Exhibit 10.1

 

EXECUTION VERSION

 

JPMORGAN CHASE BANK, N.A.
383 Madison Avenue
New York, New York 10179

GOLDMAN SACHS BANK USA
GOLDMAN SACHS LENDING
PARTNERS LLC
200 West Street
New York, New York 10282

 

CONFIDENTIAL

 

October 28, 2018

 

International Business Machines Corporation
One New Orchard Road
Armonk, New York 10504

 

Attention:                                       Simon J. Beaumont
Treasurer

 

Project Socrates
364-Day Bridge Facility
Commitment Letter

 

Ladies and Gentlemen:

 

You (“you”, the “Borrower” or “Parent”) have advised JPMorgan Chase Bank, N.A.
(“JPMorgan”), Goldman Sachs Bank USA (“Goldman Sachs”) and Goldman Sachs Lending
Partners LLC (“GS Lending Partners” and, together with JPMorgan and Goldman
Sachs, the “Initial Lenders”, and the Initial Lenders, together with each Lender
(as defined below) that becomes a party hereto pursuant to Section 1 or
Section 2 hereof, collectively, the “Commitment Parties”, “we” or “us”) that you
intend to acquire (the “Acquisition”) all of the outstanding equity interests of
a company previously identified to us and codenamed “Rocket” (the “Target” and,
together with its subsidiaries, the “Acquired Business”), through a wholly-owned
subsidiary of Parent (“Merger Sub”) in the manner contemplated by the Agreement
and Plan of Merger (together with the schedules and exhibits thereto, the
“Acquisition Agreement”) entered (or to be entered) into among Parent, Merger
Sub and the Target. Upon consummation of the Acquisition, the Target will be a
wholly-owned direct or indirect subsidiary of the Borrower.

 

In connection therewith, the Borrower intends to obtain $20.0 billion of gross
proceeds from (a) the issuance by the Borrower of senior unsecured debt
securities through a public offering or in a private placement or the borrowing
by the Borrower of term loans, or a combination of the foregoing (collectively,
the “Permanent Financing”) and/or (b) to the extent the Borrower does not issue
or borrow the Permanent Financing up to such amount on or prior to the Closing
Date (as defined below) for any reason, loans under a 364-day bridge loan credit
facility (the “Bridge Facility”) in an aggregate principal amount of $20.0
billion upon the terms and subject to the conditions set forth in this letter
and in Exhibits A and B hereto (collectively,

 

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the “Term Sheet” and, together with this letter agreement, collectively, the
“Commitment Letter”).

 

The Acquisition, the issuance or borrowing of the Permanent Financing and the
Bridge Facility and the other transactions contemplated by or related to the
foregoing are collectively referred to herein as the “Transactions”. The date on
which all conditions precedent to the consummation of the Acquisition set forth
in the Acquisition Agreement are satisfied, and on which the Bridge Loans (as
defined in Exhibit A hereto) will become available to be drawn under the Bridge
Facility, is referred to herein as the “Closing Date.”

 

1.                                     Commitments. In connection with the
foregoing,

 

(a)                                 JPMorgan is pleased to advise you of its
commitment, severally and not jointly, to provide 70% of the principal amount of
the Bridge Facility, Goldman Sachs is pleased to advise you of its commitment,
severally and not jointly, to provide 16.25% of the principal amount of the
Bridge Facility and GS Lending Partners is pleased to advise you of its
commitment, severally and not jointly, to provide 13.75% of the principal amount
of the Bridge Facility;

 

(b)                                (i) You hereby engage each of JPMorgan and
Goldman Sachs, severally and not jointly, to act as a joint lead arranger and a
joint bookrunning manager (in such capacity, each a “Lead Arranger” and
collectively, the “Lead Arrangers”) for the Bridge Facility, and in connection
therewith to form a syndicate of lenders for the Bridge Facility (collectively,
the “Lenders”) as described below, (ii) JPMorgan is pleased to advise you of its
willingness to act, and you hereby engage JPMorgan to act, as sole and exclusive
administrative agent (in such capacity, the “Administrative Agent”) for the
Bridge Facility, upon the terms and subject to the conditions set forth in the
Term Sheet and (iii) Goldman Sachs is pleased to advise you of its willingness
to act, and you hereby engage Goldman Sachs to act, as sole and exclusive
syndication agent for the Bridge Facility, upon the terms and subject to the
conditions set forth in the Term Sheet; and

 

(c)                                 JPMorgan will have “lead left” placement,
and Goldman Sachs will have placement immediately to the right of JPMorgan, on
all marketing materials relating to the Bridge Facility, and each will perform
the duties and exercise the authority customarily performed and exercised by it
in such role, including JPMorgan acting as manager of the physical books.  The
Borrower agrees that JPMorgan may perform its responsibilities hereunder through
its affiliate, J.P. Morgan Securities LLC.  You agree that no other titles will
be awarded and no compensation (other than that expressly contemplated by this
Commitment Letter and the Fee Letter (as herein defined)) will be paid in
connection with the Bridge Facility unless you and the Lead Arrangers shall so
agree; provided that it is acknowledged that you and the Lead Arrangers have
agreed as of the date hereof that the appointment of titles and the allocation
of compensation be in accordance with the syndication plan agreed between you
and the Lead Arrangers on or prior to the date hereof (the “Syndication Plan”). 
The respective commitments of the Commitment Parties in respect of the Bridge
Facility and the undertaking of the Lead Arrangers to provide the services
described herein are subject only to the satisfaction of each of the conditions
precedent set forth in Exhibit B attached to this Commitment Letter. All

 

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capitalized terms used and not otherwise defined herein shall have the same
meanings as specified therefor in the Term Sheet.

 

2.                                     Syndication. The Lead Arrangers intend to
commence syndication of the Bridge Facility promptly after your acceptance of
the terms of this Commitment Letter and the Fee Letter (as defined below) and
the execution of the Acquisition Agreement. Such syndication shall be managed by
the Lead Arrangers in consultation and coordination with the Borrower; provided,
however, that (a) until the date that is 45 days after the date hereof (the
“Initial Syndication Period”), the selection of any Lender, any role awarded and
allocations by the Lead Arrangers shall be in accordance with the Syndication
Plan, (b) following the Initial Syndication Period, if and for so long as a
Successful Syndication (as defined in the Fee Letter) has not been achieved, the
selection of Lenders by the Lead Arrangers shall be subject to the reasonable
approval (not to be unreasonably withheld or delayed) of the Borrower other than
with respect to any such Lender that is a commercial or investment bank whose
senior, unsecured, long-term indebtedness has an “investment grade” rating by
S&P and Moody’s (each as defined below) and shall not include any Disqualified
Institution (as defined below) and (c) following the achievement of a Successful
Syndication, further assignments of commitments under the Bridge Facility shall
be in accordance with the section captioned “Assignment and Participations” in
the Term Sheet.

 

The respective commitments of the Initial Lenders hereunder with respect to the
Bridge Facility shall be reduced pursuant to the Syndication Plan as and when
commitments for the Bridge Facility are received from Lenders selected in
accordance with the provisions of this section to the extent that each such
Lender becomes (i) party to a commitment letter on substantially the same terms
and conditions as this Commitment Letter assuming a portion of the commitments
with respect to the Bridge Facility or (ii) party to the applicable definitive
documentation with respect to the Bridge Facility that contains terms consistent
in all respects with those set forth in this Commitment Letter and otherwise as
mutually agreed in good faith between the Borrower and the Lead Arrangers (the
“Credit Documentation”) as a “Lender” thereunder; provided, however, that to the
extent that any portion of the respective commitments of the Initial Lenders
hereunder with respect to the Bridge Facility is syndicated to a Lender that,
upon assuming a portion of the commitments with respect to the Bridge Facility,
is not approved by the Borrower (including in the Syndication Plan) or otherwise
is not a commercial or investment bank whose senior, unsecured, long-term
indebtedness has an “investment grade” rating by S&P and Moody’s (each as
defined below) at the time such commitments are assumed, then the Initial
Lenders shall not (except to the extent such Lender is a commercial or
investment bank that satisfies such ratings requirement) be relieved of their
respective obligations hereunder to fund such portion of such commitment on the
Closing Date to the extent that such other Lender fails to fund such commitment
on the Closing Date in accordance with the terms of the Bridge Facility. For
purposes hereof, “Disqualified Institutions” means, collectively, those persons
that are (i) competitors of you or your subsidiaries or the Acquired Business,
identified in writing by you to the Lead Arrangers from time to time prior to
the Closing Date or to the Administrative Agent after the Closing Date,
(ii) such other persons identified in writing by you to the Lead Arrangers prior
to the date hereof and (iii) affiliates of the persons identified pursuant to
clauses (i) or (ii) that are either clearly identifiable as affiliates of such
persons on the basis of such affiliate’s name or identified in writing by you to
the Lead Arrangers prior to the Closing Date or to the Administrative Agent
after the Closing Date (it being understood that,

 

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notwithstanding anything herein to the contrary, in no event shall a supplement
apply retroactively to disqualify any parties that have previously acquired an
assignment or participation interest hereunder or under the Bridge Facility that
is otherwise permitted hereunder, but upon the effectiveness of such
designation, any such party may not acquire any additional commitments, loans or
participations).

 

Until the earlier of 60 days following the Closing Date and the completion of a
Successful Syndication (such date, the “Syndication Date”), you agree to
actively assist, and to use your commercially reasonable efforts to cause the
Acquired Business (to the extent consistent with the Acquisition Agreement) to
actively assist, the Lead Arrangers in achieving a Successful Syndication. Such
assistance shall include (a) your providing and causing your advisors to
provide, and using your commercially reasonable efforts to cause the Acquired
Business (to the extent consistent with the Acquisition Agreement) and their
advisors to provide, the Lead Arrangers and the Lenders upon reasonable request
with all information reasonably requested by the Lead Arrangers to complete such
syndication, including, but not limited to, information and evaluations prepared
by you, the Acquired Business and your and its advisors, or on your or its
behalf, relating to the Transactions, (b) providing assistance to the Lead
Arrangers (and to the extent consistent with the Acquisition Agreement, your
using commercially reasonable efforts to cause the Acquired Business to provide
assistance to the Lead Arrangers) in the preparation of confidential information
memoranda with respect to the Bridge Facility in form and substance customary
for transactions of this type and otherwise reasonably satisfactory to the Lead
Arrangers (each, an “Information Memorandum”) and other customary marketing
materials (including a customary lender presentation) (other than materials the
disclosure of which would violate any law, rule or regulation or any
confidentiality obligation or waive attorney-client privilege, but you hereby
agree promptly (i) if and to the extent within your control, to use commercially
reasonable efforts to obtain waivers with respect to confidentiality obligations
(but not attorney-client privilege) and to otherwise provide such information
that does not violate such confidentiality obligations and (ii) to notify the
Lead Arrangers as to what is not being provided under this exception) to be used
in connection with the syndication of the Bridge Facility (collectively with the
Term Sheet and any additional summary of terms prepared for distribution to
Public Lenders (as defined below), the “Information Materials”), (c) your using
your commercially reasonable efforts to ensure that the syndication efforts of
the Lead Arrangers benefit from your existing lending relationships and, to the
extent practical and appropriate and consistent with the Acquisition Agreement,
the existing banking relationships of the Acquired Business and (d) your
otherwise reasonably assisting the Lead Arrangers in their syndication efforts,
including by making your officers and advisors, and using your commercially
reasonable efforts to make the officers and advisors of the Acquired Business
(to the extent reasonably requested by the Lead Arrangers and consistent with
the Acquisition Agreement), available from time to time to attend and make
presentations at one or more meetings of prospective Lenders at reasonable times
and places to be mutually agreed, subject to confidentiality agreements
reasonably acceptable to the Borrower and the Lead Arrangers. In addition, you
agree to use commercially reasonable efforts to promptly obtain ratings giving
effect to the Transactions from each of Moody’s Investor Services, Inc.
(“Moody’s”) and Standard & Poor’s Financial Services LLC (“S&P”), with respect
to the Borrower’s non-credit-enhanced, senior unsecured long-term debt.

 

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In order to facilitate an orderly and successful syndication of the Bridge
Facility, you agree that until the Syndication Date, the Borrower and its
subsidiaries will not, without the consent of the Lead Arrangers, issue, offer,
place or arrange debt or equity securities or any credit facilities of the
Borrower or its subsidiaries (other than (a) the Permanent Financing,
(b) intercompany debt among the Borrower and/or its subsidiaries, (c) any
borrowings under, or amendment, refinancing, replacement or renewal (provided
that the aggregate principal amount of indebtedness outstanding or committed
(without duplication) thereunder is not increased in connection therewith) of
that certain (i) 364-Day Credit Agreement, dated as of July 19, 2018 (as
amended, restated, amended and restated, supplemented and/or otherwise modified
from time to time prior to the date hereof, the “Existing 364-Day Credit
Agreement”), among you and IBM Credit LLC, as borrowers, the lenders from time
to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent,
(ii) Amended and Restated Three-Year Credit Agreement, dated as of July 19, 2018
(as amended, restated, amended and restated, supplemented and/or otherwise
modified from time to time prior to the date hereof, the “Existing Three-Year
Credit Agreement”), among you and IBM Credit LLC, as borrowers, the lenders from
time to time party thereto and JPMorgan Chase Bank, N.A., as administrative
agent, and (iii) Amended and Restated 5-Year Credit Agreement, dated as of
July 19, 2018 (as amended, restated, amended and restated, supplemented and/or
otherwise modified from time to time prior to the date hereof, the “Existing
5-Year Credit Agreement” and, together with the Existing 364-Day Credit
Agreement and Existing Three-Year Credit Agreement, the “Existing Credit
Agreements”), among you, as borrower, the lenders from time to time party
thereto and JPMorgan Chase Bank, N.A., as administrative agent, (d) ordinary
course letter of credit facilities, overdraft protection, short term working
capital facilities, ordinary course local credit facilities (including the
refinancing, renewal, replacement or roll-over thereof), factoring arrangements,
seller lending financing activities, capital leases, commercial paper issuances,
financial leases, indebtedness issued in connection with tenant leases, hedging
and cash management and purchase money and facility and equipment financings
(including sale-leasebacks) and similar obligations, (e) equity issuances
pursuant to employee compensation plans, employee benefit plans, employee
incentive plans and retirement plans or issued as compensation to officers
and/or non-employee directors or issuances of directors’ qualifying shares
and/or other nominal amounts required to be held by persons other than the
Borrower or its subsidiaries under applicable law, (f) any refinancing, renewal,
replacement or roll-over of debt of the Borrower, IBM Credit LLC or either of
their respective subsidiaries maturing within two years of the date of such
refinancing, renewal, replacement or roll-over (regardless of whether such
refinanced, renewed, replaced or rolled-over debt remains outstanding until its
maturity), (g) other debt, together with debt under the Existing Credit
Agreements, the Permanent Financing, commercial paper issuances and the debt
contemplated by this Commitment Letter, in an aggregate principal amount to pay
the consideration for the Acquisition and to pay fees and expenses incurred in
connection with the Transactions, (h) other debt incurred to finance any other
acquisition or investment and related fees and expenses, (i) other debt in an
aggregate principal amount not to exceed $5.0 billion and (j) any other
financing agreed by the Lead Arrangers, such agreement not to be unreasonably
withheld), in each case, if such issuance, offering, placement or arrangement
could reasonably be expected to materially impair the primary syndication of the
Bridge Facility.

 

It is understood and agreed that the Lead Arrangers will manage and control all
aspects of the syndication of the Bridge Facility in consultation and
coordination with you and subject to the foregoing provisions of this Section 2,
decisions as to the selection of prospective

 

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Lenders and any titles offered to proposed Lenders, when commitments will be
accepted and the final allocations of the commitments among the Lenders. It is
understood that no Lender participating in the Bridge Facility will receive
compensation from you in order to obtain its commitment, except on the terms
contained herein and in the Term Sheet and Fee Letter.  Notwithstanding anything
to the contrary provided herein, unless otherwise agreed in writing by you or
pursuant to Section 8 or this Section 2 of this Commitment Letter, no assignment
in connection with the syndication described herein will reallocate, reduce or
release any Initial Lender’s obligation to fund its entire commitments in the
event any assignee of such Initial Lender shall fail to do so on the Closing
Date.

 

Notwithstanding anything to the contrary contained in this Commitment Letter or
any other agreement or undertaking concerning the Bridge Facility, but without
limiting the conditions precedent in Exhibit B, and without limiting your
obligations to assist with syndication in this Section 2, none of the foregoing
obligations under the provisions of this Section 2 nor the commencement, conduct
or completion of the syndication contemplated by this Section 2 is a condition
to the commitments or the funding of the Bridge Facility on the Closing Date.

 

3.                                     Information Requirements. You hereby
represent and warrant that (a) all written information, other than (i) any
Projections (as defined below), (ii) forward-looking information,
(iii) estimates and (iv) other information of a general economic or industry
nature (the “Information”), 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 Transactions (which
representation and warranty shall be only to your knowledge to the extent it
relates to the Acquired Business or its businesses or to any other third party,
or is of a general economic or industry nature), when taken as a whole, is and
will be, when furnished, complete and correct in all material respects and does
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements were made or are made, when taken as a whole (giving effect to all
supplements and updates provided thereto) and (b) any written financial
projections concerning the Borrower, the Acquired Business and their respective
subsidiaries that have been or are hereafter made available to the Lead
Arrangers or any of the Lenders by or on behalf of you or any of your
representatives (the “Projections”) have been or will be prepared in good faith
based upon assumptions that were believed by the Borrower to be reasonable as of
the date such Projections are prepared and as of the date such Projections are
made available to the Lead Arrangers (it being understood that the Projections
are as to future events and are not to be viewed as facts, the Projections are
subject to significant uncertainties and contingencies, many of which are beyond
your control, that no assurance can be given that any particular Projections
will be realized and that actual results during the period or periods covered by
any such Projections may differ significantly from the projected results and
such differences may be material). You agree that if at any time prior to the
Syndication Date, you become aware that any of the representations in the
preceding sentence would be incorrect in any material respect (only to your
knowledge with respect to Information, estimates and forward looking information
relating to the Acquired Business) if the Information and Projections were being
furnished, and such representations were being made, at such time, then you will
(and with respect to the Acquired Business, use your commercially reasonable
efforts to) promptly supplement, or cause to be supplemented, the

 

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Information and Projections so that such representations (to the best of your
knowledge with respect to Information and forward looking information relating
to the Acquired Business) will be correct in all material respects at such time.
Notwithstanding anything set forth above, the accuracy of the foregoing
representations and warranties, whether or not supplemented, and any obligation
to supplement the Information and Projections shall not be a condition to the
obligations of the Commitment Parties hereunder. In issuing this commitment and
arranging and syndicating the Bridge Facility, the Commitment Parties are and
will be using and relying on the Information and the Projections without
independent verification thereof.

 

You acknowledge that (a) the Lead Arrangers will make available Information
Materials to the proposed syndicate of Lenders by posting the Information
Materials on IntraLinks, SyndTrak or another similar electronic system 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
and state securities laws, “MNPI”) with respect to the Borrower, the Acquired
Business, their respective affiliates or any other entity, or the respective
securities of any of the foregoing, and who may be engaged in investment and
other market-related activities with respect to such entities’ securities or
loans. If requested, you will assist the Lead Arrangers in preparing an
additional version of the Information Materials not containing MNPI (the “Public
Information Materials”) to be distributed to prospective Public Lenders.

 

Before distribution of any Information Materials (a) to prospective Private
Lenders, you shall provide the Lead Arrangers with a customary letter
authorizing the dissemination of the Information Materials and (b) to
prospective Public Lenders, you shall provide the Lead Arrangers with a
customary letter authorizing the dissemination of the Public Information
Materials and confirming the absence of MNPI therefrom. In addition, at our
request, you shall identify Public Information Materials by clearly and
conspicuously marking the same as “PUBLIC”.

 

You agree that the Lead Arrangers may (after you have had an opportunity to
review such materials) distribute the following documents to all prospective
Lenders, unless you advise us in writing (including by email) within a
reasonable time prior to their intended distributions that such material should
only be distributed to prospective Private Lenders: (a) administrative materials
for prospective Lenders such as lender meeting invitations and funding and
closing memoranda, (b) term sheets summarizing the Bridge Facility’s terms
and notifications of changes to the terms of the Bridge Facility and (c) drafts
and final versions of definitive documents with respect to the Bridge Facility
and other materials intended for prospective Lenders after the initial
distribution of Information Materials. If you advise us that any of the
foregoing items should be distributed only to Private Lenders, then the Lead
Arrangers will not distribute such materials to Public Lenders without further
discussions with you.

 

4.                                     Fees and Indemnities.

 

(a)                                 You agree to pay, or cause to be paid, the
fees set forth in the separate fee letter addressed to you, dated as of the date
hereof, from the Initial Lenders (the “Fee Letter”). You also agree to reimburse
the Commitment Parties from time to time promptly after demand for all
reasonable and documented or invoiced out-of-pocket fees and expenses
(including, but

 

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not limited to, the reasonable fees, disbursements and other charges of counsel
which shall be limited to the reasonable and documented or invoiced
out-of-pocket fees and other charges of Simpson Thacher & Bartlett LLP, as
counsel to the Commitment Parties and the Administrative Agent) incurred in
connection with the Bridge Facility, the syndication thereof, the preparation of
the Credit Documentation therefor and the other transactions contemplated hereby
and thereby, in the case of legal fees and expenses, whether or not the Closing
Date occurs or any Credit Documentation is executed and delivered or any
extensions of credit are made under the Bridge Facility, and in all other cases,
if the Closing Date occurs. You acknowledge that we may receive a benefit,
including, without limitation, a discount, credit or other accommodation, from
any of such counsel based on the fees such counsel may receive on account of
their relationship with us including, without limitation, fees paid pursuant
hereto.

 

(b)                                You also agree to indemnify and hold harmless
each of the Commitment Parties and each of their affiliates and controlling
persons, successors and assigns and their respective officers, directors,
employees, agents, advisors and other representatives (each, an “Indemnified
Party”) from and against (and will reimburse each Indemnified Party as the same
are incurred for) any and all claims, damages, losses, liabilities and expenses
(limited, in the case of attorney’s fees, to the reasonable fees, disbursements
and other charges of counsel (but limited, in the case of legal fees and
expenses, to the reasonable and documented or invoiced out-of-pocket fees and
expenses of one counsel, but excluding the allocated cost of internal counsel,
representing all of the Indemnified Parties, taken as a whole, and, if
necessary, of a single local counsel in each appropriate jurisdiction (which may
include a single special counsel acting in multiple jurisdictions) for all such
Indemnified Parties, taken as whole (and, in the case of an actual or perceived
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, those of another firm of counsel for each such affected Indemnified
Party))) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case, arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (a) any
aspect of the Transactions or any of the other transactions contemplated hereby
or (b) the Bridge Facility or any use made or proposed to be made with the
proceeds thereof, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from (x) such Indemnified Party’s (or its Related
Parties’ (as defined below)) gross negligence, bad faith or willful misconduct,
(y) such Indemnified Party’s (or its Related Parties) material breach of its
obligations under this Commitment Letter, the Fee Letter or any of the Credit
Documentation or (z) disputes solely among Indemnified Parties not arising from
or in connection with any act or omission by the Borrower or any of its
affiliates (other than any Proceedings (as defined below) against a Commitment
Party in its capacity or in fulfilling its role as an administrative agent or
arranger or other similar role under the Bridge Facility). In the case of any
claim, litigation, investigation or proceeding to which the indemnity in this
paragraph applies (any of the foregoing, a “Proceeding”), such indemnity shall
be effective whether or not such Proceeding is brought by you, your equity
holders or creditors, the Acquired Business or their subsidiaries, affiliates or
equity holders, or an Indemnified Party, whether or not an Indemnified Party is
otherwise a party thereto and whether or not any aspect of the Transactions is
consummated. If any Proceeding is instituted or threatened against any
Indemnified Party (or its Related Parties’) in respect of which indemnity may be
sought hereunder, you shall be entitled to assume the defense thereof with
counsel selected by you

 

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(which counsel shall be reasonably satisfactory to such Indemnified Party) and
after notice from you to such Indemnified Party of your election so to assume
the defense thereof, you will not be liable to such Indemnified Party hereunder
for any legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof, other than reasonable costs of
investigation and such other expenses as have been approved in advance;
provided, that (i) if counsel for such Indemnified Party determines in good
faith that there is a conflict that requires separate representation for you and
such Indemnified Party or that there may be legal defenses available to such
Indemnified Party which are different from or in addition to those available to
you or (ii) you fail to assume or proceed in a timely and reasonable manner with
the defense of such Proceeding or fail to employ counsel reasonably satisfactory
to such Indemnified Party in any such action, then in either such event,
(A) such Indemnified Party shall be entitled to one primary counsel and, if
necessary, one local counsel to represent such Indemnified Party and all other
Indemnified Parties similarly situated (such counsels selected by the Lead
Arrangers), (B) you shall not, or shall not any longer, be entitled to assume
the defense thereof on behalf of such Indemnified Party and (C) such Indemnified
Party shall be entitled to indemnification for the expenses (including fees and
expenses of such counsel) to the extent provided in the preceding paragraph.
Such counsel shall, to the fullest extent consistent with its professional
responsibilities, cooperate with you and any counsel designated by you. Nothing
contained herein shall preclude any Indemnified Party, at its own expense, from
retaining additional counsel to represent such Indemnified Party in any action
with respect to which indemnity may be sought from you hereunder. It is further
agreed that the Commitment Parties shall only have liability to you (as opposed
to any other person), and that the Commitment Parties shall be severally liable
solely in respect of their respective commitments to the Bridge Facility, on a
several, and not joint, basis with any other Lender. Notwithstanding any other
provision of this Commitment Letter, no party hereto nor any Indemnified Person
shall be liable for any indirect, special, punitive or consequential damages in
connection with its activities relating to the Bridge Facility, this Commitment
Letter, the Fee Letter, the Transactions, the use of proceeds thereof or any
related transactions; provided that the foregoing shall not limit your
indemnification obligations under the provisions of this Section 4(b) with
respect to any such damages claimed against any Indemnified Party.
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 (as opposed to
special, indirect, consequential or punitive) damages determined in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s (or its Related Parties’) gross negligence, bad
faith or willful misconduct. You shall not be liable for any settlement of any
Proceeding effected without your prior written consent (which consent shall not
be unreasonably withheld, conditioned or delayed), but if settled with your
prior written consent or if there is a final judgment in any such Proceeding,
you agree to indemnify and hold harmless each Indemnified Party from and against
any and all losses, claims, damages, liabilities and expenses by reason of such
settlement or judgment in accordance with this Section 4. You shall not, without
the prior written consent of an Indemnified Party (which consent shall not be
unreasonably withheld), effect any settlement or consent to the entry of any
judgment 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 such settlement (i) includes an unconditional release of such
Indemnified Party from all liability or claims that are the subject

 

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matter of such Proceeding, (ii) does not include any statement as to any
admission of fault by or on behalf of such Indemnified Party and (iii) contains
customary confidentiality and non-disparagement provisions. Each Indemnified
Party will promptly notify you upon receipt of written notice of any claim or
threat to institute a claim, provided that any failure by any Indemnified Party
to give such notice shall not relieve you from the obligation to indemnify the
Indemnified Parties unless such failure to provide such notice is prejudicial to
your interests. For purposes hereof, “Related Party” of an Indemnified Party
means any (or all, as the context may require) of such Indemnified Party’s
controlled affiliates and controlling persons and its or their respective
directors, officers, employees, agents, advisors and other representatives
thereof directly involved in the transaction and, in the case of agents,
advisors and other representatives, only to the extent acting on behalf or at
the instruction of such Indemnified Party or its controlled affiliates or
controlling persons; provided, that each reference to a controlling person,
controlled affiliate, director, officer or employee in this sentence pertains to
a controlling person, controlled affiliate, director, officer or employee
involved in the negotiation or syndication of this Commitment Letter and the
Bridge Facility. The provisions of this Section 4(b) shall be superseded in each
case by the applicable provisions contained in the definitive financing
documentation upon execution thereof and thereafter shall have no further force
and effect.

 

5.                                     Conditions to Financing. The Commitment
Parties’ respective commitments hereunder, and each of our agreements to perform
the services described herein, are subject solely to satisfaction or waiver of
the conditions set forth on Exhibit B, it being understood that there are no
conditions (implied or otherwise) to the commitments hereunder (including
compliance with the terms of the Commitment Letter, the Fee Letter and the
Credit Documentation) other than those that are expressly stated in Exhibit B to
be conditions to the funding under the Bridge Facility on the Closing Date (and
upon satisfaction or waiver of such conditions, the initial funding under the
Bridge Facility shall occur).

 

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 Transactions to the contrary, the only representations the
accuracy of which shall be a condition to the availability of the Bridge
Facility on the Closing Date shall be (i) such of the representations made by
the Acquired Business in the Acquisition Agreement as are material to the
interests of the Lenders, but only to the extent that you have (or a subsidiary
of yours has) the right to terminate your (or your affiliates’) obligations
under the Acquisition Agreement as a result of the breach of such
representations in the Acquisition Agreement, or the accuracy of such
representations in the Acquisition Agreement is a condition to your (or your
affiliates’) obligations to consummate the Acquisition pursuant to the
Acquisition Agreement (the “Acquisition Agreement Representations”) and (ii) the
Specified Representations (as defined below). For purposes hereof, “Specified
Representations” means the representations and warranties of the Borrower
relating to corporate status, corporate power and authority to enter into the
Credit Documentation; due authorization, execution, delivery and enforceability
of the Credit Documentation; no conflicts of the Credit Documentation with, or
consents required under, (i) charter documents or (ii) the Existing Credit
Agreements (in each case, without giving effect to any “material adverse effect”
qualification in the Existing 5-Year Credit Agreement) or any other debt
instruments in excess of $750,000,000; solvency as of the Closing Date (after
giving effect to the Transactions) of the Borrower and its subsidiaries on a
consolidated basis (such representation and warranty to be consistent with the
solvency certificate in the form set

 

10

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forth in Annex I to Exhibit B); Federal Reserve margin regulations; use of
proceeds not violating sanctions imposed by the U.S. (including OFAC), the
United Nations Security Council, the European Union, any European Union member
state or Her Majesty’s Treasury of the United Kingdom, anti-corruption laws or
the Patriot Act; and the Investment Company Act. This paragraph, and the
provisions herein, shall be referred to as the “Limited Conditionality
Provision”.

 

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 in whole or in part to any person or
entity without our prior written consent (such approval not to be unreasonably
withheld or delayed), except (a) on a confidential basis, to your affiliates and
your and your affiliates’ directors, officers, employees, accountants, attorneys
and other professional advisors in connection with the Transactions,
(b) following your acceptance of the provisions hereof and your return of an
executed counterpart of this Commitment Letter and the Fee Letter to the Lead
Arrangers as provided below, you may disclose this Commitment Letter and the
contents hereof (but not the Fee Letter or the contents thereof) in any offering
memoranda relating to the Bridge Facility, in any syndication or other marketing
materials in connection with the Bridge Facility or in connection with any
public filing relating to the Transactions, (c) following your acceptance of the
provisions hereof and your return of an executed counterpart of this Commitment
Letter and the Fee Letter to the Lead Arrangers as provided below, you may file
a copy of any portion of this Commitment Letter (but not the Fee Letter) in any
public record in which it is required by law to be filed, (d) you may disclose,
on a confidential basis, the existence and contents of this Commitment Letter,
including the Exhibits hereto (but not the Fee Letter) to any rating agency or
any prospective Lenders to the extent necessary to satisfy your obligations or
the conditions hereunder, (e) pursuant to the order of any court or
administrative agency in any pending legal, judicial or administrative
proceeding, or otherwise as required by applicable law, compulsory legal process
or to the extent requested or required by governmental and/or regulatory
authorities, in each case, based on the advice of your legal counsel (in which
case you agree, to the extent practicable and not prohibited by applicable law,
to inform us promptly thereof), (f) you may disclose the aggregate fee amounts
contained in the Fee Letter in financial statements or as part of Projections,
pro forma information or a generic disclosure of aggregate sources and uses
related to fee amounts related to the Transactions to the extent customary or
required in offering materials for any securities and marketing materials for
the Bridge Facility or in any public filing relating to the Transactions (which
in the case of such public filing may indicate the existence of the Fee Letter),
(g) in connection with the exercise of any remedy or enforcement of any right
under this Commitment Letter and the Fee Letter and (h) this Commitment Letter
and the Fee Letter (redacted in a manner reasonably satisfactory to us) may be
disclosed to the Acquired Business, their respective subsidiaries and their
officers, directors, employees, affiliates, independent auditors (but only with
respect to this Commitment Letter), legal counsel and other advisors who need to
know such information in connection with the Transactions on a confidential
basis in connection with their consideration of the Transactions.

 

Each Commitment Party shall use all information provided to them by or on behalf
of you hereunder or in connection with the Acquisition or the related
Transactions solely for the purpose of providing the services which are the
subject of this Commitment Letter and otherwise in connection with the
Transactions and shall treat confidentially all such information

 

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and shall not disclose such information; provided, however, that nothing herein
shall prevent the Commitment Parties or their respective affiliates or their
respective representatives from disclosing any such information (a) pursuant to
the order of any court or administrative agency or in any pending legal or
administrative proceeding, or otherwise as required by applicable law or
compulsory legal process (in which case the Commitment Parties agree to inform
you promptly thereof prior to such disclosure to the extent not prohibited by
law, rule or regulation (except with respect to any audit or examination
conducted by bank accountants or any governmental agency, securities or bank
regulatory authority exercising examination or regulatory authority)), (b) upon
the request or demand of any regulatory authority having jurisdiction over the
Commitment Parties or any of their respective affiliates (in which case, such
Commitment Party agrees to inform you promptly thereof prior to disclosure to
the extent not prohibited by law, rule or regulation (except with respect to any
audit or examination conducted by bank accountants or any governmental agency,
securities or bank regulatory authority exercising examination or regulatory
authority)), (c) to the extent that such information becomes publicly available
other than by reason of disclosure in violation of this Commitment Letter by the
Commitment Parties or any of their respective affiliates, (d) to the Commitment
Parties’ affiliates’ and their and their affiliates’ respective directors,
officers, employees, legal counsel, independent auditors and other experts or
agents who need to know such information in connection with the Transactions,
are informed of the confidential nature of such information and are instructed
to keep such information confidential in accordance with the provisions of this
Section 6, (e) for purposes of establishing a “due diligence” defense, (f) to
the extent that such information is or was received by a Commitment Party from a
third party that is not to such Commitment Party’s knowledge subject to
confidentiality obligations to you or any of your affiliates, (g) to the extent
that such information is independently developed by any of the Commitment
Parties or any of their affiliates, (h) to actual or prospective, direct or
indirect counterparties (or their advisors) to any swap or derivative
transaction relating to the Borrower, the Acquired Business or any of their
respective subsidiaries or any of their respective obligations; provided, that
the disclosure of any such information to any actual or prospective, direct or
indirect counterparty (or their advisors) to any such swap or derivative
transaction shall be made subject to the acknowledgment and acceptance by such
counterparty (and their advisors, as applicable) that such information is being
disseminated on a confidential basis (on substantially the terms set forth in
this paragraph or as is otherwise reasonably acceptable to you and the Lead
Arrangers) in accordance with customary market standards for dissemination of
such type of information, (i) to potential Lenders, participants or assignees
who agree to be bound by the terms of this paragraph (or language substantially
similar to this paragraph or as otherwise reasonably acceptable to you and the
Lead Arrangers, including as may be agreed in any confidential information
memorandum or other marketing material), or (j) in connection with the exercise
of any remedy or enforcement of any right under this Commitment Letter and/or
the Fee Letter. The obligations of the Commitment Parties under this paragraph
shall terminate on the second anniversary of the date hereof.

 

You acknowledge that the Commitment Parties or their respective affiliates may
be providing financing or other services to parties whose interests may conflict
with yours.  In particular, each party hereto acknowledges that each of Goldman,
Sachs & Co. and J.P. Morgan Securities LLC is acting as a buy-side financial
advisor (in such capacities, the “Financial Advisors”) to you in connection with
the Acquisition. You agree not to assert or allege any claim based on actual or
potential conflict of interest arising or resulting from, on the one hand, the

 

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engagement of each of Goldman, Sachs & Co. and J.P. Morgan Securities LLC in
such capacity referred to in the immediately preceding sentence and our and our
affiliates’ relationships an arrangements with you as described and referred to
herein.  Each of the Commitment Parties hereto acknowledges (i) the retention of
Goldman, Sachs & Co and J.P. Morgan Securities LLC as the Financial Advisors and
(ii) that such relationship does not create any fiduciary duties or fiduciary
responsibilities to such Commitment Party on the part of Goldman Sachs or its
affiliates or J.P. Morgan Securities LLC or its affiliates.  Each Commitment
Party agrees that it will not furnish confidential information obtained from you
to any of their other customers and will treat confidential information relating
to the Borrower, the Acquired Business and their respective affiliates with the
same degree of care as they treat their own confidential information and
otherwise subject to the immediately preceding paragraph. The Commitment Parties
further advise you that they will not make available to you confidential
information that they have obtained or may obtain from any other customer. In
connection with the services and transactions contemplated hereby, you agree
that the Commitment Parties are permitted to access, use and share, subject to
the immediately preceding paragraph, with any of their bank or non-bank
affiliates, agents, advisors (legal or otherwise) or representatives any
information concerning the Borrower, the Acquired Business or any of their
respective affiliates that is or may come into the possession of the Commitment
Parties or any of such affiliates.

 

In connection with all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (a) the transactions contemplated by this Commitment
Letter, including the Bridge Facility and any related arranging or other
services described in this Commitment Letter are arm’s-length commercial
transactions between you and your affiliates, on the one hand, and the
Commitment Parties, on the other hand, (b) the Commitment Parties have not
provided any legal, accounting, regulatory or tax advice with respect to the
financing contemplated hereby and you have consulted your own legal, accounting,
regulatory and tax advisors to the extent you have deemed appropriate, (c) you
are capable of evaluating, and understand and accept, the terms, risks and
conditions of the transactions contemplated hereby and the Commitment Parties
shall have no liability to you with respect thereto, (d) in connection with the
financing contemplated hereby and the process leading to such transaction, 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, (e) 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 the financing contemplated hereby or the
process leading thereto (irrespective of whether any of the Commitment Parties
has advised or is currently advising you or your affiliates on other matters)
and the Commitment Parties have no obligation to you or your affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth in this Commitment Letter and (f) 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, you hereby agree
that you will not assert 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 this Commitment Letter and the Fee Letter any aspect of any
transaction contemplated by this Commitment Letter or the Fee Letter.

 

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As you know, each Commitment Party (together with its respective affiliates, the
“Initial Lender Parties”) is a full service financial institution engaged,
either directly or through its affiliates, in a broad array of activities,
including commercial and investment banking, financial advisory, market making
and trading, investment management (both public and private investing),
investment research, principal investment, financial planning, benefits
counseling, risk management, hedging, financing, brokerage and other financial
and non-financial activities and services globally. In the ordinary course of
their various business activities, the Initial Lender Parties and funds or other
entities in which any Initial Lender Party invests or with which they co-invest,
may at any time purchase, sell, hold or vote long or short positions and
investments in securities, derivatives, loans, commodities, currencies, credit
default swaps and other financial instruments for their own account and for the
accounts of their customers. In addition, any Initial Lender Party may at any
time communicate independent recommendations and/or publish or express
independent research views in respect of such assets, securities or instruments.
Any of the aforementioned activities may involve or relate to assets, securities
and/or instruments of you or the Acquired Business and/or other entities and
persons which may (i) be involved in transactions arising from or relating to
the arrangement contemplated by this Commitment Letter or (ii) have other
relationships with you or your affiliates.

 

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 and their affiliates are required
to obtain, verify and record information that identifies you, which information
includes your name, address, tax identification number and other information
that will allow the Commitment Parties, as applicable, to identify you in
accordance with the U.S.A. Patriot Act, and that such information may be shared
with Lenders.  This notice is given in accordance with the requirements of the
Patriot Act and is effective for each of the Commitment Parties and each of
their respective affiliates.

 

7.                                     Survival of Obligations. The provisions
of Sections 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 the provisions
of Sections 2 and 3 shall not survive if the commitments and undertakings of the
Commitment Parties are terminated prior to the effectiveness of the Bridge
Facility; provided, further, that our obligations with respect to
confidentiality shall terminate in accordance with and to the extent provided in
Section 6; provided, further, that if the Bridge Facility closes and the Credit
Documentation shall be executed and delivered, (a) the provisions of Sections 2
and 3 shall survive only until the Syndication Date and (b) the provisions of
the second paragraph of Section 6 shall be superseded and deemed replaced by the
applicable terms of the Credit Documentation to the extent covered thereby.

 

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 constitute
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 “tif”) shall be effective as delivery of a
manually executed counterpart thereof. Headings are for convenience of reference
only and shall not affect

 

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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; provided, however, that
(a) the interpretation of the definition of “Material Adverse Effect” (and
whether or not a “Material Adverse Effect” has occurred or would reasonably be
expected to occur), (b) the determination of the accuracy of any Acquisition
Agreement Representations and whether as a result of any inaccuracy of any
Acquisition Agreement Representation there has been a failure of a condition
precedent to your (or your affiliates’) obligation to consummate the Acquisition
or such failure gives you the right to terminate your (or your affiliates’)
obligations under the Acquisition Agreement and (c) the determination of whether
the Acquisition has been consummated in accordance with the terms of the
Acquisition Agreement shall, in each case, be governed by, and construed and
interpreted in accordance with, the internal laws and judicial decisions of the
State of Delaware applicable to agreements executed and performed entirely
within such jurisdiction without giving effect to any choice or conflict of laws
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of laws of any jurisdiction other than the
State of Delaware. Each party hereto hereby irrevocably waives any and all right
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment
Letter, the Fee Letter, the Transactions 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 the United States District Court for the Southern
District of New York sitting in the Borough of Manhattan (or if such court lacks
subject matter jurisdiction, the Supreme Court of the State of New York sitting
in the Borough of Manhattan) in respect of any suit, action or proceeding
arising out of or relating to the provisions of this Commitment Letter, the Fee
Letter, the Transactions 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 such Federal court (or if
such court lacks subject matter jurisdiction, such New York State court).  Each
party hereto irrevocably 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 the federal or state courts
located in the City of New York, Borough of Manhattan, 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 you are or may be subject by suit upon judgment.

 

This Commitment Letter, together with the Fee Letter, embodies the entire
agreement and understanding among the parties hereto and your affiliates with
respect to the Transactions 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 or the Fee 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.

 

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This Commitment Letter may not be assigned by you without our prior written
consent (and any purported assignment without such consent will be null and
void), is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto (and the Indemnified Parties). We may
assign our commitments and agreement hereunder (a) subject to the requirements
set forth in Section 2 above, to any proposed Lender prior to the Closing Date,
and upon any such assignment, be released from that portion of our commitments
and agreements that has been so assigned, provided that no such assignment shall
relieve any Initial Lender of its obligations hereunder (other than its
obligations hereunder to fund such commitments that have been so assigned to the
extent assigned in accordance with the requirements set forth in Section 2
above), except to the extent such assignment is evidenced by (i) an assumption
by the assignee in a form reasonably acceptable to the Borrower or (ii) from the
Closing Date (after the funding of the Bridge Facility), the Credit
Documentation and (b) to any of our respective affiliates that is an entity
exclusively engaged in the commercial lending business whose senior, unsecured,
long-term indebtedness has an “investment grade” rating by S&P and Moody’s and
who is not a Disqualified Institution; provided that, notwithstanding the
foregoing, Goldman Sachs shall be permitted to assign its commitments and
agreement hereunder to GS Lending Partners and GS Lending Partners shall be
permitted to assign its commitments and agreement hereunder to Goldman Sachs.

 

Any and all obligations of, and services to be provided by the Commitment
Parties hereunder (including, without limitation, the commitments of JPMorgan,
Goldman Sachs and/or GS Lending Partners) may be performed and any and all
rights of the Commitment Parties hereunder may be exercised by or through any of
its respective affiliates or branches and, in connection with such performance
or exercise, the Commitment Parties may exchange with such affiliates or
branches information concerning you and your affiliates that may be the subject
of the transactions contemplated hereby and, to the extent so employed, such
affiliates and branches shall be entitled to the benefits afforded to the
Commitment Parties hereunder.

 

Each of the parties hereto agrees that this Commitment Letter and the Fee Letter
are binding and enforceable agreements with respect to the subject matter
contained herein and therein, including an agreement to negotiate in good faith
the Credit Documentation by the parties hereto in a manner consistent with this
Commitment Letter, it being acknowledged and agreed that the commitments
provided hereunder by the Commitment Parties are subject only to conditions
precedent set forth in Exhibit B.

 

Please indicate your acceptance of the terms set forth in this Commitment Letter
and the Fee Letter by returning to us executed counterparts of this Commitment
Letter and the Fee Letter together with a copy of the executed Acquisition
Agreement prior to 9:00 a.m. (New York City time) on October 29, 2018, whereupon
the undertakings of the parties with respect to the Bridge Facility shall become
effective to the extent and in the manner provided hereby. This offer shall
terminate with respect to the Bridge Facility if not so accepted by you at or
prior to that time. Thereafter, all commitments and undertakings of each
Commitment Party hereunder will expire on the earliest of (i) the execution and
delivery of the Credit Documentation, (ii) the closing of the Acquisition
without borrowing of the Bridge Facility, (iii) the date on which the
Acquisition Agreement is terminated in accordance with its terms and such
termination has either been publicly announced by a party thereto or the
Commitment

 

16

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Parties have received written notice thereof from the Borrower (which notice the
Borrower agrees to provide upon such termination), (iv) receipt by the
Commitment Parties of written notice from the Borrower of its election to
terminate all commitments under the Bridge Facility in full and
(v) the Termination Date (as defined in the Acquisition Agreement as in effect
on the date hereof and as it may be extended in accordance with the terms of the
Acquisition Agreement as in effect on the date hereof) (such earliest date
referred to in clauses (ii) through (v), the “Commitment Termination Date”).

 

[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,

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

By:

/s/ Peter B. Thauer

 

 

Name:

Peter B. Thauer

 

 

Title:

Managing Director

 

[Signature Page to Commitment Letter]

 

--------------------------------------------------------------------------------

 

 

GOLDMAN SACHS BANK USA

 

 

 

By:

/s/ Robert Ehudin

 

 

Name

Robert Ehudin

 

 

Title:

Authorized Signatory

 

 

GOLDMAN SACHS LENDING PARTNERS LLC

 

 

 

By:

/s/ Robert Ehudin

 

 

Name:

Robert Ehudin

 

 

Title:

Authorized Signatory

 

[Signature Page to Commitment Letter]

 

--------------------------------------------------------------------------------

 

Accepted and agreed to as of

 

the date first written above:

 

 

 

INTERNATIONAL BUSINESS MACHINES

 

CORPORATION

 

 

 

By:

/s/ Simon J. Beaumont

 

 

Name:

Simon J. Beaumont

 

 

Title:

Treasurer

 

 

[Signature Page to Commitment Letter]

 

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EXHIBIT A

 

SUMMARY OF TERMS AND CONDITIONS
BRIDGE FACILITY

 

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

 

Borrower:

 

International Business Machines Corporation, a New York corporation (the
“Borrower”).

 

 

 

Guarantors:

 

None.

 

 

 

Administrative Agent:

 

JPMorgan Chase Bank, N.A. (“JPMorgan”) will act as sole and exclusive
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”).

 

 

 

Syndication Agent:

 

Goldman Sachs Bank USA (“Goldman Sachs”) will act as sole and exclusive
syndication agent for the Bridge Facility.

 

 

 

Joint Lead Arrangers and Joint Bookrunning Managers:

 

JPMorgan and Goldman Sachs will act as joint lead arrangers and joint
bookrunning managers for the Bridge Facility (in such capacities, the “Lead
Arrangers”).

 

 

 

Lenders:

 

JPMorgan, Goldman Sachs, GS Lending Partners and other banks, financial
institutions and institutional lenders selected in accordance with the
Commitment Letter (each, a “Lender” and collectively, the “Lenders”).

 

 

 

Documentation Principles:

 

The Credit Documentation will be based upon the Existing 5-Year Credit Agreement
and only with modifications consistent with this Exhibit A (including this
paragraph) or that are otherwise mutually and reasonably agreed by the Borrower
and the Lead Arrangers. The Credit Documentation will contain only those
representations and warranties, affirmative and negative covenants, mandatory
prepayments and commitment reductions and events of default expressly set forth
in the Commitment Letter, including this Exhibit A. For purposes hereof, the
words “based upon” or “substantially the same as” the Existing 5-Year Credit
Agreement and words of similar import mean substantially the same as the
Existing 5-Year Credit Agreement with modifications only (a) as are necessary to
reflect the other terms specifically set forth in this Commitment Letter
(including the nature of the Bridge Facility as a bridge facility), (b) to
reflect any changes in law or accounting standards (or in the interpretation
thereof) since the date of the Existing 5-Year Credit Agreement as reasonably
agreed by the Borrower and the Administrative Agent and (c) to

 

A-1

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reflect the operational or administrative requirements of the Administrative
Agent, as reasonably agreed between the Borrower and the Administrative Agent.

 

 

 

Bridge Facility:

 

A senior unsecured bridge loan credit facility in an aggregate principal amount
in U.S. dollars of $20.0 billion (the “Bridge Facility”).

 

 

 

Purpose:

 

The proceeds shall be used by the Borrower (a) to pay all or a portion of the
consideration for the Acquisition and (b) to pay fees and expenses incurred in
connection with the Transactions.

 

 

 

Availability:

 

The Bridge Facility shall be available in a single draw on the Closing Date. Any
loans made under the Bridge Facility are referred to herein as the “Bridge
Loans”.

 

 

 

Interest Rates and Fees:

 

As set forth in Annex I hereto.

 

 

 

Calculation of Interest and Fees:

 

Other than calculations in respect of interest at the Base Rate (which shall be
made on the basis of actual number of days elapsed in a 365/366 day year), all
calculations of interest and fees shall be made on the basis of actual number of
days elapsed in a 360-day year.

 

 

 

Cost and Yield Protection:

 

Substantially the same as the Existing 5-Year Credit Agreement, including,
without limitation, in respect of breakage or redeployment costs, changes in
capital adequacy, liquidity and capital requirements or their interpretation
(including pursuant to Dodd-Frank or Basel III), illegality, unavailability and
clear of withholding or other taxes.

 

 

 

Maturity:

 

The Bridge Facility will mature on the date that is 364 days after the Closing
Date (the “Maturity Date”).

 

 

 

Scheduled Amortization:

 

None.

 

 

 

Mandatory Prepayments and Commitment Reductions:

 

On or prior to the Closing Date, the aggregate commitments in respect of the
Bridge Facility under the Commitment Letter or under the Credit Documentation
(as applicable) shall be automatically and permanently reduced, and after the
Closing Date, the aggregate Bridge Loans shall be prepaid, in each case,
dollar-for-dollar, by the following amounts:

 

 

 

 

 

(a)        100% of the net cash proceeds (other than proceeds from (i) any
intercompany transfer and (ii) any single disposition or series of related
dispositions in an amount not to exceed $5.0 billion in the aggregate), whether
in cash or cash equivalents, of all non-ordinary course asset sales or other

 

A-2

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dispositions (excluding (w) factoring arrangements, (x) any leasing
transactions, (y) sale-leaseback transactions and (z) dispositions by the
Borrower’s foreign subsidiaries to the extent the repatriation of the proceeds
of such dispositions would result in material adverse tax consequences as
reasonably determined by the Borrower) or any casualty or condemnation event in
respect of property by the Borrower and its subsidiaries (including proceeds
from the sale of stock of any subsidiary of the Borrower, but excluding casualty
or condemnation events in respect of property of the Borrower’s foreign
subsidiaries to the extent the repatriation of the proceeds of such casualty or
condemnation event would result in material adverse tax consequences as
reasonably determined by the Borrower), other than net cash proceeds that are
reinvested in or committed to be reinvested in or applied in the replacement or
repair of assets to be used in the Borrower’s and/or its subsidiaries’ business
within 12 months of receipt of such proceeds;

 

 

 

 

 

(b)        100% of the commitments provided to the Borrower or any of its
subsidiaries pursuant to any committed but unfunded credit agreement or similar
definitive agreement for the incurrence of debt for borrowed money other than
Excluded Debt (as defined below) that has become effective for the purpose of
financing the Transactions and having conditions to availability which are not
more restrictive than the conditions to availability of the Bridge Facility (a
“Qualifying Term Loan Facility”); and

 

 

 

 

 

(c)        100% of the net cash proceeds (including in escrow; provided that
there are no conditions to the release of such proceeds from such escrow that
are more onerous than the Funding Conditions (as defined below)) of (i) any sale
or issuance of debt securities (including, without limitation, any Permanent
Financing) or incurrence of other debt for borrowed money (other than Excluded
Debt (as defined below) and without duplication of amounts referred to in
clause (b) above to the extent already applied to reduce the commitments under
the Bridge Facility) and (ii) any sale or issuance of equity securities or
equity-linked securities of the Borrower in excess of $1.0 billion in the
aggregate (other than (x) issuances pursuant to employee compensation plans,
employee benefit plans, employee incentive plans and retirement plans or issued
as compensation to officers and/or non-employee directors, (y) issuances of
directors’ qualifying shares and/or other nominal amounts required to be held by
persons other than the Borrower or its subsidiaries under applicable law and
(z) issuances by the Borrower’s foreign subsidiaries to the

 

A-3

--------------------------------------------------------------------------------

 

 

 

extent the repatriation of the proceeds of such issuances would result in
material adverse tax consequences as reasonably determined by the Borrower).

 

 

 

 

 

For purposes hereof, “Excluded Debt” means (i) intercompany debt among the
Borrower and/or its subsidiaries, (ii) any borrowings under, or amendment,
refinancing, replacement, roll-over or renewal of the Existing Credit
Agreements; provided that the aggregate principal amount of indebtedness
outstanding or committed (without duplication) thereunder is not increased in
connection therewith, (iii) commercial paper issuances, ordinary course letter
of credit facilities, overdraft protection, short term working capital
facilities, ordinary course local credit facilities (including the renewal,
replacement, roll-over or refinancing thereof), factoring arrangements, seller
lending financing activities, capital leases, financial leases, indebtedness
issued in connection with credit tenant leases, hedging and cash management,
purchase money and facility and equipment financings (including sale-leasebacks)
and similar obligations, (iv) debt incurred to refinance, renew, replace or
roll-over any outstanding debt of the Borrower, IBM Credit LLC or either of
their respective subsidiaries maturing within two years of the date of such
refinancing, renewal, replacement or roll-over (regardless of whether such
refinanced, renewed, replaced or rolled-over debt remains outstanding until its
maturity), (v) other debt incurred to finance any other acquisition or
investment and related fees and expenses, (vi) other debt, together with debt
under the Existing Credit Agreements, the Permanent Financing, commercial paper
issuances and the debt contemplated by the Commitment Letter in an aggregate
principal amount to pay the consideration for the Acquisition and to pay fees
and expenses incurred in connection with the Transactions and (vii) other debt
(other than the Permanent Financing) in an aggregate principal amount up to $5.0
billion.

 

 

 

 

 

The Borrower shall notify the Administrative Agent within three business days of
any receipt by the Borrower or its subsidiaries of the proceeds described above
or of having entered into a Qualifying Term Loan Facility.  Any required
commitment reduction resulting from any of the foregoing shall be effective on
the same day as such net cash proceeds are actually received or funded into
escrow, as applicable, or in the case of any Qualifying Term Loan Facility, the
date of effectiveness of the definitive credit or similar agreement with respect
thereto. Any required prepayment of the Bridge Facility resulting from any of
the foregoing shall be made on or prior to

 

A-4

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the fifth business day after such net cash proceeds are received.

 

 

 

 

 

All commitment reductions shall be permanent and any repayment of the Bridge
Loans may not be reborrowed. All commitment reductions and prepayments shall be
applied to reduce, respectively, the commitments in respect of the Bridge
Facility and Bridge Loans on a ratable basis, or with respect to any Lenders
which are affiliated with each other, between them as they and the
Administrative Agent may agree.

 

 

 

 

 

In addition, the commitments shall terminate on the Commitment Termination Date.

 

 

 

Optional Prepayments and Commitment Reductions:

 

The Bridge 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
that any prepayment of LIBOR Loans other than at the end of the applicable
interest periods therefor shall be made with reimbursement for any funding
losses and redeployment costs of the Lenders resulting therefrom. The
commitments under the Bridge Facility may be reduced permanently or terminated
by the Borrower at any time without penalty. Optional prepayments of the Bridge
Loans may not be reborrowed.

 

 

 

Conditions Precedent to Borrowing on the Closing Date:

 

The borrowing under the Bridge Facility on the Closing Date will be subject
solely to the conditions precedent set forth in Exhibit B to the Commitment
Letter (the “Funding Conditions”).

 

 

 

Representations and Warranties:

 

Subject to the Documentation Principles and the Limited Condition Provision,
substantially the same as the Existing 5-Year Credit Agreement, each to be made
on the date of the Credit Documentation and upon borrowing under the Bridge
Facility; provided, that the Credit Documentation shall include a customary
representation for transactions of this type to be agreed with respect to
accuracy of disclosed information.

 

 

 

Affirmative Covenants:

 

Subject to the Documentation Principles and the Limited Condition Provision,
substantially the same as the Existing 5-Year Credit Agreement.

 

 

 

Negative Covenants:

 

Subject to the Documentation Principles and the Limited Condition Provision,
substantially the same as the Existing 5-Year Credit Agreement.

 

 

 

Financial Maintenance Covenants:

 

Consolidated Net Interest Expense Ratio of no less than 2.20 to 1.0, calculated
in a manner substantially the same as the

 

A-5

--------------------------------------------------------------------------------

 

 

 

Existing 5-Year Credit Agreement.

 

 

 

Events of Default:

 

Subject to the Documentation Principles and the Limited Condition Provision,
substantially the same as the Existing 5-Year Credit Agreement.

 

 

 

 

 

Without limiting (and subject to) the conditions set forth in Exhibit B hereto,
the Lenders shall not be entitled to terminate the commitments under the Bridge
Facility prior to the Closing Date due to an event of default unless a payment
or bankruptcy event of default (with respect to the Borrower) under the Credit
Documentation has occurred and is continuing. The acceleration of the Bridge
Loans shall be permitted at any time after they have been funded only to the
extent that an event of default is outstanding and continuing at such time.

 

 

 

Actions between Effective Date and Closing Date:

 

During the period from and including the effectiveness of the Bridge Facility
(the “Effective Date”) and to and including the earlier of the Commitment
Termination Date and the funding of the Bridge Loans on the Closing Date, and
notwithstanding (i) that any representation given as a condition to the
Effective Date (excluding the Specified Representations and Acquisition
Agreement Representations constituting Funding Conditions) was incorrect,
(ii) any failure by the Borrower to comply with the affirmative covenants and
negative covenants (excluding compliance on the Closing Date with certain
negative covenants constituting Funding Conditions), (iii) any provision to the
contrary in the Credit Documentation or (iv) that any condition to the Effective
Date may subsequently be determined not to have been satisfied, neither the
Administrative Agent nor any Lender shall be entitled to (unless an event of
default under the Credit Documentation shall have occurred and is continuing
with respect to nonpayment of fees thereunder or bankruptcy or insolvency of the
Borrower) (a) cancel any of its commitments in respect of the Bridge Facility
(except as set forth in “Mandatory Prepayments and Commitment Reductions”
above), (b) rescind, terminate or cancel the Credit Documentation or any of its
commitments thereunder or exercise any right or remedy under the Credit
Documentation, to the extent to do so would prevent, limit or delay the making
of its Bridge Loan, (c) refuse to participate in making its Bridge Loan or
(d) exercise any right of set-off or counterclaim in respect of its Bridge Loan
to the extent to do so would prevent, limit or delay the making of its Bridge
Loan; provided, that the Funding Conditions are satisfied. Furthermore, (a) the
rights and remedies of the Lenders and the Administrative Agent shall not be
limited in the event that any Funding Condition is not

 

A-6

--------------------------------------------------------------------------------

 

 

 

satisfied on the Closing Date and (b) from the Closing Date after giving effect
to the funding of the Bridge Loans on such date, all of the rights, remedies and
entitlements of the Administrative Agent and the Lenders shall be available
notwithstanding that such rights were not available prior to such time as a
result of the foregoing.

 

 

 

Defaulting Lender:

 

Substantially the same as the Existing 5-Year Credit Agreement.

 

 

 

Assignments and Participations:

 

Lenders will be permitted to assign commitments under the Bridge Facility and
Bridge Loans in a minimum amount of $10.0 million (subject to exceptions
consistent with the Existing 5-Year Credit Agreement) with the consent of
(i) the Borrower (not to be unreasonably withheld or delayed, and such consent
not to be required (a) during the continuance of a payment or bankruptcy event
of default, (b) in connection with an assignment to a Lender, an affiliate of a
Lender or following the Closing Date an approved fund or (c) to the extent not
required in connection with assignments made by the Lead Arrangers during
primary syndication pursuant to the applicable provisions of Section 2 of the
Commitment Letter) and (ii) the Administrative Agent (not to be unreasonably
withheld or delayed, and such consent of the Administrative Agent not to be
required in connection with an assignment to a Lender, an affiliate of a Lender
or following the Closing Date an approved fund); provided, that (A) prior to the
funding of the Bridge Loans on the Closing Date, (x) the Borrower’s consent
right described above shall apply, and there shall be no Deemed Consent (as
defined below), unless a bankruptcy event of default of the Borrower shall have
occurred and be continuing at the applicable time and (y) unless otherwise
consented to in writing in advance by the Borrower in its sole discretion, any
assignment of commitments to make Bridge Loans (including assignments to another
Lender, an affiliate of a Lender or an approved fund) must be to commercial and
investment banks, in each case, whose senior, unsecured, long-term indebtedness
has a rating of BBB- or better by S&P and Baa3 or better by Moody’s and (B) no
assignment shall be made to any Disqualified Institution at any time. Subject to
the proviso to the immediately preceding sentence, if the consent of the
Borrower is required in connection with any assignment, the Borrower shall be
deemed to have provided such consent unless it has notified the Administrative
Agent of its refusal to give such consent within ten business days of receiving
written request for its consent to such assignment (“Deemed Consent”). The
Lenders will be permitted to sell participations in Bridge

 

A-7

--------------------------------------------------------------------------------

 

 

 

Loans and commitments without restriction, other than to Disqualified
Institutions. Voting rights of participants shall be limited to significant
matters such as changes in amount, rate and maturity date. An assignment fee in
the amount of $3,500 will be charged with respect to each assignment unless
waived by the Administrative Agent. Customary pledges of Bridge Loans shall also
be permitted without restriction.

 

 

 

Waivers and Amendments:

 

Amendments and waivers of the provisions of the Credit Documentation will
require the approval of Lenders holding Bridge Loans and commitments
representing more than 50% of the aggregate Bridge Loans and commitments under
the Bridge Facility (the “Required Lenders”), except that the consent of each
Lender will be required with respect to among other things (a) increases in
commitment amount of such Lender, (b) reductions of principal, interest, or fees
payable to such Lender, (c) extensions of scheduled maturities or times for
payment of the Bridge Loans, commitments, fees, interest, or other amounts due
to such Lender, (d) changes to the relevant percentages applicable to Lender
voting requirements and (e) modifications to certain pro rata provisions of the
Credit Documentation.

 

 

 

Indemnification:

 

Subject to the limitations set forth in Section 4 of the Commitment Letter to
which this Exhibit A is attached, the Borrower will indemnify and hold harmless
the Administrative Agent, each Lead Arranger, each Lender and each of their
affiliates and their officers, directors, employees, agents and advisors (each,
an “Indemnified Party”) from and against all losses, liabilities, claims,
damages or expenses arising out of or relating to the Transactions, the Bridge
Facility, managing the syndication thereof, the Borrower’s use of loan proceeds
or the commitments, including, but not limited to, reasonable and documented
out-of-pocket attorneys’ fees and settlement costs, except, in each case, to the
extent such losses, liabilities, claims, damages or expenses resulted from
(x) such Indemnified Party’s (or its Related Parties’) gross negligence, bad
faith or willful misconduct as determined by a final, non-appealable judgment of
a court of competent jurisdiction, (y) such Indemnified Party’s (or its Related
Parties’) material breach of its obligations under the Credit Documentation and
(z) disputes solely among the Indemnified Parties not arising from or in
connection with any act or omission by the Borrower or any of its affiliates
(other than any Proceedings against the Administrative Agent or the Lead
Arrangers in their capacity or in fulfilling their role as such under the Bridge
Facility). This indemnification shall survive and continue for the benefit of
all

 

A-8

--------------------------------------------------------------------------------

 

 

 

such persons or entities, notwithstanding any failure of the Bridge Facility to
close.

 

 

 

Governing Law:

 

New York; provided, however, that (a) the interpretation of the definition of
“Material Adverse Effect” (and whether or not a “Material Adverse Effect” has
occurred or would reasonably be expected to occur), (b) the determination of the
accuracy of any Acquisition Agreement Representations and whether as a result of
any inaccuracy of any Acquisition Agreement Representation there has been a
failure of a condition precedent to the Borrower’s (or its affiliates’)
obligation to consummate the Acquisition or such failure gives the Borrower the
right to terminate its (or its affiliates’) obligations under the Acquisition
Agreement and (c) the determination of whether the Acquisition has been
consummated in accordance with the terms of the Acquisition Agreement shall, in
each case, be governed by, and construed and interpreted in accordance with, the
internal laws and judicial decisions of the State of Delaware applicable to
agreements executed and performed entirely within such jurisdiction without
giving effect to any choice or conflict of laws provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of laws of any jurisdiction other than the State of Delaware.

 

 

 

Expenses:

 

The Borrower will pay all reasonable documented or invoiced out-of-pocket fees
and expenses (including, but not limited to, the reasonable fees, disbursements
and other charges of counsel which shall be limited to the reasonable and
documented or invoiced out-of-pocket fees and other charges of one counsel to
the Administrative Agent, and, if necessary, of one regulatory counsel and one
local counsel to the Lenders retained by the Administrative Agent in each
relevant regulatory field and each relevant jurisdiction, respectively (and, in
the case of an actual or perceived conflict of interest where the Lender
affected by such conflict notifies the Borrower of the existence of such
conflict and thereafter retains its own counsel, of another firm of counsel for
each such affected Lender), and due diligence expenses) incurred in connection
with the Bridge Facility, the syndication thereof, the preparation,
administration and enforcement of all Credit Documentation, and the other
transactions contemplated thereby, whether or not the Closing Date occurs or any
extensions of credit are made under the Bridge Facility.

 

 

 

E.U. Bail-in Provisions:

 

The Credit Documentation will include customary “E.U. Bail-in” provisions.

 

A-9

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Counsel to the Administrative Agent and the Lead Arrangers:

 

Simpson Thacher & Bartlett LLP.

 

 

 

Miscellaneous:

 

Each of the parties shall (a) waive its right to a trial by jury and (b) submit
to the exclusive jurisdiction of the United States District Court for the
Southern District of New York sitting in the Borough of Manhattan (or if such
court lacks subject matter jurisdiction, the Supreme Court of the State of New
York sitting in the Borough of Manhattan).

 

 

 

 

A-10

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ANNEX I
TO EXHIBIT A

 

INTEREST AND CERTAIN FEES

 

Interest Rates:

 

The interest rates per annum applicable to the Bridge Facility will be, at the
option of the Borrower, (a) the LIBO Rate plus the Applicable Margin (as defined
below) or (b) the Base Rate plus the Applicable Margin.

 

 

 

 

 

The Borrower may select interest periods of one, two, three or six months for
LIBO Rate borrowings. Interest shall be payable at the end of the selected
interest period, but no less frequently than quarterly.

 

 

 

 

 

For purposes of the Credit Documentation, (a) LIBO Rate shall be defined in a
manner consistent with the definition of “Eurodollar Rate” in the Existing
5-Year Credit Agreement and (b) “Base Rate” shall be defined in a manner
consistent with the definition of “ABR” in the Existing 5-Year Credit Agreement.

The Credit Documentation will contain provisions with respect to a replacement
of the LIBO Rate substantially the same as the Existing 5-Year Credit Agreement.

 

 

 

 

 

The “Applicable Margin” means the applicable percentage per annum determined in
accordance with the pricing grid attached hereto as Annex I-A (the “Pricing
Grid”).

 

 

 

Default Interest:

 

Automatically upon the occurrence and during the continuation of any payment
default, all overdue amounts under the Bridge Facility shall bear interest at a
rate per annum equal to (a) in the case of principal of any Bridge Loan, 2.0%
above the rate otherwise applicable thereto or (b) in the case of any other
amount, 2.0% above the rate applicable to Base Rate Loans, with such interest
being payable on demand.

 

 

 

Undrawn Fees:

 

The Borrower will pay fees (the “Undrawn Fees”), for the ratable benefit of the
Lenders at the “Applicable Undrawn Fee Rate” determined in accordance with the
Pricing Grid on the undrawn commitments in respect of the Bridge Facility
accruing daily from and including the later of (a) the day that is 90 days
following the execution of the Commitment Letter and (b) date of

 

Annex I-1 to Exhibit A

--------------------------------------------------------------------------------

 

 

 

execution of the Credit Documentation until the date on which the commitments
under the Bridge Facility are terminated. Accrued Undrawn Fees shall be payable
upon the date on which the commitments under the Bridge Facility are terminated;
provided that any such Undrawn Fees shall accrue without duplication to any
Ticking Fees (as defined in the Fee Letter).

 

 

 

Duration Fees:

 

The Borrower will pay a fee (the “Duration Fee”), for the ratable benefit of the
Lenders, in an amount equal to (i) 0.50% of the aggregate principal amount of
the loans under the Bridge Facility outstanding on the date which is 90 days
after the Closing Date, due and payable in cash on such 90th day (or if such day
is not a business day, the next business day); (ii) 0.75% of the aggregate
principal amount of the loans under the Bridge Facility outstanding on the date
which is 180 days after the Closing Date, due and payable in cash on such 180th
day (or if such day is not a business day, the next business day); and
(iii) 1.00% of the aggregate principal amount of the loans under the Bridge
Facility outstanding on the date which is 270 days after the Closing Date, due
and payable in cash on such 270th day (or if such day is not a business day, the
next business day).

 

Annex I-2 to Exhibit A

--------------------------------------------------------------------------------

 

ANNEX I-A
TO EXHIBIT A

 

PRICING GRID

 

 

 

Applicable Margin

 

 

Borrower’s
Debt Ratings
(S&P/

 

Closing Date through
89 Days after Closing
Date

 

90 days after Closing
Date through 179 days
after Closing Date

 

180 days after Closing
Date through 269 days
after Closing Date

 

270 days after Closing
Date and thereafter

 

Applicable
Undrawn

Moody’s)

 

Base Rate

 

LIBOR

 

Base Rate

 

LIBOR

 

Base Rate

 

LIBOR

 

Base Rate

 

LIBOR

 

Fee Rate

Level I: A+/A1 or higher

 

0.0 bps

 

75.0 bps

 

0.0 bps

 

100.0 bps

 

25.0 bps

 

125.0 bps

 

50.0 bps

 

150.0 bps

 

3.0 bps

Level II: A/A2

 

0.0 bps

 

87.5 bps

 

12.5 bps

 

112.5 bps

 

37.5 bps

 

137.5 bps

 

62.5 bps

 

162.5 bps

 

4.0 bps

Level III: A-/A3 or lower

 

0.0 bps

 

100.0 bps

 

25.0 bps

 

125.0 bps

 

50.0 bps

 

150.0 bps

 

75.0 bps

 

175.0 bps

 

6.0 bps

 

 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s of the Borrower’s non-credit-enhanced, senior unsecured
long-term debt; provided, that (a) if the respective Debt Ratings issued by the
foregoing rating agencies differ by one level, then the Pricing Level for the
higher of such Debt Ratings shall apply (with the Debt Rating for Pricing
Level I being the highest and the Debt Rating for Pricing Level III being the
lowest); (b) if there is a split in Debt Ratings of more than one level, the
Debt Rating used to determine the Pricing Level shall be one Debt Rating level
lower than the higher Debt Rating; (c) if the Borrower has only one Debt Rating,
the Pricing Level of such Debt Rating shall apply; and (d) if the Borrower does
not have any Debt Rating, Pricing Level III shall apply.

 

Annex I-A  to Exhibit A

--------------------------------------------------------------------------------

 

EXHIBIT B

 

CONDITIONS PRECEDENT TO CLOSING

 

The borrowing under the Bridge Facility on the Closing Date will be subject to
the following conditions precedent (subject to the Limited Conditionality
Provision):

 

(a)        The Credit Documentation shall have been executed and delivered by
the parties thereto; provided, that, the terms of the Credit Documentation shall
be in a form such that they do not impair availability of the Bridge Facility on
the Closing Date if the conditions expressly set forth in this Exhibit B are
satisfied.

 

(b)        All of the conditions precedent to the consummation of the
Acquisition set forth in Article VI of the Acquisition Agreement shall have been
satisfied or waived in accordance with the terms and conditions of the
Acquisition Agreement, and no provision of the Acquisition Agreement (in the
form of the draft Acquisition Agreement, dated October 28, 2018 and marked
“Execution Version” provided to the Lead Arrangers prior to its execution of the
Commitment Letter) shall have been amended or modified, and no condition therein
shall have been waived or consent granted, in each case, in any respect that is
materially adverse to the Lenders or the Lead Arrangers without each Lead
Arranger’s prior written consent (which consent shall not be unreasonably
withheld or delayed); provided, that changes in the purchase price shall not be
deemed to be materially adverse to the interests of the Lenders or the Lead
Arrangers and shall not require the consent of the Lead Arrangers if such
purchase price changes do not exceed 10.0% in aggregate and, in the case of a
purchase price decrease, shall reduce the commitments in respect of the Bridge
Facility proportionately.

 

(c)        Since the date of the Acquisition Agreement, no Effect has occurred
that would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect of which the existence or consequences are still
continuing; provided that clause (ii) of the definition of Material Adverse
Effect shall be excluded from such definition for the purposes of determining
the satisfaction of this paragraph (c). All terms capitalized used in this
paragraph (c) and not defined herein shall have the meaning assigned thereto in
the Acquisition Agreement (as of the date hereof) for purposes of this paragraph
(c).

 

(d)        The Lead Arrangers shall have received (i) audited consolidated
balance sheets and related statements of income, stockholders’ equity and cash
flows of each of (x) the Borrower for the last three full fiscal years ended at
least 60 days prior to the Closing Date and (y) the Target for each of the last
three full fiscal years ended at least 60 days prior to the Closing Date and
(ii) unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the Borrower and the Target for each
subsequent fiscal quarterly interim period or periods ended at least 40 days
prior to the Closing Date (other than the fourth fiscal quarter of any fiscal
year), together with unaudited consolidated financial statements for the
corresponding period(s) of the prior fiscal year (it being understood that, with
respect to such financial information for each such fiscal year and subsequent
interim period, such condition shall be deemed satisfied through the filing by
the Borrower or the Target of its annual report on Form 10-K or quarterly report
on Form 10-Q with respect to such fiscal year or interim period), which are
prepared in accordance with US GAAP and meet the requirements of

 

Exhibit B-1

--------------------------------------------------------------------------------

 

Regulation S-X and all other accounting rules and regulations of the SEC
promulgated thereunder applicable to registration statements on Form S-3.

 

(e)        The Administrative Agent shall have received (i) a customary legal
opinion from Paul, Weiss, Rifkind, Wharton & Garrison LLP, the Borrower’s
corporate organizational documents, good standing certificates for Borrower’s
jurisdiction of incorporation, resolutions and other customary closing
certificates (including a customary certificate that the conditions set forth
herein have been satisfied), and a borrowing notice, each in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower, (ii) a
solvency certificate from the Treasurer of the Borrower in the form attached as
Annex I to this Exhibit B and (iii) at least three business days prior to the
Closing Date, to the extent requested at least ten business days prior to the
Closing Date, all documentation and other information required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including, without limitation, the U.S.A. PATRIOT Act.

 

(f)         The Lead Arrangers, the Administrative Agent, the Commitment Parties
and the Lenders shall have received all fees and invoiced expenses required to
be paid on or prior to the Closing Date pursuant to the Fee Letter, Commitment
Letter or the Credit Documentation (solely with respect to expenses) to the
extent invoiced at least two business days prior to the Closing Date.

 

(g)        (i) There shall exist no event of default under the Credit
Documentation corresponding to the following provisions of the Existing 5-Year
Credit Agreement (as in effect on the date hereof): Sections 8.01(a);
Section 8.01(f) (solely with respect to the Borrower); and 8.01(g) (solely with
respect to the Borrower); and (ii) each of the Acquisition Agreement
Representations shall be true and correct to the extent required by the Limited
Conditionality Provision and each of the Specified Representations shall be true
and correct in all material respects, in each case, at the time of, and after
giving effect to, the making and application of the Bridge Loans on the Closing
Date.

 

Exhibit B-2

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ANNEX I
TO EXHIBIT B

 

FORM OF
SOLVENCY CERTIFICATE

 

[  ], 201[  ]

 

This Solvency Certificate is delivered pursuant to Section [  ] of the Credit
Agreement, dated as of [  ], 201[  ] (the “Credit Agreement”), among
International Business Machines Corporation, a New York corporation, as borrower
(the “Borrower”), the lenders from time to time party thereto (the “Lenders”),
and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity and
together with its successors and assigns, the “Administrative Agent”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.

 

The undersigned hereby certifies, solely in his capacity as an officer of the
Borrower and not in his individual capacity, as follows:

 

1.         I am the Treasurer of the Borrower. I am familiar with the
Transactions and have reviewed the Credit Agreement, financial statements
referred to in Section [  ] of the Credit Agreement and such documents and made
such investigation as I deemed relevant for the purposes of this Solvency
Certificate.

 

2.         As of the date hereof, immediately after giving effect to the
consummation of the Transactions, on and as of such date (a) the fair value of
the assets of the Borrower and its subsidiaries on a consolidated basis, at a
fair valuation on a going concern basis, will exceed the debts and liabilities,
direct, subordinated, contingent or otherwise, of the Borrower and its
subsidiaries on a consolidated basis; (b) the present fair saleable value of the
property of the Borrower and its subsidiaries on a consolidated and going
concern basis will be greater than the amount that will be required to pay the
probable liability of the Borrower and its subsidiaries on a consolidated basis
on their debts and other liabilities, direct, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured in
the ordinary course of business; (c) the Borrower and its subsidiaries on a
consolidated basis will be able to pay their debts and liabilities, direct,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured in the ordinary course of business; and (d) the Borrower
and its subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.

 

This Solvency Certificate is being delivered by the undersigned officer only in
his capacity as Treasurer of the Borrower and not individually and the
undersigned shall have no personal liability to the Administrative Agent or the
Lenders with respect thereto.

 

Annex I-1 to Exhibit B

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IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate on
the date first written above.

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

Name: Simon J. Beaumont

 

 

Title: Treasurer

 

Annex I-2 to Exhibit B

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