination
agreement), (E) the conversion or exchange of subordinated or junior lien debt
to equity interests of the US Borrower, (F) intercompany Restricted Debt
Payments and (G) other Restricted Debt Payments in an amount to be mutually
agreed;
(xii)    burdensome agreements (negative pledge clauses that limit or restrict
the Administrative Agent from taking or perfecting its lien in the intended
Collateral, subject to exceptions to be agreed, and restrictions on dividends
and distributions from subsidiaries of the Borrowers); and
(xiii)    amending or waiving (A) organizational documents in a manner that
would be materially adverse to the Lenders or (B) subordinated, second lien or
junior debt instruments to the extent prohibited by applicable subordination or
intercreditor terms, to permit a payment not otherwise permitted hereunder or as
would otherwise be materially adverse to the Lenders.
 
Among other things, the Credit Documentation will permit (a) acquisitions (each,
a “Permitted Acquisition”) subject to (i) no event of default under the
Facilities at the time of consummation of the Permitted Acquisition or resulting
therefrom or, if consummated using the proceeds of an Incremental Facility, at
the time of execution of the definitive agreement governing such Permitted
Acquisition if agreed by the Lenders providing such Incremental Facility, (ii)
the acquired entity and its subsidiaries becoming Guarantors to the extent
required under “Security” above, subject to a basket to be agreed to permit
acquisitions of non-Guarantors, (iii) the acquisition being approved by the
board of directors, or other governing body, of the target and (iv) the acquired
entity or assets being in the same, related, complimentary or ancillary line of
business as the Borrowers and their subsidiaries, (b) an “Available Amount
Basket”, which may be used for certain investments, Restricted Payments and
Restricted Debt Payments subject to limitations to be agreed (including, without
limitation, with respect to (x) Restricted Payments, on a pro forma basis, the
Total Net Leverage Ratio being equal to or less than 2.50:1.00 and (y)
Restricted Debt Payments, on a pro forma basis, the Total Net Leverage Ratio
being equal to or less than 2.75:1.00) and be based on the retained portion of
Excess Cash Flow (which in no event shall be less than zero) with an initial
basket of $50,000,000 and (c) (x) reorganizations and other activities related
to tax planning and reorganization or otherwise to achieve synergies, in each
case, as set forth on a schedule to the Credit Documentation (such schedule to
be provided by Borrower and deemed acceptable so long as of the date of the
Credit Documentation, on a pro forma basis, after giving effect to the actions
contemplated thereby (and assuming all required Guarantors have become
Guarantors as of such date), the Guarantor Coverage Test would be met and the
security interests of the Lenders in the Collateral, taken as a whole, would not
be materially impaired), and (y) such other actions to achieve synergies in
connection with the Acquisition, provided after giving effect to such actions
the Guarantor Coverage Test would be met and the security interests of the
Lenders in the Collateral, taken as a whole, would not be materially impaired.
“Corresponding Percentage of Consolidated Total Assets” means, with respect to
any dollar basket, the amount of such dollar basket divided by the initial
consolidated total assets of the Borrowers and their restricted subsidiaries
giving effect to the Transaction, expressed as a percentage.
Financial Covenant:
Limited to the following (applicable each Borrower and its restricted
subsidiaries):
 
Term Facility: None.
Revolving Facility: Senior Secured Net Leverage Ratio to be set at a level to be
agreed (the “Financial Covenant”), commencing with the first full fiscal quarter
after the Closing Date to be tested on the last day of each fiscal quarter. The
Financial Covenant shall be set with a cushion of 30% (rounded in a manner to be
mutually agreed) off Consolidated EBITDA set forth in the model projections
delivered to the Lead Arrangers prior to the date of the Commitment Letter.
 
“Consolidated EBITDA” shall be defined in a manner consistent with the
Documentation Precedent; provided that the aggregate amount of all net cost
savings, operating expense reductions, other operating improvements and
acquisition synergies in good faith projected to be realized during such period
(collectively, the “Synergies”) shall not exceed 20% of Consolidated EBITDA.
“Secured Net Leverage Ratio” means, as of any date of determination, the ratio
of (a)(i) Total Funded Secured Indebtedness as of such date, less (ii) all
unrestricted cash and Cash Equivalents (with “Cash Equivalents” being defined to
include investments permitted by the Borrower’s cash investment policy delivered
to the Lead Arrangers prior to the date of the Commitment Letter and any
amendments thereto reasonably acceptable to the Administrative Agent) of the
Borrowers and the Guarantors to (b) Consolidated EBITDA for the most recently
ended four-fiscal quarter period for which financial statements are available.
“Senior Secured Net Leverage Ratio” means, as of any date of determination, the
ratio of (a)(i) Total Funded Senior Secured Indebtedness as of such date, less
(ii) all unrestricted cash and Cash Equivalents of the Borrowers and the
Guarantors to (b) Consolidated EBITDA for the most recently ended four-fiscal
quarter period for which financial statements are available.
“Total Funded Indebtedness” means, if and to the extent the same would
constitute indebtedness or a liability in accordance with GAAP, the sum of
(without duplication) (i) the outstanding principal amount of funded
indebtedness for borrowed money, (ii) unreimbursed draws under letters of
credit, (iii) the outstanding principal amount of purchase money indebtedness
and (iv) the outstanding principal amount of capital leases of the Borrowers and
their restricted subsidiaries, subject to exceptions to be agreed.
“Total Funded Secured Indebtedness” means Total Funded Indebtedness as of such
date secured by a lien, subject to exceptions to be agreed.
“Total Funded Senior Secured Indebtedness” means Total Funded Indebtedness as of
such date secured by a lien (excluding any lien ranking junior to the liens
securing the Facilities), subject to exceptions to be agreed.
“Total Gross Leverage Ratio” means, as of any date of determination, the ratio
of (a) Total Funded Indebtedness as of such date to (b) Consolidated EBITDA for
the most recently ended four-fiscal quarter period for which financial
statements are available.
“Total Net Leverage Ratio” means, as of any date of determination, the ratio of
(a)(i) Total Funded Indebtedness as of such date, less (ii) all unrestricted
cash and Cash Equivalents of the Borrowers and the Guarantors to
(b) Consolidated EBITDA for the most recently ended four-fiscal quarter period
for which financial statements are available.
In the event that any additional OID or upfront fees are implemented pursuant to
the “market flex” provisions of the Facilities Fee Letter, any Secured Net
Leverage Ratio, Senior Secured Net Leverage Ratio, Total Gross Leverage Ratio or
Total Net Leverage Ratio tests set forth in the Term Sheet shall be adjusted as
mutually agreed to account for the additional interest expense or additional
indebtedness and maintain the agreed cushion taking into account such additional
interest expense or additional indebtedness.
Unrestricted Subsidiaries:
The Credit Documentation will contain provisions pursuant to which, subject to
customary limitations on investments, loans, advances to, and other investments
in, unrestricted subsidiaries, the Borrower Representative will be permitted to
designate any existing or subsequently acquired or organized subsidiary as an
“unrestricted subsidiary” and, in each case, subsequently re-designate any such
unrestricted subsidiary as a “restricted subsidiary” so long as, after giving
effect to any such designation or re-designation, (i) no event of default shall
have occurred and be continuing or would result from any such designation and
(ii) the Borrowers shall be in pro forma compliance with the Financial Covenant.
Unrestricted subsidiaries will not be subject to the mandatory prepayment,
representation and warranty, affirmative or negative covenant or event of
default provisions of the Credit Documentation, and the cash held by, results of
operations, indebtedness and interest expense of unrestricted subsidiaries will
not be taken into account for purposes of determining any financial ratio or
covenant contained in the Credit Documentation. The designation of any
subsidiary as an unrestricted subsidiary after the Closing Date shall constitute
an investment by the relevant Borrower or its subsidiary (as applicable) at the
date of designation in an amount equal to the fair market value of the
Borrower’s or its subsidiaries’ (as applicable) investment therein.
Events of Default:
Only the following events of default shall apply (to be applicable to the
Borrowers and their restricted subsidiaries), with grace periods, baskets and
materiality to be agreed consistent with the Documentation Principles: (i)
nonpayment of principal; nonpayment of interest with a grace period of three
business days and nonpayment of fees or other amounts with a grace period of
five business days; (ii) any representation or warranty proving to have been
inaccurate in any material respect when made or confirmed; (iii) failure to
perform or observe covenants set forth in the Credit Documentation (subject, in
the case of certain affirmative covenants, to a grace period of 30 days); (iv)
cross-defaults to other indebtedness in an amount to be agreed; (v) bankruptcy,
insolvency defaults (with a 60 day grace period for involuntary proceedings in
case of US Loan Parties and customary grace periods in other jurisdictions) and,
in case of the Euro Loan Parties, is illiquid (zahlungsunfähig) pursuant to
section 17 of the German Insolvency Code, imminent illiquid
(drohend zahlungsunfähig) pursuant to Section 18 of German Insolvency Code or
over-indebted (überschuldet) pursuant to Section 19 of German Insolvency Code;
(vi) monetary judgment defaults to the extent not covered by indemnities or
insurance above an amount to be agreed; (vii) invalidity of guarantees or other
loan documents; (viii) change of control; and (ix) ERISA defaults.
Notwithstanding the foregoing and the provisions under “Waivers and Amendments”
below, (i) only Lenders holding at least a majority of the Revolving Loan
commitments and Revolving Loans shall have the ability to amend the Financial
Covenant, waive a breach of the Financial Covenant or accelerate the Revolving
Credit Facility and (ii) a breach of the Financial Covenant shall not constitute
an event of default with respect to the Term Facility or trigger a cross-default
under the Term Facility until the date on which the Revolving Loans (if any)
have been accelerated or the Revolving Loan commitments have been terminated, in
each case, by the Lenders in accordance with the terms of the Revolving Credit
Facility.
Assignments and Participations:
Each Lender will be permitted to make assignments (except to Disqualified
Institutions) in minimum amounts to be agreed to other entities approved by (x)
the Administrative Agent (y), so long as no payment or bankruptcy event of
default has occurred and is continuing, the Borrower Representative, and (z)
with respect to commitments under the Revolving Credit Facility, the Swingline
Lender and the Issuing Bank, each such approval not to be unreasonably withheld
or delayed; provided, however, that (i) no approval of the Borrower
Representative shall be required in connection with assignments to other Lenders
or any of their affiliates, (ii) the Borrower Representative shall be deemed to
have given consent to an assignment if it shall have failed to respond to a
written notice thereof within ten business days and (iii) no approval of the
Administrative Agent shall be required in connection with assignments (x) under
the Term Facility to other Lenders or any of their affiliates or approved funds
or (y) under the Revolving Credit Facility to other Lenders under the Revolving
Credit Facility or any of their affiliates or approved funds. Each Lender will
also have the right, without consent of the Borrower Representative or the
Administrative Agent, to assign as security all or part of its rights under the
Credit Documentation to any Federal Reserve Bank.
 
Lenders will be permitted to sell participations (except to Disqualified
Institutions, if the list of Disqualified Institutions has been provided to all
Lenders) with voting rights (a) limited to matters in respect of (i) increases
in commitment amount of such participant, (ii) reductions of principal, interest
or fees payable to such participant, (iii) extension of scheduled maturities or
times for payment of amounts payable to such participant and (iv) releases of
all or substantially all of the Collateral or value of the guarantees and (b)
for clarification purposes, which shall not include the right to vote on waivers
of defaults or events of default and the sale of such participations shall not
require the approval of the Borrower Representative or the Administrative Agent.
An assignment fee in the amount of $3,500 will be charged with respect to each
assignment unless waived by the Administrative Agent in its sole discretion.
 
Notwithstanding anything herein or in the Credit Documentation to the contrary,
(i) in the case that after the date of the Commitment Letter the Borrower
Representative supplements the list of Disqualified Institutions, such
supplement from the Borrower Representative may not retroactively disqualify any
person that previously acquired an assignment or participation in the Facilities
and (ii) the Administrative Agent shall not be responsible or have any liability
for, or have any duty to ascertain, inquire into, monitor or enforce, compliance
with the provisions hereof relating to Disqualified Institutions.  Without
limiting the generality of the foregoing, the Administrative Agent shall not
‎(x) be obligated to ascertain, monitor or inquire as to whether any Lender or
participant or prospective Lender or participant is a Disqualified Institution
or (y) have any liability with respect to or arising out of any assignment or
participation of loans, or disclosure of confidential information, to, or the
restrictions on any exercise of rights or remedies of, any Disqualified
Institution.

 
Subject to the Documentation Principles, assignments of loans under the Term
Facility to the Borrowers or any of their subsidiaries shall be permitted
subject to satisfaction of conditions to be set forth in the Documentation
Precedent.
Waivers and Amendments:
Amendments and waivers of the provisions of the Credit Documentation will
require the approval of Lenders holding loans and commitments representing more
than 50% of the aggregate advances and commitments under the Facilities (the
“Required Lenders”), except that (a) the consent of each Lender directly and
adversely affected thereby will also be required with respect to, among other
things, (i) increases in commitment amount of such Lender (it being understood
that a waiver of any condition precedent or the waiver of any default or
mandatory prepayment shall not constitute an increase in any commitment of any
Lender), (ii) reductions of principal, interest, or fees payable to such Lender
(other than waivers of default interest, a default or an event of default or
mandatory prepayment); provided that any change in the definitions of any ratio
used in the calculation of any rate of interest or fees (or the component
definitions) shall not constitute a reduction in any rate of interest or fees,
(iii) extensions of scheduled maturities or times for payment of amounts payable
to such Lender (it being understood and agreed that the waiver of any mandatory
prepayment, default interest, default or event of default shall only require the
consent of the Required Lenders), (iv) releases of all or substantially all of
the Collateral or value of the guarantees (other than in connection with
permitted asset sales, dispositions, mergers, liquidations or dissolutions or as
otherwise permitted), (v) changes that impose any restriction on the ability of
such Lender to assign any of its rights or obligations, (vi) the definition of
Required Lenders, (vii) pro rata/sharing provisions and (viii) re-denominations
of currency and (b) tranche voting will be required for certain matters.
Notwithstanding the foregoing, (i) amendments and waivers of the Financial
Covenant shall only require the approval of Lenders holding more than 50% of the
aggregate amount of the commitments under the Revolving Credit Facility and (ii)
amendments to affect a Repricing Transaction which reduced the interest rate
shall only require the approval of Lenders directly and adversely affected
thereby.
 
Subject to the Documentation Principles, the Credit Documentation shall contain
defaulting lender provisions and “yank-a-bank” provisions substantially
consistent with the Documentation Precedent.
If the Administrative Agent and the Borrower Representative shall have jointly
identified an obvious error or any error or omission of a technical nature in
the Credit Documentation, then the Administrative Agent and the Borrower
Representative shall be permitted to amend such provision without further action
or consent of any other party so long as the Required Lenders do not object
thereto within 10 business days following receipt of notice thereof.
Notwithstanding anything to the contrary set forth herein, the Credit
Documentation shall provide that the Borrower Representative may at any time and
from time to time request that all or a portion of any loans under the
Facilities be converted to extend (i) the scheduled maturity date of any payment
of principal with respect to all or a portion of any principal amount of such
loans and (ii) the scheduled termination date of any commitments pursuant to the
Revolving Credit Facility (any such loans which have been so converted,
“Extended Loans”) and upon such request of the Borrower Representative any
individual Lender shall have the right to agree to extend the maturity date of
its outstanding loans or the termination date of its commitments without the
consent of any other Lender; provided that all such requests shall be made pro
rata to all Lenders within the applicable Facility. The terms of Extended Loans
shall be identical to the loans of the existing class from such Extended Loans
are converted except for interest rates, fees, amortization, final maturity date
or final termination date, provisions requiring optional and mandatory
prepayments to be directed first to the non-extended loans prior to being
applied to Extended Loans and certain other customary provisions to be agreed.
Any applicable intercreditor agreement may be amended solely with the consent of
the Administrative Agent and, if a party thereto, the Borrowers and the
Guarantors, to give effect thereto or to carry out the purposes thereof.
Indemnification:
The Borrowers will indemnify the Administrative Agent, the Syndication Agent,
the Lead Arrangers, each Swingline Lender and Issuing Bank, and the Lenders and
their respective affiliates, and the officers, directors, employees, affiliates,
agents, advisors and controlling persons of the foregoing (each an “Indemnified
Person”), 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 proceeding (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 Borrowers
or any of its affiliates, creditors or shareholders) that relate to the Credit
Documentation, provided that no Indemnified Person will be indemnified for any
cost, expense or liability (x) to the extent determined by a court of competent
jurisdiction in a final non-appealable judgment to have resulted from the gross
negligence, bad faith, willful misconduct of such Indemnified Person or any of
such Indemnified Person’s controlled or controlling affiliates or any of its or
their respective officers, directors, employees, agents, advisors or controlling
persons, (y) arising from a material breach of such Indemnified Person’s (or any
of their respective affiliates, successors and assigns and the officers,
directors, employees, agents, advisors and controlling persons) obligations
under the definitive loan documentation (as determined by a court of competent
jurisdiction in a final non-appealable judgment), or (z) arising from any claim,
actions, suits, inquiries, litigation, investigation or proceeding that does not
involve an act or omission of the Borrower or any of its affiliates and that is
brought by an Indemnified Person against any other Indemnified Person (other
than any claim, actions, suits, inquiries, litigation, investigation or
proceeding against the Administrative Agent, the Syndication Agent, the Issuing
Bank, any Lead Arranger or any Commitment Party in its capacity as such).
Governing Law:
New York.
Expenses:
The Borrowers shall pay (a) all reasonable and documented out-of-pocket expenses
of the Administrative Agent, the Syndication Agent, the Lead Arrangers, each
Swingline Lender and Issuing Bank associated with the syndication of the
Facilities and the preparation, execution, delivery and administration of the
Credit Documentation and any amendment or waiver with respect thereto
(including, without limitation, the reasonable fees, disbursements and other
charges of one firm of counsel for all such persons, taken as a whole, one local
counsel for all such persons, taken as a whole, in each relevant state and in
each Material Jurisdiction, in each case retained by the Lead Arrangers (each
such counsel subject to the Borrower Representative’s reasonable consent (such
consent not to be unreasonably withheld, delayed or conditioned)) and (b) all
reasonable and documented or invoiced out-of-pocket expenses of the
Administrative Agent, the Syndication Agent, the Lead Arrangers, each Swingline
Lender and Issuing Bank, and the Lenders (including, without limitation, the
fees, disbursements and other charges of counsel) in connection with the
enforcement of the Credit Documentation.
Counsel to the Commitment Parties:
Weil, Gotshal & Manges LLP.
Miscellaneous:
Each of the parties shall (i) waive its right to a trial by jury and (ii) submit
to exclusive New York jurisdiction. The Credit Documentation shall contain
customary “defaulting lender” provisions.

ANNEX II
CONDITIONS PRECEDENT TO CLOSING
Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex II is attached.
The initial extensions of credit under the Facilities on the Closing Date will
be subject to satisfaction (or waiver by the Lead Arrangers with the consent of
the Commitment Parties) of the following conditions precedent:
(i)The terms of the Acquisition Agreement will be reasonably satisfactory to the
Lead Arrangers (it being understood that the execution version of the
Acquisition Agreement, dated as of March 16, 2016 is reasonably satisfactory to
the Lead Arrangers). The Acquisition shall have been or shall substantially
concurrently be, consummated in accordance with the terms of the Acquisition
Agreement without giving effect to any amendment, change or supplement or waiver
of any provision thereof (including any change in the purchase price) in any
manner that is materially adverse to the interests of the Lenders or the Lead
Arrangers without the prior written consent of the Lead Arrangers (which consent
shall not be unreasonably withheld or delayed); provided that (x) (i) any
reduction in purchase price for the Acquisition shall not be deemed to be
material and adverse to the interests of the Lenders or the Lead Arrangers so
long as there is a concurrent reduction in the aggregate principal amount of the
commitments in respect of the Term Facility and (ii) any increase in purchase
price for the Acquisition shall not be deemed to be material and adverse to the
interests of the Lenders or the Lead Arrangers so long as the purchase price is
not funded with additional indebtedness (it being understood and agreed that no
purchase price, working capital or similar adjustment provisions set forth in
the Acquisition Agreement shall constitute a reduction or increase in purchase
price) and (y) any amendment, change or supplement or waiver of the definition
of “Company Material Adverse Effect” set forth in the Acquisition Agreement
shall be deemed to be material and adverse to the interests of the Lenders.
(ii)Notwithstanding anything in this Commitment Letter (including, for the
avoidance of doubt, Annexes I, II and III), the Fee Letters, the Credit
Documentation or any other letter agreement or other undertaking concerning the
financing of the Transaction to the contrary, the only representations and
warranties the accuracy of which shall be a condition to the initial
availability of the Facilities shall be (A) the Acquisition Agreement
Representations (as defined below) and (B) the Specified Representations (as
defined below). “Acquisition Agreement Representations” shall mean the
representations made by or with respect to the Acquired Business and its
subsidiaries in the Acquisition Agreement as are material to the interests of
the Lenders (in their capacities as such), but only to the extent that the
breach of any such representations results in you or any of your affiliates
having the right to terminate your or its obligations under the Acquisition
Agreement (after giving effect to any applicable notice and cure period) or
results in the failure of a condition precedent to your obligation to consummate
the Acquisition pursuant to the Acquisition Agreement. “Specified
Representations” shall mean the representations and warranties in the Credit
Documentation relating to (in each case, subject to applicable materiality
qualifiers and the Documentation Principles): (i) (A) corporate status of you
and the Guarantors and (B) corporate power and authority to enter into the
Credit Documentation by you and the Guarantors, (ii) due authorization,
execution and delivery by you and the Guarantors and enforceability of the
Credit Documentation against you and the Guarantors, (iii) no conflicts with
charter documents by you and the Guarantors as it relates to the entry into and
performance of the Credit Documentation, (iv) compliance by you and the other
Guarantors with Federal Reserve margin regulations, U.S.A. Patriot Act, not
using proceeds in violation of OFAC, FCPA and other anti-terrorism laws and the
Investment Company Act, (v) solvency of you and your subsidiaries on a
consolidated basis on the Closing Date immediately after giving effect to the
consummation of the Transaction (such representations to be substantially
identical to those set forth in the Solvency Certificate attached as Annex III
to the Commitment Letter (the “Solvency Certificate”)), and (vi) the creation,
validity and perfection of the security interests granted in the Collateral by
you and the other Guarantors on the Closing Date substantially concurrently with
the initial funding of the Facilities.
(iii)Since the date of the Acquisition Agreement, there shall not have occurred
or arisen any Company Material Adverse Effect (as defined below) that is
continuing. For purposes hereof, “Company Material Adverse Effect” means any
fact, event, violation, inaccuracy, circumstance, change or effect (any such
item, an “Effect”) that, individually or when taken together with all other
Effects that exist or have occurred prior to or at the date of determination of
the occurrence of the Company Material Adverse Effect, is or is reasonably
likely to be materially adverse to the business, operations, financial condition
or results of operations of the Company and its Subsidiaries taken as a whole;
provided, however, that in no event shall any Effect directly or indirectly
resulting from any of the following, either alone or in combination, be taken
into account when determining whether a Company Material Adverse Effect has
occurred or may, would or could occur:
(i)
general economic, regulatory, business or political conditions in the United
States or any other country or region in the world (or changes therein);

(ii)
conditions in the industries in which the Company or any of its Subsidiaries
conduct business;

(iii)
changes in Applicable Law or GAAP or the interpretations thereof;

(iv)
acts of war, terrorism or sabotage or any escalation or worsening of acts of war
or terrorism;

(v)
earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or
other natural disasters, weather conditions and other force majeure events in
the United States or any other country or region in the world;

(vi)
the public announcement or pendency of the Acquisition Agreement, the Merger or
any other transactions contemplated by the Acquisition Agreement, including by
reason of the identity of Parent or any communication by Parent regarding the
plans or intentions of Parent with respect to the conduct of the business of the
Company or any of its Subsidiaries and including the impact of any of the
foregoing on any relationships, contractual or otherwise, with customers,
suppliers, distributors, collaboration partners, stockholders, lenders,
employees or regulators (including without limitation, any cancellations of or
delays in customer agreements, any reduction in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees);

(vii)
any failure by the Company to meet published analysts’ estimates, projections or
forecasts of revenues, earnings or other financial or business metrics, in and
of itself, and or any failure by the Company to meet any internal budgets, plans
or forecasts of its revenues, earnings or other financial performance or results
of operations or the issuance of revised projections that are not as optimistic
as those in existence as of March 16, 2016 (it being understood that the
underlying cause(s) of any such failure may be taken into consideration unless
otherwise prohibited by this definition of “Company Material Adverse Effect”);

(viii)
any decline in the market price or change in the trading volume of Company
Common Stock, in and of itself (it being understood that the underlying cause(s)
of any such failure may be taken into consideration unless otherwise prohibited
by this definition of “Company Material Adverse Effect”);

(ix)
any action taken that is required by the terms of the Acquisition Agreement or
taken at the written request of Parent or with the prior written consent or
approval of Parent;

(x)
any Legal Proceedings made or brought by any of the current or former Company
Stockholders (on their own behalf or on behalf of the Company) against the
Company, arising out of the Merger or in connection with any other transactions
contemplated by the Acquisition Agreement; and

(xi)
the availability or cost of equity, debt or other financing to Parent, Merger
Sub or the Surviving Corporation, or any changes, events or occurrences in
financial, credit, banking or securities markets (including any disruption
thereof and any decline in the price of any security or market index) or any
interest rate or exchange rate changes or general financial or capital market
conditions, including interest rates, or changes therein;

(except, in the case of each of clauses (i) through (v) above, to the extent
that such Effect has had a disproportionate adverse effect on the Company and
its Subsidiaries, taken as a whole, relative to other companies operating in the
industries in which the Company and its Subsidiaries operate). All capitalized
terms used in this paragraph (iii) and the definition of “Company Material
Adverse Effect” and not defined herein shall have the meaning assigned thereto
in the Acquisition Agreement (as in effect on March 16, 2016) for purposes of
the definition of “Company Material Adverse Effect”.
(iv)The Administrative Agent under each Facility shall have received the
Solvency Certificate from the chief financial officer of the US Borrower (or, at
the US Borrower’s option, a solvency opinion from an independent investment bank
or valuation firm of nationally recognized standing that is addressed to the
Administrative Agent and the Lenders and dated as of the Closing Date) with
respect to solvency of you and your subsidiaries on a consolidated basis on the
Closing Date immediately after giving effect to the consummation of the
Transaction.
(v)The Administrative Agent under each Facility shall have received (A)
customary opinions of counsel to the US Borrower and the Guarantors, (B)
customary corporate resolutions, customary closing date officer’s certificates
certifying as to the satisfactions of the conditions precedent to the
Facilities, customary secretary’s and/or officer’s certificates appending such
resolutions, commercial register excerpts (not older than 14 days), shareholders
lists, charter documents, good standing certificates and incumbency certificate
and information necessary for the Lead Arrangers to perform customary lien
searches prior to closing, (C) subject in all respects to the Funds Certain
Provisions, all documents and instruments (including schedules to security
documentation) required to create and perfect the Administrative Agent’s senior
priority security interest in the Collateral shall have been executed and
delivered by the US Borrower, the Euro Borrower and the Guarantors (or, where
applicable, the US Borrower and the Guarantors shall have authorized the filing
of financing statements under the Uniform Commercial Code) and, if applicable,
be in proper form for filing and (D) a customary borrowing notice.
(vi)The Lead Arrangers shall have received: (A) the audited consolidated balance
sheets and related consolidated statements of operations, cash flows and
shareholders’ equity of each of the US Borrower and the Acquired Business for
the three most recently completed fiscal years of the US Borrower and the
Acquired Business, respectively, ended at least 60 days before the Closing Date,
accompanied by an unqualified report thereon by their respective independent
registered public accountants; (B) the unaudited consolidated balance sheets and
related statements of operations and cash flows of each of the US Borrower and
the Acquired Business for each subsequent fiscal quarter of the US Borrower and
the Acquired Business, respectively, ended at least 40 days before the Closing
Date; and (C) pro forma consolidated balance sheet and related statement of
operations of the US Borrower as of and for the periods for which audited and
unaudited financial statements are required by clauses (A) and (B) above, and,
other than a fiscal year end, as of and for the twelve-month period ended on the
last day of the most recently completed four fiscal quarter period at least 40
days before the Closing Date, in each case after giving effect to the
Transaction (the “Pro Forma Financial Statements”), all of which financial
statements shall be prepared in accordance with Regulation S-X under the
Securities Act (except that it is understood and agreed that the Pro Forma
Financial Statements for any last twelve-month period that does not correspond
with a fiscal year end may not comply with Regulation S-X only insofar as
Regulation S-X contemplates fiscal year and interim period pro forma financial
statements rather than “last twelve-month” pro forma financial statements).
(vii)The Lead Arrangers shall have been afforded a period of at least 21
consecutive calendar days (or such shorter period reasonably acceptable to the
Lead Arrangers) following receipt of the Information Memorandum prior to the
Closing Date; provided that such period shall (x) exclude the period from July
1, 2016 through and including July 4, 2016 and from November 23, 2016 through
and including November 27, 2016, and (y) either conclude on or prior to August
19, 2016 or commence no earlier than September 6, 2016 and on or prior to
December 23, 2016 or commence no earlier than January 3, 2017.
(viii)All fees due to the Administrative Agent, the Lead Arrangers and the
Lenders under the Fee Letters and the Commitment Letter to be paid on the
Closing Date, and all expenses to be paid or reimbursed under the Commitment
Letter to the Administrative Agent and the Lead Arrangers on the Closing Date
that have been invoiced at least three business days prior to the Closing Date,
shall have been paid, in each case, from the proceeds of the initial funding
under the applicable Facilities.
(ix)The Refinancing shall have been, or shall concurrently with the initial
funding of the Facilities be consummated and all guarantees of such indebtedness
shall be released and, to the extent applicable, all liens and security
interests securing such indebtedness shall be discharged.
(x)So long as requested at least ten business days prior to the Closing Date,
the Administrative Agent shall have received, at least three business days prior
to the Closing Date, all documentation and other information with respect to the
Borrowers and the Guarantors that is required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including, without limitation, the U.S.A. PATRIOT Act.

ANNEX III
FORM OF SOLVENCY CERTIFICATE
[     ], 201[_]
This SOLVENCY CERTIFICATE (this “Certificate”) is delivered in connection with
that certain Credit Agreement dated as of [______], 201[_] (as amended,
supplemented, amended and restated, replaced, or otherwise modified from time to
time, the “Credit Agreement”), by and among COHERENT, INC., a Delaware
corporation (the “US Borrower”), COHERENT HOLDING GMBH, a German company with
limited liability (the “Euro Borrower”), BARCLAYS BANK PLC, as administrative
agent and collateral agent (the “Administrative Agent”), and the financial
institutions from time to time party thereto as lenders. Capitalized terms used
herein without definition have the same meanings as in the Credit Agreement.
I, [●], the [Chief Financial Officer/equivalent officer] of the US Borrower, in
such capacity and not in an individual capacity and without personal liability,
hereby certify on behalf of the US Borrower that, to my knowledge, as of the
date hereof, immediately after giving effect to the consummation of the
Transaction, including the incurrence of the obligations under the Credit
Agreement and the use of proceeds thereof:
1.     The fair value of the assets of the Company (as used herein “Company”
means the Borrowers and their subsidiaries, on a consolidated basis) is more
than its debts and liabilities, subordinated, contingent or otherwise.
2.    The present fair saleable value of assets of the Company is more than the
amount that will be required to pay the probable liability, on a consolidated
basis, of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured.
3.    The Company is able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured.
4.    The Company is not engaged in, and is not about to engage in, business for
which it has “unreasonably small capital”.
For purposes of this Certificate, the amount of any contingent liability at any
time shall be computed as the amount that would reasonably be expected to become
an actual and matured liability.
[Signature page follows]

IN WITNESS WHEREOF, I represent the foregoing information is provided to the
best of my knowledge and belief and execute this Certificate as of the date
first above written.

By:
        
Name: [●]    
Title: [Chief Financial Officer/equivalent officer]