Exhibit 10.1

 

ROYAL BANK OF CANADA

200 Vesey Street

New York, New York 10281

 

BANK OF MONTREAL

BMO CAPITAL MARKETS CORP.

3 Times Square

New York, New York 10036

October 11, 2016

Tessera Technologies, Inc.

3025 Orchard Parkway

San Jose, CA 95134

Attention: Robert Andersen

Project Arizona

Amended and Restated Commitment Letter

Ladies and Gentlemen:

Tessera Technologies, Inc. (“you” or the “Parent”) has advised Royal Bank of
Canada (“Royal Bank”), RBC Capital Markets1 (“RBCCM”), Bank of Montreal (“BMO”)
and BMO Capital Markets Corp. (“BMOCM” and, together with Royal Bank, RBCCM and
BMO and any Additional Arranger appointed pursuant to paragraph 1 below, the
“Commitment Parties”, “we” or “us”) that you intend to acquire (the
“Acquisition”) an entity identified to us as “Derby” (“Derby” or the “Target”;
the Target collectively with its subsidiaries, the “Acquired Business”). The
Acquisition will be effected through (i) the merger of a newly formed wholly
owned indirect subsidiary of the Parent (“Merger Sub 1”), which such Merger Sub
1 will be wholly owned directly by a newly formed wholly owned direct subsidiary
of the Parent (the “Borrower”), with and into the Target, with the Target
surviving such merger and (ii) the merger of a newly formed wholly owned
indirect subsidiary of the Parent (“Merger Sub 2”), which such Merger Sub 2 will
be wholly owned directly by the Borrower, with and into the Parent, with the
Parent surviving such merger. In connection with the Acquisition, existing
indebtedness of the Acquired Business under that certain Credit Agreement, dated
as of October 1, 2015, among the Target, the lenders party thereto and Wells
Fargo Bank, National Association, as administrative agent (as amended from time
to time, the “Target Credit Agreement”), will be repaid in full, all commitments
thereunder will be terminated and the security interests with respect thereto
(if any) will be released (the “Refinancing”). The Parent, the Acquired Business
and their respective subsidiaries are sometimes collectively referred to herein
as the “Companies”. This Commitment Letter amends, restates and supersedes in
its entirety that certain commitment letter (the “Original Commitment Letter”)
dated September 19, 2016 among Royal Bank, RBCCM and you, and such Original
Commitment Letter shall be of no further force or effect.

You have also advised us that in connection with the Acquisition, the Borrower
intends to incur $600,000,000 aggregate principal amount of senior secured term
B loans (the “Term B Loan Facility”). The Acquisition, the Refinancing, the
entering into and initial funding of the Term B Loan Facility and all related
transactions are hereinafter collectively referred to as the “Transaction”. The
date of the consummation of the Acquisition and the funding of the Term B Loan
Facility is referred to herein as the “Closing Date”.

 

 

1  RBC Capital Markets is a brand name for the capital markets business of Royal
Bank of Canada and its affiliates.

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1. Commitments. In connection with the foregoing, (a) Royal Bank and BMO are
pleased to advise you of their commitment to provide, on a several and not joint
basis, 75% and 25%, respectively, of the principal amount of the Term B Loan
Facility (in such capacity, together with any Additional Arranger appointed as
described below, the “Initial Lenders”), subject only to the conditions set
forth in paragraph 5 hereto; and (b) RBCCM and BMOCM are pleased to advise you
of their willingness, and you hereby engage RBCCM and BMOCM, to act as joint
lead arrangers and joint bookrunning managers (in such capacities, together with
any Additional Arranger appointed as described below, the “Lead Arrangers”) for
the Term B Loan Facility, and in connection therewith to form a syndicate of
lenders for the Term B Loan Facility (collectively, the “Lenders”), in
consultation with you and reasonably acceptable to you. It is understood and
agreed that (x) Royal Bank and RBCCM shall have “top left” placement in any
listing of the Lead Arrangers and (y) Royal Bank shall act as administrative
agent for the Term B Loan Facility (in such capacity, the “Administrative
Agent”). Notwithstanding anything to the contrary contained herein, the
commitments of the Initial Lenders with respect to the funding of the Term B
Loan Facility 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 Annexes I and II hereto (the “Summary of
Terms”).

Except as set forth below, you agree that no other agents, co-agents, arrangers
or bookrunners will be appointed, no other titles will be awarded and no
compensation (other than compensation expressly contemplated by this Commitment
Letter and the Fee Letter and the administrative agent fee letter between you
and Royal Bank dated September 19, 2016 (the “Administrative Agent Fee Letter”)
referred to below) will be paid to any Lender in respect of the Term B Loan
Facility unless you and we shall so agree; provided that you may, on or prior to
the date which is 20 business days after the date of the Original Commitment
Letter, appoint one additional joint bookrunner, arranger, agent, co-agent,
manager or co-manager (the “Additional Arranger”) for the Term B Loan Facility,
and award such Additional Arranger titles in a manner and with economics set
forth in the immediately succeeding proviso (it being understood that, to the
extent you appoint such Additional Arranger or confer other titles in respect of
the Term B Loan Facility, then, notwithstanding anything in paragraph 2 to the
contrary, the commitments of Royal Bank in respect of the Term B Loan Facility,
in each case pursuant to and in accordance with this proviso, will be
permanently reduced by the amount of the commitments of such appointed entities
(or their relevant affiliates) in respect of the Term B Loan Facility, with such
reduction allocated to reduce the commitments of Royal Bank in respect of the
Term B Loan Facility at such time, upon the execution by such Additional
Arranger (and any relevant affiliate) of customary joinder documentation and,
thereafter, each such Additional Arranger (and any relevant affiliate) shall
constitute a “Commitment Party” and/or “Lead Arranger” hereunder and it or its
relevant affiliate providing such commitment shall constitute an “Initial
Lender” hereunder); provided, further, that, in connection with the appointment
of such Additional Arranger in accordance with the immediately preceding
proviso, (a) the aggregate economics payable to such Additional Arranger (or any
relevant affiliate thereof) in respect of the Term B Loan Facility shall not
exceed 10% of the total underwriting economics payable to the Commitment Parties
in respect of the Term B Loan Facility pursuant to the Fee Letter (exclusive of
any fees payable to the Administrative Agent in its capacity as such), (b) such
Additional Arranger (or its relevant affiliates) shall not receive a greater
percentage of the economics in respect of the Term B Loan Facility than BMO and
(c) such Additional Arranger (or its relevant affiliates) shall assume a
proportion of the commitments with respect to the Term B Loan Facility that is
equal to the proportion of the economics allocated to such Additional Arranger
pursuant to customary joinder documentation executed by such Additional Arranger
(and any relevant affiliate).

2. Syndication. The Lead Arrangers intend to commence syndication of the Term B
Loan Facility promptly after your acceptance of the terms of this Commitment
Letter and the Fee Letter (as hereinafter defined); provided that we agree not
to syndicate our commitments to certain banks,

 

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financial institutions and other institutional lenders and any competitors (or
Known Affiliates (as defined below) of competitors) of the Companies, in each
case, that have been specified to us by you in writing prior to the date of the
Original Commitment Letter (collectively, “Disqualified Lenders”); provided,
further, that you, upon reasonable notice to us after the date of the Original
Commitment Letter and prior to the launch of general syndication (or to the
Administrative Agent after the Closing Date), shall be permitted to supplement
in writing the list of persons that are Disqualified Lenders to the extent such
supplemented person is or becomes a competitor or a Known Affiliate of a
competitor of the Companies, which supplement shall be in the form of a list
provided to us (or the Administrative Agent) and become effective upon delivery
to us (or the Administrative Agent), but which supplement shall not apply
retroactively to disqualify any parties that have previously acquired an
assignment in the loans under the Term B Loan Facility. As used herein, “Known
Affiliates” of any person means, as to such person, known affiliates readily
identifiable by name, but excluding any affiliate that is a bona fide debt fund
or investment vehicle 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 or similar extensions of credit
or securities in the ordinary course and with respect to which the Disqualified
Lender does not, directly or indirectly, possess the power to direct or cause
the direction of the investment policies of such entity. 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 Term B Loan Facility and in no event shall the commencement or
successful completion of syndication of the Term B Loan Facility constitute a
condition to the availability of the Term B Loan Facility on the Closing Date.
You agree, until the Syndication Date (as hereinafter defined), to actively
assist, and, to the extent practical and appropriate and not in contravention of
the Acquisition Agreement, to use your commercially reasonable efforts to cause
the Acquired Business to actively assist, the Lead Arrangers in achieving a
syndication of the Term B Loan Facility that is reasonably satisfactory to the
Lead Arrangers and you; provided that, notwithstanding each Lead Arranger’s
right to syndicate the Term B Loan Facility and receive commitments with respect
thereto, it is agreed that (i) syndication of, or receipt of commitments or
participations in respect of, all or any portion of an Initial Lender’s
commitments hereunder prior to the date of the consummation of the Acquisition
and the date of the funding under the Term B Loan Facility shall not be a
condition to such Initial Lender’s commitments and (ii) (a) except as you in
your sole discretion may otherwise agree in writing, no Initial Lender shall be
relieved, released or novated from its obligations hereunder (including its
obligation to fund the Term B Loan Facility on the Closing Date) in connection
with any syndication, assignment or participation of the Term B Loan Facility,
including its commitments in respect thereof, until after the funding of the
Term B Loan Facility has occurred; (b) no assignment or novation shall become
effective with respect to all or any portion of any Initial Lender’s commitments
in respect of the Term B Loan Facility until after the funding of the Term B
Loan Facility; and (c) each Initial Lender shall retain exclusive control over
all rights and obligations with respect to its commitments in respect of the
Term B Loan Facility, including all rights with respect to consents,
modifications, supplements, waivers and amendments, until the Closing Date has
occurred and the funding under the Term B Loan Facility has been made. Such
assistance shall include (a) your providing and (subject to customary
non-reliance agreements) causing your advisors to provide, and, to the extent
not in contravention of the Acquisition Agreement, using your commercially
reasonable efforts to cause the Acquired Business, its subsidiaries and its
advisors to provide, the Lead Arrangers upon request with all customary and
reasonably available information reasonably deemed necessary by the Lead
Arrangers to complete such syndication, including, but not limited to, customary
and reasonably available information relating to the Transaction as may be
reasonably requested by us (including the Projections (as hereinafter defined);
(b) your assistance in the preparation of a customary information memorandum
with respect to the Term B Loan Facility (an “Information Memorandum”) and other
customary materials to be used in connection with the syndication of the Term B
Loan Facility (collectively with the Summary of Terms and any additional summary
of terms prepared for distribution to Lenders, the “Information Materials”);
(c) your using your commercially reasonable efforts to make your appropriate

 

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management available to participate in the marketing of the Term B Loan Facility
at mutually agreed upon times and locations following the completion of the
Information Memorandum; (d) your using commercially reasonable efforts to ensure
that the syndication efforts of the Lead Arrangers benefit from your existing
lending relationships, if any, and, to the extent practical and appropriate and
not in contravention of the Acquisition Agreement, the existing banking
relationships of the Acquired Business; (e) your using commercially reasonable
efforts to obtain, prior to the launch of syndication of the Term B Loan
Facility, monitored public corporate credit or family ratings (but not any
specific rating) for the Borrower after giving effect to the Transaction and
ratings of the Term B Loan Facility from Moody’s Investors Service, Inc.
(“Moody’s”) and Standard & Poor’s Ratings Services, a Standard & Poor’s
Financial Services LLC business (“S&P”) (collectively, the “Ratings”); (f) until
the later of the Syndication Date and the Closing Date, your ensuring, and with
respect to the Acquired Business, using your commercially reasonable efforts to
ensure, to the extent not in contravention of the Acquisition Agreement, that
none of the Companies shall syndicate or issue, attempt to syndicate or issue,
or announce or authorize the announcement of the syndication or issuance of, any
debt securities or credit facilities of the Companies (other than the Term B
Loan Facility), in each case, that would materially and adversely affect the
primary syndication of the Term B Loan Facility without the prior written
consent (not to be unreasonably withheld) of the Lead Arrangers (it being
understood that borrowings under the existing revolving credit facility of the
Target, ordinary course capital lease, purchase money and equipment financings
of any of the Companies and other indebtedness permitted to be outstanding or
issued under the Acquisition Agreement shall be permitted); and (f) your making
appropriate officers of you, and, to the extent practical and appropriate and
not in contravention of the Acquisition Agreement, using your commercially
reasonable efforts to make the appropriate officers 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 a reasonable number of meetings of prospective Lenders at
mutually agreed upon times and locations. Notwithstanding anything to the
contrary contained in this Commitment Letter or the Fee Letter 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 Term B Loan Facility on the
Closing Date.

It is understood and agreed that the Lead Arrangers will manage and control all
aspects of the syndication of the Term B Loan Facility in consultation with you,
including any titles offered to prospective Lenders (subject to your consent
rights set forth herein and your rights of appointment set forth in paragraph 1
and excluding Disqualified Lenders), when commitments will be accepted and the
final allocations of the commitments among the Lenders and the amount and
distribution of the fees among the Lenders. It is further understood that the
Initial Lenders’ commitments hereunder are not conditioned upon the syndication
of, or receipt of commitments in respect of, the Term B Loan Facility and in no
event shall the commencement of successful completion of syndication of the Term
B Loan Facility constitute a condition to availability of the Term B Loan
Facility on the Closing Date.

3. Information Requirements. You hereby represent and warrant (with respect to
Information relating to the Acquired Business, to your knowledge) that (a) all
written factual information, other than Projections (as defined below), budgets,
estimates and other forward-looking information or information of a general
economic or industry 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, to your knowledge, relating to the Acquired Business) (the
“Information”) is and will be correct when taken as a whole, in all material
respects, and does not and will not, taken as a whole, contain any untrue
statement of a fact or omit to state a fact necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not materially misleading (in each case, after giving effect to all supplements
and

 

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updates with respect 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”) (to your knowledge, in the case of Projections provided by the
Acquired Business) have been or will be prepared in good faith based upon
assumptions believed by you to be reasonable at the time provided (it being
understood and agreed that the Projections are as to future events and are not
to be viewed as facts or a guarantee of 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 Fee Letter) is achieved and (ii) 45 days
following the Closing Date (the earlier of such dates, 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 promptly supplement, or cause to be supplemented (or in the case
of Information or Projections relating to the Acquired Business, you will
promptly notify the Lead Arrangers upon becoming aware that any such Information
or Projections are incorrect in any material respect and, to the extent not in
contravention of the Acquisition Agreement, will use commercially reasonable
efforts to supplement), the Information and Projections so that such
representations (to your knowledge, in the case of the Acquired Business) will
be correct in all material respects at such time, it being understood in each
case that such supplementation shall cure any breach of such representation and
warranty. In issuing this commitment and in arranging and syndicating the Term B
Loan Facility, 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 Term B Loan Facility on the Closing Date.

You acknowledge that (a) the Lead Arrangers on your behalf will make available,
on a confidential basis, 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 or the respective securities of any of the Companies, 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 and, in each case, which
exculpate the Companies and us and our affiliates with respect to any liability
related to the use of the contents of the Information Materials or related
marketing materials by the recipients thereof. In addition, you hereby agree
that (x) you will use commercially reasonable efforts to identify (and, at the
reasonable request of the Lead Arrangers or the Administrative Agent (or its
affiliates), shall 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 the Administrative Agent (and its
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.”

 

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You agree that, subject to the confidentiality and other provisions of this
Commitment Letter, the Lead Arrangers and the Administrative Agent (and its
affiliates) on your behalf may distribute the following documents to all
prospective Lenders, unless you advise the Lead Arrangers and Administrative
Agent 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 (provided that such materials have been provided to
you and your counsel for review a reasonable period of time prior thereto):
(a) administrative materials for prospective Lenders such as lender meeting
invitations and funding and closing memoranda, (b) notifications of changes to
the terms of the Term B Loan Facility and (c) drafts approved in writing by you
and the Administrative Agent (or its affiliates) and final versions of
definitive documents with respect to the Term B Loan Facility. If you advise the
Lead Arrangers and the Administrative Agent that any of the foregoing items
should be distributed only to Private Lenders, then the Lead Arrangers and the
Administrative Agent will not distribute such materials to Public Lenders
without your prior consent. You agree that Information Materials made available
to prospective Public Lenders in accordance with this Commitment Letter shall
not contain MNPI.

4. Fees and Indemnities.

(a) If the Closing Date occurs, you agree to reimburse the Commitment Parties
upon receipt of a reasonably detailed invoice therefor for all reasonable and
documented out-of-pocket fees and expenses (in the case of fees and expenses of
counsel, limited to the reasonable and documented out-of-pocket fees,
disbursements and other out-of-pocket expenses of (x) one firm of lead counsel
to the Commitment Parties (it being understood and agreed that Paul Hastings LLP
shall act as counsel to the Commitment Parties) and (y) one firm of local
counsel in each relevant jurisdiction reasonably retained by the Administrative
Agent) incurred in connection with the Term B Loan Facility, the syndication
thereof, the preparation of the Credit Documentation (as defined below) therefor
and the other transactions contemplated hereby. You agree to pay (or cause to be
paid) the fees set forth in the separate fee letter addressed to you dated the
date hereof from the Commitment Parties (the “Fee Letter”), if and to the extent
payable.

(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, agents,
advisors, controlling persons and other representatives involved in the
Transaction (each, an “Indemnified Party”) from and against (and will reimburse
each Indemnified Party within 30 days following written demand (accompanied by
reasonable back-up therefor)) any and all claims, damages, losses, liabilities
and reasonable and documented out-of-pocket expenses (including, without
limitation, the reasonable and documented fees, disbursements and other charges
of one firm of counsel for all such Indemnified Parties, taken as a whole and,
if necessary, by a single firm of local counsel in each appropriate jurisdiction
(which may include a single firm of special counsel acting in multiple
jurisdictions) for all such Indemnified Parties, taken as a whole (and, in the
case of a conflict of interest where the Indemnified Party affected by such
conflict notifies you of the existence of such conflict and thereafter retains
its own counsel, by another firm of counsel for all such affected Indemnified
Parties)) 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) any
aspect of the Transaction or any of the other transactions contemplated hereby
or (b) the Term B Loan Facility, or any use made or proposed to be made with the
proceeds thereof, in each case, except to the extent such claim, damage, loss,
liability or expense (A) is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from such Indemnified Party’s (or any
of its affiliate’s or related party’s) gross negligence, bad faith or willful
misconduct, (B) arises from a breach of such Indemnified Party’s (or any of its
affiliate’s or related party’s) obligations hereunder (C) arises from a
proceeding by an Indemnified Party against an Indemnified Party (or any of their
respective

 

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affiliates or related parties) (other than an action involving (i) conduct by
you or any of your affiliates or (ii) against an arranger or administrative
agent in its capacity as such) or (D) resulted from any agreement governing any
settlement by such Indemnified Party that is effective without your prior
written consent (which consent shall not be unreasonably withheld). 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. It is agreed that none of you (or any of your
subsidiaries), the Target (or any of its subsidiaries) or any Indemnified Party
shall be liable for any indirect, special, punitive or consequential damages
(including, without limitation, any loss of profits, business or anticipated
savings) in connection with this Commitment Letter, the Original Commitment
Letter, the Fee Letter, the Original Fee Letter or with respect to any
activities related to the Term B Loan Facility, including the preparation of
this Commitment Letter, the Original Commitment Letter, the Fee Letter, the
Original Fee Letter and the Credit Documentation. 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 gross
negligence, bad faith or willful misconduct of such Indemnified Party (or any of
its affiliates or related parties) 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, such consent not to be unreasonably
withheld, 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. In case any Proceeding is instituted
involving any Indemnified Party for which indemnification is to be sought
hereunder by such Indemnified Party, then such Indemnified Party will promptly
notify you of the commencement of any Proceedings. You shall not be liable for
any settlement of any Proceeding affected without your written consent (which
consent shall not be unreasonably withheld).

5. Conditions to Financing. The commitment of each Initial Lender with respect
to the funding of the Term B Loan Facility is subject solely to (a) the
satisfaction (or waiver by the Lead Arrangers) of each of the conditions set
forth in Annex II hereto and (b) the execution and delivery of customary
definitive credit documentation by the Borrower and the Guarantors with respect
to the Term B Loan Facility consistent with this Commitment Letter and the Fee
Letter and subject in all respects to the Funds Certain Provisions (as defined
below) and giving effect to the Documentation Standard (as defined in Annex I))
(the “Credit Documentation”) prior to, or substantially concurrent with, such
funding. There are no conditions (implied or otherwise) to the commitments
hereunder, and there will be no conditions (implied or otherwise) under the
Credit Documentation to the funding of the Term B Loan Facility on the Closing
Date, other than those that are expressly referred to in the immediately
preceding sentence.

Notwithstanding anything in this Commitment Letter, the Fee Letter, 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 Term
B Loan Facility on the Closing Date if the conditions in this paragraph 5 shall
have been satisfied or waived by the Lead Arrangers (it being understood that to
the extent any security interest in Collateral (including the creation or
perfection of any security interest) (other than any Collateral the security
interest in which may be perfected by the filing of a UCC financing statement or
the delivery of certificates, if any, evidencing equity interests of any
material wholly-owned restricted domestic subsidiary of the Borrower and the
subsidiary Guarantors that is part of the Collateral (provided that any such
certificated equity interests with respect to subsidiaries of the Target will be
required to be

 

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delivered on the Closing Date only to the extent received from the Target after
your use of commercially reasonable efforts to obtain such certificates)) is not
perfected or provided on the Closing Date after your use of commercially
reasonable efforts to do so without undue burden or expense, the provision and
perfection of such Collateral and security interest shall not constitute a
condition precedent to the availability of the Term B Loan Facility on the
Closing Date but shall be required to be perfected not later than 90 days
(subject to extensions as may be agreed to by the Administrative Agent) after
the Closing Date pursuant to arrangements to be mutually agreed by the Borrower
and Administrative Agent), and (b) the only representations and warranties the
accuracy of which shall be a condition to the availability of the Term B Loan
Facility on the Closing Date shall be (x) such of the representations made by
the Target in the Acquisition Agreement as are material to the interests of the
Lenders, but only to the extent that you (or your affiliate) have the right
(taking into account any applicable notice and cure provisions) to terminate
your (and/or its) obligations under the Acquisition Agreement or decline to
consummate the Acquisition (in each case, in accordance with the terms thereof)
as a result of a breach of such representations in the Acquisition Agreement (to
such extent, the “Acquisition Agreement Representations”) and (y) the Specified
Representations (as defined below). “Specified Representations” shall mean the
representations and warranties of the Borrower and Target in the Credit
Documentation relating to: (i) (A) corporate status of the Borrower and the
Target and (B) corporate power and authority to enter into the Credit
Documentation by the Borrower and the Target, (ii) due authorization, execution,
delivery and enforceability of the Credit Documentation by the Borrower and the
Target, (iii) no conflicts of the Credit Documentation with charter documents of
the Borrower and the Target, (iv) compliance with Federal Reserve margin
regulations and the use of proceeds of borrowing under the Term B Loan Facility
on the Closing Date not violating OFAC, FCPA and the U.S.A. Patriot Act, (v) the
Investment Company Act, (vi) solvency of the Borrower and its subsidiaries on a
consolidated basis and on a pro forma basis for 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 (vii) subject to the limitations set forth in this
paragraph, the creation, validity and perfection of the security interests
granted in the Collateral. The provisions of this paragraph are referred to
herein as the “Funds Certain Provisions”.

Each of the parties hereto agrees that each of this Commitment Letter and the
Fee Letter 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 Letter, it being
acknowledged and agreed that the funding of the Term B Loan Facility is subject
only to the conditions precedent as set forth in this paragraph 5. For clarity,
all terms referenced herein to being defined in the Credit Documentation shall
be defined in accordance with the Documentation Standard (unless otherwise
provided for herein).

6. Confidentiality and Other Obligations. This Commitment Letter and the Fee
Letter and the contents hereof and thereof are confidential and may not be
disclosed by you in whole or in part to any person or entity without the prior
written consent of the Commitment Parties (not to be unreasonably withheld,
conditioned or delayed) except (i) this Commitment Letter and the Fee Letter and
contents hereof and thereof may be disclosed (A) on a confidential basis to your
subsidiaries, directors, officers, employees, accountants, attorneys and other
representatives and professional advisors 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 stock exchange requirement or compulsory legal
process (in which case you agree to use commercially reasonable efforts to
inform the Commitment Parties promptly thereof prior to such disclosure to the
extent permitted by applicable

 

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law), and (C) on a confidential basis to the affiliates, members, partners,
stockholders, equity holders, controlling persons, directors, officers,
employees, accountants, attorneys and other representatives and professional
advisors of the Acquired Business; provided that any such disclosure of the Fee
Letter shall be subject to customary redaction of the fees and the economic
“market flex” provisions contained therein (to the extent such “market flex”
provisions do not affect the conditionality or amount of the Term B Loan
Facility), (ii) Annex I and the existence of this Commitment Letter and the Fee
Letter (but not the contents of this Commitment Letter and the Fee Letter) may
be disclosed to Moody’s, 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 Letter may be disclosed as part
of generic disclosure regarding sources and uses for closing of the Acquisition,
projections, and pro forma information (but without disclosing any specific
fees, market flex or other economic terms set forth therein), (iv) this
Commitment Letter and the Fee Letter may be disclosed on a confidential basis to
your auditors or persons performing customary accounting functions for customary
accounting purposes, including accounting for deferred financing costs, (v) to
the directors, officers, attorneys and other professional advisors of the Target
on a confidential “need to know” basis in connection with the Transaction;
provided that any disclosure of the Fee Letter and the contents thereof shall be
redacted in a manner satisfactory to the Commitment Parties, (vi) you may
disclose this Commitment Letter (but not the Fee Letter) and its contents in any
information memorandum or syndication distribution, as well as in any proxy
statement or other public filing or other marketing materials relating to the
Acquisition or the Term B Loan Facility, (vii) this Commitment Letter and the
Fee Letter 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 Commitment
Parties promptly thereof prior to such disclosure to the extent permitted by
applicable law) and (viii) you may disclose this Commitment Letter and the Fee
Letter and the contents of each thereof to any Additional Arranger in either
case to the extent in contemplation of appointing such person pursuant to
paragraph 1 of this Commitment Letter and to any such person’s affiliates and
its and their respective officers, directors, employees, agents, attorneys,
accountants and other advisors, on a confidential basis.

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 any Commitment
Party 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 such Commitment Party agrees to inform you promptly
thereof to the extent not prohibited by law, rule or regulation), (ii) upon the
request or demand of any regulatory (including self-regulatory) authority having
jurisdiction over such Commitment Party or any of its affiliates, (iii) to the
extent that such information becomes publicly available other than by reason of
disclosure in violation of this Commitment Letter, the Fee Letter or other
confidential obligation owed by such Commitment Party, (iv) to such Commitment
Party’s 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
available under securities laws, (vi) to the extent that such information is
received by such Commitment Party from a third party that is not to such
Commitment Party’s knowledge subject to confidentiality obligations to you,
(vii) to the extent that such information is independently developed by such
Commitment Party, (viii) to potential Lenders, participants, assignees or any
direct or indirect contractual counterparties to any swap or derivative
transaction relating to the Borrower or the Borrower’s obligations under the
Term B Loan Facility (other than a Disqualified Lender), 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 the Borrower and
such Commitment Party, including as may be agreed in any confidential
information memorandum or other

 

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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 limited to Annex I and is supplied only on a
confidential basis, or (x) with your prior written consent. This paragraph shall
terminate on the earlier of (a) the initial funding under the Term B Loan
Facility and (b) the second anniversary of the date of this Commitment Letter.

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 all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (i) the Term B Loan Facility 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 the 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 each such
person in accordance with the U.S.A. Patriot Act.

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 all of the commitments and undertakings of the Commitment Parties are
terminated by any party hereto prior to the effectiveness of the Term B Loan
Facility and (ii) if the Term B Loan

 

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Facility close and the Credit Documentation is executed and delivered, the
provisions of paragraphs 2 and 3 shall survive only until the Syndication Date
and your obligations under this Commitment Letter, other than your obligations
in paragraphs 2 and 3, confidentiality of the Fee Letter and paragraph 4 to the
extent not addressed in the Credit Documentation, shall automatically terminate
and be superseded by the provisions of the Credit Documentation upon the
execution and delivery thereof, and you shall automatically be released from all
liability in connection therewith at such time. You may terminate this
Commitment Letter and/or the Initial Lenders’ commitments with respect to the
Term B Loan Facility (or any portion thereof) hereunder at any time subject to
the provisions of the preceding sentence (any such commitment termination shall
reduce the commitments of each Initial Lender on a pro rata basis based on their
respective commitments to the Term B Loan Facility as of the date hereof).

8. Miscellaneous. This Commitment Letter and the Fee Letter may be executed in
multiple counterparts and by different parties hereto in separate counterparts,
all of which, taken together, shall be deemed an original. Delivery of an
executed counterpart of a signature page to this Commitment Letter or the Fee
Letter 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 Letter.

This Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to conflict of
law principles that would result in the application of any other laws other than
the state of New York; provided that, notwithstanding the foregoing, it is
understood and agreed that (a) interpretation the definition of “Company
Material Adverse Effect” (as defined in Annex II) or the equivalent term under
the Acquisition Agreement and whether a Company Material Adverse Effect (or the
equivalent term) has occurred, (b) the determination of the accuracy of any
Acquisition Agreement Representation and whether as a result of any inaccuracy
thereof you have the right (taking into account any applicable cure provisions)
to terminate your obligations under the Acquisition Agreement or decline to
consummate the Acquisition and (c) the determination of whether the Acquisition
has been consummated in accordance with the terms of the Acquisition Agreement,
in each case shall be governed by, and construed in accordance with, the laws of
the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof. 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 LETTER, 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 Letter, 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.

 

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This Commitment Letter, together with the Fee Letter and the Administrative
Agent Fee Letter, embodies the entire agreement and understanding among the
parties hereto and your affiliates with respect to the Term B Loan Facility 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 Letter 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 is intended to be solely for the benefit of the parties
hereto and the Borrower 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 and the Borrower). This Commitment Letter and the
commitments hereunder shall not be assignable by any party hereto (other than
(i) by the Initial Lenders to any Additional Arranger pursuant to, and subject
to the provisions of, paragraph 1 and (ii) by you to the Borrower on the Closing
Date) without the prior written consent of each other party hereto (and any
attempted assignment without such consent shall be null and void); provided that
each Commitment Party may assign its commitment hereunder, in whole or in part,
to any of its affiliates or, subject to the provisions of this Commitment
Letter, to any Lender; provided further that, other than with respect to an
assignment to any Additional Arranger in compliance with paragraph 1, such
Commitment Party 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.

Please indicate your acceptance of the terms of the Term B Loan Facility set
forth in this Commitment Letter and the Fee Letter by returning to the Lead
Arrangers executed counterparts of this Commitment Letter and the Fee Letter not
later than 11:59 p.m. (New York City time) on October 11, 2016, whereupon the
undertakings of the parties with respect to the Term B Loan Facility shall
become effective to the extent and in the manner provided hereby. This offer
shall terminate with respect to the Term B Loan Facility if not so accepted by
you at or prior to that time. Thereafter, all commitments and undertakings of
the Commitment Parties hereunder will expire, unless extended by us in our sole
discretion, on the earliest of (a) 11:59 p.m., New York City time, on
February 28, 2017, unless the Closing Date occurs on or prior thereto, (b) the
consummation of the Acquisition without the use of the Term B Loan Facility and
(c) the termination of the Acquisition Agreement by you in a signed writing in
accordance with its terms.

[The remainder of this page intentionally left blank.]

 

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We are pleased to have the opportunity to work with you in connection with this
important financing.

 

Very truly yours,

 

ROYAL BANK OF CANADA

 

By:   

      /s/ James S. Wolfe

  Name:   James S. Wolfe   Title:  

Managing Director

Head of Global Leveraged Finance

 

Signature Page to Project Arizona Commitment Letter

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BANK OF MONTREAL

 

By:   

      /s/ Michael Kus

  Name:   Michael Kus   Title:   Managing Director

 

BMO CAPITAL MARKETS CORP.

 

By:   

      /s/ Bryan Rolfe

  Name:   Bryan Rolfe   Title:   Managing Director

 

Signature Page to Project Arizona Commitment Letter

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The provisions of this Commitment Letter are accepted and agreed to as of the
date first written above:

 

TESSERA TECHNOLOGIES, INC. By:   

      /s/ Thomas Lacey

  Name:   Thomas Lacey   Title:   Chief Executive Officer

 

Signature Page to Project Arizona Commitment Letter

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ANNEX I

SUMMARY OF TERMS AND CONDITIONS

$600,000,000 TERM B LOAN FACILITY

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex I is attached.

 

Borrower:

A newly formed Delaware corporation wholly owned by the Parent immediately prior
to the Acquisition and which shall, following the Acquisition, be the direct
owner of Parent and Target (as survivors of mergers contemplated by the
Acquisition Agreement) (the “Borrower”).

 

Guarantors:

The obligations of the Borrower under the Term B Loan Facility (as hereinafter
defined) will be guaranteed jointly and severally on a senior basis (the
“Guarantees”) by each of the Borrower’s wholly-owned material restricted U.S.
subsidiaries (and consistent with the principles set forth herein)
(collectively, the “Guarantors”); provided that Guarantors shall not include
(i) unrestricted subsidiaries, (ii) immaterial subsidiaries (to be defined in a
mutually acceptable manner), (iii) any subsidiary that is prohibited, but only
so long as such subsidiary would be prohibited, by applicable law, rule or
regulation or by any contractual obligation existing on the Closing Date or
existing at the time of acquisition thereof after the Closing Date (so long as
such prohibition did not arise as part of such acquisition), in each case, from
guaranteeing the Term B Loan Facility or which would require governmental
(including regulatory) consent, approval, license or authorization to provide a
Guarantee unless such consent, approval, license or authorization has been
received (but without obligation to seek the same), (iv) any direct or indirect
subsidiary of a “controlled foreign corporation” within the meaning of
Section 957 of the Internal Revenue Code of 1986, as amended (a “CFC”), (v) any
CFC, (vi) any domestic subsidiary with no material assets other than equity
interests (including, for this purpose, any debt or other instrument treated as
equity for U.S. federal income tax purposes) of one or more foreign subsidiaries
that are CFCs (a “Disregarded Domestic Person”), (vii) not-for-profit
subsidiaries, (viii) any other subsidiary with respect to which the Borrower (in
consultation with the Administrative Agent) has reasonably determined that the
material adverse tax consequences of providing a guarantee shall be excessive
relation to of the benefits to be obtained by the Lenders therefrom, and
(ix) special purpose entities. In addition, the Credit Documentation will
contain carve outs for “non-ECP Guarantors”, consistent with the LSTA
provisions. All guarantees will be guarantees of payment and not of collection.

 

  Notwithstanding the foregoing, additional subsidiaries may be excluded from
the guarantee requirements in circumstances where the Borrower and the
Administrative Agent reasonably agree that the cost of providing such a
guarantee is excessive in relation to the value afforded thereby.

 

Annex I-1

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Administrative and

Collateral Agent:

Royal Bank will act as sole and exclusive administrative and collateral agent
for the Lenders (the “Administrative Agent”).

Joint Lead Arrangers and Joint

Bookrunners:

RBCCM, BMOCM and any Additional Arranger appointed in accordance with paragraph
1 of the Commitment Letter will act as joint lead arrangers and joint
bookrunners for the Term B Loan Facility (in such capacities, the “Lead
Arrangers”).

 

Syndication Agent:

BMOCM.

 

Lenders:

Banks, financial institutions and institutional lenders selected by the Lead
Arrangers in consultation with and reasonably acceptable to the Borrower and
excluding any Disqualified Lenders and, after the funding of the Term B Loan
Facility on the Closing Date, subject to the restrictions set forth in the
Assignments and Participations section below (the “Lenders”).

 

Term B Loan Facility:

A senior secured first lien term loan B facility (the “Term B Loan Facility”) in
an aggregate principal amount of $600,000,000.

 

Purpose:

The proceeds of the borrowings under the Term B Loan Facility, together with
cash on the balance sheet of the Companies, shall be used (i) to finance the
Acquisition and the Refinancing and (ii) to pay fees and expenses incurred in
connection therewith.

 

Availability:

The Term B Loan Facility will be available in a single drawing on the Closing
Date. Amounts borrowed under the Term B Loan Facility that are repaid or prepaid
may not be reborrowed.

 

Interest Rates:

The interest rates per annum applicable to the Term B Loan Facility will be, at
the option of the Borrower, (i) LIBOR plus the Applicable Margin (as hereinafter
defined) or (ii) the Base Rate plus the Applicable Margin. The Applicable Margin
means 3.00% per annum, in the case of LIBOR advances, and 2.00% per annum, in
the case of Base Rate advances.

 

  The Borrower may select interest periods of one, two, three or six months
(and, if agreed to by all applicable Lenders, a period shorter than one month or
a period of twelve months) for LIBOR advances. Interest shall be payable 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 will be deemed to be not less
than 0.75% per annum (the “LIBOR Floor”) and (y) the Base Rate will be deemed to
be not less than 100 basis points higher than one-month LIBOR (after giving
effect to the LIBOR Floor).

 

 

During the continuance of a payment or bankruptcy event of default, interest
will accrue on overdue amounts at the Default Rate (as defined

 

Annex I-2

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below). As used herein, “Default Rate” means (i) on the principal of any loan, a
rate of 200 basis points in excess of the rate otherwise applicable to such loan
and (ii) on any other overdue amount, a rate of 200 basis points in excess of
the non-default rate of interest then applicable to Base Rate loans.

 

Calculation of Interest:

Other than calculations in respect of interest at the Base Rate when calculated
by reference to the Administrative Agent’s prime rate (which shall be made on
the basis of actual number of days elapsed in a 365/366 day year), all
calculations of interest shall be made on the basis of actual number of days
elapsed in a 360-day year.

 

Cost and Yield Protection:

Subject to the Documentation Standard (as defined below) and customary for
transactions and facilities of this type, including, without limitation, in
respect of breakage or redeployment costs incurred in connection with
prepayments (other than loss of margin), 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; 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 regulatory authorities, in each case,
pursuant to Basel III, shall be deemed introduced or adopted after the Closing
Date, so long as, in each case, any amounts with respect thereto assessed by any
Lender shall also be so assessed by such Lender against its similarly situated
customers generally under agreements containing comparable yield protection
provisions.

 

Maturity:

The Term B Loan Facility will mature on the date that is 7 years after the
Closing Date. The Credit Documentation shall contain customary “amend and
extend” provisions pursuant to which individual Lenders may agree to extend the
maturity date of their outstanding loans or loans under the Term B Loan Facility
or any Incremental Facility (which may include, among other things, an increase
in the interest rate payable in respect of such extended loans, with such
extensions not subject to any “default stoppers”, financial tests or “most
favored nation” pricing provisions) upon the request of the Borrower and without
the consent of any other Lender (it is understood that (i) no existing Lender
will have any obligation to commit to any such extension and (ii) each Lender
under the class being extended shall have the opportunity to participate in such
extension on the same terms and conditions as each other Lender under such
class).

Incremental

Facilities:

The Credit Documentation will permit the Borrower to (a) add one or more
incremental term loan facilities to the Term B Loan Facility or to increase the
existing Term B Loan Facility (each, an “Incremental Term Facility”) and/or
(b) add one or more incremental revolving credit

 

Annex I-3

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facilities (each an “Incremental Revolving Facility” and, together with the
Incremental Term Facility, the “Incremental Facilities” and each an “Incremental
Facility”) in an aggregate principal amount of up to (x) $225,000,000 (the
“Fixed Incremental Amount”) plus (y) all voluntary prepayments of the Term B
Loan Facility and voluntary prepayments of revolving loans to the extent
accompanied by a permanent reduction of the revolving commitments made prior to
such date of incurrence and not funded with the proceeds of long term debt plus
(z) an unlimited amount so long as, in the case of clause (z) only, on a pro
forma basis the First Lien Net Leverage Ratio (as defined below) would not
exceed the First Lien Net Leverage Ratio on the Closing Date, after giving
effect to any acquisition consummated in connection therewith and all other
appropriate pro forma adjustments (in the case of any Incremental Revolving
Facility, calculated assuming the entire amount of such Incremental Revolving
Facility was drawn on such date) (the “Incurrence-Based Incremental Amount”) (it
being understood that (i) the Borrower shall be deemed to have used amounts
under clause (y) prior to utilization of amounts under clause (x) or (z), and
the Borrower shall be deemed to have used amounts under clause (z) (to the
extent compliant therewith) prior to utilization of amounts under clause (x),
and (ii) loans may be incurred under both clauses (x) and (z), and proceeds from
any such incurrence may be utilized in a single transaction by first calculating
the incurrence under clause (z) above and then calculating the incurrence under
clause (x) above)); provided that (i) no Lender will be required to participate
in any such Incremental Facility, (ii) subject to customary limited
conditionality provisions in connection with any Incremental Facility incurred
to finance a permitted acquisition or similar investment, no event of default or
default exists or would exist after giving effect thereto, (iii) subject to
customary limited conditionality provisions in connection with any Incremental
Facility incurred to finance a permitted acquisition or similar investment, the
representations and warranties in the Credit Documentation shall be true and
correct in all material respects, (iv) the maturity date of any such Incremental
Term Facility shall be no earlier than the maturity date for the Term B Loan
Facility, (v) 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 B Loan Facility, (vi) the interest margins for the Incremental Facility
shall be determined by the Borrower and the lenders of the Incremental Facility;
provided that in the event that the interest margins for any Incremental Term
Facility are greater than the Applicable Margin for the Term B Loan Facility by
more than 50 basis points, then the Applicable Margin for the Term B Loan
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 B Loan Facility; provided, further, that in
determining the interest margins applicable to the Term B Loan Facility and the
Applicable Margins for any Incremental Term Facility, (x) original issue
discount (“OID”) or upfront fees (which shall be deemed to constitute like
amounts of OID) payable by the Borrower for the account of the Lenders of the
Term B Loan Facility in the primary syndication thereof shall be included (with
OID being equated to interest

 

Annex I-4

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based on an assumed four-year life to maturity), (y) customary arrangement,
structuring, underwriting, amendment or commitment fees payable to one or more
arrangers shall be excluded, and (z) if the LIBOR or Base Rate floor for any
Incremental Term Facility is greater than the LIBOR or Base Rate floor,
respectively, for the existing Term B Loan Facility, the difference between such
floor for the Incremental Term Facility and the Term B Loan Facility shall be
equated to an increase in the Applicable Margin for purposes of this clause
(vi) (all adjustments made pursuant to this clause (vi), the “MFN Adjustment”);
provided that if any Incremental Term Facility is incurred after the date that
is 18 months after the Closing Date, the MFN Adjustment shall not apply,
(vii) each Incremental Facility shall be secured by pari passu liens on the
Collateral (as hereinafter defined) securing the Term B Loan Facility and no
other assets and shall be guaranteed by the Guarantors and no other persons and
(viii) any Incremental Facility shall be on terms and pursuant to documentation
to be determined, provided that, to the extent such terms and documentation are
not consistent with the Term B Loan Facility (except to the extent permitted by
clause (i), (ii), (iii), (iv), (v) or (vi) above, as applicable), they shall be
reasonably satisfactory to the Administrative Agent. The Borrower may 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.

 

Refinancing Facilities:

The Credit Documentation will permit the Borrower to refinance loans under the
Term B Loan Facility or loans 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”) under the Credit Documentation
with the consent of the Borrower, the Administrative Agent and the institutions
providing such Refinancing Term Facility or (y) one or more series of unsecured
notes or loans, notes secured by the Collateral on a pari passu basis with the
Term B Loan Facility or notes or loans secured by the Collateral on a
subordinated basis to the Term B Loan Facility, which will be subject to
customary intercreditor terms reasonably acceptable to the Administrative Agent
and the Borrower (any such notes or loans, “Refinancing Notes” and together with
the Refinancing Term Facilities, the “Refinancing Indebtedness”); provided that
(i) any Refinancing Term Facility or Refinancing Notes do not mature prior to
the maturity date of, or have a shorter weighted average life than, the
applicable Refinanced Debt (without giving effect to any amortization or
prepayments on the outstanding loans under the Term B Loan Facility or loans
made under any Incremental Facility, as applicable), (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) there shall be no
issuers, borrowers or guarantors in respect of any Refinancing Indebtedness that
are not the Borrower or a Guarantor, (iv) 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

 

Annex I-5

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prepayments of such Refinancing Notes prior to the maturity date of the
applicable Refinanced Debt, (v) the other terms and conditions of such
Refinancing Indebtedness (excluding pricing, interest rate margins, rate floors,
discounts, fees and optional prepayment or optional redemption provisions) are
not 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) Lenders under the corresponding Refinanced
Debt also receive the benefit of such more restrictive terms or (2) any such
provisions apply after the maturity date of the Term B Loan Facility and
(vi) the proceeds of such Refinancing Indebtedness (a) shall not be in an
aggregate principal amount greater than the aggregate principal amount of the
applicable Refinanced Debt plus any fees and premiums associated therewith, and
costs and expenses related thereto and (b) shall be immediately applied to
permanently prepay in whole or in part the applicable Refinanced Debt.

 

Documentation Standard:

The Credit Documentation for the Term B Loan Facility (i) shall be based upon
the Credit Agreement, dated August 16, 2016, of Cavium, Inc. with appropriate
modifications to baskets and materiality thresholds to reflect the size,
industry, leverage and ratings of the Borrower after giving effect to the
Acquisition and with appropriate modifications to reflect (x) no interim term
facility, (y) no foreign borrower, and (z) no short-term loan arrangement,
(ii) shall contain the terms and conditions set forth in this Summary of Terms,
(iii) shall reflect the operational and strategic requirements of the Borrower
and its subsidiaries (after giving effect to the Acquisition) in light of their
size, industries and practices and (iv) shall reflect the customary agency and
operational requirements of the Administrative Agent (collectively, the
“Documentation Standard”), in each case, subject to the Funds Certain
Provisions. The Credit Documentation shall, subject to the “market flex”
provisions contained in the Fee Letter, contain only those conditions to
borrowing, mandatory prepayments, representations and warranties, covenants and
events of default expressly set forth in this Summary of Terms, in each case,
applicable to the Borrower and its restricted subsidiaries and, subject to the
Documentation Standard and limitations as set forth herein, with materiality
thresholds, standards, qualifications, exceptions, “baskets”, and grace and cure
periods to be mutually agreed and consistent with the Documentation Standard.

Limited Condition

Acquisitions:

For purposes of (i) determining compliance with any provision of the Credit
Documentation which requires the calculation of the First Lien Net Leverage
Ratio or the Total Net Leverage Ratio, (ii) determining compliance with
representations, warranties, defaults or events of default or (iii) testing
availability under baskets set forth in the Credit Documentation (including
baskets measured as a percentage of Consolidated EBITDA), in each case, in
connection with an acquisition (or similar investment) by one or more of the
Borrower and its restricted subsidiaries of any assets, business or person
permitted to be acquired by the Credit Documentation, in each case whose
consummation is not conditioned on the availability of, or on obtaining, third
party financing

 

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(any such acquisition, a “Limited Condition Acquisition”), at the option of the
Borrower (the Borrower’s election to exercise such option in connection with any
Limited Condition Acquisition, an “LCA Election”), the date of determination of
whether any such action is permitted hereunder, shall be deemed to be the date
the definitive agreements for such Limited Condition Acquisition are entered
into (the “LCA Test Date”), and if, after giving pro forma effect to the Limited
Condition Acquisition and the other transactions to be entered into in
connection therewith as if they had occurred at the beginning of the most recent
test period ending prior to the LCA Test Date, the Borrower could have taken
such action on the relevant LCA Test Date in compliance with such ratio or
basket, such ratio or basket shall be deemed to have been complied with.

 

  For the avoidance of doubt, if the Borrower has made an LCA Election and any
of the ratios or baskets for which compliance was determined or tested as of the
LCA Test Date are exceeded as a result of fluctuations in any such ratio or
basket (including due to fluctuations in pro forma Consolidated EBITDA,
including of the target of any Limited Condition Acquisition) at or prior to the
consummation of the relevant transaction or action, such baskets or ratios will
not be deemed to have been exceeded as a result of such fluctuations; however,
if any ratios improve or baskets increase as a result of such fluctuations, such
improved ratios or baskets may be utilized. If the Borrower has made an LCA
Election for any Limited Condition Acquisition, then in connection with any
subsequent calculation of any ratio or basket on or following the relevant LCA
Test Date and prior to the earlier of (i) the date on which such Limited
Condition Acquisition is consummated or (ii) the date that the definitive
agreement for such Limited Condition Acquisition is terminated or expires
without consummation of such Limited Condition Acquisition, any such ratio or
basket shall be calculated on a pro forma basis assuming such Limited Condition
Acquisition and other transactions in connection therewith (including any
incurrence of debt and the use of proceeds thereof) have been consummated.

 

Financial Definitions:

The “First Lien Net Leverage Ratio” means the ratio of (i) debt for borrowed
money of the Borrower and its restricted subsidiaries that is secured on a
senior or pari passu basis with the Term B Loan Facility (calculated net of all
unrestricted cash and cash equivalents of the Borrower and its restricted
subsidiaries) to (ii) trailing four-quarter EBITDA (as defined below).

 

  The “Total Net Leverage Ratio” means the ratio of (i) debt for borrowed money
of the Borrower and its restricted subsidiaries (calculated net of all
unrestricted cash and cash equivalents of the Borrower and its restricted
subsidiaries) to (ii) trailing four-quarter EBITDA.

 

  Undrawn letters of credit shall not constitute debt for purposes of
calculating the First Lien Net Leverage Ratio or the Total Net Leverage Ratio.

 

Annex I-7

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  “EBITDA” is to be defined in a manner consistent with the Documentation
Standard beginning with Consolidated Net Income, with add-backs (and
corresponding deductions, to the extent applicable) to include, without
limitation and without duplication, the following:

 

  i. expected cost savings, operating expense reductions, restructuring charges
and expenses and synergies related to the Transaction projected by the Borrower
in good faith to result from actions with respect to which substantial steps
have been, will be, or are expected to be, taken and which are expected to be
realized (in the good faith determination of the Borrower) within 18 months
after the Closing Date, which are factually supportable; provided that the
aggregate amount added back to EBITDA pursuant to this clause (i) and clause
(ii) below in any test period shall not exceed 25% of EBITDA for such test
period (calculated prior to giving effect to such add backs);

 

  ii. expected cost savings, operating expense reductions, restructuring charges
and expenses and synergies related to mergers and other business combinations,
acquisitions, divestitures, restructuring, cost savings initiatives which are
factually supportable and other similar initiatives and projected by the
Borrower in good faith to result from actions with respect to which substantial
steps have been, will be, or are expected to be, taken and which are expected to
be realized (in the good faith determination of the Borrower) within 18 months
after such transaction or initiative is consummated; provided that the aggregate
amount added back to EBITDA pursuant to this clause (ii) and clause (i) above in
any test period shall not exceed 25% of EBITDA for such test period (calculated
prior to giving effect to such add backs);

 

  iii. non-cash losses, charges and expenses (including non-cash compensation
charges);

 

  iv. extraordinary, unusual or non-recurring losses, charges and expenses;

 

  v. cash restructuring and related charges and business optimization expenses;

 

  vi. unrealized gains and losses due to foreign exchange adjustments
(including, without limitation, losses and expenses in connection with currency
and exchange rate fluctuations);

 

  vii. costs and expenses in connection with the Transaction;

 

  viii. expenses or charges related to any equity offering, permitted
investment, acquisition, disposition, recapitalization or incurrence of
permitted indebtedness (whether or not consummated), including non-operating or
non-recurring professional fees, costs and expenses related thereto;

 

Annex I-8

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  ix. interest, taxes, amortization and depreciation; and

 

  x. losses from discontinued operations.

 

Scheduled Amortization:

The Term B Loan Facility shall be subject to quarterly amortization of principal
equal to 0.25% of the original aggregate principal amount of the Term B Loan
Facility, commencing on the last day of the first full fiscal quarter following
the Closing Date, with the balance payable on the final maturity date.

 

Mandatory Prepayments:

In addition to the amortization set forth above and subject to the next two
paragraphs, mandatory prepayments required with respect to the Term B Loan
Facility shall be limited to: (i) subject to customary exceptions and thresholds
(with exceptions for, among others, ordinary course dispositions, dispositions
of obsolete or worn-out property, property no longer used or useful in the
business and other exceptions to be mutually agreed), from the receipt of net
cash proceeds by the Borrower or any of its restricted subsidiaries in excess of
an amount to be mutually agreed (and only in respect of amounts in excess
thereof) from any disposition of assets outside the ordinary course of business
or casualty event by the Borrower or any of its restricted subsidiaries, in each
case, to the extent such proceeds are not reinvested (or committed to be
reinvested) in the business of the Borrower or any of its subsidiaries within
twelve months after the date of receipt of such proceeds from such disposition
or casualty event and, if so committed to be reinvested, reinvested no later
than 180 days after the end of such twelve month period; (ii) following the
receipt of net cash proceeds from the issuance or incurrence after the Closing
Date of additional debt of the Borrower or any of its restricted subsidiaries
(other than debt permitted under the Credit Documentation (other than
Refinancing Indebtedness)); and (iii) in an amount equal to 50% of annual Excess
Cash Flow (to be defined in the Credit Documentation) of the Borrower and its
restricted subsidiaries for each fiscal year of the Borrower (beginning with the
first full fiscal year commencing after the Closing Date), with step downs to
25% at a 2.50:1.00 First Lien Net Leverage Ratio and 0% at a 2.00:1.00 First
Lien Net Leverage Ratio, of the Borrower (with a dollar-for-dollar credit for
optional prepayments of the Term B Loan Facility subsequent to the first day of
the relevant year other than to the extent financed with long-term debt), in
each case of clauses (i) through (iii), subject to the limitations set forth in
the paragraph immediately following, such amounts shall be applied, without
premium or penalty, to the remaining amortization payments under the Term B Loan
Facility in direct order of maturity.

 

  Any Lender under the Term B Loan Facility may elect not to accept its pro rata
portion of any mandatory prepayment other than a prepayment made with the
proceeds of a Refinancing Debt (each a “Declining Lender”). Any prepayment
amount declined by a Declining Lender may be retained by the Borrower (such
amount, a “Declined Amount”) and shall increase the Available Amount Basket (as
defined below).

 

Annex I-9

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  Mandatory prepayments in clauses (i) and (iii) above shall be limited to the
extent the upstreaming or transfer of such amounts from a foreign subsidiary to
the Borrower or any other applicable subsidiary would result in material adverse
tax consequences until such time as the Borrower or its applicable subsidiary
may upstream or transfer such amounts and shall be subject to permissibility
under local law of upstreaming proceeds (including financial assistance and
corporate benefit restrictions and fiduciary and statutory duties of the
relevant directors). The non-application of any mandatory prepayment amounts as
a consequence of the foregoing provisions will not, for the avoidance of doubt,
constitute a default or an event of default, and such amounts shall be available
for working capital purposes of the Borrower and its subsidiaries.

 

Optional Prepayments:

The Term B Loan Facility may be prepaid at any time in whole or in part without
premium or penalty, upon written notice, at the option of the Borrower, except
(x) that any prepayment of LIBOR advances other than at the end of the
applicable interest periods therefor shall be made with customary reimbursement
for any funding losses and redeployment costs (but not loss of margin) of the
Lenders resulting therefrom and (y) as set forth in “Soft-Call Premium” below.
Each optional prepayment of the Term B Loan Facility shall be applied as
directed by the Borrower (and absent such direction, in direct order of maturity
thereof).

 

Soft-Call Premium:

In the event that all or any portion of the Term B Loan Facility is (i) repaid,
prepaid, refinanced or replaced with term loan indebtedness with a lower
effective yield (to be defined) than the effective yield of such Term B Loan
Facility or (ii) repriced through any waiver, consent or amendment that has the
effect of reducing the effective yield of the Term B Loan Facility (a “Repricing
Transaction”), in each case, prior to the six-month anniversary of the Closing
Date and other than in connection with a change of control or any transformative
acquisition (to be defined), such repayment, prepayment, refinancing,
replacement or repricing will be accompanied by a premium of 1% of the principal
amount so repaid, prepaid, refinanced, replaced or repriced. If all or any
portion of the Term B Loan Facility held by any Lender is required to be
assigned pursuant to a “yank-a-bank” provision in the Credit Documentation as a
result of, or in connection with a Repricing Transaction prior to the six-month
anniversary of the Closing Date, 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 replacement will
be accompanied by a premium equal to 1% of the principal amount so required to
be assigned.

 

Security:

Subject to the Funds Certain Provisions, the Borrower and each of the Guarantors
shall grant the Administrative Agent (for its benefit and for the benefit of the
Lenders) a first-priority (subject to permitted liens and

 

Annex I-10

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other customary exceptions) security interest in (i) 100% of the equity
interests held by the Borrower and the Guarantors (but limited in the case of
the voting equity interests of any first-tier CFC or Disregarded Domestic
Person, to 65% of such voting equity interests (and 100% of any non-voting
equity interests) and none of the equity interests of any subsidiary thereof),
(ii) substantially all material owned real property of the Borrower and the
Guarantors located in the United States and (iii) substantially all other
personal property of the Borrower and the Guarantors, including, without
limitation, contracts, patents, copyrights, trademarks, other general
intangibles and all proceeds of the foregoing, in each case, excluding the
Excluded Assets (as defined below) (collectively, but excluding the Excluded
Assets (as defined below), the “Collateral”).

 

 

Notwithstanding anything to the contrary, the Collateral shall exclude the
following: (i) any fee-owned real property located outside the United States or
with a fair market value of less than an amount to be agreed (with all required
mortgages being permitted to be delivered post-closing) and all leasehold
interests in real property; (ii) motor vehicles, aircrafts and other assets
subject to certificates of title (except to the extent perfection can be
accomplished through the filing of UCC-1 financing statements); (iii) letter of
credit rights (except to the extent perfection can be accomplished through the
filing of UCC-1 financing statements) and commercial tort claims with a value of
less than an amount to be agreed; (iv) pledges and security interests prohibited
by applicable law, rule or regulation (including the requirement to obtain
consent of any governmental authority) after giving effect to the applicable
anti-assignment provisions of the Uniform Commercial Code, other than proceeds
and receivables thereof, the assignment of which is expressly deemed effective
under the Uniform Commercial Code notwithstanding such prohibition; (v) equity
interests in any person other than wholly-owned subsidiaries to the extent not
permitted by the terms of such person’s organizational or joint venture
documents after giving effect to the applicable anti-assignment provisions of
the Uniform Commercial Code, other than proceeds and receivables thereof, the
assignment of which is expressly deemed effective under the Uniform Commercial
Code notwithstanding such prohibition; (vi) any lease, permit, license or other
agreement or any property subject to a purchase money security interest or other
arrangement to the extent that a grant of a security interest therein would
violate or invalidate such lease, permit, license or agreement or arrangement or
create a right of termination in favor of, or require the consent of, any other
party thereto (other than the Borrower or any of its restricted subsidiaries)
after giving effect to the applicable anti-assignment provisions of the Uniform
Commercial Code, other than proceeds and receivables thereof, the assignment of
which is expressly deemed effective under the Uniform Commercial Code
notwithstanding such prohibition; (vii) those assets as to which the
Administrative Agent and the Borrower reasonably agree that the cost of
obtaining such a security interest or perfection thereof are excessive in
relation to the benefit to the Lenders of the security to be afforded thereby;
(viii) voting equity interests in excess of 65% of any first tier

 

Annex I-11

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CFC or Disregarded Domestic Person; (ix) any of the equity interests of a
subsidiary of a CFC or Disregarded Domestic Person; (x) 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 after giving effect to the
applicable anti-assignment provisions of the Uniform Commercial Code;
(xi) “intent-to-use” trademark or service mark applications; (xii) (a) payroll
and other employee wage and benefit accounts, (b) sales tax accounts, (c) escrow
accounts for the benefit of unaffiliated third parties, and (d) fiduciary or
trust accounts for the benefit of unaffiliated third parties, and, in the case
of clauses (a) through (d), the funds or other property held in or maintained in
any such account in each case, other than to the extent perfected by the filing
of a UCC financing statement or are proceeds of Collateral (collectively, the
“Excluded Accounts”); (xiii) any acquired property (including property acquired
through acquisition or merger of another entity) if at the time of such
acquisition the granting of a security interest therein or the pledge thereof is
prohibited by any contract or other agreement (in each case, not created in
contemplation thereof) to the extent and for so long as such contract or other
agreement prohibits such security interest or pledge after giving effect to the
applicable anti-assignment provisions of the Uniform Commercial Code, other than
proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the Uniform Commercial Code notwithstanding such prohibition;
(xiv) equity interests issued by, or assets of, unrestricted subsidiaries,
immaterial subsidiaries, not for profit subsidiaries, special purpose entities
and captive insurance subsidiaries; (xv) margin stock, and (xvi) other
exceptions to be mutually agreed upon (the foregoing described in clauses
(i) through (xvi) are, collectively, the “Excluded Assets”). Notwithstanding
anything to the contrary, the Borrower and the Guarantors shall not be required,
nor shall the Administrative Agent be authorized, (i) to perfect the
above-described pledges, security interests and mortgages by any means other
than by (A) filings pursuant to the Uniform Commercial Code in the office of the
secretary of state (or similar central filing office) of the relevant state(s)
and filings in the applicable real estate records with respect to mortgaged
properties constituting Collateral or any fixtures relating to mortgaged
properties constituting Collateral, (B) filings in United States government
offices with respect to intellectual property as expressly required in the
Credit Documentation, (C) delivery to the Administrative Agent for its
possession of all Collateral consisting of material intercompany notes, stock
(or equivalent) certificates of material wholly-owned restricted subsidiaries
and material instruments issued to the Borrower or a Guarantor (excluding
Excluded Assets) or (D) mortgages in respect of fee-owned real property located
in the United States (excluding Excluded Assets) with a fair market value in
excess of an amount to be mutually agreed between the Borrower and the
Administrative Agent, in each case as expressly required in the Credit
Documentation, (ii) other than as set forth in clause (C) of this paragraph, to
perfect security interests in any Collateral (including deposit accounts and
other bank or securities accounts, etc.) through control agreements or
perfection by “control” or

 

Annex I-12

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(iii) to take any action outside the United States with respect to any assets
titled or located outside the United States. All the above-described pledges,
security interests and mortgages shall be created on terms, and pursuant to
documentation, subject to the Documentation Standard and the Funds Certain
Provisions and reasonably satisfactory to the Administrative Agent and the
Borrower. Assets will be excluded from the Collateral in circumstances to be
agreed and in circumstances where the Administrative Agent reasonably determines
in consultation with the Borrower that the cost of obtaining a security interest
in such assets is excessive in relation to the value afforded thereby, and in
any event such exclusions shall include vehicles, trust, payroll and escrow
accounts, certain leasehold interests in real property (except as noted above),
assets subject to capital leases and purchase money arrangements, cash which
secures permitted letters of credit, assets held in jurisdictions outside the
U.S. (solely to the extent action would be required in such other jurisdictions
to obtain such security interests) and assets sold in accordance with the Credit
Documentation.

Conditions Precedent

to Borrowing on the

Closing Date:

The availability of the Term B Loan Facility on the Closing Date will be limited
to those conditions specified in paragraph 5 of the Commitment Letter.

Representations and

Warranties:

Subject to the Documentation Standard, with customary exceptions, thresholds and
baskets to be reasonably and mutually agreed, representations and warranties
applicable to the Borrower and its restricted subsidiaries (with materiality
qualifiers to be mutually agreed), limited to the following: (i) legal
existence, qualification and power; (ii) due authorization of the Credit
Documentation and, with respect to the execution, delivery and performance of
the Credit Documentation, no contravention of law, material contracts or
organizational documents; (iii) with respect to the execution, delivery and
performance of the Credit Documentation, governmental approvals and consents;
(iv) enforceability of the Credit Documentation; (v) accuracy and completeness
of specified financial statements and other information and no event or
circumstance, either individually or in the aggregate, that has had or would
reasonably be expected to have a Material Adverse Effect (to be defined in the
Credit Documentation) (after the Closing Date); (vi) no material litigation;
(vii) ownership of property; (viii) insurance matters; (ix) environmental
matters; (x) tax matters; (xi) ERISA; (xii) identification of loan parties and
subsidiaries of loan parties, and equity interests owned by loan parties;
(xiii) use of proceeds; (xiv) status under Investment Company Act; (xv) material
compliance with laws; (xvi) intellectual property; (xvii) consolidated solvency
as of the Closing Date (with solvency being determined in a manner consistent
with Annex III); (xviii) collateral documents (subject to permitted liens and
other exceptions to perfection to be mutually agreed); (xix) labor matters;
(xx) FCPA and related matters; and (xxi) foreign assets control regulations and
related matters.

 

Annex I-13

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Covenants:

Subject to the Documentation Standard, with customary materiality qualifiers,
limitations, exceptions, thresholds and baskets to be reasonably and mutually
agreed, covenants shall be limited to the following:

 

  (a) Affirmative Covenants: To be applicable to the Borrower and its restricted
subsidiaries: (i) delivery of audited annual consolidated financial statements
within 90 days after the end of any fiscal year and quarterly unaudited
consolidated financial statements within 45 days after the end of the first
three fiscal quarters of any fiscal year; (ii) annual budgets;
(iii) notification of default and customary material events; (iv) payment of
material taxes; (v) preservation of existence; (vi) maintenance of properties
(subject to casualty, condemnation and normal wear and tear); (vii) maintenance
of insurance; (viii) material compliance with laws, ERISA; (ix) maintenance of
books and records; (x) inspection rights of the Administrative Agent (subject to
frequency and cost reimbursement limitations and other than information subject
to confidentiality obligations or attorney-client privilege); (xi) use of
proceeds; (xii) joinder of applicable subsidiaries as guarantors; (xiii) pledge
of capital stock and other property; (xiv) further assurances with respect to
Collateral and guarantees (including customary information with respect to
Collateral); (xv) commercially reasonable efforts to maintain facility and
corporate ratings from Moody’s and S&P (but not any specific ratings) and
(xvi) FCPA, OFAC, PATRIOT Act and related matters.

 

  (b)

Negative Covenants: To be applicable to the Borrower and its restricted
subsidiaries: restrictions on (i) liens (to include, among other exceptions,
(a) a general lien basket of at least the greater of a fixed dollar amount to be
mutually agreed and an equivalent percentage of consolidated LTM EBITDA and
(b) liens securing permitted junior secured debt subject to pro forma compliance
with a 3.50:1.00 Total Net Leverage Ratio); (ii) investments (to include, among
other exceptions, the (a) ability to make investments subject to no event of
default and pro forma compliance with a 2.50:1.00 Total Net Leverage Ratio,
(b) Permitted Acquisitions (as defined below) and (c) investments using the
Available Amount Basket subject to no event of default); (iii) indebtedness (to
include, among other exceptions, the ability to incur any unsecured or, subject
to the liens covenant, junior secured indebtedness subject to pro forma
compliance with a 4.00:1.00 Total Net Leverage Ratio); (iv) mergers and
dissolutions; (v) dispositions (to include, among other exceptions, dispositions
of any assets on an unlimited basis for fair market value so long as at least
75% of the consideration for such dispositions in excess of a threshold amount
consists of cash or cash equivalents and the proceeds thereof are applied in
accordance with the mandatory

 

Annex I-14

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  prepayment provisions (including the reinvestment provisions));
(vi) restricted payments (to include, among other exceptions, the ability to
make restricted payments (a) subject to no event of default and pro forma
compliance with a Total Net Leverage Ratio of not greater than 1.25:1.00,
(b) using the Available Amount Basket (as defined below), subject to no event of
default and, solely in the case of the Builder Basket (as defined below), a pro
forma Total Net Leverage Ratio of not greater than 2.50:1.00) and (c) commencing
with the fiscal year of the Borrower ending December 31, 2018, an annual basket
of $40,000,000 subject to no event of default and a pro forma Total Net Leverage
Ratio of not greater than 1.75:1.00 (provided that amounts paid pursuant to this
clause (c) shall reduce the Available Amount Basket on a dollar-for-dollar
basis); (vii) material change in nature of business; (viii) changes in fiscal
year without the consent of the Administrative Agent; (ix) transactions with
affiliates above an agreed-upon threshold; (x) voluntarily prepaying, redeeming
or repurchasing certain junior or subordinated debt (to include, among other
exceptions, the ability to prepay, redeem or repurchase such junior or
subordinated debt (a) subject to no event of default and pro forma compliance
with a Total Net Leverage of not greater than 1.25:1.00 and (b) using the
Available Amount Basket (as defined below), subject to no event of default and,
solely in the case of the Builder Basket (as defined below)) a pro forma Total
Net Leverage Ratio of not greater than 2.50:1.00); (xi) granting negative
pledges that limit or restrict the Administrative Agent from taking or
perfecting its lien in the intended Collateral; (xii) amending
(x) organizational documents or (y) certain junior debt instruments, in each
case solely to the extent that such amendments are materially adverse to the
Lenders; and (xiii) limitation on restrictions on subsidiary distributions. The
foregoing limitations shall be subject to exceptions and baskets to be mutually
and reasonably agreed as are consistent with the Documentation Standard.

 

      

Monetary baskets in the negative covenants will include basket builders based on
a percentage of Consolidated EBITDA of the Borrower and its restricted
subsidiaries equivalent to the initial monetary amount of each such basket. In
addition, certain negative covenants shall include an “Available Amount Basket”,
which shall mean a cumulative amount equal to (a) $50,000,000 (the “Starter
Basket”) plus (b) the retained portion of excess cash flow (the “Builder
Basket”) plus (c) the Declined Amounts plus (d) the cash proceeds of new equity
issuances of the Borrower (other than disqualified stock), plus (e) returns,
profits, distributions and similar amounts received in cash or cash equivalents
by the Borrower and its restricted subsidiaries on investments made using the
Available Amount Basket (not to exceed the amount of such investments) or

 

Annex I-15

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  otherwise received from an unrestricted subsidiary (including the net proceeds
of any sale, or issuance of stock, of an unrestricted subsidiary) designated
using the Available Amount Basket, plus (f) the investments of the Borrower and
its restricted subsidiaries in any unrestricted subsidiary that has been
re-designated as a restricted subsidiary or that has been merged or consolidated
with or into the Borrower or any of its restricted subsidiaries (up to the
lesser of (i) the fair market value (as determined in good faith by the
Borrower) of the investments of the Borrower and its restricted subsidiaries in
such unrestricted subsidiary at the time of such re-designation or merger or
consolidation and (ii) the fair market value of the original investments by the
Borrower and its restricted subsidiaries in such unrestricted subsidiary). The
Available Amount Basket may be used for investments, restricted payments and the
prepayment, repurchase or redemption of junior or subordinated debt.

 

       The Borrower or any restricted subsidiary will be permitted to make
acquisitions of the equity interests in a person that becomes a restricted
subsidiary, or all or substantially all of the assets (or all or substantially
all the assets constituting a business unit, division, product line or line of
business) of any person (each, a “Permitted Acquisition”) so long as (a) at the
time of execution of the applicable acquisition agreement, no event of default
has occurred and is continuing, (b) the acquired company or assets are in the
same or a generally related or ancillary line of business as the Borrower and
its subsidiaries and (c) subject to the limitations set forth in “Guarantors”
and “Security” above, the acquired company and its subsidiaries (other than any
subsidiaries of the acquired company designated as an unrestricted subsidiary as
provided in “Unrestricted Subsidiaries” below) will become Guarantors and pledge
their Collateral to the Administrative Agent. Permitted Acquisitions of entities
that do not become Guarantors and made with the proceeds of any consideration
provided by the Borrower or a Guarantor will be limited to an amount equal to
the greater of $75,000,000 and an equivalent percentage of consolidated LTM
EBITDA.

 

  (c) Financial Covenants: None.

 

Unrestricted Subsidiaries:

The Credit Documentation will contain provisions pursuant to which, so long as
no event of default is continuing, the Borrower will be permitted to designate
any existing or subsequently acquired or organized subsidiary as an
“unrestricted subsidiary” and subsequently re-designate any such unrestricted
subsidiary as a restricted subsidiary; provided, that (i) the designation of a
restricted subsidiary as an unrestricted subsidiary or redesignation of an
unrestricted subsidiary as a restricted subsidiary shall be subject to customary
conditions and (ii) (x) such designation of a restricted subsidiary as an
unrestricted subsidiary shall be deemed to

 

Annex I-16

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constitute an investment (or reduction in an outstanding investment in the case
of a designation of an unrestricted subsidiary as a restricted subsidiary in an
amount equal to the fair market value thereof) and (y) any re-designation of an
unrestricted subsidiary to a restricted subsidiary shall be deemed to be an
incurrence of indebtedness and liens of such subsidiary existing at such time.
Unrestricted subsidiaries will not be subject to the mandatory prepayments,
representations and warranties, covenants, events of default or other provisions
of the Credit Documentation, and the results of operations and indebtedness of
unrestricted subsidiaries will not be taken into account for purposes of
calculating any financial ratios contained in the Credit Documentation.

 

Events of Default:

Subject to the Documentation Standard, with thresholds and grace periods to be
mutually agreed, events of default shall be limited to the following (to be
applicable to the Borrower and its restricted subsidiaries): (i) (a) nonpayment
of principal and (b) nonpayment of interest or fees and nonpayment of other
amounts (with a five (5) business day grace period for interest, fees and other
amounts); (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
affirmative covenants, to a grace period of 30 days following written notice
from the Administrative Agent (other than in respect of maintenance of the
Borrower’s existence and notices of default)); (iv) cross-defaults to other
indebtedness above an amount to be agreed; (v) bankruptcy and insolvency
defaults; (vi) monetary judgment defaults to the extent not paid or covered by
indemnities or insurance above an amount to be mutually agreed; (vii) actual or
asserted impairment of the Guarantee or security with respect to a material
portion of the Collateral; (viii) Change of Control with respect to the Borrower
(to be defined in a customary and mutually agreeable reasonable manner); and
(ix) ERISA events.

Assignments and

Participations:

Each Lender will be permitted to make assignments in minimum amounts to be
agreed to other entities approved by (x) the Administrative Agent and (y) so
long as no payment or bankruptcy default has occurred and is continuing, the
Borrower, each such approval not to be unreasonably withheld or delayed;
provided, however, that (i) no approval of the Borrower shall be required in
connection with assignments to other Lenders or any of their affiliates or
approved funds, (ii) the Borrower shall be deemed to have given consent to an
assignment if the Borrower shall have failed to respond to a written request
within 10 business days of its receipt of such written request and (iii) no
approval of the Administrative Agent shall be required in connection with
assignments to other Lenders or any of their affiliates or approved funds. Each
Lender will also have the right, without consent of the Borrower 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 with voting rights limited to customary significant matters.
An assignment fee in the amount of

 

Annex I-17

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$3,500 will be charged with respect to each assignment unless waived by the
Administrative Agent in its sole discretion. Notwithstanding the foregoing, no
loans or commitments shall be assigned or participated to Disqualified Lenders
to the extent the list of Disqualified Lenders has been made available to all
Lenders.

 

  Assignments of loans under the Term B Loan Facility to the Borrower or any of
their subsidiaries shall be permitted subject to satisfaction of conditions to
be set forth in the Credit Documentation, including that (i) no event of default
shall exist or result therefrom, (ii) the Borrower or such subsidiary shall make
an offer to all Lenders in accordance with “Dutch auction” procedures to be
agreed, (iii) the Borrower or any such subsidiaries shall either (x) make a
representation that it is not in possession of material non-public information
with respect to the Borrower, its subsidiaries or their respective securities or
(y) disclose to the assigning Lender that it cannot make such representation and
(iv) upon the effectiveness of any such assignment, such loans shall be retired.

 

Waivers and Amendments:

Amendments and waivers of the provisions of the Credit Documentation will
require the approval of Lenders holding more than 50% of the aggregate Term B
Loan Facility (the “Required Lenders”), except that (a) the consent of each
Lender directly and adversely affected thereby will also be required with
respect to (i) increases in commitment amount of such Lender, (ii) reductions of
principal, interest, or fees payable to such Lender (other than waivers of
default interest, a default or 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 amendment or waiver of any mandatory
prepayment, waiver of default interest, default or event of default shall only
require the consent of the Required Lenders) and (iv) changes in certain pro
rata provisions and the waterfall from enforcement and (b) the consent of each
Lender shall be required with respect to (i) releases of all or substantially
all of the Collateral or the release of all or substantially all of the value of
any guaranties (other than in connection with permitted asset sales,
dispositions, mergers, liquidations or dissolutions or as otherwise permitted
under the Credit Documentation) and (ii) the percentage contained in the
definition of Required Lenders or other voting provisions.

 

 

In connection with any proposed amendment, modification, waiver or termination
(a “Proposed Change”) requiring the consent of all Lenders or all directly and
adversely affected Lenders, if the consent to such Proposed Change of other
Lenders whose consent is required is not obtained (but the consent of the
Required Lenders or Lenders holding more than 50% of the directly and adversely
affected facility, as applicable, is obtained) (any such Lender whose consent is
not obtained being referred to as a “Non-Consenting Lender”), then the Borrower

 

Annex I-18

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may, at its option and at its sole expense and effort, upon notice to such
Non-Consenting Lender and the Administrative Agent, require such Non-Consenting
Lender to assign and delegate, without recourse (in accordance with and subject
to customary restrictions on assignment), all its interests, rights and
obligations under the Credit Documentation to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that, such Non-Consenting Lender shall have received
payment of an amount equal to the outstanding principal of its loans, accrued
interest thereon, accrued fees and all other amounts then due and owing to it
under the Credit Documentation (at the option of the Borrower, with respect to
the class or classes of loans or commitments subject to such Proposed Change)
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts). The
Credit Documentation shall contain other customary “yank-a-bank” provisions.

 

  Notwithstanding anything to the contrary set forth herein, the Credit
Documentation shall provide that the Borrower may at any time and from time to
time request that all or a portion of any loans under the Term B Loan Facility
be converted to extend the scheduled maturity date of any payment of principal
with respect to all or a portion of any principal amount of such loans (any such
loans which have been so converted, “Extended Loans”) and upon such request of
the Borrower any individual Lender shall have the right to agree to extend the
maturity date of its outstanding loans without the consent of any other Lender
or Required Lenders; provided that all such requests shall be made pro rata to
all Lenders within the Term B Loan 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 (so long as the weighted
average life to maturity of the Extended Loans exceeds the then remaining
weighted average life to maturity of the Term B Loan Facility), final maturity
date or final termination date, provisions permitting 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.

 

  In addition, loans under the Term B Loan Facility may be purchased by and
assigned to the Borrower or any of its subsidiaries on a non-pro rata basis
through (a) open market purchases subject to a cap of 25% of the original
principal amount of the loans under the Term B Loan Facility or (b) Dutch
auctions open to all applicable Lenders on a pro rata basis in accordance with
customary procedures, so long as (1) no event of default is has occurred and is
continuing, (2) any such loans are permanently cancelled immediately upon
acquisition thereof and (3) the Borrower or any such subsidiaries shall either
(x) make a representation that it is not in possession of material non-public
information with respect to the Borrower, its subsidiaries or their respective
securities or (y) disclose to the assigning Lender that it cannot make such
representation.

 

Annex I-19

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Indemnification:

The Administrative Agent, the Lead Arrangers and the Lenders and their
respective affiliates and controlling persons and their respective officers,
directors, employees, partners, agents, advisors and other representatives
(each, an “indemnified person”) will be indemnified for and held harmless
against, any losses, claims, damages and liabilities (it being understood that
any such losses, claims, damages or liabilities that consist of legal fees
and/or expenses shall be limited to the reasonable and documented out-of-pocket
fees, disbursements and other charges of one firm of counsel for all such
indemnified persons, taken as a whole and, if necessary, by a single firm of
local counsel in each appropriate jurisdiction (which may include a single firm
of special counsel acting in multiple jurisdictions) for all such indemnified
persons, taken as a whole (and, in the case of a conflict of interest where the
indemnified person affected by such conflict notifies the Borrower of the
existence of such conflict and thereafter retains its own counsel, by another
firm of counsel for all such affected indemnified persons)) incurred in respect
of the Credit Documentation, the Term B Loan Facility or the use or the proposed
use of proceeds thereof, the Transaction or any other transactions contemplated
hereby, except to the extent they arise from the (a) bad faith, gross negligence
or willful misconduct of, or material breach of the Credit Documentation by,
such indemnified person (or any of its affiliates or any of its or their
respective officers, directors, employees, agents, advisors, representatives and
controlling persons’), or (b) material breach of such indemnified persons’ (or
any of its controlled affiliates’ or any of its officers’, directors’,
employees’, agents’, advisors’, representatives’ and controlling persons’)
obligations under the Credit Documentation, in each case as determined by a
final, non-appealable judgment of a court of competent jurisdiction or (c) any
dispute solely among the indemnified persons (or any of their respective
controlled affiliates or any of their respective officers, directors, employees,
agents, advisors, representatives and controlling persons) (other than any
claims against an indemnified person in its capacity as the Administrative Agent
or Lead Arranger or similar role under the Term B Loan Facility) and not arising
out of any act or omission of the Borrower or any of its subsidiaries.
Notwithstanding the foregoing, each indemnified person shall be obligated to
promptly refund and return any and all amounts paid by the Borrower under this
paragraph to such indemnified person for any losses, claims, damages,
liabilities or expenses to the extent such indemnified person is not entitled to
payment of such amounts in accordance with the terms hereof.

 

Governing Law:

New York.

 

Expenses:

If the Closing Date occurs, following written demand (including documentation
reasonably supporting such request), the Borrower will pay all reasonable and
documented out-of-pocket costs and expenses associated with the preparation, due
diligence, administration, syndication and closing of all Credit Documentation
(in the case of legal fees and expenses, limited to the reasonable and
documented fees and out-of-pocket expenses of Paul Hastings LLP and of any local
counsel to the Lenders retained by the Lead Arrangers or the Administrative
Agent,

 

Annex I-20

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limited to one counsel in each relevant jurisdiction, which, in each case, shall
exclude allocated costs of in-house counsel). The Borrower will also pay the
reasonable and documented out-of-pocket expenses of the Administrative Agent and
one other counsel (in total) to all of the Lenders (in the absence of conflict)
in connection with the enforcement of any of the Credit Documentation.

Counsel to the

Commitment Parties and

the Administrative Agent:

Paul Hastings LLP.

 

Miscellaneous:

Each of the parties shall (i) waive its right to a trial by jury and (ii) submit
to New York jurisdiction. The Credit Documentation shall contain (x) customary
provisions for replacing the commitments of a (i) “defaulting lender” and (ii) a
Lender seeking indemnity for increased costs or grossed-up tax payments and
(y) customary EU “Bail-In” provisions.

 

Annex I-21

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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 funding of the Term B Loan Facility on the Closing Date will, subject in all
respects to the Funds Certain Provisions, be subject to satisfaction of the
following conditions precedent:

(i) The Acquisition shall have been, or shall substantially concurrently be,
consummated in accordance with the terms of the Agreement and Plan of Merger,
dated September 19, 2016 among the Parent, the Borrower, Merger Sub 1, Merger
Sub 2 and the Target (together with all Schedules and Exhibits thereto, the
“Acquisition Agreement”) without giving effect to any amendment, change or
supplement or waiver of any provision thereof in any manner that is materially
adverse to the interests of the Initial Lenders (in their capacities as such)
without the prior written consent (not to be unreasonably withheld, delayed or
conditioned) of the Commitment Parties holding a majority of the aggregate
amount of outstanding commitments in respect of the Term B Loan Facility (the
“Majority Lead Arrangers”); provided that (i) any reduction in the purchase
price for the Acquisition set forth in the Acquisition Agreement shall not be
deemed to be material and adverse to the interests of the Initial Lenders (in
their capacities as such) so long as such reduction is applied to reduce the
Term B Loan Facility (on a dollar-for-dollar basis) and (ii) any increase in the
purchase price set forth in the Acquisition Agreement shall be deemed to be not
material and adverse to the interests of the Initial Lenders (in their
capacities as such) so long as such purchase price increase is funded with
common equity (or the proceeds thereof) of the Borrower.

(ii) Since the date of the Acquisition Agreement, there shall not have occurred
a Company Material Adverse Effect (as defined in the Acquisition Agreement).

(iii) The Administrative Agent shall have received the Solvency Certificate from
the Borrower’s chief financial officer or other person with similar
responsibilities in substantially the form attached hereto on Annex III.

(iv) The Administrative Agent shall have received (A) customary opinions of
counsel to the Borrower and the Guarantors, (B) customary corporate (or other
organizational) resolutions from the Borrower and the Guarantors, customary
secretary’s certificates from the Borrower and the Guarantors appending such
resolutions, charter documents and an incumbency certificate (provided that such
certificates shall not include any representations or statement as to the
absence (or existence) of any default or event of default) and (C) a customary
borrowing notice (provided that such notice shall not include any representation
or statement as to the absence (or existence) of any default or event of
default).

(v) The Administrative Agent shall have received: (A) the audited consolidated
balance sheets and related consolidated statements of operations, cash flows and
stockholders’ equity of each of the Parent and the Target for the three most
recently completed fiscal years of the Parent and the Target, respectively,
ended at least 90 days before the Closing Date; (B) the unaudited condensed
consolidated balance sheets and related condensed consolidated statements of
operations and cash flows of each of the Parent and the Target for each
subsequent fiscal quarter (other than any fourth fiscal quarter of an applicable
fiscal year) of the Parent and the Target, respectively, ended at least 45 days
before the Closing Date (the “Quarterly Financial

 

Annex II-1

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Statements”); and (C) a pro forma balance sheet of the Borrower and its
subsidiaries (including the Acquired Business) as of the latest quarterly period
of the Borrower covered by the Quarterly Financial Statements, in each case
after giving effect to the Transaction (the “Pro Forma Financial Statements”),
which need not comply with the requirements of Regulation S-X under the
Securities Act, as amended, or include adjustments for purchase accounting or
any reconciliation to generally accepted accounting principles in the United
States.

(vi) The Lead Arrangers shall have received a customary Information Memorandum
(other than portions thereof customarily provided by financing arrangers and
limited, in the case of financial information, to the financial statements
described clauses (A) and (B) of paragraph (v) above) (the “Required
Information”) for the Term B Loan Facility not later than 15 consecutive
business days prior to the Closing Date; provided that such 15 consecutive
business day period shall exclude November 24, 2016, November 25, 2016 and
December 16, 2016 through January 2, 2017, which for purposes of such
calculation shall not constitute business days (the “Marketing Period”);
provided further that in no event shall the fifteen (15) consecutive business
day period be restarted or cease to continue if additional or updated Required
Information is required to be delivered pursuant to clauses (A) or (B) of
paragraph (v) above after the start of the Marketing Period so long as such
additional or updated financial information is delivered in accordance with such
paragraph. If the Borrower in good faith reasonably believes it has delivered
the Required Information, it may (but shall not be obligated to) deliver to the
Lead Arrangers a written notice to that effect, in which case the Borrower shall
be deemed to have complied with such obligation to furnish the Required
Information on the date such notice is received by the Lead Arrangers, and the
15 consecutive business day period referred to above will be deemed to have
commenced on the date such notice is received by the Lead Arrangers, in each
case, unless the Lead Arrangers in good faith reasonably believe that the
Borrower has not completed delivery of such Required Information requested by
the Lead Arrangers in accordance with the preceding sentence for use in the
Information Memorandum and, within two business days after the receipt of such
notice from the Borrower, the Lead Arrangers deliver a written notice to the
Borrower to that effect (stating with reasonable specificity which such Required
Information has not been delivered); provided, that notwithstanding the
foregoing, the delivery of the Required Information shall be satisfied at any
time at which (and so long as) the Lead Arrangers shall have actually received
the Required Information, regardless of whether or when any such notice is
delivered by the Borrower.

(vii) All fees due to the Administrative Agent, the Lead Arrangers and the
Lenders under the Fee Letter and the Commitment Letter required to be paid by
the Borrower on or prior to the Closing Date, and all reasonable and documented
out-of-pocket expenses to be paid or reimbursed by the Borrower under the
Commitment Letter to the Administrative Agent and the Lead Arrangers on or prior
to the Closing Date that have been invoiced at least three business days prior
to the Closing Date, shall have been paid (which amounts may be offset against
the proceeds of the Term B Loan Facility).

(viii) The Refinancing shall have been, or shall substantially concurrently with
the funding of the Term B Loan Facility be, consummated.

(ix) The Borrower and each of the Guarantors shall have provided the
documentation and other information to the Administrative Agent that are
required by regulatory authorities under applicable “know-your-customer” rules
and regulations, including the Patriot Act, at least 3 business days prior to
the Closing Date to the extent such information has been reasonably requested in
writing by the Administrative Agent at least 10 business days prior to the
Closing Date.

 

Annex II-2

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(x) Subject in all respects to the Funds Certain Provisions, all documents and
instruments required to create and perfect the Administrative Agent’s security
interests in the Collateral shall have been executed and delivered by the
Borrower and the Guarantors (or, where applicable, the 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.

(xi)(i) The Specified Representations shall be true and correct in all material
respects; and (ii) the Acquisition Agreement Representations shall be true and
correct in all respects; provided the condition under this clause (ii) shall be
deemed satisfied unless Parent (or Parent’s affiliate) has the right (taking
into account any applicable notice and cure provisions) to terminate its
obligations under the Acquisition Agreement or decline to consummate the
Acquisition (in each case, in accordance with the terms thereof) as a result of
a breach of such representations in the Acquisition Agreement.

 

Annex II-3

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ANNEX III

SOLVENCY CERTIFICATE2

[                ], 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”) among [                ], a Delaware
corporation (the “Borrower”), [                ], as administrative agent and
collateral agent, the financial institutions from time to time party thereto as
lenders and the other parties thereto. Capitalized terms used herein without
definition have the same meanings as in the Credit Agreement.

In my capacity as the [chief financial officer/equivalent officer] of the
Borrower, and not in my individual or personal capacity (and without personal
liability), I hereby certify on behalf of the Borrower that as of the date
hereof and after giving effect to the Transactions and the incurrence of
indebtedness and obligations incurred in connection with the Credit Agreement
and the Transactions on the date hereof that:

1. Company (as used herein “Company” means the Borrower and its subsidiaries,
taken as a whole) is not now, nor will the incurrence of the obligations under
the Credit Agreement and the consummation of the Acquisition on the Closing Date
(and after giving effect to the application of the proceeds of the Loans), on a
pro forma basis, render Company “insolvent” as defined in this paragraph; in
this context, “insolvent” means that (i) the fair value of assets (on a going
concern basis) of the Company is less than the amount that will be required to
pay the total liability on existing debts as they become absolute and matured,
(ii) the present fair salable value of assets (on a going concern basis) of the
Company is less than the amount that will be required to pay the probable
liability on existing debts as they become absolute and matured in the ordinary
course of business, or (iii) the Company ceases to pay its current obligations
in the ordinary course of business as they generally become due, or (iv) the
Company’s aggregate property is not, at a fair valuation, sufficient, or if
disposed of at a fairly conducted sale under legal process, would not be,
sufficient to enable payment of all obligations, due and accruing due. The term
“debts” as used in this Certificate includes any legal liability, whether
matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent
and “values of assets” shall mean the amount of which the assets (both tangible
and intangible) in their entirety would change hands between a willing buyer and
a willing seller, with a commercially reasonable period of time, each having
reasonable knowledge of the relevant facts, with neither being under compulsion
to act.

2. The incurrence of the obligations under the Credit Agreement and the
consummation of the other Transactions on the Closing Date (and after giving
effect to the application of the proceeds of the Loans), on a pro forma basis,
will not leave Company with property remaining in its hands constituting
“unreasonably small capital.” I understand that “unreasonably small capital”
depends upon the nature of the particular

 

2  Defined terms to be aligned with those in the definitive Credit Agreement,
but consistent with this form of solvency certificate.

 

Annex III-1

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business or businesses conducted or to be conducted, and I have reached my
conclusion based on my current assumptions regarding the needs and anticipated
needs for capital of the businesses conducted or anticipated to be conducted by
Company in light of projected financial statements and available credit
capacity, which current assumption I do not believe to be unreasonable in light
of the circumstances applicable thereto.

 

Annex III-2

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IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate in
such undersigned’s capacity as an officer of the Borrower, on behalf of the
Borrower, and not individually, as of the date first above written.

 

[BORROWER]

 

By:   

 

  Name:     Title:  

 

Signature Page to Solvency Certificate