Exhibit 10.2

 

Bank of America, N.A.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

One Bryant Park

New York, New York 10036

 

Citibank, N.A.

399 Park Avenue

New York, NY 10022

KeyBank National Association

KeyBanc Capital Markets Inc.

127 Public Square

Cleveland, Ohio 44114

 

SunTrust Bank

SunTrust Robinson Humphrey, Inc.

3333 Peachtree Road Northeast

Atlanta, Georgia 30326

March 23, 2016

Mercury Systems, Inc.

201 Riverneck Road

Chelmsford, MA 01824

Attention: Gerald M. Haines II

Project Wild

Commitment Letter

Ladies and Gentlemen:

You have advised Bank of America, N.A. (“Bank of America”) and Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“MLPF&S”), Citi (as defined below), KeyBank
National Association (“KeyBank”), KeyBanc Capital Markets Inc. (“KBCM”),
SunTrust Bank (“SunTrust”) and SunTrust Robinson Humphrey, Inc. (“STRH” and
collectively, with Bank of America, MLPF&S, Citi, KeyBank, KBCM and SunTrust,
the “Commitment Parties”, “we” or “us”) that Mercury Systems, Inc. (the
“Company” or “you”) intends (i) to acquire (the “Acquisition”), directly or
indirectly, all of the stock of the companies previously identified to us and
code-named “Wild” (collectively, the “Target”) pursuant to a stock purchase
agreement with Microsemi Corporation (the “Seller”) to be dated as of the date
hereof (as amended in accordance with the terms of this Commitment Letter and in
effect from time to time, the “Acquisition Agreement”) entered into in
connection therewith and (ii) to consummate the other transactions described in
Exhibit A hereto. Capitalized terms used but not defined herein have the
meanings assigned to them in the Exhibits attached hereto.

For purposes of this Commitment Letter, “Citi” shall mean Citibank, N.A. and/or
any of its affiliates as it shall determine to be appropriate to provide the
services contemplated herein (subject to confidentiality, assignment and other
provisions hereof).

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1. Commitments.

In connection with the Transactions, each of Bank of America, Citi, KeyBank and
SunTrust (each, an “Initial Lender” and collectively, the “Initial Lenders”) is
pleased to advise you of its commitment to provide on a several, but not joint,
basis the percentage of the entire principal amount of each of the Facilities
(as defined in Exhibit A hereto) as set forth opposite such Initial Lender’s
name on Schedule 1 hereto (as such schedule may be amended or supplemented in
accordance with this Commitment Letter), upon the terms and subject to the
conditions set forth or referred to in this commitment letter (together with the
Term Sheets (as defined in Exhibit A hereto), this “Commitment Letter”).

 

2. Titles and Roles.

It is agreed that:

(a) MLPF&S, Citi, KBCM and STRH will act as joint lead arrangers (in such
capacities, the “Lead Arrangers”) and as joint lead bookrunners for each of the
Facilities (as defined in Exhibit B hereto); and

(b) Bank of America will act as sole administrative agent (in such capacity, the
“Administrative Agent”) for the Facilities.

It is further agreed that MLPF&S will have “lead left” placement in any
marketing materials or other documentation for the Facilities, and will hold the
roles and responsibilities customarily understood to be associated with such
name placement.

You agree that no other agents, co-agents, arrangers, bookrunners or managers
will be appointed, no other titles will be awarded and no compensation (other
than as expressly contemplated by this Commitment Letter and the Fee Letter
dated as of the date hereof by and among us and you (the “Fee Letter”) will be
paid by you to any Lender in order to obtain its commitment in respect of the
Facilities unless you and the Commitment Parties as of the date hereof shall so
agree.

 

3. Syndication.

The Lead Arrangers reserve the right, prior to or after the execution of the
Facilities Documentation (as defined in Exhibit A hereto), to syndicate all or a
portion of the Initial Lenders’ commitments hereunder to a group of banks,
financial institutions and other institutional lenders identified by the
Commitment Parties in consultation with you and subject to your consent (such
consent not to be unreasonably withheld or delayed), including any relationship
lenders designated by you in consultation with the Commitment Parties (together
with the Initial Lenders, the “Lenders”); provided that, notwithstanding the
Lead Arrangers’ right to syndicate the Facilities and receive commitments with
respect thereto, the Initial Lenders shall not assign all or any portion of
their commitments hereunder until after the Closing Date (as defined in Exhibit
A hereto), such syndication shall not relieve the Initial Lenders of their
obligations set forth herein (including their obligations to fund the Facilities
on the Closing Date on the terms and conditions set forth in this Commitment
Letter) and, unless you agree in writing, each Initial Lender shall retain
exclusive control over all rights and obligations with respect to its
commitments, including all rights with respect to consents, modifications,
waivers and amendments, until after the initial funding of the Facilities on the
Closing Date has occurred. Notwithstanding the foregoing, the Commitment Parties
will not syndicate, participate to or otherwise assign any portion of a
commitment under the Facilities to those persons that are (i) identified in
writing on or prior to the date hereof by you to us, (ii) competitors of you
and/or your subsidiaries or the Target and/or their subsidiaries

 

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that are identified in writing by you to us (or, after the Closing Date, to the
Administrative Agent) from time to time or (iii) affiliates of such persons set
forth in clauses (i) and (ii) above (in the case of affiliates of such persons
set forth in clause (ii) above, other than bona fide fixed income investors or
debt funds) that are either (a) identified in writing by you to us (or, after
the Closing Date, to the Administrative Agent) from time to time or (b) clearly
identifiable as an affiliate of such persons on the basis of such affiliate’s
name (the persons described in clauses (i) through (iii), collectively, the
“Disqualified Institutions”); provided that, to the extent persons are
identified as Disqualified Institutions in writing by you to us (or after the
Closing Date, to the Administrative Agent) after the date hereof pursuant to
clauses (ii) or (iii)(a), the inclusion of such persons as Disqualified
Institutions shall not retroactively apply to prior assignments or
participations.

The Lead Arrangers intend to commence syndication efforts promptly upon the
execution of this Commitment Letter and the Fee Letter and as part of their
syndication efforts, it is the Lead Arrangers’ intent to have Lenders commit to
the Facilities prior to the Closing Date (subject to the limitations set forth
in the proviso to the first sentence of this Section 3). Until the date that is
the earlier of (a) 60 days after the Closing Date and (b) the date on which the
successful syndication (as defined in the Fee Letter) is achieved (such earlier
date, the “Syndication Date”), you agree to actively assist the Lead Arrangers
in completing a syndication that is reasonably satisfactory to them and you.
Such assistance shall include (a) using your commercially reasonable efforts to
ensure that any syndication efforts benefit from your existing lending and
investment banking relationships, (b) facilitating direct contact between
appropriate members of your senior management and the proposed Lenders at times
and locations mutually agreed upon, (c) your assistance (and using commercially
reasonable efforts to cause the Target to assist, subject to limitations on your
rights set forth in the Acquisition Agreement) in the preparation of a customary
confidential information memorandum (a “Confidential Information Memorandum”)
for the Facilities and other customary marketing materials reasonably requested
to be used in connection with the syndication (such materials, together with
such Confidential Information Memorandum and the Term Sheets, collectively, the
“Information Materials”), by providing information and other customary materials
reasonably requested in connection with such Information Materials, all subject
to the limitation on your rights to request information concerning the Target as
set forth in the Acquisition Agreement, and (d) the hosting, with the Lead
Arrangers, of one or more meetings (or, if you and we shall agree, conference
calls in lieu of any such meeting) of prospective Lenders (limited to one “bank
meeting”, unless otherwise deemed necessary in the reasonable judgment of the
Lead Arrangers) at times and locations mutually agreed upon. You will ensure
that prior to the Syndication Date, there will not be any competing issues of
debt securities, or bank or other credit facilities of you or any of your
subsidiaries, and, with respect to the Target and their subsidiaries, you will
use commercially reasonable efforts to ensure that there will be no competing
issues of debt securities, or bank or other credit facilities of the Target or
any of its subsidiaries (but, for the avoidance of doubt, not extending to the
Seller or any of its other subsidiaries), in each case being offered, placed or
arranged that would materially impair the primary syndication of the Facilities
(it being understood that (i) letters of credit, capital leases, purchase money
indebtedness and equipment financings, in each case in the ordinary course of
business of the Company and/or its subsidiaries and the Target and/or their
subsidiaries, and (ii) any other indebtedness permitted to be incurred or
outstanding under the Acquisition Agreement, shall, in either case, not be
limited pursuant to this sentence), without the written consent of the Lead
Arrangers (such consent not to be unreasonably withheld or delayed). For the
avoidance of doubt, in connection with the foregoing requirements to provide
assistance, you will not be required to provide any information to the extent
that the provision thereof would violate any law, rule or regulation, or any
obligation of confidentiality owing to a third party and binding you, the Target
or your or its respective affiliates; provided that no such obligations of
confidentiality shall be entered into in contemplation of this sentence and in
the event you do not provide information in reliance on this sentence, you shall
provide notice to us that such information is being withheld and you shall use
your commercially reasonable efforts to obtain the relevant consents and to
communicate, to the extent both feasible and permitted under applicable law,

 

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rule, regulation or confidentiality obligation, the applicable information.
Notwithstanding anything to the contrary contained in this Commitment Letter or
the Fee Letter, (i) none of the foregoing shall constitute a condition to the
commitments hereunder or the funding of the Facilities on the Closing Date and
(ii) neither the commencement nor the completion of the syndication of the
Facilities shall constitute a condition precedent to the Closing Date.

The Lead Arrangers will, in consultation with you, manage all aspects of any
syndication, including decisions as to the selection of institutions to be
approached, subject, in each case, to your consent (not to be unreasonably
withheld or delayed) and excluding Disqualified Institutions, and when they will
be approached, when their commitments will be accepted, which institutions will
participate (with your consent, not to be unreasonably withheld or delayed and
excluding Disqualified Institutions), the allocation of the commitments among
the Lenders and the amount and distribution of fees among the Lenders.

 

4. Information.

You hereby represent and warrant (with respect to such information relating to
the Target and their subsidiaries prior to the Closing Date, to your knowledge)
that (a) all written information other than financial estimates, forecasts and
other forward-looking information (collectively, the “Projections”) and other
than information of a general economic or general industry nature, that has been
or will be made available to any of the Commitment Parties by you or any of your
representatives on your behalf in connection with the transactions contemplated
hereby (the “Information”), taken as a whole, does not or will not, when
furnished, 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
are made (after giving effect to all supplements and updates thereto) and
(b) the Projections that have been or will be made available to the Lead
Arrangers by you or any of your representatives on your behalf in connection
with the transactions contemplated hereby have been or will be prepared in good
faith based upon assumptions that are believed by you to be reasonable at the
time furnished; it being understood that any such Projections are not to be
viewed as facts, 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, that actual results may differ and that
such differences may be material. You agree that, if at any time prior to the
later of the Closing Date and the Syndication Date, you become aware that any of
the representations and warranties in the preceding sentence would be incorrect
in any material respect if the Information and Projections were being furnished,
and such representations and warranties were being made, at such time, then you
will (or you will use commercially reasonable efforts to prior to the Closing
Date with respect to Information and Projections relating to the Target and
their subsidiaries, subject to any applicable limitations on your rights as set
forth in the Acquisition Agreement) promptly supplement the Information and the
Projections from time to time until the later of the Closing Date and the
Syndication Date so that (with respect to Information and Projections relating
to the Target and their subsidiaries prior to the Closing Date, to your
knowledge) such representations and warranties will be correct in all material
respects under those circumstances. In arranging and syndicating the Facilities,
the Lead Arrangers will be entitled to use and rely on the Information and the
Projections without responsibility for independent verification thereof and do
not assume responsibility for the accuracy or completeness of the Information or
the Projections. For the avoidance of doubt, it is understood and agreed that
the accuracy of the representations and warranties set forth in this paragraph
shall not be a condition to the commitments hereunder or the funding of the
Facilities on the Closing Date.

You hereby acknowledge that (a) we will make available the Information and the
Projections to the proposed syndicate of Lenders by posting on IntraLinks, Debt
X, SyndTrak Online or another similar electronic system and (b) certain of the
Lenders are or may be “public side” Lenders (i.e., Lenders that do

 

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not wish to receive material non-public information with respect to the Company,
the Target, your or its subsidiaries or your or its respective securities)
(each, a “Public Lender”). At the request of the Lead Arrangers, you agree to
assist us in preparing an additional version of the Information Materials to be
used by Public Lenders that consists exclusively of information and
documentation that is either publicly available or not material with respect to
the Company, the Target, their respective subsidiaries or their respective
securities for purposes of United States federal and state securities laws (such
information and documents, “Public Lender Information”). Any information and
documentation that is not Public Lender Information is referred to herein as
“Private Lender Information”. It is understood that in connection with your
assistance described above, a customary authorization letter will be included in
each Confidential Information Memorandum that authorizes the distribution of the
Information Materials to prospective Lenders (and contains customary “10b-5”
representations) and, if applicable, confirms that the public-side version of
the Information Materials only contains Public Lender Information, and each such
Confidential Information Memorandum shall exculpate you, the Seller and your and
its respective affiliates and us and our affiliates with respect to any
liability related to the use or misuse of the contents of such Information
Materials or any related marketing material by the recipients thereof. You
acknowledge that the following documents contain solely Public Lender
Information, unless, after having been given a reasonable opportunity to review
such documents, you notify us promptly that any such document contains Private
Lender Information: (i) term sheets and drafts and final definitive
documentation with respect to the Facilities, (ii) administrative materials
prepared by the Commitment Parties for prospective Lenders (such as a lender
meeting invitation, allocations and funding and closing memoranda) and
(iii) notification of changes in the terms of the Facilities. At our request,
you shall identify that portion of the Information Materials to be distributed
to Public Lenders by clearly and conspicuously marking the same as “PUBLIC” (it
being understood that you shall not otherwise be under any obligation to mark
Information Materials as “PUBLIC”).

 

5. Fees.

As consideration for the commitments of the Initial Lenders hereunder and the
Lead Arrangers’ agreement to perform the services described herein, you agree to
pay (or cause to be paid) the fees set forth in the Fee Letter on the terms and
subject to the conditions (including as to timing and amount) set forth therein.
Once paid, such fees shall not be refundable under any circumstances, except as
otherwise contemplated herein or by the Fee Letter or as otherwise separately
agreed to in writing by you and us.

 

6. Conditions Precedent.

The commitments of the Initial Lenders hereunder to fund the Facilities on the
Closing Date and the Lead Arrangers’ agreement to perform the services described
herein are subject only to the applicable conditions set forth in Exhibit C
hereto, and upon satisfaction (or waiver by the Commitment Parties) of such
conditions, the initial funding of the Facilities shall occur; it being
understood and agreed that there are no other conditions (implied or otherwise)
to the commitments hereunder, including compliance with the terms of the
Commitment Letter, the Fee Letter and the Facilities Documentation.

Notwithstanding anything in this Commitment Letter, the Fee Letter, the
Facilities Documentation or any other letter agreement or other undertaking
concerning the financing of the Transactions to the contrary, (i) the only
representations and warranties the accuracy of which shall be a condition on the
Closing Date shall be (A) such of the representations and warranties made by or
with respect to the Target and their subsidiaries in the Acquisition Agreement
as are material to the interests of the Initial Lenders, but only to the extent
that you have (or your applicable affiliate has) the right (taking into account
any applicable cure provisions), pursuant to the Acquisition Agreement, to
terminate your (or its) obligations under the Acquisition Agreement to
consummate the Acquisition (or the right not to consummate the Acquisition
pursuant to the Acquisition Agreement) as a result of a breach of such

 

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representations and warranties (the “Specified Acquisition Agreement
Representations”) and (B) the Specified Representations (as defined below) and
(ii) the terms of the Facilities Documentation and the Closing Deliverables (as
defined in Exhibit C hereto) shall be in a form such that they do not impair the
initial funding under the Facilities on the Closing Date if the conditions
expressly set forth in Exhibit C hereto are satisfied (or waived by the Lead
Arrangers) (it being understood that, to the extent any security interest in any
Collateral is not or cannot be provided and/or perfected (other than (A) a lien
on Collateral that may be perfected by the filing of a financing statement under
the Uniform Commercial Code (“UCC”) or (B) a pledge of the equity interests of
the Borrower’s material wholly owned U.S. restricted subsidiaries (solely to the
extent required in the Term Sheets) with respect to which a lien may be
perfected upon closing by the delivery of a stock or equivalent certificate) to
the extent required under the Term Sheets on the Closing Date after your use of
commercially reasonable efforts to do so without undue burden or expense, then
the provision and/or perfection of security interests in such Collateral shall
not constitute a condition precedent to the initial funding of the Facilities on
the Closing Date, but shall be required to be provided and/or perfected within
90 days after the Closing Date (subject to extensions by the Administrative
Agent)). For purposes hereof, “Specified Representations” means the
representations and warranties of the Borrower and the Guarantors set forth in
the Facilities Documentation relating to corporate or other organizational
existence of the Borrower and the Guarantors; organizational power and authority
(as to execution, delivery and performance of the Facilities Documentation) of
the Borrower and the Guarantors; the due authorization, execution, delivery and
enforceability of the Facilities Documentation; solvency as of the Closing Date
(after giving effect to the Transactions) of the Borrower and its restricted
subsidiaries on a consolidated basis (such representation and warranty to be
consistent with the solvency certificate in the form set forth in Annex I
attached to Exhibit C hereto); no conflicts of Facilities Documentation (limited
to the execution, delivery, and performance of the Facilities Documentation,
incurrence of the indebtedness thereunder and the granting of the guarantees and
the security interests in respect thereof) with organizational documents; the
PATRIOT Act; use of proceeds of the Facilities not violating OFAC or FCPA;
Federal Reserve margin regulations; the Investment Company Act; and the
creation, validity and perfection of security interests in the Collateral to the
extent required on the Closing Date (subject to permitted liens as set forth in
the Facilities Documentation and the limitations set forth in the preceding
provisions of this Section 6 and the Term Sheets). This paragraph and the
provisions contained herein shall be referred to as the “Certain Funds
Provision”.

 

7. Indemnification; Expenses.

You agree (a) to indemnify and hold harmless each of the Commitment Parties,
their respective affiliates and controlling persons and the respective officers,
directors, members, partners, advisors, employees, agents and representatives of
each of the foregoing and their successors and permitted assigns (each, an
“Indemnified Person”) from and against any and all losses, claims, damages,
liabilities and out-of-pocket expenses, joint or several, to which any such
Indemnified Person may become subject arising out of, resulting from or in
connection with any actual or threatened claim, dispute, litigation,
investigation or proceeding relating to this Commitment Letter, the Fee Letter,
any aspect of the Transactions or the Facilities or the use of proceeds thereof
(any of the foregoing, an “Action”), regardless of whether any such Indemnified
Person is a party thereto, whether or not such Action is brought by you, your
equity holders, affiliates, creditors or any other person, and to reimburse each
such Indemnified Person within 30 days after receipt of a written request
together with reasonably detailed backup documentation for any reasonable
out-of-pocket legal (limited to one counsel for all Indemnified Persons taken as
a whole and, if reasonably necessary, a single local counsel for all Indemnified
Persons taken as a whole in each relevant jurisdiction and, solely in the case
of a conflict of interest, one additional counsel in each relevant jurisdiction
to the affected Indemnified Persons similarly situated taken as a whole) or
other reasonable and documented out-of-pocket expenses incurred in connection
with investigating, preparing to defend or defending, or providing evidence in
or preparing to serve or serving as a witness with respect to, any of the
foregoing; provided that the foregoing indemnity will not, as to

 

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any Indemnified Person, apply to losses, claims, damages, liabilities or
expenses (i) to the extent resulting from the willful misconduct, bad faith or
gross negligence of such Indemnified Person or any of its Related Indemnified
Persons (as defined below), (ii) to the extent resulting from a material breach
of the obligations of such Indemnified Person or any of its Related Indemnified
Persons under this Commitment Letter, the Fee Letter or the Facilities
Documentation (in the case of each of the preceding clauses (i) and (ii), as
determined by a court of competent jurisdiction in a final non-appealable
judgment) or (iii) to the extent arising from any dispute solely among
Indemnified Persons other than any claims against any Commitment Party in its
capacity or in fulfilling its role as an Administrative Agent or arranger or any
similar role under any Facility and other than any claims arising out of any act
or omission on the part of you or your affiliates (as determined by a court of
competent jurisdiction in a final non-appealable judgment), and (b) to reimburse
the Commitment Parties and each of their respective affiliates from time to
time, upon presentation of a summary statement, together with any supporting
documentation reasonably requested by you, for all reasonable and documented
out-of-pocket expenses (including but not limited to out-of-pocket expenses of
the Commitment Parties’ due diligence investigation, syndication expenses,
travel expenses and reasonable fees, disbursements and other charges of one
counsel to the Commitment Parties identified in the Term Sheets and, if
necessary, of a single local counsel to the Commitment Parties in each relevant
jurisdiction), in each case incurred in connection with the Facilities and the
preparation of this Commitment Letter, the Fee Letter, the Facilities
Documentation and any security arrangements in connection therewith (such
expenses in this clause (b), collectively, the “Expenses”); provided that you
shall not be required to reimburse any of the Expenses in the event the Closing
Date does not occur. Notwithstanding any other provision of this Commitment
Letter, (i) no Indemnified Person or any other party hereto 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, except to the extent such damages are found in a final
non-appealable judgment of a court of competent jurisdiction to have resulted
from the willful misconduct, bad faith or gross negligence of such Indemnified
Person, any Related Indemnified Person or such other party hereto, as
applicable, and (ii) neither (x) any Indemnified Person or any of its Related
Indemnified Persons, nor (y) you (or any of your subsidiaries or affiliates) or
the Seller (or any of its subsidiaries or affiliates) shall be liable for any
indirect, special, punitive or consequential damages (with respect to you in the
case of this clause (y), other than pursuant to the indemnification provisions
of this Commitment Letter in respect of any such damages incurred or paid by an
Indemnified Person to a third party) in connection with this Commitment Letter,
the Fee Letter, the Facilities, the Transactions (including the Facilities and
the use of proceeds thereunder), or with respect to any activities related to
the Facilities. 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.
You shall not be liable for any settlement of any Action effected without your
prior written consent (which consent shall not be unreasonably withheld,
conditioned or delayed), but if settled with your written consent or if there is
a final non-appealable judgment by a court of competent jurisdiction against an
Indemnified Person in any such Action, you agree to indemnify and hold harmless
each Indemnified Person in the manner set forth above. You shall not, without
the prior written consent of the affected Indemnified Person (which consent
shall not be unreasonably withheld, conditioned or delayed), effect any
settlement of any pending or threatened Action against such Indemnified Person
in respect of which indemnity has been sought hereunder by such Indemnified
Person unless such settlement (i) includes an unconditional release of such
Indemnified Person in form and substance reasonably satisfactory to such
Indemnified Person from all liability or claims that are the subject matter of
such Action and (ii) does not include any statement as to any admission of fault
or culpability of such Indemnified Person. Notwithstanding the foregoing, each
Indemnified Person (and its Related Indemnified Persons) shall be obligated to
refund and/or return promptly any and all amounts paid by you or on your behalf
under this paragraph to such Indemnified Person (or its Related Indemnified
Persons) for any such losses, claims, damages, liabilities and expenses to the
extent such Indemnified Person (or its Related Indemnified Persons) is not
entitled to payment of such amounts in accordance with the terms hereof.

 

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For purposes hereof, a “Related Indemnified Person” of an Indemnified Person
means (1) any controlling person or controlled affiliate of such Indemnified
Person, (2) the respective directors, officers, or employees of such Indemnified
Person or any of its controlling persons or controlled affiliates and (3) the
respective agents or representatives of such Indemnified Person or any of its
controlling persons or controlled affiliates, in the case of this clause (3),
acting on behalf of or at the instructions of such Indemnified Person,
controlling person or such controlled affiliate; provided that each reference to
a controlled affiliate, director, officer or employee in this sentence pertains
to a controlled affiliate, director, officer or employee involved in the
negotiation or syndication of this Commitment Letter and the Facilities.

 

8. Sharing Information; Absence of Fiduciary Relationship; Affiliate Activities.

You acknowledge that the Commitment Parties and their affiliates may be
providing debt financing, equity capital or other services (including without
limitation investment banking and financial advisory services, securities
trading, hedging, financing and brokerage activities and financial planning and
benefits counseling) to other companies in respect of which you, the Seller or
the Target may have conflicting interests. We will not furnish confidential
information obtained from or on behalf of you or the Seller or Target by virtue
of the transactions contemplated by this Commitment Letter or our other
relationships with you, the Seller or the Target to other companies (except as
contemplated below in Section 12). You also acknowledge that we do not have any
obligation to use in connection with the transactions contemplated by this
Commitment Letter, or to furnish to you or the Seller, confidential information
obtained by us or any of our respective affiliates from other companies.

You further acknowledge and agree that (a) no fiduciary, advisory or agency
relationship between you and your affiliates and the Commitment Parties and/or
their affiliates is intended to be or has been created in respect of any of the
transactions contemplated by this Commitment Letter, irrespective of whether the
Commitment Parties have advised or are advising you on other matters, (b) the
Commitment Parties, on the one hand, and you, on the other hand, have an
arm’s-length business relationship that does not directly or indirectly give
rise to, nor do you rely on, any fiduciary duty on the part of the Commitment
Parties and you waive, to the fullest extent permitted by law, any claims you
may have against us for breach of fiduciary duty or alleged breach of fiduciary
duty in connection with the Transactions and agree that we will have no
liability (whether direct or indirect) to you in respect of such a fiduciary
duty claim or to any person asserting a fiduciary duty claim on your behalf,
including equity holders, employees or creditors, (c) you are capable of
evaluating and understanding, and you understand and accept, the terms, risks
and conditions of the transactions contemplated by this Commitment Letter,
(d) you have been advised that the Commitment Parties and their affiliates are
engaged in a broad range of transactions that may involve interests that differ
from your and your affiliates’ interests and that the Commitment Parties have no
obligation to disclose such interests and transactions to you or your
affiliates, (e) you have consulted your own legal, accounting, regulatory and
tax advisors to the extent you have deemed appropriate and (f) each Commitment
Party has been, is and will be acting solely as a principal and, except as
otherwise expressly agreed in writing by the relevant parties, has not been, is
not and will not be acting as an advisor, agent or fiduciary for you, any of
your affiliates or any other person or entity. In addition, the Commitment
Parties may employ the services of their respective affiliates in providing
certain services hereunder and may exchange with such affiliates in connection
therewith information concerning you and the Target, and such affiliates shall
be entitled to the benefits afforded to, and be subject to the obligations of,
the Commitment Parties under this Commitment Letter. You acknowledge and agree
that we have not provided you with legal, tax or accounting advice and that you
have obtained such independent advice from your own advisors, representatives
and agents.

 

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You further acknowledge that each Commitment Party and/or its affiliates is a
full service securities firm engaged in securities trading and brokerage
activities as well as providing investment banking and other financial services.
In the ordinary course of business, each Commitment Party may provide investment
banking and other financial services to, and/or acquire, hold or sell, for its
own accounts and the accounts of customers, equity, debt and other securities
and financial instruments (including bank loans and other obligations) of, the
Company, the Seller and their respective subsidiaries and other companies with
which the Company, the Seller or their respective subsidiaries may have
commercial or other relationships. With respect to any securities and/or
financial instruments so held by the Commitment Parties, their affiliates or any
of their respective customers, all rights in respect of such securities and
financial instruments, including any voting rights, will be exercised by the
holder of the rights, in its sole discretion.

 

9. Assignments; Amendments; Governing Law, Etc.

This Commitment Letter and the commitments hereunder shall not be assignable by
any party hereto without the prior written consent of each other party hereto
(and any attempted assignment without such consent shall be null and void), is
intended to be solely for the benefit of the parties hereto (and Indemnified
Persons), is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto (and Indemnified Persons) and
is not intended to create a fiduciary relationship among the parties hereto.
Subject to the limitations set forth in Section 3, any and all services to be
provided by the Commitment Parties hereunder may be performed by or through any
of their respective affiliates or branches. This Commitment Letter may not be
amended or any provision hereof waived or modified except by an instrument in
writing signed by the Commitment Parties and you. This Commitment Letter may be
executed in any number of counterparts, each of which shall be an original and
all of which, when taken together, shall constitute one agreement. Delivery of
an executed counterpart of a signature page of this Commitment Letter by
facsimile transmission or by “.pdf” or similar electronic transmission shall be
effective as delivery of a manually executed counterpart hereof. Section
headings used herein are for convenience of reference only, are not part of this
Commitment Letter and are not to affect the construction of, or to be taken into
consideration in interpreting, this Commitment Letter. This Commitment Letter,
together with the Fee Letter, supersedes all prior understandings, whether
written or oral, among us with respect to the Facilities and sets forth the
entire understanding of the parties hereto with respect thereto. THIS COMMITMENT
LETTER, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
COMMITMENT 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 a Target Material Adverse Effect and whether there shall have
occurred a Target Material Adverse Effect, (b) whether the Acquisition has been
consummated as contemplated by the Acquisition Agreement and (c) whether as a
result of any inaccuracy of a Specified Acquisition Agreement Representation you
have the right to terminate your obligations under the Acquisition Agreement to
consummate the Acquisition (or the right not to consummate the Acquisition
pursuant to the Acquisition Agreement) shall, in each case, be determined
pursuant to the Acquisition Agreement, which is governed by, and construed in
accordance with the laws of, the State of Delaware without giving effect to any
conflicts of laws principles, provisions or rules (whether of the State of
Delaware or any other jurisdiction) that would result in the application of the
laws of any jurisdiction other than the State of Delaware.

 

10. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THE
ACQUISITION OR THIS COMMITMENT LETTER, THE FEE LETTER OR THE PERFORMANCE OF
SERVICES HEREUNDER OR THEREUNDER.

 

9

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11. Jurisdiction.

Each of the parties hereto hereby irrevocably and unconditionally (a) submits,
for itself and its property, to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America, in each case, sitting in
the Borough of Manhattan in the City of New York, and any appellate court from
any thereof, as to any action or proceeding arising out of or relating to this
Commitment Letter, the Fee Letter or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and agrees that all
claims in respect of any such action or proceeding shall be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court, (b) waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Commitment Letter,
the Fee Letter or the transactions contemplated hereby or thereby in any court
in which such venue may be laid in accordance with clause (a) of this sentence,
(c) waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court and (d) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Service of any process,
summons, notice or document by registered mail or overnight courier addressed to
any of the parties hereto at the addresses set forth above shall be effective
service of process against such party for any suit, action or proceeding brought
in any such court.

 

12. Confidentiality.

This Commitment Letter is delivered to you on the understanding that none of
this Commitment Letter or the Fee Letter or their terms or substance shall be
disclosed, directly or indirectly, to any other person or entity (including
other lenders, underwriters, placement agents, advisors or any similar persons)
except (a) to your officers, directors, employees, affiliates, members,
partners, stockholders, attorneys, accountants, agents and advisors on a
confidential basis, (b) if the Commitment Parties consent to such proposed
disclosure, (c) this Commitment Letter, including the Term Sheets and the other
annexes, schedules and exhibits hereto, and the contents thereof, may be
disclosed as may be required by the rules, regulations, schedules and forms of
the Securities and Exchange Commission (the “SEC”) in connection with any
filings with the SEC in connection with the Transactions (in which case you
agree to inform us promptly thereof to the extent lawfully permitted to do so)
or (d) pursuant to the order of any court or administrative agency in any
pending legal or administrative proceeding, or otherwise as required by
applicable law, regulation, compulsory legal process or as requested by a
governmental authority (in which case you agree to inform us promptly thereof to
the extent practicable and so long as you are lawfully permitted to do so);
provided that (i) in connection with the Transactions, you may disclose this
Commitment Letter and the contents thereof and, on a redacted basis in a manner
reasonably acceptable to the Commitment Parties, the Fee Letter and the contents
thereof to the Seller and its subsidiaries and their respective officers,
directors, employees, attorneys, accountants, agents and advisors, on a
confidential basis, (ii) you may disclose the aggregate fee amounts (including
upfront fees and original issue discount) payable under the Fee Letter as part
of generic disclosure regarding sources and uses (but without disclosing any
specific fees, flex or other economic terms set forth therein) in connection
with any syndication of the Facilities as part of a disclosure of overall
transaction fees and expenses (not limited to fees associated with the
Facilities) to the Seller and its subsidiaries and their respective officers,
directors, employees, attorneys, accountants, agents and advisors, (iii) you may
disclose to the Company’s auditors the Fee Letter and the contents thereof after
the Closing Date for customary accounting purposes, including accounting for
deferred financing costs and (iv) you may disclose the Term Sheets and the
existence of this Commitment Letter and the contents hereof (but, for the
avoidance of doubt, not the Fee

 

10

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Letter or the contents thereof) in any syndication of the Facilities or in any
proxy statement or other public filing in connection with the Acquisition;
provided, further, that the foregoing restrictions shall cease to apply in
respect of the existence and contents of this Commitment Letter (but not in
respect of the Fee Letter and its fees and substance) on the date that is two
years following the termination of this Commitment Letter in accordance with its
terms.

Each Commitment Party, on behalf of itself and its affiliates, agrees that it
will use all information provided to it or its affiliates by or on behalf of you
hereunder solely for the purpose of providing the services which are the subject
of this Commitment Letter and shall treat confidentially all such information
and the terms and contents of this Commitment Letter, the Fee Letter and the
Facilities Documentation and shall not publish, disclose or otherwise divulge
such information; provided that nothing herein shall prevent a Commitment Party
or its affiliates who are providing services hereunder from disclosing any such
information (a) pursuant to the order of any court or administrative agency or
otherwise as required by applicable law, regulation, compulsory legal process or
as requested by a governmental authority (in which case such Commitment Party,
to the extent practicable and so long as it is permitted by law and except in
connection with any order or request as part of a regulatory examination or
audit, agrees to inform you promptly thereof), (b) upon the request or demand of
any regulatory authority (including any self-regulatory authority) having
jurisdiction over such Commitment Party or any of its affiliates (in which case
such Commitment Party agrees to inform you promptly thereof prior to such
disclosure to the extent practicable, unless such Commitment Party is prohibited
by applicable law from so informing you, or except in connection with any
request as part of a regulatory examination or audit), (c) to the extent that
such information becomes publicly available other than by reason of disclosure
by such Commitment Party or any of its affiliates in violation of this
paragraph, (d) to the extent that such information is received by such
Commitment Party from a third party that is not to such Commitment Party’s
knowledge subject to confidentiality obligations to you or the Seller (or your
or its respective affiliates), (e) to the extent that such information is
independently developed by such Commitment Party or its affiliates, in each
case, so long as not based on information obtained in a manner that would
otherwise violate this provision, (f) to such Commitment Party’s affiliates and
its and their officers, directors, employees, legal counsel, independent
auditors and other experts, professionals, advisors or agents (collectively, the
“Representatives”) who need to know such information in connection with the
Transactions and are informed of the confidential nature of such information
(provided that no such disclosure shall be made by the Commitment Parties, their
respective affiliates or any of their respective Representatives to any such
affiliates that are Disqualified Institutions), (g) to prospective Lenders,
participants or assignees or, with the prior consent of the Company, any
potential counterparty to any swap or derivative transaction relating to the
Company or any of its subsidiaries or any of their respective obligations (in
each case, other than a Disqualified Institution); provided that such disclosure
shall be made subject to the acknowledgment and acceptance by such prospective
Lender, participant, assignee or counterparty, on behalf of itself and its
Representatives, that such information is being disseminated on a confidential
basis (on substantially the terms set forth in this paragraph or as is otherwise
reasonably acceptable to you and the Commitment Parties, including, without
limitation, as set forth in any Information Materials) in accordance with the
standard syndication process of the Commitment Parties or market standards for
dissemination of such type of information which, in the case of any electronic
access, shall in any event require “click through” or other affirmative action
on the part of the recipient to access such confidential information, (h) for
purposes of establishing a “due diligence” defense or (i) with your prior
written consent. In addition, each Commitment Party may disclose the existence
of the Facilities and the information about the Facilities to market data
collectors, similar service providers to the lending industry and service
providers to the Commitment Parties in connection with the administration and
management of the Facilities. Each Commitment Party’s obligations under this
paragraph shall automatically terminate and be superseded by the confidentiality
provisions in the definitive documentation relating to each of the Facilities
upon the execution and delivery of the definitive documentation therefor and in
any event shall terminate two years from the date hereof. A

 

11

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Commitment Party shall be principally liable to the extent any confidentiality
restrictions set forth herein are violated by one or more of its affiliates or
any of its or their Representatives to whom such Commitment Party has disclosed
information pursuant to clause (f) in the proviso in the first sentence of this
paragraph.

 

13. Surviving Provisions.

The provisions of this Section 13 and the indemnification, confidentiality,
jurisdiction, service of process, venue, governing law, absence of advisory or
fiduciary duty and waiver of jury trial, information and syndication provisions
contained herein and the alternate transaction fee, administrative fees, Flex
Provisions (as defined in the Fee Letter) and governing law provisions contained
in the Fee Letter shall remain in full force and effect regardless of whether
definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or the Initial
Lenders’ commitments hereunder and the Lead Arrangers’ agreements to provide the
services described herein; provided that your obligations under this Commitment
Letter, other than those relating to confidentiality, information and to the
syndication of the Facilities, shall automatically terminate and, to the extent
covered thereby, be superseded by the definitive documentation relating to the
Facilities upon the initial funding under the Facilities, and you shall be
released from all liability in connection therewith at such time. You may
terminate this Commitment Letter and/or, reduce on a pro rata basis, the Initial
Lenders’ commitments with respect to any Facility (or any portion thereof pro
rata across such Facility) hereunder at any time subject to the provisions of
the preceding sentence.

 

14. Patriot Act Notification.

We 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) (as amended, the
“Patriot Act”), each Commitment Party and each Lender is required to obtain,
verify and record information that identifies the Borrower and each Guarantor,
which information includes the name, address, tax identification number, if any,
and other information regarding the Borrower and each such Guarantor that will
allow such Commitment Party or such Lender to identify the Borrower and each
such Guarantor in accordance with the Patriot Act. This notice is given in
accordance with the requirements of the Patriot Act and is effective as to the
Commitment Parties and each Lender.

 

15. Acceptance and Termination.

If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms of this Commitment Letter and of the Fee Letter by
returning to the Lead Arrangers executed counterparts hereof and of the Fee
Letter not later than 11:59 p.m., New York City time, on March 25, 2016. Each
Commitment Party’s respective commitments hereunder and agreements contained
herein will expire at such time in the event that the Lead Arrangers have not
received such executed counterparts in accordance with the immediately preceding
sentence. This Commitment Letter and the commitments and undertakings of the
Commitment Parties hereunder shall automatically terminate (a) in the event that
the initial borrowing in respect of the Facilities does not occur on or before
5:00 p.m., New York City time on June 28, 2016, unless each of the Commitment
Parties shall, in their discretion, agree to an extension, or (b) if earlier,
upon either (i) the valid termination of the Acquisition Agreement in accordance
with its terms prior to the closing of the Acquisition or (ii) the consummation
of the Acquisition with or without the use of the Facilities (unless the
Commitment Parties have failed to fund in breach of their obligations
hereunder); provided that the termination of any commitment pursuant to this
sentence does not prejudice our or your rights and remedies in respect of any
breach of this Commitment Letter.

 

12

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Each of the parties hereto agrees that this Commitment Letter is a binding and
enforceable agreement with respect to the subject matter contained herein,
including an agreement to negotiate in good faith the Facilities Documentation
by the parties hereto in a manner consistent with this Commitment Letter, it
being acknowledged and agreed that the commitments provided hereunder (and the
initial funding in respect thereof) by the Commitment Parties are subject only
to the conditions precedent set forth in Exhibit C hereto, including the
execution and delivery of the Facilities Documentation (which shall be
negotiated in good faith as required by the Documentation Principles).

[Remainder of this page intentionally left blank]

 

13

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The Commitment Parties are pleased to have been given the opportunity to assist
you in connection with the financing for the Transactions.

 

Very truly yours, BANK OF AMERICA, N.A. By:  

/s/ Monica Sevila

Name:   Monica Sevila Title:   Senior Vice President MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED By:  

/s/ D. Clay Hall

Name:   D. Clay Hall Title:   Director CITIBANK, N.A. By:  

/s/ Michael Berry

Name:   Michael Berry Title:   Authorized Signatory KEYBANK NATIONAL ASSOCIATION
By:  

/s/ Stacy Moritz

Name:   Stacy Moritz Title:   Managing Director KEYBANC CAPITAL MARKETS INC. By:
 

/s/ Stacy Moritz

Name:   Stacy Moritz Title:   Managing Director

 

[Project Wild Commitment Letter]

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SUNTRUST BANK By:  

/s/ David Dutton

Name:   David Dutton Title:   Vice President SUNTRUST ROBINSON HUMPHREY, INC.
By:  

/s/ Michael Chung

Name:   Michael Chung Title:   Director

 

[Project Wild Commitment Letter]

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Accepted and agreed to as of the date first above written: MERCURY SYSTEMS, INC.
By:  

/s/ Gerald M. Haines

Name:   Gerald M. Haines II Title:   Executive Vice President & Chief Financial
Officer

 

[Project Wild Commitment Letter]

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Schedule 1

 

Commitment Party

   Term Loan A
Facility   Revolving Facility

Bank of America

   25%   25%

Citi

   25%   25%

KeyBank

   25%   25%

SunTrust

   25%   25%

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EXHIBIT A

Project Wild

$265,000,000 Term Loan A Facility

$75,000,000 Revolving Facility

Transaction Description1

It is intended that:

(a) the Company will consummate the Acquisition pursuant to the Acquisition
Agreement;

(b) the Borrower will obtain the senior secured credit facilities described in
the Summary of Principal Terms and Conditions attached as Exhibit B to the
Commitment Letter (the “Facilities Term Sheet”) in an aggregate principal amount
of $340.0 million, comprised of a $265.0 million term loan facility (the “Term
Loan A Facility”) available to the Borrower and a $75.0 million revolving credit
facility (the “Revolving Facility”); provided that the amount of the term loan
facility shall be reduced dollar for dollar by the net cash proceeds (if any)
received by the Borrower prior to or on the Closing Date from any Pre-Closing
Equity Offering (as defined below).

(c) the Company intends to consummate a public offering and sale of its common
equity interests after the date hereof and prior to or on the Closing Date (any
such public offering and sale, the “Pre-Closing Equity Offering”) (it being
understood that the ability for the Company to so consummate such an offering is
subject to market conditions and that no such offering and sale may be
consummated prior to or on the Closing Date).

(d) (i) all indebtedness under that certain Credit Agreement, dated as of
October 12, 2012, by and among Mercury Computer Systems, Inc., KeyBank National
Association, as administrative agent, and the lenders and other parties thereto
(as amended, restated, supplemented or otherwise modified through the Closing
Date) shall be paid in full, and all commitments, security interests and
guaranties in connection therewith shall be terminated and released and (ii) the
guarantees of the Target and/or its subsidiaries, and any security interests
granted in the Target, its subsidiaries and their assets shall be terminated and
released under (A) that certain Guarantee and Collateral Agreement, dated as of
January 15, 2016, by and among Microsemi Corporation, the other Grantors party
thereto and Morgan Stanley Senior Funding, Inc. and (B) that certain Indenture,
dated as of January 15, 2016, by and among Microsemi Corporation, the guarantors
named therein and U.S. Bank National Association.

The transactions described in clauses (a) through (d) above, together with the
transactions related thereto, are collectively referred to herein as the
“Transactions”, and the transactions described in clause (d) above are
collectively referred to herein as the “Refinancing”. This Exhibit A, the
Facilities Term Sheet and the Conditions Precedent attached as Exhibit C to the
Commitment Letter are collectively referred to herein as the “Term Sheets”. The
Term Loan A Facility and Revolving Facility are collectively referred to herein
as the “Facilities”. For purposes of this Commitment Letter, “Closing Date”
shall mean the date of the initial funding under the Facilities and the
consummation of the Refinancing and the Acquisition.

 

 

1  All capitalized terms used but not defined herein have the meanings given to
them in the Commitment Letter to which this Exhibit is attached, including the
other Exhibits thereto. In the event any such capitalized term is subject to
multiple and differing definitions, the appropriate meaning thereof in this
Exhibit shall be determined by reference to the context in which it is used.

 

A-1

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EXHIBIT B

Project Wild

$265,000,000 Term Loan A Facility

$75,000,000 Revolving Facility

Summary of Principal Terms and Conditions2

 

Borrower:    Mercury Systems, Inc. (the “Borrower” or the “Company”).
Administrative Agent:    Bank of America will act as sole and exclusive
administrative agent (in such capacity, the “Administrative Agent”) and
collateral agent for a syndicate of banks, financial institutions and
institutional lenders excluding any Disqualified Institutions and otherwise
reasonably acceptable to the Borrower (together with the Initial Lenders, the
“Lenders”), and will perform the duties customarily associated with such roles.
Bookrunners and Lead Arrangers:    MLPF&S, Citi, KBCM and STRH will act as joint
lead arrangers for the Facilities (the “Lead Arrangers”) and as joint
bookrunners, and will perform the duties customarily associated with such roles.
Facilities:   

(A)

   A senior secured term loan A facility in an aggregate principal amount of
$265.0 million (the “Term Loan A Facility”; the loans thereunder, the “Term
Loans”); provided that the amount of the term loan facility shall be reduced
dollar for dollar by the net cash proceeds (if any) received by the Borrower
prior to or on the Closing Date from any Pre-Closing Equity Offering (as defined
in Exhibit A).   

(B)

   A senior secured revolving credit facility in an aggregate principal amount
of $75.0 million (the “Revolving Facility” and, together with the Term Loan A
Facility, the “Facilities”), available in U.S. dollars, of which up to an amount
to be agreed (and in any event no less than $10.0 million) will be available in
the form of stand-by and trade letters of credit (collectively, “Letters of
Credit” and individually, a “Letter of Credit”) to be issued at the request of
the Borrower for the account of the Borrower or any of its restricted
subsidiaries    In connection with the Revolving Facility, Bank of America (in
such capacity, the “Swingline Lender”) will make available to the Borrower a
swingline facility under which the Borrower may make short-term borrowings in
U.S. Dollars of up to an amount to be agreed (and in any event no less than
$10.0 million). Except for purposes of calculating the Commitment Fee described
below, any such swingline borrowings will reduce availability under the
Revolving Facility on a dollar-for-dollar basis.

 

 

2  All capitalized terms used but not defined herein have the meanings given to
them in the Commitment Letter to which this Term Sheet is attached, including
the other Exhibits thereto. In the event any such capitalized term is subject to
multiple and differing definitions, the appropriate meaning thereof in this
Exhibit shall be determined by reference to the context in which it is used.

 

B-1

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   Each Lender under the Revolving Facility shall, promptly upon request by the
Swingline Lender, fund to the Swingline Lender its pro rata share of any
swingline borrowings.    If any Lender becomes a Defaulting Lender (to be
defined in a manner consistent with the Documentation Principles), then the
swingline exposure of such Defaulting Lender will automatically be reallocated
among the non-Defaulting Lenders pro rata in accordance with their commitments
under the Revolving Facility up to an amount such that the revolving credit
exposure of such non-Defaulting Lender does not exceed its commitments. In the
event such reallocation does not fully cover the exposure of such Defaulting
Lender, the Swingline Lender may require the Borrower to repay such “uncovered”
exposure in respect of the swingline loans and will have no obligation to make
new swingline loans to the extent such swingline loans would exceed the
commitments of the non-Defaulting Lenders. Incremental Facilities:   

The Facilities Documentation (as defined below), with terms other than as set
forth below consistent with the Documentation Principles, will permit the
Borrower to (a) add one or more incremental term loan tranches or evidence an
increase in loans under the Term Loan A Facility or any other then-existing term
loan tranche (any such additional term loan tranches or increase in loans under
an existing term loan tranche, an “Incremental Term Facility”) and (b) add one
or more revolving credit facility tranches or increase commitments under the
Revolving Facility or any other then-existing revolving facility tranche (any
such revolving credit facility tranche or increase, a “Incremental Revolving
Facility”; the Incremental Term Facilities and the Incremental Revolving
Facilities are collectively referred to as “Incremental Facilities”); provided
that:

 

(i) if the proceeds under any Incremental Facility are to be used to finance a
permitted acquisition whose consummation is not conditioned on the availability
of, or on obtaining, third party financing, the conditions to the availability
or borrowing under such Incremental Facility related to the accuracy of
representations and warranties or the absence of a default or event of default
(other than payment or bankruptcy events of default) may be waived or limited,
as agreed between the Borrower and the lenders providing such Incremental
Facility without the consent of the existing Lenders;

 

(ii) any Incremental Facility will rank pari passu with the Facilities in right
of payment and security and shall be guaranteed by the Guarantors;

 

(iii) any Incremental Term Facility (x) will have a final scheduled maturity
date no earlier than the then-final scheduled maturity date of the original Term
Loan A Facility and (y) that is an increase in loans to an existing tranche of
term loans shall be on the same terms (including maturity date and, other than
with respect to original issue discount or upfront fees, interest rates) and
pursuant to the same documentation (other than the amendment evidencing such
Incremental Term Facility) applicable to such term loan tranche;

   (iv) (A) with respect to any Incremental Term Facility, the weighted average
life to maturity shall be no shorter than that of the Term Loan A Facility

 

B-2

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(without giving effect to prepayments that would otherwise modify the weighted
average life to maturity of the Term Loan A Facility), (B) no Incremental
Revolving Facility shall provide for scheduled amortization or mandatory
commitment reductions prior to the then final scheduled maturity date of the
Revolving Facility and (C) subject to preceding clause (A) and clause (iii)
above, any Incremental Term Facility may otherwise have an amortization schedule
as determined by the Borrower and the lenders thereunder;

 

(v) the all-in yield on (whether in the form of margin, original issue discount
or otherwise), and any fees payable in connection with, any such Incremental
Facility shall be determined by the Borrower and the arrangers and/or lenders
providing such Incremental Facility;

 

(vi) (A) any Incremental Revolving Facility (w) that is an increase in
commitments to the Revolving Facility or any other of the then-existing
Revolving Facilities (as defined below) shall be on the same terms (including
maturity date and interest rates but excluding upfront fees) and pursuant to the
same documentation (other than the amendment evidencing such Incremental
Revolving Facility) applicable to such facility, (x) may provide for the ability
to participate with respect to borrowings and, subject to exceptions consistent
with the Documentation Principles, repayments on a pro rata basis or less than
pro rata basis (but not greater than pro rata basis) with other then-outstanding
Revolving Facilities, (y) may not have a final scheduled maturity date earlier
than the then-final scheduled maturity date of the Revolving Facility but (z)
may provide for the ability to permanently repay and terminate revolving
commitments on a pro rata basis or less than a pro rata basis (but not greater
than a pro rata basis other than with respect to any termination of undrawn
revolving commitments or a permanent repayment of any Revolving Facilities (1)
with the proceeds of a Refinancing Facility or (2) that mature earlier than
outstanding Revolving Facilities) and (B) any Incremental Term Facility may
provide for the ability to participate (x) with respect to any voluntary
prepayments, on a pro rata basis, less than a pro rata basis or greater than a
pro rata basis with the Term Loan A Facility and any other then-existing Term
Facilities (as defined below) and (y) with respect to any mandatory prepayments,
on a pro rata basis or less than a pro rata basis with the Term Loan A Facility
and any other then-existing Term Facilities (but not greater than a pro rata
basis other than with respect to prepayments of any Term Facilities (1) with the
proceeds of Refinancing Facilities or (2) that mature earlier than outstanding
Term Facilities); and

 

(viii) except as otherwise required or permitted in clauses (i) through (vii)
above, all other terms of such Incremental Facility, if not consistent with the
terms of any then-existing term loan tranche or revolving facility tranche, as
the case may be, shall (x) be conformed (or added) in the Facilities
Documentation for the benefit of the Facilities (i.e., if being added or
modified for an Incremental Term Facility, then such provision will be added or
modified for the benefit of the other Term Facilities and the other Revolving
Facilities) pursuant to an amendment thereto subject solely to the reasonable
satisfaction of the Administrative Agent, (y) be applicable solely to periods
after the latest final maturity date of the applicable Facilities existing at
the time of the incurrence of such Incremental Facility) or (z) be reasonably
satisfactory to the Administrative Agent.

 

B-3

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The aggregate principal amount of Incremental Facilities added shall not exceed
at any time the sum of (A) $85.0 million plus (B) an unlimited amount; provided
that after giving pro forma effect to the incurrence of such amount pursuant to
this clause (B) (and after giving effect to any transaction consummated in
connection therewith and all customary pro forma events and adjustments and in
the case of an Incremental Revolving Facility, assuming a full draw on such
Incremental Revolving Facility, but excluding the proceeds of the Incremental
Facility proposed to be incurred from netting in the calculation of the Total
Net Leverage Ratio), the Total Net Leverage Ratio as of the last day of the most
recently ended period of four consecutive fiscal quarters for which financial
statements have been delivered pursuant to the Facilities Documentation does not
exceed 2.50x (with the Borrower to select utilization under clauses (A) or (B)
in its sole discretion) (the sum of the amounts in clauses (A) and (B), the
“Available Incremental Amount”). Any Incremental Facility may be incurred under
either clause (A) or clause (B) as selected by the Borrower in its sole
discretion, including by designating any portion of any Incremental Facility in
excess of an amount permitted to be incurred under clause (B) at the time of
such incurrence as incurred under clause (A).

 

The Borrower may in its sole discretion seek commitments in respect of the
Incremental Facilities from existing Lenders (each of which shall be entitled to
agree or decline to participate in its sole discretion) and additional banks,
financial institutions and other institutional lenders (in the case of such
additional banks, financial institutions and other institutional lenders,
subject to the consent of the Administrative Agent, and in the case of an
Incremental Revolving Facility, each Issuing Bank and the Swingline Lender (in
each case, not to be unreasonably withheld, conditioned or delayed), in each
case if such consent is required under the heading entitled “Assignments and
Participations”) who will become Lenders in connection therewith.

 

In addition, the Borrower may, in lieu of adding Incremental Term Facilities,
issue or incur Incremental Equivalent Debt (as defined below), subject, in the
case of (i) Incremental Equivalent Debt that is secured on a junior lien basis
with the Facilities, to an intercreditor agreement reasonably acceptable to the
Borrower and the Administrative Agent and (ii) Incremental Equivalent Debt that
is subordinated in right of payment to the Facilities, to a subordination
agreement reasonably acceptable to the Borrower and the Administrative Agent.

 

“Incremental Equivalent Debt” means indebtedness issued or incurred in lieu of
loans under any Incremental Term Facility consisting of the issuance or
incurrence of senior or subordinated loans or notes (in each case, which may be
unsecured or secured on a junior lien basis with the Facilities) and, in the
case of notes, issued in a public offering, Rule 144A or other private placement
or bridge in lieu of the foregoing, and subject to customary conditions other
than as set forth below consistent with the Documentation Principles; provided
that (x) except with respect to Incremental Equivalent Debt issued or incurred
in

 

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   lieu of loans under clause (A) of the Available Incremental Amount, after
giving pro forma effect to the incurrence of such Incremental Equivalent Debt
(and after giving effect to any transaction consummated in connection therewith
and all customary pro forma events and adjustments but excluding the proceeds of
the Incremental Equivalent Debt proposed to be incurred from netting in the
calculation of the Total Net Leverage Ratio), the Total Net Leverage Ratio as of
the last day of the most recently ended period of four consecutive fiscal
quarters for which financial statements have been delivered pursuant to the
Facilities Documentation does not exceed 2.50x and (y) such Incremental
Equivalent Debt shall have (1) a final scheduled maturity date no earlier than
91 days after the final scheduled maturity date of the initial Facilities, (2)
no scheduled amortization prior to the final scheduled maturity date of the Term
Loan A Facility, (3) other terms (excluding pricing, fees, rate floors and
optional prepayment or redemption terms) substantially similar to, or (taken as
a whole) no more favorable (as reasonably determined by the Borrower) to the
lenders or holders providing such Incremental Equivalent Debt than, those
applicable to the original Term Loan A Facility (except to the extent applicable
solely to periods after the latest final maturity date of the Facilities
existing at the time of the incurrence of such Incremental Equivalent Debt), (4)
(x) financial maintenance covenants that are not more restrictive than the
Financial Covenants or (y) no financial maintenance covenants and (5) no
mandatory prepayment, redemption or offer to purchase events that are earlier
than the maturity date of the Term Loan A Facility (but may include customary
change of control and asset sale proceeds offers). Refinancing Facilities:   

The Facilities Documentation, with terms other than as set forth below
consistent with the Documentation Principles, will permit the Borrower to
refinance any tranche of term loans under the Facilities Documentation
(including the Term Loan A Facility) or any tranche of revolving commitments
under the Facilities (including the Revolving Facility) from time to time, in
whole or part, by (a) adding one or more term loan tranches to the Facilities
(any such additional term loan tranches, a “Refinancing Term Facility”) and
together with the Term Loan A Facility and any Incremental Term Facilities, the
“Term Facilities” and (b) adding one or more revolving credit facility tranches
(any such revolving credit facility tranche, a “Refinancing Revolving Facility”
and together with the Revolving Facility and any Incremental Revolving
Facilities, the “Revolving Facilities”); the Refinancing Term Facilities and the
Refinancing Revolving Facilities are collectively referred to as “Refinancing
Facilities”); provided that:

 

(i) any Refinancing Facility will (A) rank on the same basis in right of payment
and security as the tranche being refinanced and (B) be guaranteed by the
Guarantors;

 

(ii) no Refinancing Facility will have a final scheduled maturity date (or, in
the case of a Refinancing Revolving Facility, any mandatory commitment reduction
date) earlier than the final scheduled maturity date (and mandatory commitment
reduction dates, if any) of the tranche being refinanced;

 

(iii) (A) with respect to any Refinancing Term Facility, the weighted average
life to maturity shall be no shorter than that of the tranche of term loans
being

 

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refinanced (without giving effect to prepayments that would otherwise modify the
weighted average life to maturity of the tranche of term loans being
refinanced), (B) no Refinancing Revolving Facility shall provide for scheduled
amortization (or, except as set forth in clause (ii) above, mandatory commitment
reductions) prior to the then final scheduled maturity date of the Revolving
Facility and (C) subject to preceding clause (A) and clause (ii) above, any
Refinancing Term Facility may otherwise have an amortization schedule as
determined by the Borrower and the lenders thereunder;

 

(iv) [reserved];

 

(v) the all-in yield on (whether in the form of margin, original issue discount
or otherwise), and any fees payable in connection with, any such Refinancing
Facility shall be determined by the Borrower and the arrangers and/or lenders
providing such Refinancing Facility;

 

(vi) (A) any Refinancing Revolving Facility may provide for the ability to
participate (x) with respect to borrowings and, subject to customary exceptions
consistent with the Documentation Principles, repayments on a pro rata basis or
less than pro rata basis (but not greater than pro rata basis) with other
then-outstanding Revolving Facilities and (y) with respect to permanent
repayments and terminations of revolving commitments, on a pro rata basis or
less than a pro rata basis (but not greater than a pro rata basis other than
with respect to any termination of undrawn revolving commitments or a permanent
repayment of any Revolving Facilities (1) with the proceeds of a Refinancing
Facility or (2) that mature earlier than outstanding Revolving Facilities) and
(B) any Refinancing Term Facility may provide for the ability to participate (x)
with respect to any voluntary prepayments, on a pro rata basis, less than a pro
rata basis or greater than a pro rata basis with the Term Loan A Facility and
any other then-existing Term Facilities and (y) with respect to any mandatory
prepayments, on a pro rata basis or less than a pro rata basis with the Term
Loan A Facility (but not greater than a pro rata basis other than with respect
to prepayments of any Term Facilities (1) with the proceeds of Refinancing Term
Facilities or (2) that mature earlier than outstanding Term Facilities);

 

(vii) the principal amount of such any Refinancing Facility shall not exceed the
principal amount of the tranche of term loans or revolving commitments, as
applicable, so refinanced (plus any accrued but unpaid interest, premiums, fees
and penalties payable by the terms of such tranche of term loans or revolving
commitments, as applicable, thereon and reasonable fees, expenses, original
issue discount and upfront fees incurred in connection with the incurrence of
such Refinancing Facility); and

 

(viii) except as otherwise required or permitted in clauses (i) through (vii)
above, all other terms of such Refinancing Facility, if not consistent with the
terms of any then-existing term loan tranche or revolving facility tranche, as
the case may be, shall (x) be conformed (or added) in the Facilities
Documentation for the benefit of the Facilities (i.e., if being added or
modified for a Refinancing Term Facility, then such provision will be added or
modified for the benefit of the other Term Facilities and the other Revolving
Facilities) pursuant to an amendment thereto subject solely to the reasonable
satisfaction

 

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of the Administrative Agent, (y) be applicable solely to periods after the
latest final maturity date of the applicable Facilities existing at the time of
such refinancing) or (z) be reasonably satisfactory to the Administrative Agent.

 

In addition, the Borrower may, in lieu of adding Refinancing Term Facilities,
issue or incur Refinancing Equivalent Debt (as defined below), subject, in the
case of (i) Refinancing Equivalent Debt that is secured on a junior lien basis
to the Facilities, to an intercreditor agreement reasonably acceptable to the
Borrower and the Administrative Agent and (ii) Refinancing Equivalent Debt that
is subordinated in right of payment to the Facilities, to a subordination
agreement reasonably acceptable to the Borrower and the Administrative Agent.

 

“Refinancing Equivalent Debt” means indebtedness issued or incurred in lieu of
loans under any Refinancing Term Facility consisting of the issuance or
incurrence of senior or subordinated loans or notes (in each case, which may be
unsecured or secured on a junior lien basis with the Term Loan A Facility), and
on terms and subject to conditions consistent with the Documentation Principles;
provided that such Refinancing Equivalent Debt shall have (1) a final scheduled
maturity date no earlier than 91 days after the final scheduled maturity date of
the initial Facilities, (2) no scheduled amortization prior to the final
scheduled maturity date of the Term Loan A Facility, (3) other terms (excluding
pricing, fees, rate floors and optional prepayment or redemption terms) that are
substantially similar to, or (taken as a whole) no more favorable (as reasonably
determined by the Borrower) to the lenders or holders providing such Refinancing
Equivalent Debt than, those applicable to the original Term Loan A Facility
(except to the extent applicable solely to periods after the latest final
maturity date of the Term Facilities existing at the time of such refinancing),
(4) (x) financial maintenance covenants that are not more restrictive than the
Financial Covenants or (y) no financial maintenance covenants and (5) no
mandatory prepayment, redemption or offer to purchase events that are earlier
than the maturity date of the Term Loan A Facility (but may include customary
change of control and asset sale proceeds offers).

Purpose:    (A)    The proceeds of the Term Loan A Facility will be used by the
Borrower on the Closing Date, together with any borrowings under the Revolving
Facility (if any and to the extent contemplated under “Availability” below), the
net cash proceeds of any Pre-Closing Equity Offering and cash on the balance
sheet, solely to pay the consideration for the Acquisition, for the Refinancing
and for the payment of any close-out fees in connection with the termination of
hedging obligations, if any, of the Company, the Target and their respective
subsidiaries (including accrued and unpaid interest and applicable premiums),
and to pay fees, costs and expenses related to the Transactions.    (B)    The
Letters of Credit and proceeds of loans under the Revolving Facility (except as
set forth below) will be used by the Borrower and its subsidiaries solely for
general corporate purposes (including permitted acquisitions and other purposes
not prohibited by the Facilities Documentation).

 

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Availability:    (A)    The Term Loan A Facility will be available to the
Borrower in a single drawing on the Closing Date. Amounts borrowed under the
Term Loan A Facility that are repaid or prepaid may not be reborrowed.   

(B)

  

Loans under the Revolving Facility may be made available on the Closing Date (a)
to finance (i) the Transactions and (ii) fees and expenses related to the
Transactions (including original issue discount and upfront fees, but excluding
original issue discount and upfront fees contemplated by clause (c) below), (b)
to finance ordinary course working capital needs and working capital adjustments
under the Acquisition Agreement and (c) to fund any original issue discount or
upfront fees in connection with the Flex Provisions; provided that amounts
available under clauses (a) and (b) above shall in the aggregate not exceed
$10.0 million.

 

In addition, Letters of Credit may be issued on the Closing Date to backstop or
replace letters of credit, bankers guarantees and performance and similar bonds
outstanding on the Closing Date (including by “grandfathering” such existing
letters of credit or bankers guarantees in the Revolving Facility) or for other
general corporate purposes.

 

Loans under the Revolving Facility will be available at any time prior to the
final maturity of the Revolving Facility, in a minimum principal amount of
$1,000,000 or a whole multiple of $100,000 thereof for Adjusted LIBOR loans and
in a minimum principal amount of $500,000 or a whole multiple of $100,000
thereof for ABR loans. Amounts repaid under the Revolving Facility may be
reborrowed.

Interest Rates and Fees:    As set forth on Annex I hereto. Default Rate:   
With respect to overdue principal, at the applicable interest rate plus 2.00%
per annum, and with respect to any other overdue amount (including overdue
interest), at the interest rate applicable to ABR loans (as defined in Annex I)
plus 2.00% per annum, which, in each case, shall be payable on demand. Letters
of Credit:    Letters of Credit under the Revolving Facility will be issued by
the Administrative Agent and/or another Lender under the Revolving Facility
reasonably acceptable to the Borrower and the Administrative Agent and that
consents in writing to act in such capacity (each, an “Issuing Bank”). Each
Letter of Credit shall expire not later than the earlier of (a) (x) in the case
of a standby Letter of Credit, 12 months after its date of issuance and (y) in
the case of a trade Letter of Credit, 180 days after its date of issuance and
(b) the fifth business day prior to the final maturity of the Revolving Facility
(except to the extent cash collateralized or backstopped pursuant to
arrangements reasonably acceptable to the applicable Issuing Bank and the
Administrative Agent); provided that any standby Letter of Credit may provide
for renewal thereof for additional periods of up to 12 months (which in no event
shall extend beyond the date referred to in clause (b) above).

 

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Drawings under any Letter of Credit shall be reimbursed by the Borrower within
one business day. To the extent that the Borrower does not reimburse the
applicable Issuing Bank within one business day, the Lenders under the Revolving
Facility shall be irrevocably obligated to reimburse such Issuing Bank pro rata
based upon their respective Revolving Facility commitments.

 

If any Lender becomes a Defaulting Lender (to be defined consistent with the
Documentation Principles), then the Letter of Credit exposure of such Defaulting
Lender will automatically be reallocated among the non-Defaulting Lenders pro
rata in accordance with their commitments under the Revolving Facility up to an
amount such that the revolving credit exposure of such non-Defaulting Lender
does not exceed its commitments. In the event that such reallocation does not
fully cover the Letter of Credit exposure of such Defaulting Lender, the
applicable Issuing Bank may require the Borrower to cash collateralize such
“uncovered” exposure in respect of each outstanding Letter of Credit and will
have no obligation to issue new Letters of Credit, or to extend, renew or amend
existing Letters of Credit to the extent Letter of Credit exposure would exceed
the commitments of the non-Defaulting Lenders, unless such “uncovered” exposure
is cash collateralized to the applicable Issuing Bank’s reasonable satisfaction.

Final Maturity and Amortization:    (A)    Term Loan A Facility   

The Term Loan A Facility will mature on the date that is five years after the
Closing Date and will amortize in equal quarterly installments commencing on the
last day of the first full fiscal quarter ended after the Closing Date based on
the following amortization table, with the balance payable on the final maturity
date of the Term Loan A Facility:

 

Four Quarter Period

   Amortization 1st period    5.0% 2nd period    5.0% 3rd period    7.5% 4th
period    10.0% 5th period    12.5%

 

  provided that the Facilities Documentation shall provide the right for the
Borrower to extend commitments and/or outstandings pursuant to one or more
tranches with only the consent of the respective extending Lenders in a manner
consistent with the Documentation Principles; it being understood that each
Lender under the tranche that is being extended shall have been offered the
opportunity to participate in such extension on a pro rata basis on the same
terms and conditions as each other Lender under such tranche.

 

B-9

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   (B)   

Revolving Facility

 

   The Revolving Facility will mature on the date that is five years after the
Closing Date; provided that the Facilities Documentation shall provide the right
for the Borrower to extend commitments and/or outstandings pursuant to one or
more tranches with only the consent of the respective extending Lenders in a
manner consistent with the Documentation Principles; it being understood that
each Lender under the tranche that is being extended shall have been offered the
opportunity to participate in such extension on a pro rata basis on the same
terms and conditions as each other Lender under such tranche. Guarantees:    All
obligations of the Borrower (the “Borrower Obligations”) under the Facilities
and any obligations of the Borrower and each of its restricted subsidiaries
under any interest rate protection, currency exchange or other hedging
arrangements entered into with the Administrative Agent, any Lead Arranger or
any Lender or any of their respective affiliates at the time of the entering
into of such arrangements (“Hedging Obligations”) and under any cash management
arrangements entered into with the Administrative Agent, any Lead Arranger or
any Lender or any of their respective affiliates at the time of the entering
into of such arrangements (“Cash Management Obligations” and, together with the
Borrower Obligations and the Hedging Obligations, collectively, the
“Obligations”) will be unconditionally guaranteed jointly and severally on a
senior secured basis (the “Guarantees”) except to the extent (and for so long
as) such a Guarantee would be prohibited or restricted by applicable law or by
any restriction in any contract existing on the Closing Date (or, so long as any
such restriction in any contract is not entered into in contemplation of such
subsidiary becoming a subsidiary, at the time such subsidiary becomes a
subsidiary) or would require governmental (including regulatory) consent,
approval, license or authorization or would result in material adverse tax
consequences to the Borrower and/or any of its subsidiaries as reasonably
determined by the Borrower in consultation with the Administrative Agent, by
each existing and subsequently acquired or organized direct or indirect wholly
owned U.S. subsidiary of the Borrower (other than any direct or indirect U.S.
subsidiary of a direct or indirect non-U.S. subsidiary of the Borrower that is a
“controlled foreign corporation” within the meaning of Section 957 of the
Internal Revenue Code (a “CFC”), any U.S. subsidiary (a “CFC Holdco”) that has
no material assets other than equity interests (or equity interests and
indebtedness) of one or more non-U.S. subsidiaries that are CFCs or other CFC
Holdcos, unrestricted subsidiaries, captive insurance companies, not-for-profit
subsidiaries, special purpose entities reasonably satisfactory to the
Administrative Agent, immaterial subsidiaries (defined in a manner to be agreed)
and any subsidiary where the Administrative Agent and the Borrower agree that
the cost of obtaining a guarantee by such subsidiary would be excessive in light
of the practical benefit to the Lenders afforded thereby) (the “Guarantors” and,
together with the Borrower, collectively the “Loan Parties”). Security:    The
Obligations and the Guarantees will be secured by substantially all of the
present and after-acquired assets of the Borrower and each Guarantor
(collectively, the “Collateral”), including but not limited to: (a) a perfected
pledge of all the equity interests directly held by the Borrower or any
Guarantor in any restricted subsidiary (which pledge, in the case of the equity
interests of (x) any non-U.S. subsidiary or (y) any CFC Holdco, shall in either

 

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case be limited to 65% of the equity interests of such non-U.S. subsidiary or
such CFC Holdco, as the case may be) (the “Pledged Collateral”) and (b)
perfected security interests in, and mortgages on, substantially all other
tangible and intangible assets of the Borrower and each Guarantor (including
accounts receivable, inventory, equipment, general intangibles, investment
property, intellectual property, material fee-owned real property, intercompany
notes and proceeds of the foregoing).

 

Notwithstanding the foregoing, (a) the Collateral shall not include: (i) any
fee-owned real property with a fair market value of less than an amount to be
agreed, but in any event, not less than $5.0 million (as such fair market value
is reasonably determined by the Borrower) and any leasehold interest in real
property (it being understood there shall be no requirement to obtain any
landlord waivers, estoppels or collateral access letters), (ii) motor vehicles,
aircraft and other assets subject to certificates of title, except to the extent
a security interest therein can be perfected by the filing of a UCC financing
statement, (iii) commercial tort claims below a threshold to be agreed, but in
any event, not less than $5.0 million, (iv) governmental licenses or state or
local franchises, charters and authorizations and any other property and assets
to the extent that the Administrative Agent may not validly possess a security
interest therein under applicable laws (including, without limitation, rules and
regulations of any governmental authority or agency) or the pledge or creation
of a security interest in which would require governmental consent, approval,
license or authorization, other than to the extent such prohibition or
limitation is rendered ineffective under the UCC or other applicable law
notwithstanding such prohibition or to the extent such consent has been
obtained, (v) any particular asset or right under contract, if the pledge
thereof or the security interest therein is prohibited or restricted by
applicable law, rule or regulation (including any requirement thereunder to
obtain the consent of any governmental or regulatory authority), or third party
(so long as any agreement with such third party that provides for such
prohibition or restriction was not entered into in contemplation of the
acquisition of such assets or entering into of such contract for the purpose of
creating such prohibition or restriction), other than to the extent such
prohibition or restriction is rendered ineffective under the UCC or other
applicable law notwithstanding such prohibition or restriction, (vi) (A) margin
stock, (B) equity interests in any unrestricted subsidiaries and (C) equity
interests in any non-wholly owned restricted subsidiaries and any entities which
do not constitute subsidiaries, but only to the extent that (x) the
organizational documents or other agreements with other equity holders (other
than the Borrower and restricted subsidiaries) of such non-wholly owned
restricted subsidiary or other entity do not permit or restrict the pledge of
such equity interests (to the extent such restriction exists on the Closing Date
or on the date of acquisition of such non-wholly owned restricted subsidiary),
or (y) the pledge of such equity interests (including any exercise of remedies)
would result in a change of control, repurchase obligation or other adverse
consequence to any of the Loan Parties or such non-wholly owned restricted
subsidiary or other entity, (vii) any lease, license or agreement or any
property subject to a purchase money security interest, capital lease
obligations or similar arrangement permitted under the Facilities Documentation,
in each case, permitted under the Facilities Documentation and to the extent the
grant of a security interest therein would violate or invalidate such lease,
license or

 

B-11

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agreement or purchase money or similar arrangement or create a right of
termination in favor of any other party thereto (other than the Borrower or any
restricted subsidiary of the Borrower) after giving effect to the applicable
anti-assignment provisions of the UCC or other applicable law, other than
proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the UCC or other applicable law notwithstanding such
prohibition, (viii) any property or assets for which the creation or perfection
of pledges of, or security interests in such property or assets pursuant to the
Facilities Documentation, would result in material adverse tax consequences to
the Borrower or any of its Subsidiaries, as reasonably determined by the
Borrower in consultation with the Administrative Agent, (ix) letter of credit
rights, except to the extent the security interest therein may be perfected by
the filing of a UCC financing statement (it being understood that no actions
shall be required to perfect a security interest in letter of credit rights,
other than the filing of a UCC financing statement), (x) (A) payroll and other
employee wage and benefit accounts, (B) tax accounts, including, without
limitation, sales tax accounts, (C) escrow accounts and (D) fiduciary or trust
accounts and, in the case of clauses (A) through (D), the funds or other
property held in or maintained in any such account (as long as the accounts
described in clauses (A) through (D) are used solely for such purposes), (xi)
any intent-to-use trademark application prior to the filing of a “Statement of
Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any,
that, and solely during the period, if any, in which the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark application under applicable federal law, (xii) assets
in circumstances where the cost of obtaining a security interest in such assets,
including, without limitation, the cost of title insurance, surveys or flood
insurance (if necessary) would be excessive in light of the practical benefit to
the Lenders afforded thereby as reasonably determined together by the Borrower
and the Administrative Agent and (xiii) certain other assets to be agreed (all
of the items in clauses (i) through (xiii) above, collectively, the “Excluded
Assets”), (b) control agreements and perfection by “control” or possession shall
not be required with respect to any Collateral (other than delivery of
certificated equity interests that constitute Pledged Collateral in wholly owned
restricted subsidiaries and delivery of certain promissory notes that constitute
Collateral above a threshold to be agreed); and (c) no actions in any non-U.S.
jurisdiction or required by the laws of any non-U.S. jurisdiction shall be
required in order to create any security interests in assets located or titled
outside of the U.S. or to perfect such security interests, including any
intellectual property registered in any non-U.S. jurisdiction (it being
understood that there shall be no security agreements or pledge agreements
governed under the laws of any non-U.S. jurisdiction).

 

Notwithstanding the foregoing, the requirements of the preceding two paragraphs
shall be subject to the Certain Funds Provision.

Mandatory Prepayments:    Revolving Facility: None, subject to customary
prepayment requirements if the utilization under the Revolving Facility exceeds
the commitments thereunder.

 

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Term Loan A Facility: Loans under the Term Loan A Facility shall be prepaid with
(a) 100% of the net cash proceeds of all non-ordinary course asset sales or
other dispositions of property by the Borrower and its restricted subsidiaries
(including casualty insurance and condemnation proceeds, but with exceptions for
sales of inventory in the ordinary course and other ordinary course
dispositions, obsolete or worn-out property, property no longer useful in the
business and other exceptions to be set forth in the Facilities Documentation)
in excess of a threshold amount per transaction (or series of related
transactions) and a threshold amount per fiscal year and subject to the right of
the Borrower to reinvest if such excess proceeds are reinvested (or committed to
be reinvested) within 12 months and, if so committed to reinvestment, reinvested
no later than 6 months after the end of such 12-month period; (b) 100% of the
net cash proceeds of issuances of debt obligations of the Borrower and its
restricted subsidiaries (except the net cash proceeds of any permitted debt
other than Refinancing Facilities or Refinancing Equivalent Debt); and (c)
unless a Pre-Closing Equity Offering has been consummated on or prior to the
Closing Date, 50% of the net cash proceeds of the first public offering and sale
of common equity interests made within 6 months of the Closing Date (such an
offering (if any) that is subject to the requirements for sweep pursuant to this
clause (c), the “Post-Closing Equity Offering”).

 

Within the Term Loan A Facility, mandatory prepayments shall be applied to the
scheduled installments of principal of the Term Loan A Facility as directed by
the Borrower (and absent such direction, in direct order of maturity thereof).
Mandatory prepayments in clause (a) above shall be subject to customary
limitations to the extent required to be made from cash at non-U.S. restricted
subsidiaries, the repatriation of which would result in material adverse tax
consequences (as reasonably determined in good faith by the Borrower) or would
be prohibited or restricted by applicable law (subject to commercially
reasonable efforts to mitigate or avoid such tax effects or restrictions).

 

Any Lender under the Term Loan A Facility may elect not to accept any mandatory
prepayment (each a “Declining Lender”) (except in respect of a mandatory
prepayment made with the net cash proceeds of Refinancing Facilities or
Refinancing Equivalent Debt). Any prepayment amount declined by the Declining
Lenders shall be paid to non-declining Lenders; provided that such reallocated
payments to non-declining Lenders shall be subject to the limits on repatriation
set forth above. Any remaining amount may be retained by the Borrower.

Voluntary Prepayments and Reductions in Commitments:    Voluntary reductions of
the unutilized portion of the Facilities commitments and prepayments of
borrowings will be permitted at any time (subject to customary notice
requirements), in minimum principal amounts consistent with the Documentation
Principles, without premium or penalty (except as provided below), subject to
reimbursement of the Lenders’ redeployment costs in the case of a prepayment of
Adjusted LIBOR borrowings prior to the last day of the relevant interest period.
All voluntary prepayments of the Term Loan A Facility will be applied to the
remaining amortization payments under the Term Loan A Facility as directed by
the Borrower (and absent such direction, in direct order of maturity thereof).

 

B-13

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Facilities Documentation:    The definitive documentation for each of the
Facilities (the “Facilities Documentation”) shall (i) be consistent with this
Term Sheet and shall contain only those payments, conditions to borrowing,
mandatory prepayments, representations, warranties, covenants and events of
default expressly set forth in this Exhibit B (subject only to the exercise of
any Flex Provisions) applicable to the Borrower and its restricted subsidiaries
and be usual and customary for facilities of such kind and shall be based on the
Credit Agreement dated as of December 12, 2012 (as the same has been amended
from time to time), among Tempur-Pedic International Inc., Tempur-Pedic
Management, LLC, Tempur-Pedic North America, LLC, Tempur Production USA, LLC,
the lenders party thereto and Bank of America, N.A. as Administrative Agent,
Swingline Lender and L/C Issuer, and related ancillary agreements (the “Credit
Agreement Precedent”), (ii) reflect the operational and strategic requirements
of the Borrower and its subsidiaries (together with the Target and their
subsidiaries) in light of their size, geographic locations, industries,
businesses and business practices, operations, financial accounting, matters
disclosed in the Acquisition Agreement and the proposed business plan (including
the Company’s acquisition thesis), (iii) be subject to materiality
qualifications and other exceptions that give effect to and/or permit the
Transactions, (iv) reflect reasonable administrative, agency and operational
requirements of the Administrative Agent, (v) reflect customary Loan
Syndications & Trading Association EU Bail-In provisions (which shall include a
provision specifying that in the event any Lender (or a direct or indirect
parent company thereof) becomes subject to a “Bail-in Action”, such Lender shall
be deemed to be a defaulting lender for all purposes under the Facility
Documentation), (vi) provide that all leases of the Company and its subsidiaries
that are or would be treated as operating leases for purposes of GAAP as in
effect on the Closing Date shall be accounted for as operating leases for
purposes of the defined financial terms, including “Capitalized Leases” under
the Facilities Documentation regardless of any change to GAAP following such
date which would otherwise require such leases to be treated as capital leases,
(vii) be modified to remove provisions (unless otherwise provided for herein)
applicable or customarily provided for in “term loan B facilities” and (viii) be
negotiated in good faith to finalize the Facilities Documentation, giving effect
to the Certain Funds Provision (as defined in the Commitment Letter), as
promptly as reasonably practicable (collectively, the “Documentation
Principles”). Standards, qualifications, thresholds, exceptions, “baskets” and
grace and cure periods shall be consistent with the Documentation Principles;
provided that, except to the extent expressly set forth herein, the sizing of
dollar “baskets” and thresholds shall be as agreed taking into account the
foregoing and the pro forma Consolidated EBITDA for the Borrower (after giving
effect to the Transactions) without regard to the “baskets” and thresholds in
the applicable precedent documents. To the extent that any representations and
warranties made on, or as of, the Closing Date (or a date prior thereto) are
qualified by or subject to “Material Adverse Effect”, the definition thereof
shall be “Material Adverse Effect” as defined in the Acquisition Agreement for
purposes of such representations and warranties. Counsel for the Company shall
initially draft the Facilities Documentation consistent with the Documentation
Principles.

 

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Representations and Warranties:    Limited to the following (to be applicable
only to the Borrower and its restricted subsidiaries): organizational existence,
qualification and power; compliance with laws; authorization; no contravention;
material governmental authorization and other consents; binding effect;
financial statements; no material adverse effect (after the Closing Date);
litigation; labor matters; ownership of property; environmental matters; taxes;
ERISA compliance; subsidiaries; margin regulations; Investment Company Act;
accuracy of disclosure; intellectual property; creation, validity and perfection
of security interests in the Collateral (subject to permitted liens and the
Certain Funds Provision); and solvency of the Borrower and its consolidated
restricted subsidiaries at closing (such representation and warranty to contain
a definition of solvency consistent with the solvency certificate in the form
set forth in Annex I attached to Exhibit C to the Commitment Letter); PATRIOT
Act, OFAC and FCPA. Conditions Precedent to Initial Borrowing:    Subject to the
Certain Funds Provision, the initial borrowings under the Facilities on the
Closing Date will be subject solely to the applicable conditions precedent set
forth in Exhibit C to the Commitment Letter. Conditions Precedent to Ongoing
Borrowings:    After the Closing Date, except as otherwise provided above under
“Incremental Facilities”, each extension of credit will be conditioned upon:
delivery of a notice of borrowing (or letter of credit request in the case of
Letters of Credit), accuracy of representations and warranties in all material
respects (or, to the extent qualified by materiality, in all respects) and
absence of defaults. Affirmative Covenants:    Limited to the following (to be
applicable only to the Borrower and its restricted subsidiaries): delivery
within 90 days of each fiscal year of annual audited financial statements
accompanied by an opinion of an independent accounting firm that is not subject
to qualifications as to the scope of such audit, but that may contain a “going
concern” statement that is due to the impending maturity of any indebtedness
under any of the Facilities (including any Incremental Facilities, Incremental
Equivalent Debt, Refinancing Facilities or Refinancing Equivalent Debt) or any
prospective default of any financial covenant under the Facilities
Documentation; delivery within 45 days of quarterly unaudited financial
statements (for each of the first three (3) fiscal quarters of each fiscal
year), together in the case of such annual and quarterly financial information,
compliance certificates and customary management’s discussion and analysis
narratives; annual budgets; additional information; notices of default and
certain other events that would reasonably be expected to have a material
adverse effect; payment of taxes; preservation of existence; maintenance of
properties; maintenance of insurance; compliance with laws; books and records;
inspection rights; covenant to guarantee obligations and give security;
compliance with environmental laws; designation of unrestricted subsidiaries
(and re-designation as restricted subsidiaries); further assurances as to
security; and use of proceeds. Negative Covenants:    Limited to (to be
applicable only to the Borrower and its restricted subsidiaries) limitations on:
incurrence of liens; incurrence of indebtedness; fundamental changes;
dispositions; investments (including acquisitions, loans, etc.); restricted
payments in the form of dividends or distributions on, or redemption of,
Borrower’s equity interests; prepayments of subordinated, junior-lien or
unsecured debt (“Junior Debt”); transactions with affiliates; restrictions on
burdensome agreements; amendments to definitive documentation for material
Junior Debt that are materially adverse to the Lenders; material changes in the
nature of business; and changes in fiscal year.

 

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Baskets and exceptions to the foregoing covenants will include baskets and
exceptions consistent with the Documentation Principles and, in any event,
include (but not be limited to) the following:

 

(a) (i) Indebtedness under the Facilities, Incremental Facilities, Incremental
Equivalent Debt, Refinancing Facilities and Refinancing Equivalent Debt, (ii)
purchase money indebtedness and capital leases in an aggregate outstanding
principal amount not to exceed an amount to be determined (with a growth
component based on Total Assets (to be defined in the Facilities Documentation
consistent with the Documentation Principles)); (iii) intercompany debt between
the Borrower and its restricted subsidiaries to the extent constituting a
permitted investment; provided that all such indebtedness owing from a Loan
Party to a non-Loan Party shall be unsecured and subordinated to the obligations
under the Facilities pursuant to an intercompany note; (iv) unsecured and junior
lien indebtedness subject to a Total Net Leverage Ratio no greater than 0.50x
inside the level then in effect under the Leverage Ratio Covenant (defined
below) (such indebtedness, “Ratio Debt”) with a sublimit (with a Total Assets
based growth component) to be mutually agreed for the Ratio Debt incurred by
restricted subsidiaries that are not Guarantors; provided that (A) any such
Ratio Debt does not mature prior to the date that is 91 days following the
maturity date of the Term Loan A Facility or have a weighted average life to
maturity less than the Term Loan A Facility (without giving effect to
prepayments that would otherwise modify the weighted average life to maturity of
the Term Loan A Facility) (B) any such Ratio Debt does not have mandatory
prepayment, redemption or offer to purchase events that are earlier than the
maturity date of the Term Loan A Facility (but may include customary change of
control and asset sale proceeds offers), (C) such Ratio Debt either (i) does not
have financial maintenance covenants or (ii) contains financial maintenance
covenants that are no more restrictive than the Financial Covenants, (D) to the
extent such Ratio Debt is subordinated to the Term Loan A Facility, is subject
to subordination terms reasonably satisfactory to the Administrative Agent and
(E) to the extent such Ratio Debt is secured on a junior basis, is subject to an
intercreditor agreement reasonably satisfactory to the Administrative Agent; (v)
indebtedness in an amount equal to any cash equity contribution received by the
Borrower to the extent not utilized to increase other covenant exceptions (other
than contributions in respect of disqualified equity); (vi) indebtedness assumed
in connection with permitted acquisitions so long as, after giving pro forma
effect thereto and any related specified transactions, the Borrower could incur
$1.00 of Ratio Debt (subject to a cap with a Total Assets based growth component
on indebtedness incurred by restricted subsidiaries that are not Guarantors to
be agreed); and (vii) a general fixed dollar basket to be agreed (with a Total
Assets based growth component);

 

(b) Liens securing (i) indebtedness permitted pursuant to subclauses (i) and
(ii) of clause (a) above, (ii) permitted indebtedness assumed in connection with
(but not in contemplation of) a permitted acquisition; provided that liens
securing such indebtedness shall be subject to customary limitations on the

 

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scope of such liens (as applies to additional assets), (iii) indebtedness
permitted pursuant to subclause (iv) above (which, in the case of any liens on
Collateral shall be junior to the liens securing the obligations under the
Facilities and at all times subject to an intercreditor agreement in form and
substance reasonably satisfactory to the Administrative Agent) and (iv)
obligations not to exceed a general fixed dollar basket to be agreed (with a
Total Assets based growth component);

 

(c) Restricted payments (i) in an unlimited amount subject to “Payment
Conditions” to be defined as satisfaction with (A) a Total Net Leverage Ratio no
greater than 2.50:1.00, (B) minimum pro forma liquidity (consisting of cash and
cash equivalents on the balance sheet, together with undrawn commitments under
the Revolving Facility) of at least $25,000,000 and (C) no event of default
continuing or resulting therefrom, (ii) regular dividends not less than 6% per
year of the net proceeds of any equity offerings (other than any Post-Closing
Equity Offering), (iii) to the extent funded with the proceeds of common equity
(or contributions in respect thereof) of the Borrower (other than any
Post-Closing Equity Offering) and (iv) from a general restricted payments fixed
dollar basket (with a Total Assets based growth component)

 

(d) Investments (i) in an unlimited amount subject to satisfaction of the
Payment Conditions, (ii) consisting of permitted investments (including
acquisitions) consistent with high yield debt securities (with exceptions for,
among other things, acquisitions of restricted subsidiaries (with a cap with a
Total Assets based growth basket on acquisitions of non-Loan Parties in an
amount to be agreed) subject to a Total Net Leverage Ratio no greater than 0.25x
inside the level then in effect under the Leverage Ratio Covenant (defined
below), intercompany investments (including intercompany debt) in the Borrower
or any restricted subsidiary (with a cap with a Total Assets based growth basket
on investments in non-Loan Parties in an amount to be agreed), (iii) to the
extent funded with the proceeds of common equity (or contributions in respect
thereof) of the Borrower (other than any Post-Closing Equity Offering) and (iv)
from general investment fixed dollar baskets (each with a growth component based
on Total Assets);

 

(e) Prepayments of Junior Debt (i) in an unlimited amount subject to
satisfaction of the Payment Conditions, (ii) subject to customary exceptions
(including for scheduled payment of principal and interest on permitted
indebtedness), (iii) to the extent funded with the proceeds of common equity (or
contributions in respect thereof) of the Borrower (other than any Post-Closing
Equity Offering) and (iv) from a general fixed dollar basket (with a growth
component based on Consolidated Total Assets); and

 

(f) Subject to compliance with the mandatory prepayment or reinvestment
requirements for asset sales and other dispositions of property, asset sales and
other dispositions of property (i) subject to a cap of 10.0% of Total Assets for
any fiscal year, for fair market value as long as at least 75% of the
consideration in excess of an amount to be determined consists of cash or cash
equivalents (subject to customary exceptions to the cash consideration
requirement, including a basket for non-cash consideration that may be
designated as cash consideration and exceptions for asset swaps and

 

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  exchanges) and no event of default has occurred and is continuing or would
result therefrom and subject to pro forma compliance with the Financial
Covenants, (ii) asset swaps and exchanges and (iii) dispositions of non-core
assets acquired in any acquisition consummated after the Closing Date (not
exceeding, for any such acquisition, 20% of the fair market value of the assets
so acquired). Financial Covenants:  

Limited to (i) a maximum Total Net Leverage Ratio (the “Leverage Ratio
Covenant”) and (ii) a minimum Consolidated Cash Interest Coverage Ratio (the
“Interest Coverage Covenant” and together with the Leverage Ratio Covenant, the
“Financial Covenants”).

 

The Leverage Ratio Covenant will initially be set at a Total Net Leverage Ratio
of 3.75:1.00 with a single step down to a Total Net Leverage Ratio of 3.25:1.00
from and after the fiscal quarter ended June 30, 2017. The Interest Coverage
Covenant will be set at 3.00:1.00.

 

Each Financial Covenant described above will be tested with respect to the
Borrower and its restricted subsidiaries on a consolidated basis on the last day
of any applicable fiscal quarter ending on and after a date to be agreed upon
(which date shall be no earlier than the last day of the first full fiscal
quarter of the Borrower ending after the Closing Date).

Selected Financial Definitions:  

“Consolidated EBITDA” (and component definitions, including Consolidated Net
Income) will be defined giving effect to the Documentation Principles (including
add-backs and deductions consistent therewith or otherwise set forth in the
Company’s model dated February 28, 2016 (the “Company Model”) (together with any
updates or modifications reasonably agreed between the Company and the
Commitment Parties), and will include in any event, among others, adjustments or
add-backs (not subject to caps) for:

 

(a) extraordinary, unusual or non-recurring items (including all costs
associated with the Transactions),

 

(b) non-cash charges, losses or expenses,

 

(c) all gains and losses on sales of assets outside the ordinary course of
business,

 

(d) restructuring and similar charges, severance, relocation costs, integration
and facilities opening costs and other business optimization expenses, signing
costs, retention or completion bonuses, transition costs, costs related to
closure/consolidation of facilities and curtailments or modifications to pension
and post-retirement employee benefit plans (including any settlement of pension
liabilities),

 

(e) changes in earn-out and other similar reserves,

 

(f) currency translation gains or losses,

 

(g) non-controlling or minority interest expense consisting of income
attributable to third parties in non-wholly owned subsidiaries,

 

B-18

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(h) non-cash costs or expenses incurred pursuant to any management equity plan,
stock option plan or any other stock subscription or shareholder agreement,

 

(i) (x) pro forma “run rate” cost savings, operating expense reductions and
synergies related to the Transactions that are reasonably identifiable,
factually supportable and projected by the Borrower in good faith to result from
actions that have been taken or with respect to which substantial steps have
been taken or are expected to be taken (in the good faith determination of the
Borrower) within 12 months after the Closing Date; and (y) pro forma “run rate”
cost savings, operating expense reductions and synergies related to
acquisitions, dispositions and other specified transactions (including, for the
avoidance of doubt, acquisitions occurring prior to the Closing Date),
restructurings, cost savings initiatives and other initiatives that are
reasonably identifiable, factually supportable and projected by the Borrower in
good faith to result from actions that have been taken or with respect to which
substantial steps have been taken or are expected to be taken (in the good faith
determination of the Borrower) within 12 months after such acquisition,
disposition or other specified transaction, restructuring, cost savings
initiative or other initiative); provided that the amount of adjustments made
pursuant to clause (y) above shall not exceed an amount not less than 15% of
Consolidated EBITDA for such four quarter test period as calculated prior to
giving effect to such adjustments (but, for the avoidance of doubt, after giving
effect to other pro forma adjustments),

 

(j) other adjustments and add-backs of the type identified in the Interim due
diligence assistance DRAFT dated February 27, 2016 and prepared by KPMG, and

 

(k) other adjustments and add-backs as shall be mutually agreed or as otherwise
consistent with the Documentation Principles.

 

“Total Net Leverage Ratio” means the ratio of consolidated debt of the Borrower
and its consolidated restricted subsidiaries (consisting of indebtedness for
borrowed money, capitalized lease obligations, purchase money debt and all
guarantees of the foregoing, net of up to $50,000,000 of unrestricted cash and
cash equivalents, all as set forth on the balance sheet of the Borrower and its
consolidated restricted subsidiaries in accordance with GAAP) to Consolidated
EBITDA of the Borrower and its consolidated restricted subsidiaries.

 

“Consolidated Cash Interest Coverage Ratio” shall mean, with respect to any test
period, the ratio of (a) Consolidated EBITDA to (b) consolidated cash interest
expense (net of cash interest income).

 

The definition of “Indebtedness” shall be consistent with the Documentation
Principles.

 

B-19

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In connection with any action taken solely in connection with a permitted
acquisition whose consummation is not conditioned on the availability of, or on
obtaining, third party financing (each, a “Limited Condition Transaction”), for
purposes of:

 

(i) determining compliance with any provision of the Facilities Documentation
(other than the Financial Covenants) which requires the calculation of any
financial ratio or test, including the Total Net Leverage Ratio and Consolidated
Cash Interest Coverage Ratio (and for the avoidance of doubt, to also include
any financial ratio or test set forth in the provisions under the heading
“Incremental Facilities” above);

 

(ii) determining compliance with representations and warranties, or a
requirement regarding the absence of a default or event of default; or

 

(iii) testing availability under baskets set forth in the Facilities
Documentation (including baskets measured as a percentage of Total Assets and
baskets subject to default and event of default conditions)

 

in each case, at the option of the Borrower (the Borrower’s election to exercise
such option in connection with any Limited Condition Transaction, an “LCT
Election”), the date of determination of whether any such action is permitted
hereunder (or any requirement or condition therefor is complied with or
satisfied (including as to the absence of any continuing default or event of
default)) shall be deemed to be the date the definitive agreements for such
Limited Condition Transaction are entered into (the “LCT Test Date”), and if,
after giving pro forma effect to the Limited Condition Transaction and the other
transactions to be entered into in connection therewith (including any
incurrence of indebtedness and the use of proceeds thereof) as if they had
occurred on the first day of the most recent test period ending prior to the LCT
Test Date (except with respect to any incurrence or repayment of indebtedness
for purposes of the calculation of any leverage-based test or ratio, which shall
in each case be treated as if they had occurred on the last day of such test
period), the Borrower would have been permitted to take such action on the
relevant LCT Test Date in compliance with such ratio, test or basket, such
ratio, test or basket shall be deemed to have been complied with (or satisfied).
For the avoidance of doubt, if the Borrower has made an LCT Election and any of
the ratios, tests or baskets for which compliance was determined or tested as of
the LCT Test Date are exceeded as a result of fluctuations in any such ratio,
test or basket, including due to fluctuations in Consolidated EBITDA of the
Borrower or the person subject to such Limited Condition Transaction, at or
prior to the consummation of the relevant transaction or action, such baskets,
tests or ratios will not be deemed to have been exceeded as a result of such
fluctuations.

 

If the Borrower has made an LCT Election for any Limited Condition Transaction,
then in connection with any calculation of any ratio, test or basket
availability with respect to the incurrence of indebtedness or liens, the making
of restricted payments, the making of any permitted investment, mergers, the
conveyance, lease or other transfer of all or substantially all of the assets of
the Borrower, the prepayment, redemption, purchase, defeasance or other
satisfaction of indebtedness, or the designation of an unrestricted subsidiary
(a

 

B-20

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  “Subsequent Transaction”) following the relevant LCT Test Date and prior to
the earlier of the date on which such Limited Condition Transaction is
consummated or the date that the definitive agreement for such Limited Condition
Transaction is terminated or expires without consummation of such Limited
Condition Transaction, for purposes of determining whether such Subsequent
Transaction is permitted under the Facilities, any such ratio, test or basket
shall be required to be satisfied on a pro forma basis (i) assuming such Limited
Condition Transaction and other transactions in connection therewith (including
any incurrence of indebtedness and the use of proceeds thereof) have been
consummated and (ii) assuming such Limited Condition Transaction and other
transactions in connection therewith (including any incurrence of indebtedness
and the use of proceeds thereof) have not been consummated. Unrestricted
Subsidiaries:   The Facilities Documentation will contain provisions pursuant to
which, subject to customary limitations on investments, loans, advances to, and
other investments in, unrestricted subsidiaries, the Borrower will be permitted
to designate any existing or subsequently acquired or organized subsidiary as an
“unrestricted subsidiary” and subsequently re-designate (subject to conditions
consistent with the Documentation Principles) any such unrestricted subsidiary
as a restricted subsidiary; provided that no event of default has occurred and
is continuing or would result therefrom and subject to pro forma compliance with
the Financial Covenants. Unrestricted subsidiaries will not be subject to the
mandatory prepayments, representations and warranties, affirmative or negative
covenants or event of default provisions of the Facilities Documentation and the
results of operations and indebtedness of unrestricted subsidiaries will not be
taken into account for purposes of determining any financial ratio or covenant
contained in the Facilities Documentation. Events of Default:  

Limited to the following: nonpayment of principal, interest, fees or other
amounts (with grace period of 5 business days for interest, fees and other
amounts); failure to perform negative covenants and the Financial Covenants (and
affirmative covenants to provide notice of default or maintain the Borrower’s
corporate existence); failure to perform other covenants subject to a 30-day
cure period after notice from the Administrative Agent; any representation or
warranty incorrect in any material respect when made or deemed made;
cross-default to material indebtedness (other than under the Facilities
Documentation) subject to a threshold amount; bankruptcy events or other
insolvency events of the Borrower or its material restricted subsidiaries (with
a customary grace period for involuntary events); monetary judgment defaults
subject to a threshold amount (to the extent not covered by insurance); ERISA
events subject to material adverse effect; invalidity (actual or asserted in
writing by the Borrower or any Guarantor) of the Facilities Documentation or
material portion of the Collateral; and Change of Control (as defined below).

 

“Change of Control” means the earliest to occur of:

 

(a) any person or persons constituting a “group” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but
excluding any employee benefit plan of such person and its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), becomes the “beneficial owner”

 

B-21

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(as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or
indirectly, of equity interests representing more than thirty-five (35%) of the
aggregate ordinary voting power represented by the issued and outstanding equity
interests of the Borrower; (b) during any period of the 12 consecutive months,
the occupation of a majority of the seats (other than vacant seats) on the board
of directors (or equivalent governing body) of the Borrower by persons (i) who
were not members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or nomination to
that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body; and

 

(c) a “change of control” (or similar event) shall occur in any document
pertaining to the Incremental Equivalent Debt, Refinancing Equivalent Debt, debt
incurred under the Ratio Debt Basket or any permitted refinancing thereof;
provided that, such debt is in an aggregate outstanding principal amount in
excess of a threshold to be agreed.

Voting:  

Amendments and waivers of the Facilities Documentation will require the approval
of Lenders holding more than 50% of the aggregate principal amount of the loans
and commitments under the Facilities (the “Required Lenders”), except that (a)
the consent of each Lender directly and adversely affected thereby shall be
required with respect to (i) increases in the commitment of such Lender, (ii)
reductions of principal, interest or fees, (iii) extensions of final scheduled
maturity or the due date of any scheduled interest or fee payment and (iv)
changes in voting thresholds and (b) the consent of 100% of the Lenders shall be
required with respect to (A) releases of all or substantially all Guarantors or
all or substantially all of the Collateral (other than in connection with
permitted asset sales) and (B) amendments to the pro rata payments or sharing of
payment provisions. Defaulting Lenders will be subject to the suspension of
certain voting rights. The Facilities Documentation will contain customary
protections for the Administrative Agent, the Swingline Lender and each Issuing
Bank.

 

Notwithstanding the foregoing, certain amendments and waivers of the Facilities
Documentation that affect solely the Lenders under a particular facility or
tranche and not directly and adversely affect any other Lender (including waiver
or modification of conditions to extensions of credit under the Revolving
Facility or Incremental Facility, as applicable, and pricing or other
modifications) will, as agreed upon, require only the consent of Lenders holding
more than 50% of the aggregate commitments or loans, as applicable, under such
facility or tranche and no other consents or approvals shall be required.

 

The Facilities Documentation will permit amendments thereof without the approval
or consent of the Lenders to effect a permitted “repricing transaction” (i.e., a
transaction in which any tranche of Term Loans is refinanced with a

 

B-22

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replacement tranche of term loans, or is modified with the effect of, bearing a
lower rate of interest) other than any Lender holding Term Loans subject to such
“repricing transaction” that will continue as a Lender in respect of the
repriced tranche of Term Loans or modified Term Loans.

 

Modifications to provisions requiring non-pro rata distributions and commitment
reductions will be permitted in connection with loan buy back or similar
programs, “amend and extend” transactions or the addition of one or more
tranches of debt and the like as permitted by the Facilities Documentation.

 

In addition, if the Administrative Agent and the Borrower shall have jointly
identified an obvious error or any error or omission of a technical nature in
the Facilities Documentation for either of the Facilities, then the
Administrative Agent and the Borrower shall be permitted to amend such provision
without any further action or consent of any other party.

Cost and Yield Protection:   The Facilities Documentation shall contain
customary provisions (a) protecting the Lenders against increased costs or loss
of yield resulting from changes in reserve, capital adequacy and other
requirements of law and from the imposition of or changes in certain withholding
or other taxes (it being understood that the Dodd Frank Wall Street Reform and
Consumer Protection Act and Basel III and all regulations, interpretations and
directives thereunder shall be deemed to be a change in law if, and only if, it
is the Lender’s general policy or practice to demand compensation in similar
circumstances under comparable provisions of other financing agreements) and (b)
indemnifying the Lenders for “breakage costs” incurred in connection with, among
other things, any prepayment of a LIBOR borrowing on a day prior to the last day
of an interest period with respect thereto, it being understood that the
gross-up obligations shall not apply to U.S. federal withholding taxes imposed
by Sections 1471 through 1474 of the Internal Revenue Code as of the Closing
Date (and any amended or successor provisions to the extent substantively
comparable thereto and not materially more onerous to comply with) and any
regulations promulgated thereunder or official guidance issued pursuant thereto
including any intergovernmental agreements. Assignments and Participations:  
The Lenders will be permitted to assign (other than to natural persons or any
Disqualified Institution to the extent the identity of such Disqualified
Institution has been made available to all Lenders) (a) loans under the Term
Facilities with the consent of the Borrower (not to be unreasonably withheld,
conditioned or delayed), and (b) loans and commitments under the Revolving
Facility with the consent of the Borrower and each Issuing Bank (in each case
not to be unreasonably withheld, conditioned or delayed); provided that no
consent of the Borrower shall be required (i) under the Term Facilities if such
assignment is made to another Lender or an affiliate or approved fund of a
Lender or (ii) after the occurrence and during the continuance of a payment or
bankruptcy event of default. All assignments will require the consent of the
Administrative Agent, not to be unreasonably withheld, conditioned or delayed.
Each assignment will be in an amount of an integral multiple of $5,000,000 with
respect to the Revolving Facility and the Term Loan A Facility or, in each case,
if less, all of such Lender’s remaining loans and

 

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  commitments of the applicable class. Assignments will be by novation and will
not be required to be pro rata among the Facilities. An assignment fee in the
amount of $3,500 shall be paid by the respective assignor or assignee to the
Administrative Agent. Pledges of loans shall be permitted.  

The Lenders will be permitted to sell participations (other than to natural
persons or any Disqualified Institution to the extent the identity of such
Disqualified Institution has been made available, with the consent of the
Borrower, to all Lenders) in loans and commitments without consent being
required, subject to customary limitations. Voting rights of participants shall
be limited to matters in respect of (a) increases in commitments participated to
such participants, (b) reductions of principal, interest or fees, (c) extensions
of final maturity or the due date of any amortization, interest or fee payment,
(d) releases of the guarantees of all or substantially all Guarantors
guaranteeing the participated tranche or all or substantially all of the
Collateral securing the participated tranche, and (e) changes in voting
threshold. Participants will have customary rights with respect to yield
protection and increased costs.

 

In no event will the Administrative Agent have responsibility for monitoring the
list of Disqualified Institutions.

 

The Facilities Documentation shall provide that so long as no event of default
is continuing Term Loans may be purchased by and assigned to the Borrower or any
of its subsidiaries on a non-pro rata basis through Dutch auctions open to all
Lenders on a pro rata basis in accordance with customary procedures; provided
that (1) no event of default shall have occurred and be continuing, (2) any such
Term Loans acquired by the Borrower or any of its subsidiaries shall be retired
and cancelled promptly upon acquisition thereof (or contribution thereto,
including as contemplated by the preceding paragraph), (3) no proceeds from any
loan under the Revolving Facilities shall be used to fund such assignments and
(4) the Borrower shall represent and warrant to the holders of the Term Loans,
or shall make a statement that such representation and warranty cannot be made,
that it does not possess material non-public information with respect to the
Borrower and its subsidiaries that has not been disclosed to the holders of the
Term Loans generally (other than holders that have elected not to receive such
information).

 

The Facilities Documentation will contain customary provisions allowing the
Borrower to replace a Lender in connection with amendments and waivers requiring
the consent of all Lenders or of all Lenders directly and adversely affected
thereby (so long as the Required Lenders have approved the amendment or waiver),
increased costs, taxes, etc. and Defaulting Lenders.

Expenses and Indemnification:   The Borrower shall pay, if the Closing Date
occurs, all reasonable and documented out-of-pocket expenses of the
Administrative Agent and the Lead Arrangers (within 30 days of a written demand
therefor, together with backup documentation supporting such reimbursement
request) (a) associated with the syndication of the Facilities and the
preparation, execution, delivery and administration of the Facilities
Documentation and any amendment or waiver with respect thereto (but limited, in
the case of legal fees and expenses, to the

 

B-24

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reasonable and documented fees, disbursements and other charges of one counsel
to the Administrative Agent and the Lead Arrangers taken as a whole and, if
necessary, of one local counsel in any relevant jurisdiction) and (b) in
connection with the enforcement of the Facilities Documentation or protection of
rights thereunder (but limited, in the case of legal fees and expenses, to the
reasonable and documented fees, disbursements and other charges of one counsel
to the Administrative Agent and the Lenders taken as a whole, and, if necessary,
of one local counsel to the Administrative Agent and the Lenders taken as a
whole in any relevant jurisdiction and additional counsel for each group of
similarly situated parties in the event of a conflict of interest).

 

The Administrative Agent, the Lead Arrangers and the Lenders (and their
affiliates and controlling persons and their respective officers, directors,
members, partners, employees, advisors, agents and other representatives) (each,
an “indemnified person”) will be indemnified for and held harmless against, any
losses, claims, damages, liabilities or out-of-pocket expenses (but limited, in
the case of legal fees and expenses, to the reasonable and documented
out-of-pocket fees, disbursements and other charges of one counsel to all
indemnified persons taken as a whole and, solely in the case of a conflict of
interest, one additional counsel in each relevant jurisdiction to the affected
indemnified persons similarly situated taken as a whole, and, if reasonably
necessary, one local counsel to all indemnified persons taken as a whole in any
relevant jurisdiction) incurred in respect of the Facilities or the use or the
proposed use of proceeds thereof, except to the extent they (a) relate to any
taxes other than (i) taxes that represent losses, claims, damages, liabilities
or expenses arising from any non-tax claim or (ii) taxes for which
indemnification is provided under “Cost and Yield Protection” above, or (b)
arise from the gross negligence, bad faith or willful misconduct of, or material
breach of the Facilities Documentation by, the relevant indemnified person or
any of its Related Indemnified Persons as determined by a final, non-appealable
judgment of a court of competent jurisdiction or any dispute solely among the
indemnified persons other than any claims against an indemnified person in its
capacity as an administrative agent or arranger or any similar role under the
Facilities and other than any claims arising out of any act or omission of the
Borrower or any of its affiliates, provided that the Borrower shall not be
liable for any indirect, special, punitive or consequential damages (other than
in respect of any such damages incurred or paid by an indemnified person to a
third party). Notwithstanding the foregoing, each indemnified person (and its
Related Indemnified Persons) shall be obligated to refund and/or return promptly
any and all amounts paid by the Borrower or any of its affiliates under this
paragraph to such indemnified person (or its Related Indemnified Persons) for
any such losses, claims, damages, liabilities and expenses to the extent such
indemnified person (or its Related Indemnified Persons) is not entitled to
payment of such amounts in accordance with the terms hereof.

Governing Law and Forum:   New York. Counsel to the Commitment Parties and Lead
Arrangers:   Cahill Gordon & Reindel LLP.

 

B-25

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ANNEX I to

EXHIBIT B

 

Interest Rates:   The interest rates under the Facilities will be as follows:  
At the option of the Borrower, initially, Adjusted LIBOR plus 3.00% or ABR plus
2.00%. From and after the delivery by the Borrower to the Administrative Agent
of the Borrower’s financial statements for the period ending at least one full
fiscal quarter following the Closing Date, interest rates under the Facilities
shall be determined pursuant to the pricing grid set forth below:

 

   

Total Net Leverage

Ratio

   Adjusted LIBOR   ABR       >2.50x    3.00%   2.00%     >2.00x to < 2.50x   
2.50%   1.50%     <2.00x    2.00%   1.00%  

 

  The Borrower may elect interest periods of 1, 2, 3 or 6 months (or, if agreed
by all relevant Lenders, 12 months or a shorter period) for Adjusted LIBOR
borrowings.   Calculation of interest shall be on the basis of the actual days
elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the
case of ABR loans) and interest shall be payable (i) in the case of Adjusted
LIBOR loans, at the end of each interest period and, in any event, at least
every three months and (ii) in the case of ABR loans, quarterly in arrears.  

ABR is the Alternate Base Rate, which is the highest of the Administrative
Agent’s Prime Rate, the Federal Funds Effective Rate plus 1/2 of 1.00% and
one-month Adjusted LIBOR plus 1.00%.

 

Adjusted LIBOR is the London interbank offered rate for U.S. dollars, adjusted
for customary Eurodollar reserve requirements, if any, and subject to a floor of
0.0% per annum.

Letter of Credit Fee:   A per annum fee equal to the spread over Adjusted LIBOR
under the Revolving Facility will accrue on the aggregate face amount of
outstanding letters of credit under the Revolving Facility, payable in arrears
at the end of each quarter and upon the termination of the Revolving Facility,
in each case for the actual number of days elapsed over a 360-day year. Such
fees shall be distributed to the Lenders participating in the Revolving Facility
pro rata in accordance with the amount of each such Lender’s Revolving Facility
commitment. In addition, the Borrower shall pay to the applicable Issuing Bank,
for its own account, (a) a fronting fee equal to 0.125% of the aggregate face
amount of outstanding letters of credit, payable in arrears at the end of each
quarter and upon the termination of the Revolving Facility, calculated based
upon the actual number of days elapsed over a 360-day year, and (b) customary
issuance and administration fees.

 

I-B-1

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Commitment Fees:  

0.50% per annum on the average daily undrawn portion (excluding for purposes of
such calculation any drawing of swingline loans) of the commitments in respect
of the Revolving Facility, payable to the Lenders under the Revolving Facility
(other than Defaulting Lenders) quarterly in arrears after the Closing Date and
upon the termination of the commitments, calculated based on the number of days
elapsed in a 360-day year.

 

From and after the delivery by the Borrower to the Administrative Agent of the
Borrower’s financial statements for the period ending at least one full fiscal
quarter following the Closing Date, commitment fees under the Revolving Facility
shall be determined pursuant to the pricing grid set forth below

 

   

Total Net Leverage

Ratio

   Commitment Fee       >2.50x    0.50%     >2.00x to < 2.50x    0.40%    
<2.00x    0.30%  

 

I-B-2

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EXHIBIT C

Project Wild

$265,000,000 Term Loan A Facility

$75,000,000 Revolving Facility

Conditions Precedent3

Except as otherwise set forth below, subject to the Certain Funds Provision, the
initial borrowing on the Closing Date under each of the Facilities shall be
subject to the following conditions precedent:

1. Since the date hereof, except as set forth in the disclosure schedules to the
Acquisition Agreement, there shall not have been a Material Adverse Effect (as
defined in, and interpreted pursuant to, the Acquisition Agreement as in effect
on the date hereof) (a “Target Material Adverse Effect”) or the occurrence of
any change, effect, event, occurrence, state of facts or development, which
would, individually or in the aggregate, be reasonably likely to have a Target
Material Adverse Effect.

2. The Acquisition shall have been consummated, or shall be consummated
substantially concurrently with the initial borrowing under any of the
Facilities. The Acquisition Agreement shall not have been amended or waived, and
no consents shall have been given with respect thereto, in each case, in any
material respect by you or your subsidiaries in a manner materially adverse to
the Initial Lenders or the Lead Arrangers (in each case, in their capacity as
such) without the consent of the Lead Arrangers (such consent not to be
unreasonably withheld, conditioned or delayed); provided that (a) any amendment,
waiver or consent that results in a change in the amount of consideration
required to consummate the Acquisition shall be deemed not to be materially
adverse to the Initial Lenders or the Lead Arrangers so long as (i) subject to
clause (d) below, any reduction shall be applied to reduce the Term Loan A
Facility, the use of cash from the Company’s balance sheet and the proceeds from
any common equity issuance (if any) on a pro rata basis and (ii) any increase is
funded by cash on the Company’s balance sheet or the proceeds of common equity
of the Company, (b) the granting of any consent under the Acquisition Agreement
that is not materially adverse to the interests of the Initial Lenders or the
Lead Arrangers shall not otherwise constitute an amendment or waiver, (c) any
change to the definition of “Material Adverse Effect” in the Acquisition
Agreement shall be deemed materially adverse to the Initial Lenders and the Lead
Arrangers and (d) any reduction in the purchase price of the Acquisition in
excess of 10% shall be deemed materially adverse to the Initial Lenders and the
Lead Arrangers.

3. The Refinancing shall have been consummated, or shall be consummated
substantially concurrently with the initial borrowing under any of the
Facilities.

4. The Lead Arrangers shall have received (a) audited consolidated balance
sheets and related statements of comprehensive income, shareholders’ equity and
cash flows of the Company for the fiscal years ended June 30, 2013, June 30,
2014 and June 30, 2015 (it being understood that the Lead Arrangers acknowledge
receipt of such audited financial statements for the fiscal years of the Company
ended June 30, 2013, June 30, 2014 and June 30, 2015) and (b) unaudited
consolidated balance sheets and

 

3 

All capitalized terms used but not defined herein have the meanings given to
them in the Commitment Letter to which this Exhibit is attached, including the
other Exhibits thereto. In the event any such capitalized term is subject to
multiple and differing definitions, the appropriate meaning thereof in this
Exhibit shall be determined by reference to the context in which it is used.

 

C-1

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related consolidated statements of comprehensive income and cash flows for the
Company for (1) the fiscal quarters of the Company ended September 30, 2015 and
December 31, 2015 (it being understood that the Lead Arrangers acknowledge
receipt of such financial statements for the fiscal quarters of the Company
ended September 30, 2015 and December 31, 2015) and (2) each subsequent fiscal
quarter (other than the fourth fiscal quarter) of the Company ended at least 45
days prior to the Closing Date.

5. The Lead Arrangers shall have received (a) the audited consolidated balance
sheet of the Target as of September 27, 2015 and September 28, 2014 and
consolidated statement of profit and loss of the Target for the fiscal years
ended September 27, 2015, September 28, 2014 and September 29, 2013 (it being
understood that the Lead Arrangers acknowledge receipt of such audited financial
statements for the fiscal years of the Target ended September 27, 2015,
September 28, 2014 and September 29, 2013) and (b) the consolidated unaudited
balance sheet and related consolidated statement of profit and loss and cash
flows of the Target, reviewed by PricewaterhouseCoopers LLP in accordance with
the Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants, for (1) the fiscal quarter
of the Target ended January 3, 2016 and (2) each subsequent fiscal quarter
(other than the fourth fiscal quarter) of the Target ended at least 45 days
prior to the Closing Date.

6. The Lead Arrangers shall have received a pro forma balance sheet and related
pro forma statement of income of the Company and its subsidiaries (including the
Target) as of and for the twelve-month period ending on the last day of the most
recently completed four-fiscal quarter period of the Company ended at least 45
days (or 90 days in case such four-fiscal quarter period is the end of the
Borrower’s fiscal year) prior to the Closing Date, prepared after giving effect
to the Transactions as if the Transactions had occurred as of such date (in the
case of such balance sheet) or at the beginning of such period (in the case of
the statement of income).

7. With respect to each Facility, (i) the execution and delivery by the Borrower
and the Guarantors of the Facilities Documentation which shall, in each case, be
in accordance with the terms of the Commitment Letter and the applicable Term
Sheets and subject to the Certain Funds Provision and the Documentation
Principles and (ii) subject to the Certain Funds Provision, delivery to the Lead
Arrangers of (a) customary legal opinions, (b) customary evidence of authority,
(c) customary officer’s certificates, (d) good standing certificates (or the
equivalent) in the respective jurisdictions of organization of the Borrower and
the Guarantors, (e) customary borrowing requests and (f) a solvency certificate,
substantially in the form set forth in Annex I attached to this Exhibit C, from
the chief financial officer or chief accounting officer or other officer with
equivalent duties of the Borrower (the deliverables set forth in clauses
(a) through (f), collectively the “Closing Deliverables”).

8. With respect to the Facilities, all documents and instruments required to
perfect the Administrative Agent’s security interests in the Collateral shall
have been executed and delivered and, if applicable, be in proper form for
filing; provided, however, that this condition is subject in all respects to the
Certain Funds Provision.

9. The Lead Arrangers shall have been afforded a period (the “Marketing Period”)
of at least fifteen (15) consecutive Business Days (as defined in the
Acquisition Agreement), following receipt of the financial statements referred
to in paragraphs 4, 5 and 6 above and the other information customarily
delivered by a borrower and necessary for the preparation of a confidential
information memorandum for a senior secured revolving and term loan A financing,
to syndicate the Facilities; provided that, for the avoidance of doubt, delivery
of financial statements pursuant to clause (b)(2) of paragraph 4, clause (b)(2)
of paragraph 5, or pro forma financial statements pursuant to paragraph 6,
subsequent to the Marketing Period having already commenced based on prior
deliveries pursuant to paragraphs 4, 5 and 6, shall not restart the Marketing
Period.

 

C-2

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10. The Administrative Agent shall have received, at least three business days
prior to the Closing Date, all documentation and other information about the
Borrower and the Guarantors required under applicable “know your customer” and
anti-money laundering rules and regulations, including the PATRIOT Act, that has
been requested in writing at least ten business days prior to the Closing Date.

11. You shall have paid (or caused to be paid) all fees and expenses due to the
Commitment Parties under the Commitment Letter and the Fee Letter and required
to be paid on the Closing Date, to the extent invoiced at least three business
days prior to the Closing Date (except as otherwise reasonably agreed by the
Borrower).

12. The Specified Representations shall be true and correct in all material
respects (except for representations and warranties that are already qualified
by materiality, which representations and warranties shall be true and correct
after giving effect to such materiality qualifier).

13. The Specified Acquisition Agreement Representations shall be true and
correct in all material respects, but only to the extent that you have (or your
applicable affiliate has) the right (taking into account any applicable cure
provisions), pursuant to the Acquisition Agreement, to terminate your (or its)
obligations under the Acquisition Agreement to consummate the Acquisition (or
the right not to consummate the Acquisition pursuant to the Acquisition
Agreement) as a result of a breach of such Specified Acquisition Agreement
Representations.

 

C-3

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ANNEX I to

EXHIBIT C

[FORM OF]

SOLVENCY CERTIFICATE

of

[BORROWER]

AND ITS RESTRICTED SUBSIDIARIES

Pursuant to the Credit Agreement4, the undersigned hereby certifies, solely in
such undersigned’s capacity as [chief financial officer] [chief accounting
officer] [specify other officer with equivalent duties] of the Borrower, and not
individually, as follows:

I am generally familiar with the businesses and assets of the Borrower and its
Restricted Subsidiaries, taken as a whole, and am duly authorized to execute
this Solvency Certificate on behalf of the Borrower pursuant to the Credit
Agreement. As of the date hereof, after giving effect to the consummation of the
Transactions, including the making of the Loans under the Credit Agreement, on
the date hereof, and after giving effect to the application of the proceeds of
such indebtedness:

 

  a. The fair value of the assets of the Borrower and its restricted
subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their
debts and liabilities, subordinated, contingent or otherwise;

 

  b. The present fair saleable value of the property of the Borrower and its
restricted subsidiaries, on a consolidated basis, is greater than the amount
that will be required to pay the probable liability, on a consolidated basis, of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured;

 

  c. The Borrower and its restricted subsidiaries, on a consolidated basis, are
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such liabilities become absolute and matured; and

 

  d. The Borrower and its restricted subsidiaries, on a consolidated basis, are
not engaged in, and are not about to engage in, business for which they have
unreasonably small capital.

For purposes of this Certificate, the amount of any contingent liability at any
time shall be computed as the amount that would reasonably be expected to become
an actual and matured liability. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement,
as applicable.

[Signature Page Follows]

 

 

4  Credit Agreement to be defined.

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

IN WITNESS WHEREOF, the undersigned has executed this Certificate in such
undersigned’s capacity as [chief financial officer] [chief accounting officer]
[specify other officer with equivalent duties] of the Borrower, on behalf of the
Borrower, and not individually, as of the date first stated above.

 

[BORROWER] By:  

 

Name:   Title: