Exhibit 10.1

 

Execution Version

 

	
JPMORGAN CHASE BANK, N.A.
   383 Madison Avenue
   New York, New York 10179
    	
 
    	
CAPITAL ONE, NATIONAL
   ASSOCIATION
   299 Park Avenue
   New York, NY 10171
    


 

CONFIDENTIAL
 November 15, 2017

 

Diplomat Pharmacy, Inc.

4100 S. Saginaw St.

Flint, Michigan 48507

 

Attention:  Mr. Atul Kavthekar, Chief Financial Officer

 

Project Duke
 $795,000,000 Senior Secured Credit Facilities

Commitment Letter

 

Ladies and Gentlemen:

 

You have advised each of JPMorgan Chase Bank, N.A. (“JPMorgan”) and Capital One, National Association (“Capital One and, together with JPMorgan, the “Commitment Parties”, “we” or “us”) that you intend to consummate the Transactions (such term and each other capitalized term used but not defined herein having the meanings assigned to them in the Term Sheet (as defined below)).

 

In connection with the Transactions, JPMorgan and Capital One each are pleased to advise you of their commitment, on a several and not joint basis, to provide 65% and 35%, respectively, of the principal amount of the Facilities, upon the terms and subject to the conditions set forth in this commitment letter (this “Commitment Letter”) and in the Summary of Principal Terms and Conditions attached hereto as Exhibit A (the “Senior Facilities Term Sheet” and, together with the Summary of Additional Conditions Precedent attached hereto as Exhibit B (the “Conditions Exhibit”), the “Term Sheet”).

 

You hereby appoint each of JPMorgan and Capital One to act, and JPMorgan and Capital One hereby agree to act, as joint lead arrangers and joint bookrunners for the Facilities, upon the terms and subject to the conditions set forth in this Commitment Letter and in the Term Sheet.  You also hereby appoint (i) JPMorgan to act, and JPMorgan hereby agrees to act, as sole and exclusive administrative agent and collateral agent for the Facilities, in each case upon the terms and subject to the conditions set forth in this Commitment Letter and in the Term Sheet. JPMorgan, in such capacity, will perform the duties and exercise the authority customarily performed and exercised by it in such roles; provided that you agree that JPMorgan may perform its responsibilities hereunder as a joint lead arranger and joint bookrunner through its affiliate, J.P. Morgan Securities LLC and (ii) Capital One to act, and Capital One hereby agrees to act, as sole and exclusive syndication agent for the Facilities, upon the terms and subject to the conditions set forth in this Commitment Letter and in the

 











 

Term Sheet. JPMorgan and Capital One, each in such capacity, will perform the duties and exercise the authority customarily performed and exercised by it in such roles. It is understood and agreed that (a) no additional agents, co-agents, arrangers, co-arrangers, managers, co-managers, bookrunners or co-bookrunners will be appointed and no other titles will be awarded in connection with the Facilities and (b) no compensation (other than as expressly contemplated by the Term Sheet or the Fee Letters referred to below) will be paid in connection with the Facilities, in each case unless you and we so agree in writing.  It is further agreed that JPMorgan will have “left” placement on and will appear on the top left of any Information Materials (as defined below) and all other offering or marketing materials in respect of the Facilities (with Capital One immediately to the “right” of JPMorgan), and JPMorgan will perform the roles and responsibilities conventionally understood to be associated with such “left” placement.

 

The Commitment Parties reserve the right, prior to or after the execution of definitive documentation for the Facilities (the “Facilities Documentation”), to, after consultation with you, syndicate all or a portion of its commitments hereunder to one or more financial institutions reasonably satisfactory to you that will become parties to such definitive documentation pursuant to syndications to be managed by the Commitment Parties (the financial institutions becoming parties to such definitive documentation being collectively referred to herein as the “Lenders”); provided, however, that notwithstanding the Commitment Parties’ right to syndicate the Facilities and receive commitments with respect thereto, other than with respect to the commitments of any additional agent, co-agent or joint bookrunner appointed in accordance with the immediately preceding paragraph, unless otherwise agreed in writing by you, (a) the Commitment Parties shall not be relieved, released or novated from their obligations hereunder (including their respective obligations to fund the Facilities on the Closing Date) in connection with any syndication, assignment or participation of the Facilities, including their commitment in respect thereof, until after the initial funding under the Facilities on the Closing Date has occurred, (b) no assignment or novation shall become effective with respect to all or any portion of the Commitment Parties’ commitments in respect of the Facilities until after the initial funding under the Facilities on the Closing Date has occurred and (c) the Commitment Parties shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Facilities, including all rights with respect to consents, modifications, supplements, waivers and amendments, until after the initial funding under the Facilities on the Closing Date has occurred.  You understand that each of the Facilities may be separately syndicated.  The Commitment Parties may decide to commence syndication efforts promptly, and you agree, until the earlier of (x) the date upon which a Successful Syndication (as defined in the Arranger Fee Letter) of the Facilities is achieved and (y) the date that is 60 days after the Closing Date (such earlier date, the “Syndication Date”), to assist (and, to the extent provided in the Purchase Agreement, to use your commercially reasonable efforts to cause the Target to actively assist) the Commitment Parties in completing satisfactory syndications.  Such assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit from your existing banking relationships, (b) direct contact during the syndications between your senior management, representatives and advisors and the proposed Lenders (and, to the extent provided in the Purchase Agreement, using your commercially reasonable efforts to ensure such contact between senior management of the Target and the proposed Lenders), (c) your assistance (and, to the extent provided in the Purchase Agreement, using commercially

 

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reasonable efforts to cause the Target to assist) in the preparation of a Confidential Information Memorandum for the Facilities and other marketing materials to be used in connection with the syndications (collectively, the “Information Materials”), (d) the hosting, with the Commitment Parties, of one or more meetings with prospective Lenders at times and locations to be mutually agreed upon, (and, to the extent provided in the Purchase Agreement, using your commercially reasonable efforts to cause the officers of the Target to be available for such meetings) and (e) prior to the Syndication Date, there being no competing issues, offerings, placements or arrangements of debt securities or commercial bank or other credit facilities of you or your subsidiaries being issued, offered, placed or arranged (other than the Facilities) without the consent of JPMorgan if such issuance, offering, placement or arrangement would reasonably be expected to materially impair the primary syndications of the Facilities.  Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letters or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, none of the compliance with the foregoing provisions of this paragraph or any syndications of the Facilities shall constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date.

 

It is understood and agreed that the Commitment Parties will, after consultation with and in a manner reasonably acceptable to you, manage all aspects of the syndications, including but not limited to selection of Lenders, the determination of when the Commitment Parties will approach potential Lenders and the time of acceptance of the Lenders’ commitments and the final allocations of the commitments among the Lenders; provided that the selection of Lenders and the final allocations of the commitments among the Lenders shall be subject to your consent (not to be unreasonably withheld).  In acting as the joint lead arrangers and joint bookrunners, the Commitment Parties will have no responsibility other than to arrange the syndications as set forth herein and shall in no event be subject to any fiduciary or other implied duties.  To assist the Commitment Parties in their syndication efforts, you agree to promptly prepare and provide to the Commitment Parties (and, to the extent provided in the Purchase Agreement, use commercially reasonable efforts to cause the Target to prepare and provide) all information with respect to you, the Target and your and its respective subsidiaries, the Transactions and the other transactions contemplated hereby, including financial information and projections (the “Projections”) as the Commitment Parties may reasonably request in connection with the structuring, arrangement and syndications of the Facilities. At the request of the Commitment Parties, you agree to assist the Commitment Parties in preparing an additional version of the Information Materials (the “Public Side Version”) to be used by prospective Lenders’ public-side employees and representatives (“Public-Siders”) who do not wish to receive material non-public information (within the meaning of the United States Federal or State securities laws) with respect to you, the Target, your and its respective affiliates and any of your or its respective securities (such material non-public information, “MNPI”) and who may be engaged in investment and other market-related activities with respect to your, the Target’s or your and its respective affiliates’ securities or loans.  Before distribution of any Information Materials, (a) you agree to execute and deliver to the Commitment Parties (i) a customary letter in which you authorize distribution of the Information Materials to a prospective Lender’s employees willing to receive MNPI (“Private-Siders”) and (ii) a separate customary letter in which you authorize distribution of the Public Side Version to Public-Siders and represent that no MNPI is contained therein and (b) you agree to identify that portion of the Information Materials that

 

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may be distributed to Public-Siders as not containing MNPI, which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof (and you agree that, by marking Information Materials as “PUBLIC”, you shall be deemed to have authorized the Commitment Parties and the prospective Lenders to treat such Information Materials as not containing MNPI (it being understood that you shall not be under any obligation to mark the Information Materials as “PUBLIC”)).  You acknowledge that the Commitment Parties will make available the Information Materials on a confidential basis to the proposed syndicate of Lenders by posting such information on Intralinks, Debt X or SyndTrak Online or by similar electronic means.  You agree that the following documents may be distributed to both Private-Siders and Public-Siders, unless you advise the Commitment Parties within a reasonable time after receipt of such materials for review that such materials should only be distributed to Private-Siders: (1) administrative materials prepared by the Commitment Parties for prospective Lenders (such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda), (2) the Term Sheet and notification of changes in the Facilities’ terms and conditions and (3) drafts and final versions of the Facilities Documentation.  If you so advise the Commitment Parties that any of the foregoing should be distributed only to Private-Siders, then Public-Siders will not receive such materials without further discussions with you. You acknowledge that the Commitment Parties’ public-side employees and representatives who are publishing debt analysts may participate in any meetings held pursuant to clause (d) of the second preceding paragraph; provided that such analysts shall not publish any information obtained from such meetings (i) until the syndication of the Facilities has been completed upon the making of allocations by JPMorgan and JPMorgan freeing the Facilities to trade or (ii) in violation of any confidentiality agreement between you and any other party hereto.

 

You hereby represent and warrant that (but the accuracy of such representation and warranty shall not be a condition to the commitment hereunder or the funding of the Facilities on the Closing Date) (with respect to any information or data relating to the Target, the following representations and warranties shall be made solely to your knowledge) (a) all written information and written data (other than the Projections and other forward-looking information and other than information of a general economic or industry specific nature) (such information and data, the “Information”) that has been or will be made available to the Commitment Parties or their representatives by or on behalf of you or your representatives, when taken as a whole, is or will be, when furnished, correct in all material respects and 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 (giving effect to all supplements and updates provided thereto from time to time) and (b) the Projections that have been or will be made available to the Commitment Parties or their representatives by or on behalf of you or your representatives have been and will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time made (it being understood that (i) the Projections are as to future events and are not to be viewed as facts, (ii) the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, (iii) no assurance can be given that any particular Projections will be realized and (iv) actual results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material).  You agree that if at any time from and including the date hereof until the later of the Closing

 

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Date and the Syndication Date you become aware that the representation and warranty in the immediately preceding sentence would not be satisfied if the Information and Projections were being furnished, and such representations were being made, at such time, then you will (or with respect to Information and Projections relating to the Target, use commercially reasonable efforts to) promptly supplement the Information and the Projections so that such representation and warranty would be correct (prior to the Closing Date, to your knowledge with respect to Information and Projections relating to the Target) under those circumstances.  In arranging the Facilities, including the syndications of the Facilities, the Commitment Parties (A) will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof and (B) do not assume responsibility for the accuracy or completeness of the Information or the Projections.

 

As consideration for the Commitment Parties’ commitments hereunder and agreement to structure, arrange and syndicate the Facilities, you agree to pay the fees as set forth in the Term Sheet, the Arranger Fee Letter dated the date hereof and delivered herewith with respect to the Facilities (the “Arranger Fee Letter”) and the Administrative Agent Fee Letter dated the date hereof and delivered herewith with respect to the Facilities (the “Agent Fee Letter” and, together with the Arranger Fee Letter, the “Fee Letters”).  Once paid, except as expressly provided in the Fee Letters, such fees shall not be refundable under any circumstances.

 

The Commitment Parties’ commitments hereunder to fund the Facilities on the Closing Date and the agreement of the Commitment Parties to perform the services described herein are subject solely to the express conditions set forth under the headings “Conditions Precedent to Initial Borrowing” and “Conditions Precedent to All Borrowings” in the Senior Facilities Term Sheet and the conditions set forth in the Conditions Exhibit, and upon satisfaction (or waiver by the Commitment Parties) of such conditions, the initial funding of the Facilities shall occur.

 

Notwithstanding anything in this Commitment Letter, the Term Sheet, the Fee Letters, the Facilities Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (a) the only representations and warranties the accuracy of which shall be a condition to the availability of the Facilities on the Closing Date shall be (i) such of the representations and warranties made by the Seller, the Target or their affiliates with respect to the Target in the Purchase Agreement as are material to the interests of the Lenders, but only to the extent that you have (or an affiliate of yours has) the right to terminate your (or its) obligations under the Purchase Agreement or decline to consummate the Acquisition as a result of a breach of such representations and warranties in the Purchase Agreement (the “Specified Purchase Agreement Representations”) and (ii) the Specified Representations (as defined below) made by you in the Facilities Documentation and (b) the terms of the Facilities Documentation shall be in a form such that they do not impair the availability or funding of the Facilities on the Closing Date if the conditions described in the immediately preceding paragraph are satisfied or waived by the Commitment Parties (it being understood that, to the extent any security interest in any Collateral is not or cannot be provided and/or perfected on the Closing Date (other than the creation of and perfection (including by delivery of stock or other equity certificates, if any) of security interests (i) in the equity interests in any of your material domestic subsidiaries (to the extent constituting Collateral under the Senior Facilities Term Sheet) and (ii) in other assets located

 

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in the United States with respect to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after your use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Facilities on the Closing Date, but instead shall be required to be provided or delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed by the Administrative Agent and the Borrower acting reasonably).  For purposes hereof, “Specified Representations” means the representations and warranties of you relating to the Borrower and the Guarantors set forth in the Facilities Documentation relating to organization and powers (as to execution, delivery and performance of the Facilities Documentation); authorization, due execution and delivery and enforceability; no conflicts between the Facilities Documentation and organizational documents immediately after giving effect to the Transactions; sanctions and anti-corruption; solvency on a consolidated basis as of the Closing Date (after giving effect to the Transactions) of you and your subsidiaries on a consolidated basis; the Investment Company Act of 1940; Federal Reserve margin regulations; and subject to the parenthetical statement in the immediately preceding sentence, creation, perfection and priority (subject to permitted liens) of security interests in the Collateral.  This paragraph, and the provisions herein, shall be referred to as the “Limited Conditionality Provisions”.

 

By executing this Commitment Letter, you agree (a) to indemnify and hold harmless each Commitment Party, their respective affiliates and each of their respective Related Parties (as defined below) (each, an “indemnified person”) from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Term Sheet, the Fee Letters, the Transactions, the Facilities or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any such indemnified person is a party thereto or whether a Proceeding is initiated by or on behalf of a third party or you or any of your affiliates, and to reimburse each such indemnified person upon demand for any reasonable and documented out-of-pocket legal expenses of one firm of counsel for all such indemnified persons, taken as a whole, and, if necessary, of a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for all such indemnified persons, taken as a whole (and, in the case of an actual or perceived conflict of interest where the indemnified person affected by such conflict informs you of such conflict and thereafter retains its own counsel, of another firm of counsel for such affected indemnified person and, if necessary, of a single firm of local counsel in each appropriate jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for such affected indemnified person) and other reasonable and documented out-of-pocket fees and expenses, in each case incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they (i) are found in a final and non-appealable judgment of a court of competent jurisdiction to have resulted from the bad faith, willful misconduct or gross negligence of such indemnified person, (ii) result from a claim brought by you or any of your subsidiaries against such indemnified person for material breach of such indemnified person’s obligations hereunder, the Fee Letters or the Facilities Documentation if you or such

 

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subsidiary has obtained a final and non-appealable judgment in your or its favor on such claim as determined by a court of competent jurisdiction or (iii) result from a proceeding that does not involve an act or omission by you or any of your affiliates and that is brought by an indemnified person against any other indemnified person (other than claims against any arranger, bookrunner or agent in its capacity or in fulfilling its roles as an arranger, bookrunner or agent hereunder or any similar role with respect to the Facilities), and (b) to reimburse each Commitment Party upon presentation of a summary statement for all reasonable and documented out-of-pocket expenses (including but not limited to the expenses of each Commitment Party’s due diligence investigation, consultants’ fees and expenses, syndication expenses, travel expenses and reasonable fees, disbursements and other charges of counsel (such charges and disbursements limited to one firm of counsel to JPMorgan and one firm of counsel to Capital One (with such fees of Capital One’s counsel not required to be reimbursed to the extent in excess of $20,000), and, if necessary, one firm of local counsel in each appropriate jurisdiction)) incurred in connection with the Facilities and the preparation of this Commitment Letter, the Term Sheet, the Fee Letters, the Facilities Documentation and any security arrangements in connection therewith; provided that you shall not be required to reimburse any of the foregoing expenses in clause (b) in excess of $250,000 (plus, if applicable, such fees of Capital One’s counsel to the extent not in excess of $20,000) in the event the Closing Date does not occur.  Notwithstanding any other provision of this Commitment Letter, (1) no indemnified person shall be liable for any damages directly or indirectly arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems (except to the extent that any such damages have resulted from the willful misconduct or gross negligence of such indemnified person (as determined by a court of competent jurisdiction in a final non-appealable judgment)) and (2) none of the indemnified persons, you or the Target or your or its respective subsidiaries or affiliates shall be liable for any special, indirect, consequential or punitive damages in connection with the Facilities or the Transactions; provided that nothing contained in this paragraph shall limit your indemnity and reimbursement obligations to the extent set forth in this paragraph. You shall not be liable for any settlement, compromise or consent to the entry of any judgment in any Proceeding effected without your prior written consent (which consent shall not be unreasonably withheld or delayed), but if settled with your written consent or if there is a final judgment in any such Proceeding, you agree to indemnify and hold harmless each indemnified person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with, and to the extent required by, this paragraph.  Notwithstanding the foregoing, each indemnified person shall be obligated to refund and return promptly any and all amounts paid by you or any of your affiliates under this paragraph to such indemnified persons for any loss, claim, expense, damage or liability with respect to which such indemnified person was not entitled to payment in accordance with the terms hereof (as determined by a court of competent jurisdiction in a final non-appealable judgment). You shall not, without the prior written consent of an indemnified person (which consent shall not be unreasonably withheld or delayed), effect any settlement or consent to the entry of any judgment of any pending or threatened Proceeding in respect of which indemnity could have 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 on claims that are the subject matter

 

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of such Proceeding, (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of such indemnified person and (iii) contains customary confidentiality and non-disparagement provisions. For purposes hereof, “Related Parties” means, with respect to any person, the directors, officers, employees, agents, advisors, representatives and controlling persons of such person.

 

You acknowledge that the Commitment Parties and their respective affiliates may be providing debt financing, equity capital or other services (including but not limited to financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. Neither the Commitment Parties or any of their respective affiliates will use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or its other relationships with you in connection with the performance by the Commitment Parties or any of their respective affiliates of services for other companies, and none of the Commitment Parties or any of their respective affiliates will furnish any such information to other companies.  You also acknowledge that neither the Commitment Parties or any of their respective affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, the Target or your or their respective subsidiaries or representatives, confidential information obtained by the Commitment Parties or any of their respective affiliates from any other company or person.

 

You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you, on the one hand, and the Commitment Parties, on the other hand, is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter and the Term Sheet, irrespective of whether the Commitment Parties have advised or are advising you on other matters, (b) each Commitment Party, on the one hand, and you, on the other hand, have an arms-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, (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 and the Term Sheet, (d) you have been advised that each Commitment Party is engaged in a broad range of transactions that may involve interests that differ from your interests and that the Commitment Parties do not have an obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship, (e) the Commitment Parties are not advising you as to any legal, regulatory, tax, accounting or investment matters in any jurisdiction (including, without limitation, with respect to any consents needed in connection with the transactions contemplated hereby) and that you shall consult your own advisors with respect to such matters to the extent you deem appropriate in connection with the transactions contemplated hereby and (f) you agree not to assert, to the fullest extent permitted by law, any claims against the Commitment Parties for alleged breach of fiduciary duty in connection with the Transactions.

 

You further acknowledge that each Commitment Party 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

 

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other securities and financial instruments (including bank loans) and other obligations of, you, the Target and other companies with which you or the Target may have commercial or other relationships.  With respect to any securities and/or financial instruments so held by the Commitment Parties 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.

 

This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto, and such party’s obligations hereunder may not be delegated, without the prior written consent of the Commitment Parties (in the case of any such assignment or delegation by the Borrower) or the Borrower (in the case of any such assignment or delegation by the Commitment Parties), and any attempted assignment without such consent shall be null and void.  This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each Commitment Party and you.  This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed 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 other electronic transmission (in “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart of this Commitment Letter.  This Commitment Letter, the Term Sheet and the Fee Letters are the only agreements that have been entered into among us with respect to the Facilities and set forth the entire understanding of the parties with respect thereto.  This Commitment Letter, the Term Sheet and the Fee Letters supersede all prior understandings, whether written or oral, between us with respect to the Facilities.  This Commitment Letter is intended to be solely for the benefit of the parties hereto and the indemnified persons and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons.  THIS COMMITMENT LETTER AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT, (A) THE INTERPRETATION OF THE DEFINITION OF A COMPANY MATERIAL ADVERSE EFFECT (AS DEFINED IN EXHIBIT B) AND THE DETERMINATION AS TO WHETHER THERE SHALL HAVE OCCURRED A COMPANY MATERIAL ADVERSE EFFECT, (B) WHETHER THE ACQUISITION HAS BEEN CONSUMMATED AS CONTEMPLATED BY THE PURCHASE AGREEMENT AND (C) WHETHER THE REPRESENTATIONS AND WARRANTIES MADE BY THE SELLER OR THE TARGET IN THE PURCHASE AGREEMENT ARE ACCURATE AND WHETHER AS A RESULT OF ANY INACCURACY THEREOF YOU (OR YOUR APPLICABLE AFFILIATES) HAVE THE RIGHT TO TERMINATE YOUR OBLIGATIONS UNDER THE PURCHASE AGREEMENT, OR TO DECLINE TO CONSUMMATE THE ACQUISITION (IN EACH CASE, IN ACCORDANCE WITH THE TERMS THEREOF), SHALL, IN EACH CASE, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.  The Commitment Parties may perform the duties and activities described hereunder through any of their respective affiliates and the provisions of the fourth

 

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preceding paragraph shall apply with equal force and effect to any of such affiliates so performing any such duties or activities.

 

Subject to the last sentence of this paragraph, each of the parties hereto irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against any other party hereto or any of their respective affiliates or any of their respective officers, directors, employees, agents and controlling persons in any way relating to the Transactions, this Commitment Letter, the Term Sheet or the Fee Letters or the performance of services hereunder or thereunder, in any forum other than any Federal court for the Southern District of New York sitting in the Borough of Manhattan in the City of New York (or in the event such court lacks subject matter jurisdiction, in any State court for the State of New York sitting in the Borough of Manhattan in the City of New York) or any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such court.  Each of the parties hereto hereby agrees that service of any process, summons, notice or document by registered mail addressed to such party shall be effective service of process for any suit, action or proceeding brought in any such court.  Each party hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any such action, litigation or proceeding brought in any such court and any claim that any such action, litigation or proceeding has been brought in any inconvenient forum.  Each party hereto hereby agrees that a final judgment in any such action, litigation or proceeding brought in any such court shall be conclusive and binding upon such party and may be enforced in any other courts to whose jurisdiction such party is or may be subject, by suit upon judgment.  Nothing in this Commitment Letter, the Term Sheet or the Fee Letters shall affect any right that the Commitment Parties may have to bring any action, litigation or proceeding relating to the Transactions, this Commitment Letter, the Term Sheet or the Fee Letters or the performance of services hereunder or thereunder against you or your property in the courts of any other jurisdiction.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, THE TERM SHEET, THE FEE LETTERS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO HERBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS COMMITMENT LETTER AND THE FEE LETTERS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

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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 and the Term Sheet, it being acknowledged and agreed that the commitment provided hereunder is subject to conditions precedent as provided herein.

 

You agree that you will not disclose, directly or indirectly, this Commitment Letter, the Term Sheet, the Fee Letters, the contents of any of the foregoing or the activities of the Commitment Parties pursuant hereto or thereto to any person without the prior approval of the Commitment Parties, except that you may disclose (a) this Commitment Letter, the Term Sheet, the Fee Letters and the contents hereof and thereof (i) to the Seller, the Target and your and the Seller’s and the Target’s directors, officers, employees, attorneys, accountants and advisors directly involved in the consideration of this matter on a confidential and need-to-know basis (provided that any disclosure of the Fee Letters or their terms or substance to the Seller, the Target or their directors, officers, employees, attorneys, accountants and advisors shall be redacted in a manner reasonably satisfactory to the Commitment Parties), (ii) pursuant to the order of any court or administrative agency or in any legal, judicial or administrative proceeding or other compulsory process or otherwise as required by applicable law or regulations (in which case you shall promptly notify us, in advance, to the extent lawfully permitted to do so), (iii) in connection with the exercise of remedies to the extent relating to this Commitment Letter, the Term Sheet or the Fee Letters and (iv) to the extent this Commitment Letter, the Term Sheet, the Fee Letters or the contents hereof and thereof become publicly available other than by reason of disclosure by you, the Seller, the Target or your, the Seller’s or the Target’s directors, officers, employees, attorneys, accountants and advisors in breach of this Commitment Letter, (b) this Commitment Letter, the Term Sheet and the contents hereof and thereof (but not the Fee Letters or the contents thereof) (i) to S&P and Moody’s in connection with the Transactions and on a confidential and need-to-know basis and (ii) in any syndication or other marketing materials in connection with the Facilities (including the Information Materials) or, to the extent required by law, in connection with any public filing and (c) the aggregate fee amount contained in the Fee Letters as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts in connection with the Transactions in marketing materials for the Facilities or, to the extent required by applicable law, in any public filing.

 

Each Commitment Party shall use all non-public information received by them in connection with the Facilities and the Transactions solely for the purposes of providing the services that are the subject of this Commitment Letter, the Term Sheet and the Fee Letters and shall treat confidentially all such information; provided, however, that nothing herein shall prevent the Commitment Parties from disclosing any such information (a) to ratings agencies on a confidential basis and in consultation with you, (b) to any Lenders or participants or prospective Lenders or prospective participants, (c) pursuant to the order of any court or administrative agency or in any legal, judicial or administrative proceeding or other compulsory process or otherwise as required by applicable law or regulations (in which case the Commitment Parties shall promptly notify you, in advance, to the extent lawfully permitted to do so), (d) upon the request or demand of any regulatory authority having jurisdiction over the Commitment Parties or any of their respective affiliates (in which case 

 

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the Commitment Parties shall, except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority, promptly notify you, in advance, to the extent lawfully permitted to do so), (e) to its affiliates and the respective Related Parties of the Commitment Parties and its affiliates who are informed of the confidential nature of such information and are or have been advised of their obligation to keep all such information confidential or are otherwise under a professional or employment duty of confidentiality, (f) to any direct or indirect contractual counterparties to any swap or derivatives transaction relating to the Borrower or the transactions under the Facilities, (g) to the extent any such information becomes publicly available other than by reason of disclosure by the Commitment Parties, their affiliates or any of their respective Related Parties in breach of this Commitment Letter, (h) to the extent such information is received by the Commitment Parties from a third party that is not, to the Commitment Parties’ knowledge, subject to a confidentiality obligation to you with respect to such information and (i) in connection with the exercise of remedies to the extent relating to this Commitment Letter, the Term Sheet or the Fee Letters; provided that the disclosure of any such information to any Lenders, prospective Lenders, participants, prospective participants or derivatives counterparties referred to in clauses (b) or (f) above shall be made subject to the acknowledgment and acceptance by such recipient that such information is being disseminated on a confidential basis in accordance with the standard syndication processes of the Commitment Parties or customary market standards for dissemination of such type of information. The obligations of the Commitment Parties under this paragraph shall automatically terminate and be superseded by the confidentiality provisions of the Facilities Documentation upon the initial funding thereunder; provided that if not previously terminated, the provisions of this paragraph shall automatically terminate two years following the date of this Commitment Letter.

 

The Commitment Parties hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001), as subsequently amended and reauthorized) (the “Patriot Act”), that they and each of the Lenders may be required to obtain, verify and record information that identifies you, which information may include your name and address, the name and address of each of the Guarantors and other information that will allow the Commitment Parties and each of the Lenders to identify you and each of the Guarantors in accordance with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act and is effective for the Commitment Parties and each of the Lenders.

 

Please indicate your acceptance of the terms hereof and of the Fee Letters by signing in the appropriate space below and in the Fee Letters and returning to JPMorgan (or its counsel) executed original copies (or facsimiles or other electronic copies in “pdf” or “tif” format thereof) of this Commitment Letter and the Fee Letters not later than 11:59 p.m., New York City time, on November 15, 2017.  The commitments and agreements of the Commitment Parties hereunder will expire at such time in the event that JPMorgan has not received such executed original copies (or facsimiles or other electronic copies in “pdf” or “tif” format thereof) in accordance with the immediately preceding sentence.  In the event that (i) the initial borrowing under the Facilities does not occur on or before December 31, 2017; provided that if the termination date is extended under the Purchase Agreement pursuant to the second proviso to Section 9.1(a) thereof (as in effect on the date hereof), such December 

 

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31, 2017 date shall automatically be extended to such extended date under the Purchase Agreement; provided further that in no event shall such extended date be later than January 14, 2018, (ii) the Purchase Agreement is terminated without consummation of the Acquisition and the funding of the Facilities or (iii) the consummation of the Acquisition occurs with or without the use of the Facilities, then this Commitment Letter and the commitments hereunder shall automatically terminate unless the Commitment Parties shall, in their sole discretion, agree to an extension.  The syndication (including information), compensation, reimbursement, indemnification, jurisdiction, governing law, waiver of jury trial, no fiduciary relationship and, except as expressly set forth above, confidentiality provisions contained herein and in the Fee Letters shall remain in full force and effect regardless of whether Facilities Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder.  You may terminate this Commitment Letter and/or the commitments hereunder with respect to the Facilities (or a portion thereof, ratably among any parties hereto) at any time subject to the provisions of the immediately preceding sentence.

 

[The remainder of this page intentionally left blank]

 

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We are pleased to have been given the opportunity to assist you in connection with this important financing.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Diane D. Forrest
    
	
 
    	
 
    	
Name:   Diane D. Forrest
    
	
 
    	
 
    	
Title:   Authorized Officer
    


 

[Signature Page to Commitment Letter]

 











 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Karen M. Dahlquist
    
	
 
    	
 
    	
Name:   Karen M. Dahlquist
    
	
 
    	
 
    	
Title:   Duly Authorized Signatory
    


 

	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joe Lee
    
	
 
    	
 
    	
Name:   Joe Lee
    
	
 
    	
 
    	
Title:   Duly Authorized Signatory
    


 

[Signature Page to Commitment Letter]

 











 

	
Accepted   and agreed to as of the date first above written:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
DIPLOMAT   PHARMACY, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Philip R. Hagerman
    	
 
    
	
 
    	
Name:   Philip R. Hagerman
    	
 
    
	
 
    	
Title:   Chief Executive Officer
    	
 
    


 

[Signature Page to Commitment Letter]

 












 

Execution Version

 

EXHIBIT A

 

CONFIDENTIAL

 

Project Duke
 $795,000,000 Senior Secured Credit Facilities
 Summary of Principal Terms and Conditions(1)

 

	
Borrower:
    	
 
    	
The borrower under the Facilities (as defined below)   will be Diplomat Pharmacy, Inc., a Michigan corporation (the “Borrower”).
    
	
 
    	
 
    	
 
    
	
Transactions:
    	
 
    	
The Borrower intends to acquire all of the   outstanding equity interests of the entity previously identified to JPMorgan   as “Duke” (the “Target”) pursuant to, and subject to the conditions   set forth in, the Securities Purchase Agreement and Plan of Merger (together   with the schedules, annexes, exhibits and other attachments thereto, the “Purchase   Agreement”) dated as of November 15, 2017 and among the Borrower,   the Target, the Sellers (as defined in the Purchase Agreement) (the “Seller”)   and the other parties thereto (the “Acquisition”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Upon consummation of the Acquisition, the Seller   shall receive cash consideration (the “Cash Consideration”) and   consideration in the form of common equity interests of the Borrower (the “Equity   Issuance to Seller”), in each case in an aggregate amount and in the   manner provided for in the Purchase Agreement.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In connection with the Acquisition, (a) the   Borrower will obtain the senior secured credit facilities (the “Facilities”)   described below under the heading “Facilities” on the date on which the   Acquisition is consummated (the “Closing Date”), (b) the   Borrower’s Second Amended and Restated Credit Agreement dated as of   April 1, 2015 among the Borrower, General Electric Capital Corporation   as agent and the other parties thereto (including any amendments, increases   replacements, refinancings or modifications thereof), certain other existing   indebtedness of the Borrower and its subsidiaries and all material 
    


 




(1)  Capitalized terms used herein but not otherwise defined have the meanings assigned thereto in the Commitment Letter to which this Exhibit A is attached (the “Commitment Letter”), including the other exhibits thereto.

 











 

	
 
    	
 
    	
indebtedness of the Target and its subsidiaries (the   “Existing Indebtedness”) will be repaid, repurchased, redeemed or   otherwise retired and all existing commitments, guarantees, obligations and   security interests in respect of the Existing Indebtedness will be terminated   in full (collectively, the “Existing Indebtedness Refinancing”) and   (c) fees and expenses incurred in connection with the Transactions (the   “Transaction Costs”) will be paid. The transactions described in   clauses (a) through (c) of this paragraph, together with the   Acquisition, are collectively referred to herein as the “Transactions”.
    
	
 
    	
 
    	
 
    
	
Administrative Agent:
    	
 
    	
JPMorgan Chase Bank, N.A. (“JPMorgan”) will   act as sole and exclusive administrative agent and collateral agent for the   Facilities (in such capacities, the “Administrative Agent”) for a   syndicate of financial institutions (the “Lenders”) and will perform   the duties customarily performed by persons acting in such capacities.
    
	
 
    	
 
    	
 
    
	
Syndication Agent:
    	
 
    	
Capital One, National Association (“Capital One”)   will act as sole and exclusive syndication agent for the Facilities.
    
	
 
    	
 
    	
 
    
	
Joint Lead Arrangers and Joint Bookrunners:
    	
 
    	
Each of JPMorgan and Capital One will act as a joint   lead arranger and joint bookrunner for the Facilities (each in such   capacities, the “Arrangers”) and will manage the syndication of the   Facilities.
    
	
 
    	
 
    	
 
    
	
Facilities:
    	
 
    	
(a)   A senior secured term loan facility   denominated in U.S. Dollars in an aggregate principal amount equal to   $545,000,000 (the “Term Loan Facility”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   A senior secured revolving credit facility   available in U.S. Dollars with aggregate commitments in an amount equal to   $250,000,000 (the “Revolving Credit Facility”). Up to an amount equal   to $10,000,000 of the Revolving Credit Facility will be available for the   issuance of letters of credit.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In connection with the Revolving Credit Facility,   JPMorgan, in its capacity as the maker of swingline loans (in such capacity,   the “Swingline Lender”), may, in its sole discretion, make available   to the Borrower a swingline facility in an amount equal to $20,000,000 
    


 

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under which the Borrower may make same-day   short-term borrowings. Any such swingline loans will reduce availability   under the Revolving Credit Facility on a dollar-for-dollar basis, except for   purposes of calculating the commitment fee described in Annex I. Each Lender   under the Revolving Credit Facility will, promptly upon request by the   Administrative Agent, fund to the Administrative Agent its pro rata   share of any swingline borrowings.
    
	
 
    	
 
    	
 
    
	
Incremental Facility:
    	
 
    	
The Facilities Documentation will permit the   Borrower (pursuant to procedures to be mutually agreed upon and set forth in   the credit agreement with respect to the Facilities (the “Credit Agreement”))   to add one or more incremental term loan facilities to the Facilities (each,   an “Incremental Term Loan Facility”) and/or increase the commitments   under the Revolving Credit Facility (each such increase, a “Revolving   Credit Facility Increase” and, together with the Incremental Term Loan   Facilities, the “Incremental Facilities”) in an aggregate principal   amount not to exceed for all such increases and incremental facilities the   sum of (x) $125,000,000 plus (y) the amount of any voluntary   prepayments of the Term Loan Facility or any Incremental Term Loan Facility,   plus (z) an amount of Incremental Facilities such that, after giving   effect to the incurrence of any Incremental Facilities pursuant to clauses   (x) and (y) (and after giving effect to any acquisition consummated   concurrently therewith and any other acquisition, disposition, debt incurrence,   debt retirement and other appropriate pro forma adjustment events, including   any debt incurrence or retirement subsequent to the end of the applicable   test period and on or prior to the date of such incurrence, all to be further   defined in the Credit Agreement), on a pro forma basis (but excluding the   cash proceeds of such incurrence and assuming, in the case of any Revolving   Credit Facility Increase, that the commitments in respect thereof are fully   drawn) the First Lien Net Leverage Ratio (to be defined in a manner to be   agreed and in any event to permit netting of Unrestricted Cash (as defined   below)) would not exceed 3.75 to 1.00; provided that (a) no   default or event of default exists or would exist after giving effect to such   Incremental Facility (or if agreed by the lenders providing such Incremental   Facility in connection with any acquisition or investment permitted under the   Credit Agreement, no payment or bankruptcy event of default),
    


 

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(b)   all fees   and expenses owing in respect of such Incremental Facility to the   Administrative Agent have been paid and (c) no Lender shall be required   to participate in any such Incremental Facility; provided further that   the loans under any Incremental Term Loan Facility (i) will rank pari   passu in right of payment and security with the other Facilities,   (ii) will mature no earlier than the final maturity of the Term Loan   Facility and (iii) will have a weighted average life to maturity no   shorter than the remaining weighted average life to maturity of the Term Loan   Facility. If the “yield” (which, for this purpose, shall be deemed to include   all upfront or similar fees or original issue discount payable to the lenders   in respect of such Incremental Term Loan Facility and any pricing “floor”   applicable to such Incremental Term Loan Facility but excluding customary   arrangement and commitment fees paid to arrangers thereof) applicable to any   Incremental Term Loan Facility incurred prior to the 12 month anniversary of   the Closing Date exceeds the “yield” applicable to the Term Loan Facility by   more than 0.50%, then the interest rate spread applicable to the Term Loan   Facility shall be increased so that the “yield” on the Term Loan Facility is   equal to the “yield” applicable to such Incremental Term Loan Facility less   0.50%. Any Incremental Term Loan Facility will have terms and conditions   substantially identical to the Term Loan Facility (other than with respect to   pricing, amortization and maturity) and will be otherwise on terms and   subject to conditions reasonably satisfactory to the Administrative Agent.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Borrower will be permitted to utilize the above   available incremental credit capacity in the form of (in addition to   Incremental Term Loan Facilities and Revolving Credit Facility Increases)   senior unsecured notes or loans or senior secured notes or loans that are   secured by the Collateral, in the case of notes, on a pari passu or   junior basis or, in the case of loans, a junior basis (“Alternative   Incremental Indebtedness”); provided that, subject to clause   (f) below, in addition to the requirements with respect to the amount,   incurrence and maturity of any such incremental credit extensions set forth   above, (a) in the case of any such Alternative Incremental Indebtedness   in the form of notes, such Alternative Incremental Indebtedness is not   required to be repaid, prepaid, redeemed, repurchased or defeased, whether on   one or 
    


 

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more fixed dates, upon the occurrence of one or more   events or at the option of any holder thereof (except, in each case, upon the   occurrence of an event of default, a change in control, an event of loss or   an asset disposition) prior to the date that is 91 days after the latest   maturity date of the Term Loan Facility and revolving credit commitments   existing under the Credit Agreement at the time of such incurrence,   (b) if such Alternative Incremental Indebtedness is secured,   (i) such indebtedness shall not be secured by any assets or property   other than the Collateral and (ii) all security therefor shall be   granted pursuant to documentation substantially similar to the applicable   collateral documents, and the secured parties thereunder, or a trustee or collateral   agent on their behalf, shall have become a party to a first lien   intercreditor agreement or a junior lien intercreditor agreement, in each   case in form and substance reasonably satisfactory to the Administrative   Agent, (c) such Alternative Incremental Indebtedness is not guaranteed   by any subsidiaries of the Borrower other than the Guarantors, (d) any   Alternative Incremental Indebtedness does not have a shorter weighted average   life than the remaining weighted average life of the Term Loan Facility,   (e) the other terms and conditions of such Alternative Incremental   Indebtedness (excluding pricing) are no more favorable to the investors   providing such Alternative Incremental Indebtedness than those applicable to   the Term Loan Facility (except for covenants or other provisions applicable   only to periods after the latest final maturity date of the Term Loan   Facility existing under the Credit Agreement at the time of incurrence of   such Alternative Incremental Indebtedness) and (f) in lieu of the First   Lien Net Leverage Ratio test applicable to Incremental Facilities pursuant to   clause (z) under the heading “Incremental Facility” such test with   respect to Alternative Incremental Indebtedness shall instead be: (1) in   the case of such indebtedness secured on a pari passu basis with the   Facilities, a First Lien Net Leverage Ratio not to exceed 3.75 to 1.00,   (2) in the case of such indebtedness secured on a junior basis to the   Facilities, a Secured Net Leverage Ratio (to be defined in a manner to be   agreed and in any event to permit netting of Unrestricted Cash) not to exceed   4.25 to 1.00 or (3) in the case of such unsecured indebtedness, a Total   Net Leverage Ratio (as defined below) not to exceed 5.00 to 
    


 

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1.00.
    
	
 
    	
 
    	
 
    
	
Refinancing Term Loans and Revolving Credit   Commitments:
    	
 
    	
With the consent of the Borrower, the Administrative   Agent and the lenders providing the refinancing term loans or refinancing   revolving credit commitments, one or more tranches of term loans or any   revolving credit commitments can be refinanced from time to time, in whole or   part, with one or more new tranches of term loans, senior secured notes   (which may rank pari passu or junior in right of security to the Term   Loan Facility) or senior unsecured notes (“Refinancing Debt”) or new   revolving credit commitments (“Refinancing Commitments”),   respectively, under the Credit Agreement; provided that (i) any   Refinancing Debt does not mature prior to the maturity date of, or have a   shorter weighted average life than, the term loans being refinanced,   (ii) any Refinancing Commitments do not mature prior to the maturity   date of the revolving credit commitments being refinanced and (iii) the   other terms and conditions of such Refinancing Debt or Refinancing   Commitments (excluding pricing and optional prepayment terms) are no more   favorable to the lenders or investors, as the case may be, providing such   Refinancing Debt or Refinancing Commitments, as applicable, than those   applicable to the term loans or revolving credit commitments being refinanced   (except for covenants or other provisions applicable only to periods after   the latest final maturity date of the Term Loan Facility and revolving credit   commitments existing under the Credit Agreement at the time of such   refinancing).
    
	
 
    	
 
    	
 
    
	
Purpose:
    	
 
    	
(a)   The proceeds of the loans under the Term   Loan Facility will be used by the Borrower on the Closing Date solely   (i) first, to pay the Transaction Costs, (ii) second,   to consummate the Existing Indebtedness Refinancing, (iii) third,   to pay the Cash Consideration and (iv) fourth, for working   capital and other general corporate purposes.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   The proceeds of loans under the Revolving   Credit Facility will be used by the Borrower for working capital and other   general corporate purposes.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)   Letters of credit will be used to support   obligations of the Borrower and its subsidiaries incurred in the 
    


 

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ordinary course of   business.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)   The proceeds of loans under any Incremental   Term Loan Facility will be used by the Borrower for the purposes specified in   the definitive documentation relating thereto.
    
	
 
    	
 
    	
 
    
	
Availability:
    	
 
    	
(a)   The Term Loan Facility must be drawn in a   single drawing on the Closing Date. Amounts borrowed under the Term Loan   Facility that are repaid or prepaid may not be reborrowed.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   Loans under the Revolving Credit Facility   will be available on and after the Closing Date at any time prior to the   final maturity of the Revolving Credit Facility, in minimum principal amounts   to be mutually agreed upon; provided that extensions of credit under   the Revolving Credit Facility made on the Closing Date shall be subject to a   requirement that the unutilized Revolving Credit Facility commitments plus   the amount of Unrestricted Cash shall be at least $100,000,000 on a pro forma   basis after giving effect to the Transactions (provided any amounts under the   Revolving Credit Facility utilized to fund “flex” original issue discount and   upfront fees in respect of the Facilities pursuant to the terms of the   Arranger Fee Letter shall not be deemed a utilization of the Revolving Credit   Facility solely for purposes of this test). Amounts repaid under the   Revolving Credit Facility may be reborrowed.
    
	
 
    	
 
    	
 
    
	
Interest Rates and Fees:
    	
 
    	
As set forth on Annex I hereto.
    
	
 
    	
 
    	
 
    
	
Default Rate:
    	
 
    	
The applicable interest rate plus 2.0% per annum.
    
	
 
    	
 
    	
 
    
	
Letters of Credit:
    	
 
    	
Letters of credit under the Revolving Credit   Facility will be made available by JPMorgan and Capital One (or their   applicable banking affiliate) in respect of the Facilities and any other   Lender under the Revolving Credit Facility that is acceptable to the Borrower   and the Administrative Agent (each, an “Issuing Bank”). Each letter of   credit shall expire not later than the earlier of (a) 12 months after   its date of issuance and (b) the fifth business day prior to the final   maturity of the Revolving Credit Facility; provided that any letter of   credit having a 12-month tenor may provide for the renewal of such letter of   credit for 
    


 

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additional 12-month periods (which shall, in no   event, extend beyond the date referred to in clause (b) of this   paragraph). The Letter of credit sublimit shall be shared ratably among   JPMorgan and Capital One based on the amount of their commitments in respect   of the Revolving Credit Facility, and such institution may in its discretion,   but shall not be required to, issue letters of credit in an aggregate amount   in excess of its individual sub-limit.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Each drawing under any letter of credit shall be   reimbursed by the Borrower not later than one business day after such   drawing. To the extent that the Borrower does not reimburse the applicable   Issuing Bank on such business day, the Lenders under the Revolving Credit   Facility shall be irrevocably obligated to reimburse such Issuing Bank pro   rata based upon their respective Revolving Credit Facility commitments.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The issuance of all letters of credit shall be   subject to the customary procedures of the applicable Issuing Bank. Letters   of credit shall be denominated in U.S. Dollars.
    
	
 
    	
 
    	
 
    
	
Maturity and Amortization:
    	
 
    	
(a)   The Term Loan Facility will mature on the   date that is seven years after the Closing Date and will amortize in equal   quarterly installments in an amount equal to 1.00% per annum beginning with   the first full fiscal quarter after the Closing Date, with the balance due at   maturity.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   The Revolving Credit Facility will mature   on the date that is five years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
Guarantees:
    	
 
    	
All obligations of the Borrower under the Facilities   and all obligations of the Borrower and the other Guarantors (as defined   below) under any interest rate protection or other hedging arrangements   entered into with the Administrative Agent or a Lender (or an affiliate of   the Administrative Agent or a Lender) and all obligations of the Borrower and   the other Guarantors in respect of overdrafts and related liabilities owed to   a Lender (or an affiliate of a Lender) arising from treasury, depository or   other cash management services, will be unconditionally guaranteed (the “Guarantees”)   by the Borrower and each existing or subsequently acquired or organized   material domestic subsidiary of the Borrower (including the Target and its   material domestic subsidiaries) (the “Guarantors”), 
    


 

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subject to restrictions imposed by applicable law or   otherwise agreed in the Facilities Documentation.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
All obligations of the Borrower under the   Facilities, all obligations of the Borrower and the other Guarantors under   any interest rate protection and other hedging arrangements entered into with   the Administrative Agent or a Lender (or an affiliate of the Administrative   Agent or a Lender) and all obligations of the Borrower and the other   Guarantors in respect of overdrafts and related liabilities owed to the   Administrative Agent or a Lender (or an affiliate of the Administrative Agent   or a Lender) arising from treasury, depository or cash management services,   including credit card and merchant card programs, and all Guarantees will be   secured by substantially all the assets of the Borrower and each other   Guarantor (collectively, the “Collateral”), including but not limited   to (a) a perfected first-priority pledge of all the capital stock held   by the Borrower or any other Guarantor of each existing or subsequently acquired   or organized subsidiary of the Borrower (which pledge, in the case of stock   of any foreign subsidiary of the Borrower, shall not include more than 65% of   the voting stock of such foreign subsidiary) and (b) perfected   first-priority security interests in, and mortgages on, substantially all   tangible and intangible assets of the Borrower and each other Guarantor   (including but not limited to accounts, inventory, equipment, commercial tort   claims, investment property, intellectual property, intercompany indebtedness   (which shall be evidenced by a note), general intangibles, licensing   agreements, real property, letter of credit rights and proceeds of the   foregoing), subject to exceptions and thresholds to be mutually agreed upon   and, at closing, to the Limited Conditionality Provisions (as defined in the   Commitment Letter).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding anything to the contrary, the   Collateral shall exclude the following: (a) any fee-owned real property   with a fair market value of less than $5,000,000 and all leasehold interests;   (b) motor vehicles and other assets subject to certificates of title   (other than to the extent a security interest in such assets can be perfected   by filing a Uniform Commercial Code financing statement); (c) equity   interests in any non-wholly owned subsidiaries of the Borrower or any   Guarantor to the extent not permitted by such person’s organizational or 
    


 

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joint-venture documents (provided the   Borrower shall have taken commercially reasonable efforts to obtain a waiver   of such restriction); (d) commercial tort claims with a value of less   than an amount to be mutually agreed upon; (e) any lease, license or   other agreement or any property subject to a purchase money security interest   or similar arrangement to the extent that a grant of a security interest   therein would violate or invalidate such lease, license or agreement or   purchase money security interest or similar arrangement or create a right of   termination in favor of any other party thereto (other than the Borrower or   any subsidiary thereof) after giving effect to the applicable anti-assignment   provisions of the Uniform Commercial Code, other than proceeds and   receivables thereof, the assignment of which is expressly deemed effective   under the Uniform Commercial Code notwithstanding such prohibition;   (f) those assets as to which the Administrative Agent and the Borrower   reasonably agree that the cost of obtaining such a security interest or   perfection thereof are excessive in relation to the benefit to the Lenders of   the security to be afforded thereby; (g) “intent-to-use” trademark   applications; and (h) other exceptions to be mutually agreed upon. In   addition, in no event shall (a) control agreements or control or similar   arrangements be required with respect to cash deposit or securities accounts,   (b) notice be required to be sent to account debtors or other   contractual third parties prior to the occurrence and absent the continuance   of an event of default, (c) perfection be required with respect to   letter of credit rights and commercial tort claims (except to the extent   perfected through the filing of Uniform Commercial Code financing statements)   and (d) security documents governed by the laws of a jurisdiction other   than the United States or any State thereof or the District of Columbia be   required.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All the above-described pledges, security interests   and mortgages shall be created on terms, and pursuant to documentation, reasonably   satisfactory to the Administrative Agent (including, in the case of real   property, by customary items such as satisfactory title insurance and   surveys) and, subject to exceptions permitted under the Facilities   Documentation, none of the Collateral shall be subject to any other pledges,   security interests or mortgages.
    


 

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Mandatory Prepayments:
    	
 
    	
Loans under the Term Loan 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,   subject to thresholds and reinvestment rights to be mutually agreed upon   (with a reinvestment period equal to 12 months) and other exceptions to be   mutually agreed upon;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   Starting   with the first full fiscal year of the Borrower ended after the Closing Date   (or if the Closing Date occurs in 2018, starting with the fiscal year of the   Borrower ended in 2018 based on the Excess Cash Flow from the Closing Date to   the last day of such fiscal year), 50%, with step-downs to 25% and 0% at   Secured Net Leverage Ratios of 3.75 to 1.00 and 3.25 to 1.00, respectively,   of annual Excess Cash Flow in excess of $1.0 million (to be defined in a   manner to be agreed) of the Borrower and its restricted subsidiaries; provided   that any voluntary prepayments of Loans under the Term Loan Facility, any   Incremental Term Loan Facility, any Incremental Alternative Facility secured   on a pari passu basis with the Term Loan Facility or of loans under the   Revolving Credit Facility (including any Revolving Credit Facility Increase)   accompanied by an equivalent permanent termination of such applicable   revolving commitment, made during such fiscal year (or, without duplication   for any deductions in future periods, thereafter but prior to the date such   Excess Cash Flow prepayment is due) other than prepayments funded with the   proceeds of long term indebtedness, shall be credited against excess cash   flow prepayment obligations for such fiscal year on a dollar-for-dollar   basis; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)  100% of the net cash proceeds of   issuances of indebtedness of the Borrower and its restricted subsidiaries   (other than indebtedness permitted under the Credit Agreement).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, each Lender under the   Term Loan Facility shall have the right to reject its pro rata share   of any mandatory prepayments described in clause (a) above, in which   case the amounts so rejected may be retained by the Borrower.
    


 

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The above-described mandatory prepayments shall be   applied to the remaining amortization payments under the Term Loan Facility   as follows: (a) in direct order of maturity to the amortization   repayments occurring in the eight quarters following the date of such   prepayment and (b) pro rata to the remaining amortization   payments.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Loans under the Revolving Credit Facility will be   required to be prepaid if the aggregate revolving credit exposure under the   Revolving Credit Facility exceeds the aggregate commitments thereunder. Any   unused portion of the commitment in respect of the Term Loan Facility shall   terminate in full immediately after the funding thereof on the Closing Date.
    
	
 
    	
 
    	
 
    
	
Voluntary Prepayments/Reductions in Commitments:
    	
 
    	
Voluntary prepayments of borrowings under the   Facilities and voluntary reductions of the unutilized portion of the   Revolving Credit Facility commitments will be permitted at any time, in minimum   principal amounts to be mutually agreed upon, without premium or penalty   (except as described below), subject to reimbursement of the Lenders’   redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings   other than on the last day of the relevant Interest Period (to be defined).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Any (a) voluntary prepayment of the loans under   the Term Loan Facility that is made on or prior to the date that is six   months after the Closing Date with the proceeds from a Repricing Transaction   (as defined below) and (b) amendment or other modification of the Credit   Agreement on or prior to the date that is six months after the Closing Date,   the effect of which is a Repricing Transaction, in each case shall be   accompanied by a prepayment premium equal to 1.00% of (i) the aggregate   principal amount of the loans under the Term Loan Facility so prepaid, in the   case of a voluntary prepayment, and (ii) the aggregate principal amount   of the loans under the Term Loan Facility affected by such amendment or modification,   in the case of an amendment or other modification of the Credit Agreement.   For the avoidance of doubt, any Lender that has its loans under the Term Loan   Facility prepaid as a result of the “yank-a-bank” provisions of the   Facilities Documentation due to failure to consent to an amendment described   in clause (b) above shall be entitled to such prepayment premium. “Repricing   Transaction” means the prepayment or refinancing (other than in 
    


 

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connection with a change of control) of all or a   portion of the loans under the Term Loan Facility concurrently with the   incurrence by the Borrower or its subsidiaries of any term loan financing, in   each case having a lower all-in yield (taking into account any original issue   discount and upfront fees in respect of such financing and any pricing   “floor” applicable thereto but excluding customary arrangement and commitment   fees paid to arrangers thereof) than the all-in yield applicable to such   loans.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All voluntary prepayments under the Term Loan   Facility shall be applied to the remaining amortization payments under the   Term Loan Facility as directed by the Borrower.
    
	
 
    	
 
    	
 
    
	
Facilities Documentation:
    	
 
    	
The definitive documentation for the Facilities (the   “Facilities Documentation”) will be consistent with this Term Sheet   and will contain only those conditions precedent, mandatory prepayments,   representations and warranties, affirmative and negative covenants, financial   covenants and events of default expressly set forth herein (subject only to   the exercise of any “market flex” expressly provided in the Arranger Fee   Letter) and, to the extent such terms are not expressly set forth herein,   such terms will be negotiated in good faith.
    
	
 
    	
 
    	
 
    
	
Representations and Warranties:
    	
 
    	
Limited to the following (to be applicable to the   Borrower and its restricted subsidiaries (or in the case of certain   representations and warranties customarily applicable to all subsidiaries,   all subsidiaries)): organization and powers; authorization, due execution and   delivery and enforceability; governmental approvals and no conflicts   (including no creation of liens); accuracy of financial statements; no   material adverse change; ownership of properties; intellectual property;   absence of actions, suits or proceedings; environmental matters; compliance   with laws; sanctions and anti-corruption; Investment Company Act of 1940;   Federal Reserve regulations; payment of taxes; compliance with ERISA;   accuracy of information; subsidiaries; insurance; labor matters; solvency on   a consolidated basis; delivery of certain documents; validity, perfection and   priority of security interests in the Collateral (subject to the Limited   Conditionality Provisions); and neither the Borrower nor any Guarantor is an   EEA Financial Institution, in each case subject to customary qualifications   and exceptions to be mutually 
    


 

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agreed upon.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to Initial Borrowing:
    	
 
    	
Limited to those set forth in the Conditions   Exhibit and those under the heading “Conditions Precedent to All   Borrowings” below.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to All Borrowings:
    	
 
    	
The making of each extension of credit shall be   conditioned upon (a) the accuracy in all material respects (or, if   already qualified by materiality, in all respects) of all representations and   warranties (which, for purposes of the initial extensions of credit on the   Closing Date and, in the case of any extension of credit under any   Incremental Facility in connection with any acquisition or investment   permitted under the Credit Agreement, if agreed by the lenders providing such   Incremental Facility, shall be limited to the Specified Representations and   the Specified Purchase Agreement Representations), (b) solely for   extensions of credit after the Closing Date, there being no default or event   of default in existence at the time of, or immediately after giving effect to   the making of, such extension of credit (or, in the case of any extension of   credit under any Incremental Facility in connection with any acquisition or   investment permitted under the Credit Agreement, if agreed by the lenders   providing such Incremental Facility, no payment or bankruptcy event of   default) and (c) the delivery of a borrowing notice.
    
	
 
    	
 
    	
 
    
	
Affirmative Covenants:
    	
 
    	
Limited to the following (to be applicable to the   Borrower and its restricted subsidiaries (or in the case of certain   affirmative covenants customarily applicable to all subsidiaries, all   subsidiaries): delivery of audited annual consolidated financial statements   for the Borrower, unaudited quarterly consolidated financial statements for   the Borrower and other financial information (including, to the extent the   same is not already included in the Borrower’s public disclosure for an   applicable fiscal period, customary management’s discussion and analysis with   respect to such fiscal period) and other information; quarterly lender calls   (provided such calls shall not be required to the extent the Borrower hosts a   public call for its investors with respect to such quarter); delivery of   notices of default, litigation, material adverse change and other material   matters; maintenance of corporate existence and rights and conduct of   business; payment of taxes; maintenance of properties; maintenance of   customary insurance; maintenance and inspection by the 
    


 

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Administrative Agent of property and books and   records; compliance with laws (including environmental laws); ERISA; use of   proceeds and letters of credit; commercially reasonable efforts to maintain   public ratings; sanctions and anti-corruption; additional subsidiaries; and   further assurances, in each case subject to customary qualifications and   exceptions to be mutually agreed upon.
    
	
 
    	
 
    	
 
    
	
Negative Covenants:
    	
 
    	
Limited to the following (to be applicable to the   Borrower and its restricted subsidiaries):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a) limitations on indebtedness;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) limitations on liens;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)  limitations on asset sales;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d) limitations on mergers, consolidations and   fundamental changes;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e)  limitations on restricted payments   (including with respect to certain indebtedness) and investments (including   unlimited Permitted Acquisitions (to be defined in the Facilities   Documentation) of entities that become Guarantors);
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f)  limitations on transactions with affiliates;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(g)  limitations on restrictions on liens and   other restrictive agreements;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(h) limitations on amendments to certain   agreements; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)   limitation on changes in the fiscal year.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The negative covenants will be subject, in the case   of each of the foregoing covenants, to exceptions, qualifications and   “baskets” to be set forth in the Facilities Documentation which, in the case   of certain monetary baskets, shall contain a “grower” component based on a   percentage of Consolidated EBITDA equivalent to the initial monetary cap.   Additionally, investments, acquisitions, redemptions, prepayments of   restricted debt and other restricted payments shall include an exception   based on an available basket amount (the “Available 
    


 

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Amount Basket”) equal to the   following: (a) $25,000,000, plus (b) retained Excess Cash Flow plus   (c) the net cash proceeds of equity issuances and capital contributions   (other than disqualified equity) received by the Borrower and cash   distributions received by the Borrower or a restricted subsidiary from any   unrestricted subsidiary, plus (d) the net cash proceeds of debt   and disqualified equity of the Borrower, in each case issued after the   Closing Date, which have been exchanged or converted into qualified equity of   the Borrower, plus (e) the net cash proceeds of sales of   investments made under the Available Amount Basket (in an amount, together   with amounts added pursuant to clause (f) below, not to exceed the   amount of such investment made under the Available Amount Basket), plus   (f) returns, profits, distributions and similar amounts received in cash   or cash equivalents on investments made under the Available Amount Basket (in   an amount, together with amounts added pursuant to clause (e) above, not   to exceed the amount of such investment made under the Available Amount   Basket). The Available Amount Basket may be used for, among other things,   investments, acquisitions, redemptions or prepayments of restricted debt and   other restricted payments; provided that, no default or event of   default under the Facilities Documentation shall exist or result therefrom.   Usage of the Available Amount Basket for redemptions or prepayments of   restricted debt and other restricted payments shall be subject to the Total Net   Leverage Ratio (as defined below), on a pro forma basis, not exceeding   5.00:1.00 (provided that this Total Net Leverage Ratio test shall not apply   to the redemption or prepayment of any junior secured indebtedness funded   with the proceeds of any common equity offering of the Borrower).
    
	
 
    	
 
    	
 
    
	
Financial Covenants:
    	
 
    	
Limited to the following:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
With respect to the Term Loan Facility: None.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
With respect to the Revolving Credit Facility:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a) a maximum ratio of total consolidated   indebtedness less Unrestricted Cash (as defined below) to Consolidated EBITDA   (to be defined in a manner to be agreed) (the “Total Net Leverage Ratio”)   of 6.00x to 1.00; provided such ratio shall step down to (i) 5.75   to 1.00 on and after 
    


 

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March 31, 2019; (ii) 5.50 to 1.00 on and   after September 30, 2019; (iii) 5.00 to 1.00 on and after   March 31, 2020; (iv) 4.50 to 1.00 on and after September 30,   2020; and (v) 4.00 to 1.00 on and after March 31, 2021. For   purposes of this paragraph, “Unrestricted Cash” shall mean the lesser of   (x) any unrestricted cash or cash equivalents of the Borrower and the   Guarantors and (y) $50,000,000; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) a minimum ratio of Consolidated EBITDA to   cash interest expense (the “Interest Coverage Ratio”) of 2.75 to 1.00,   stepping up to 3.00 to 1.00 on the last day of the first fiscal quarter ended   on or after the date that is 24 months after the Closing Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Lenders holding more than 50% of the aggregate   amount of the commitments under the Revolving Credit Facility (excluding the   commitments of defaulting Lenders, the “Requisite Revolving Lenders”)   may amend the definitions related to such covenants, amend or waive the terms   of such covenants and waive, amend, terminate or otherwise modify such   covenants with respect to the occurrence of an event of default.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Consolidated EBITDA will include an addback for   factually supportable cost savings and synergies in connection with the   Transactions as certified in good faith by the chief financial officer of the   Borrower to the extent reasonably expected to be achieved within 18 months of   the Closing Date (without duplication of achieved cost savings); provided   that such amount added back in any period shall not exceed a percentage of   Consolidated EBITDA to be agreed for such period (prior to giving effect to   such addback).
    
	
 
    	
 
    	
 
    
	
Unrestricted Subsidiaries:
    	
 
    	
The Credit Agreement will contain provisions   pursuant to which, subject to limitations to be agreed (including on loans,   advances, guarantees and other investments in unrestricted subsidiaries, and   transactions with affiliates), the Borrower will be permitted to designate   any existing or subsequently acquired or organized subsidiary as an   “unrestricted subsidiary” and subsequently re-designate any such unrestricted   subsidiary as a restricted subsidiary so long as (w) no default or event   of default then exists or would result therefrom, (x) after giving   effect to any such designation or re-designation the Borrower shall be in pro   forma compliance with the financial covenants 
    


 

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recomputed as of the last day of the most recently   ended fiscal quarter of the Borrower for which financial statements have been   delivered, (y) the designation of any unrestricted subsidiary as a   restricted subsidiary shall constitute the incurrence at the time of   designation of any indebtedness or liens of such subsidiary existing at such   time and (z) the fair market value of such subsidiary at the time it is   designated as an “unrestricted subsidiary” shall be treated as an investment   by the Borrower at such time. Unrestricted subsidiaries will not be subject   to the representation and warranties, affirmative or negative covenant or   event of default provisions of the Credit Agreement (other than certain   representation and warranties and affirmative covenants customarily   applicable to all subsidiaries) and the results of operations and   indebtedness of unrestricted subsidiaries will not be taken into account for   purposes of determining compliance with any financial ratio or financial   covenant contained in the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Events of Default:
    	
 
    	
Limited to the following (to be applicable to the   Borrower and its restricted subsidiaries): nonpayment of principal, interest,   fees or other amounts; inaccuracy of representations and warranties;   violation of covenants (provided that, with respect to the financial   covenants described under the heading “Financial Covenants” above, a breach   thereof shall only result in an event of default under the Term Loan Facility   after the Requisite Revolving Lenders have terminated the Revolving Credit   Facility and accelerated any loans outstanding thereunder); cross default;   voluntary and involuntary bankruptcy or insolvency proceedings; inability to   pay debts as they become due; material judgments; ERISA events; actual or   asserted invalidity of the Guarantees or the documentation in respect of the   Collateral; and Change in Control (to be defined in a manner to be mutually   agreed upon), in each case with customary grace periods, qualifications and   exceptions to be mutually agreed upon.
    
	
 
    	
 
    	
 
    
	
Voting:
    	
 
    	
Except as provided above with respect to the   financial covenants, amendments and waivers of the Credit Agreement and the   other Facilities Documentation will require the approval of Lenders holding   more than 50% of the aggregate amount of the extensions of credit and unused   commitments under the Facilities, except that 
    


 

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(a) the consent of each Lender directly and   adversely affected thereby shall be required with respect to, among other   things, (i) increases in commitments, (ii) reductions of principal   (it being understood that a waiver of any condition precedent or the waiver   of any default, event of default or mandatory prepayment shall not constitute   a reduction in principal), interest (other than a waiver of default interest)   or fees, (iii) extensions of scheduled amortization, final maturity or   reimbursement dates or postponement of any payment dates and   (iv) modifications to the pro-rata sharing and “waterfall” provisions   and (b) the consent of 100% of the Lenders shall be required with   respect to (i) modifications to any of the voting percentages,   (ii) releases of all or substantially all the Collateral (other than in   connection with any sale of the applicable Collateral permitted by the Credit   Agreement) and (iii) releases of all or substantially all the value of   the guarantees provided by the subsidiaries of the Borrower (other than in   connection with any sale of the applicable Guarantor permitted by the Credit   Agreement). Notwithstanding the foregoing and for the avoidance of doubt,   changes to the Facilities Documentation as a result of the exercise of the   “flex” provisions of the Arranger Fee Letter shall only require the consent   of the Borrower and the Administrative Agent.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Credit Agreement will contain customary amend   and extend and “yank-a-bank” provisions to be mutually agreed upon.
    
	
 
    	
 
    	
 
    
	
Cost and Yield Protection:
    	
 
    	
Usual for facilities and transactions of this type   (it being agreed that the Dodd-Frank Wall Street Reform and Consumer   Protection Act and all requests, rules, guidelines or directives promulgated   thereunder or issued in connection therewith, and all requests, rules, guidelines   or directives promulgated by the Bank for International Settlement, the Basel   Committee on Banking Supervision (or any successor or similar authority) or   the United States of America or foreign regulatory authorities, in each case   pursuant to Basel III, in each case will be deemed to be a “change in law”,   regardless of the date enacted, adopted, promulgated or issued, for purposes   of such cost and yield protections).
    
	
 
    	
 
    	
 
    
	
Assignments and 
    	
 
    	
The Lenders will be permitted to assign all or a   portion of 
    


 

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Participations:
    	
 
    	
their loans and commitments (other than to a natural   person) with the consent (such consent not to be unreasonably withheld or   delayed) of (a) the Borrower (unless an event of default has occurred   and is continuing or such assignment is to a Lender, an affiliate of a Lender   or an Approved Fund (to be defined in a manner to be mutually agreed upon)); provided   that the Borrower shall be deemed to have consented to a proposed assignment   of loans or commitments if the Borrower has not responded to such proposal   within seven business days after the Borrower has received notice thereof,   (b) the Administrative Agent (unless such assignment is an assignment of   a loan under the Term Loan Facility to a Lender, an affiliate of a Lender or   an Approved Fund) and (c) the Swingline Lender and each Issuing Bank   (unless such assignment is an assignment of a loan under the Term Loan   Facility), in each case which consent shall not be unreasonably withheld.   Each assignment (except to other Lenders or their affiliates) will be in a   minimum amount of (a) $5,000,000 in respect of loans and commitments   under the Revolving Credit Facility and (b) $1,000,000 in respect of   loans and commitments under the Term Loan Facility, unless otherwise agreed   by the Borrower (unless an event of default has occurred and is continuing)   and the Administrative Agent. The Administrative Agent will receive a   processing and recordation fee of $3,500, payable by the assignor and/or the   assignee, with each such assignment. Assignments will be by novation and will   not be required to be pro rata among the Facilities.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Assignments of loans under the Term Loan Facility to   the Borrower and its subsidiaries shall be permitted so long as:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) any offer to   purchase or take by assignment any loans under the Term Loan Facility by the   Borrower and its subsidiaries shall have been made to all Lenders pro rata   (with buyback mechanics to be mutually agreed upon);
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii) no default or   event of default has occurred and is continuing or would result therefrom;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(iii) the loans   purchased are immediately canceled (with customary restrictions on increasing   EBITDA
    


 

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by any non-cash gains   associated with such cancellation of debt); and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(iv) no proceeds   from any extensions of credit under the Revolving Credit Facility shall be   used to fund such assignments.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Lenders will be permitted to sell participations   in loans and commitments without restriction. Participants shall have the   same benefits as the Lenders with respect to yield protection and increased   cost provisions. Voting rights of participants shall be limited to matters   that require the consent of all Lenders or all affected Lenders.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pledges of loans in accordance with applicable law   shall be permitted without restriction. Promissory notes shall be issued   under the Facilities only upon request.
    
	
 
    	
 
    	
 
    
	
Expenses and Indemnification:
    	
 
    	
All reasonable and documented out-of-pocket expenses   of the Administrative Agent, the Syndication Agent, the Arrangers and their   respective affiliates (including, without limitation, the reasonable fees,   charges and disbursements of counsel for any of the foregoing) associated   with the structuring, arrangement and syndication of the Facilities and the   preparation, negotiation, execution, delivery and administration of the   Credit Agreement and the other Facilities Documentation and any amendments,   modifications and waivers thereof (which, in the case of preparation,   negotiation, execution, delivery and administration of the Credit Agreement   and other Facilities Documentation shall be limited to a single counsel for   such persons and one local counsel in each jurisdiction as the Administrative   Agent shall deem advisable in connection with the creation and perfection of   security interests in the Collateral), as well as all reasonable and documented   out-of-pocket expenses incurred by the Issuing Banks in connection with the   issuance, amendment, renewal or extension of letters of credit or any demand   for payment thereunder, are to be paid by the Borrower. In addition, all   out-of-pocket expenses of the Administrative Agent, the Issuing Banks and the   Lenders (including, without limitation, the reasonable and documented   out-of-pocket fees, charges and disbursements of counsel for any of the   foregoing) for enforcement costs associated with the Facilities are to be 
    


 

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paid by the Borrower.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Borrower will indemnify the Arrangers, the   Administrative Agent, the Syndication Agent, the Issuing Banks, the Lenders   and their respective affiliates and each of their respective Related Parties   (each, an “indemnified person”) and hold them harmless from and   against all losses, claims, damages, liabilities and related expenses   (including, without limitation, the fees, charges and disbursements of one   firm of counsel for all such indemnified persons, taken as a whole, and, if   necessary, of a single firm of local counsel in each appropriate jurisdiction   (which may include a single firm of special counsel acting in multiple jurisdictions)   for all such indemnified persons, taken as a whole (and, in the case of an   actual or perceived conflict of interest where the indemnified person   affected by such conflict informs the Borrower of such conflict and   thereafter retains its own counsel, of another firm of counsel for such   affected indemnified person and, if necessary, of a single firm of local   counsel in each appropriate jurisdiction (which may include a single firm of   special counsel acting in multiple jurisdictions) for such affected   indemnified person)) of any such indemnified person arising out of, in   connection with or as a result of the Transactions, including, without   limitation, the financings contemplated thereby, or any transactions   connected therewith or any claim, litigation, investigation or proceeding   (regardless of whether any such indemnified person is a party thereto and   regardless of whether such claim, litigation, investigation or proceeding is   brought by a third party or by the Borrower or any of its subsidiaries) that   relate to any of the foregoing; provided that the foregoing indemnity   will not, as to any indemnified person, apply to losses, claims, damages,   liabilities and related expenses to the extent they (a) are found in a   final and non-appealable judgment of a court of competent jurisdiction to   have resulted from the bad faith, willful misconduct or gross negligence of   such indemnified person, (b) result from a claim brought by the Borrower   or any of its subsidiaries against such indemnified person for material   breach of such indemnified person’s obligations hereunder if the Borrower or   such subsidiary has obtained a final and non-appealable judgment in its or   its subsidiary’s favor on such claim as determined by a court of competent   jurisdiction or (c) result from a proceeding that does not 
    


 

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involve an act or omission by the Borrower or any of   its affiliates and that is brought by an indemnified person against any other   indemnified person (other than claims against any arranger, bookrunner or   agent in its capacity or in fulfilling its roles as an arranger, bookrunner   or agent hereunder or any similar role with respect to the Facilities). No   party to the Facilities Documentation shall be liable for any special,   indirect, consequential or punitive damages in connection with the Facilities   or the Transactions; provided that, nothing contained in this sentence shall   limit the Borrower’s indemnity and reimbursement obligations to the extent   set forth in this paragraph. Notwithstanding the foregoing, each indemnified   person shall be obligated to refund and return promptly any and all amounts   paid by the Borrower for any loss, claim, expense, damage or liability with   respect to which such indemnified person was not entitled to payment in   accordance with the terms of the Credit Agreement (in a final and   non-appealable judgment of a court of competent jurisdiction). “Related   Parties” means, with respect to any person, the directors, officers,   employees, agents, advisors, representatives and controlling persons of such   person.
    
	
 
    	
 
    	
 
    
	
Defaulting Lenders:
    	
 
    	
The Credit Agreement shall contain customary   provisions relating to “defaulting” Lenders (including, without limitation,   provisions relating to providing cash collateral to support letters of credit   and swingline loans, the suspension of voting rights and rights to receive   interest and fees, and assignment of commitments or loans of such Lenders).
    
	
 
    	
 
    	
 
    
	
Bail-In:
    	
 
    	
The Facilities Documentation shall contain customary   “EU-Bail In” provisions.
    
	
 
    	
 
    	
 
    
	
Governing Law and Forum:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Counsel to Administrative Agent and Arrangers:
    	
 
    	
Simpson Thacher & Bartlett LLP.
    


 

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ANNEX I

 

	
Interest Rates:
    	
 
    	
The   interest rates under the Facilities will be as follows:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Revolving Credit Facility
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the option of the Borrower, a per annum rate of Adjusted LIBOR plus 2.25% or   ABR plus 1.25%, subject to two Total Net Leverage Ratio based step-downs to   be agreed; provided, however, that all swingline loans shall   bear interest based upon the ABR.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Term Loan Facility
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the option of the Borrower, the Term Loans shall accrue interest at either   Adjusted LIBOR plus 4.00% or ABR plus 3.00%. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All Facilities
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Borrower may elect interest periods of 1, 2, 3 or 6 months (or, to the extent   available to the applicable Lenders, 12 months) for Adjusted LIBOR   borrowings.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Calculation   of interest shall be on the basis of actual days elapsed in a year of   360 days (or 365 or 366 days, as applicable, in the case of ABR   loans based on the Prime Rate) and interest shall be payable at the end of   each interest period and, in any event, at least every 3 months.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ABR   is the Alternate Base Rate, which is the highest of (i) JPMorgan’s prime   rate, (ii) the greater of the federal funds effective rate and the   overnight bank funding rate published by the Federal Reserve Bank  of New York plus 1⁄2 of 1.00% and   (iii) the Adjusted LIBOR for a one-month interest period plus   1.00%.  For the avoidance of doubt, if   ABR shall be less than zero, such rate shall be deemed to be zero; provided,   however, that notwithstanding the rate calculated in accordance with   the foregoing, at no time shall the ABR for the Term Loan Facility be less   than 2.00% per annum.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Adjusted   LIBOR will at all times include statutory reserves and if LIBOR shall be less   than zero, such rate shall be deemed to be zero; provided, however,   that notwithstanding the foregoing, at no time shall LIBOR with respect to   the Term Loan Facility be less than 1.00% per annum.
    
	
 
    	
 
    	
 
    
	
Letter of Credit Fee:
    	
 
    	
A per annum fee equal to   the spread over Adjusted LIBOR under the Revolving Credit Facility will   accrue on the aggregate face amount of outstanding letters of credit under
    


 











 

	
 
    	
 
    	
the   Revolving Credit Facility, payable in arrears at the end of each quarter and   upon the termination of the Revolving Credit 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 Credit Facility pro rata in   accordance with the amount of each such Lender’s Revolving Credit Facility   commitment.  In addition, the Borrower   shall pay to each Issuing Bank, for its own account, (a) a fronting fee   of 0.125% per annum on the aggregate face amount of outstanding letters   of credit issued by such Issuing Bank, payable in arrears at the end of each   quarter and upon the termination of the Revolving Credit Facility, in each   case for the actual number of days elapsed over a 360-day year, and   (b) customary issuance and administration fees.
    
	
 
    	
 
    	
 
    
	
Commitment Fees:
    	
 
    	
0.40%   per annum, subject to two Total Net Leverage Ratio based step-downs to be   agreed, on the undrawn portion of the commitments in respect of the Revolving   Credit Facility, commencing to accrue on the Closing Date and payable   quarterly in arrears after the Closing Date.    For purposes of calculating the commitment fee, outstanding swingline   loans will be deemed not to utilize the Revolving Credit Facility   commitments.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   the avoidance of doubt, all calculations of interest and fees in respect of   the Facilities will be calculated on the basis of their full stated principal   amount.
    


 

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EXHIBIT B

 

Project Duke
 Summary of Additional Conditions Precedent(2)

 

The initial borrowings under the Facilities shall be subject to the following conditions precedent:

 

1.                                      The Acquisition shall have been consummated in compliance with the Purchase Agreement prior to or substantially simultaneously with the closing of the Facilities in accordance with applicable law and the Purchase Agreement and all other related documentation shall not have been amended, consented to or waived in any manner materially adverse to the Lenders unless consented to in writing by the Arrangers (such consent not to be unreasonably withheld or delayed); provided that, (i) any reduction in purchase price by not more than 10% will not be deemed to be materially adverse to the interests of the Lenders if such purchase price reduction shall ratably reduce the equity issuance to Seller and funded debt on the Closing Date under the Facilities; (ii) any amendment or waiver to the terms of the Purchase Agreement that has the effect of increasing the cash consideration required to be paid thereunder on the Closing Date will not be deemed to be materially adverse to the Lenders if such increase is funded with an increase in the aggregate amount of the equity issuance required by the terms thereof; (iii) any amendment, modification or waiver to the definition of “Material Adverse Effect” or “Material Adverse Change” in the Purchase Agreement will be deemed materially adverse to the Lenders; (iv) any amendment, modification or waiver to Sections 10.8, 10.12, 10.13, 10.14, 10.15, 10.16 or 10.17 of the Purchase Agreement will be deemed materially adverse to the Lenders; and (v) decreases in purchase price by more than 10% will be deemed materially adverse to the Lenders.  The Specified Purchase Agreement Representations and the Specified Representations shall be true and correct in all material respects (or if already qualified by materiality,  material adverse effect or similar qualification, in all respects) on, or as of, the Closing Date (except in the case of any Specified Purchase Agreement Representation or Specified Representation which expressly relates to a given date or period, which such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be).

 

2.                                      Since November 15, 2017, there has not occurred, a Company Material Adverse Effect (as defined below, and with capitalized terms used in such definition having the meanings ascribed to them in the Purchase Agreement (as in effect on the date hereof)).

 

“Company Material Adverse Effect” shall mean any change, effect, event or occurrence that, individually or in the aggregate, (a) does, or would be reasonably expected to, prevent or materially impair, delay or affect the ability of the Company or the Blocker Sellers to consummate the Transactions or (b) has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, condition (financial or 

 




(2)  All capitalized terms used but not defined herein shall have the meanings set forth in the Commitment Letter to which this Exhibit B  is attached, including the other exhibits thereto.

 











 

otherwise) or results of operations of the Company and the Subsidiary taken as a whole; provided, however, that in the case of this clause (b), none of the following shall be deemed in themselves to constitute a Material Adverse Effect and excluding any change, effect, event or occurrence arising from the following: (i) the announcement or pendency or consummation of the Transactions, including any related losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Company; (ii) any change, effect, event or occurrence in any industry in which the Company participates, the U.S. economy or any other economy where the Company conducts business (in each case, as a whole) or the capital, banking or financing markets in general or the markets in which the Company operates or any geographical area in which the Company conducts its business; (iii) any “act of God” including weather, natural disasters and earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions; (iv) any change in global, national or regional political conditions; (v) changes after the date hereof in GAAP or any change in any applicable Laws, rules or regulations issued by any Governmental Entity; (vi) any failure, in and of itself, by the Company to meet any internal projections or forecasts for any period ending on or after the date of the Purchase Agreement (but not the change, effect, event or occurrence underlying, causing or contributing to such failure to the extent such change, effect, event or occurrence would otherwise constitute or contribute to a Material Adverse Effect under this definition); (vi) any existing event or occurrence or circumstance of which the Purchaser has actual knowledge on the date hereof as a result of such existing event or occurrence or circumstance having been expressly disclosed in reasonable detail in the Disclosure Schedules; or (vii) any action taken by a party hereto as expressly required by the Purchase; except, in the case of the foregoing clauses (ii) through (v), any change, effect, event or occurrence that has a material disproportionate effect on the Company or the Subsidiary or the business, assets, liabilities, condition (financial or otherwise) or results of operations of the Company or the Subsidiary as compared to other participants in the industry in which the Company or the Subsidiary operate.

 

3.                                      The Existing Indebtedness Refinancing and the Equity Issuance to Seller (in an aggregate amount at least equal to that set forth in the Purchase Agreement as in effect on the date hereof) shall have occurred or shall occur substantially simultaneously with the closing of the Facilities.

 

4.                                      The Lenders shall have received (a) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for the three most recently completed fiscal years ended at least 90 days prior to the Closing Date and (b) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for each subsequent fiscal quarter ended at least 45 days before the Closing Date (and comparable periods for the prior fiscal year), provided that if requested by the Arrangers and solely to the extent available to the Borrower, such unaudited quarterly financial statements for the fourth fiscal quarter of 2017 of the Borrower shall also be required to be provided; provided further that the filing of the required financial statements on Form 10-K and Form 10-Q within such time periods by the Borrower will satisfy the requirements of this paragraph 4.

 

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5.                                      The Lenders shall have received (a) audited consolidated financial statements of the Target consisting of a consolidated balance sheet as of December 31, 2016 and the related consolidated statements of income and retained earnings, shareholders’ equity and cash flows for the period beginning August 17, 2016 through December 31, 2016 and (b) unaudited consolidated financial statements of the Target consisting of (i) a consolidated balance sheet as of December 31, 2015 and the related financial statements for the fiscal year ended December 31, 2015, (ii) a consolidated balance sheet as of October 31, 2016 and the related financial statements for the ten month period beginning January 1, 2016 through October 31, 2016, and (iii) a consolidated balance sheet as of September 30, 2017 and the related financial statements for the nine month period beginning January 1, 2017 through September 30, 2017 (or, in lieu thereof, a quality of earnings report in form reasonably satisfactory to the Arranger for the Target’s fiscal year 2015, 2016 and the first three quarters of 2017).

 

6.                                      The Lenders shall have received a pro forma consolidated balance sheet of the Borrower and its subsidiaries as of the last day of the most recent fiscal period for which financial statements were delivered under paragraph 4 above, prepared after giving effect to the Transactions and the other transactions contemplated hereby.

 

7.                                      The Lenders shall have received a certificate from the chief financial officer of the Borrower in substantially the form of Annex II hereto confirming the solvency of the Borrower and its subsidiaries on a consolidated basis after giving effect to the Transactions and the other transactions contemplated hereby.

 

8.                                      The Administrative Agent shall have received, at least five business days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act, in each case requested at least ten business days prior to the Closing Date.

 

9.                                      All fees required to be paid by the Borrower on the Closing Date pursuant to the Fee Letters and the Term Sheet and the reasonable and documented out-of-pocket expenses required to be reimbursed by the Borrower on the Closing Date pursuant to the Commitment Letter shall, upon the initial borrowing under the Facilities, have been paid (which amounts may be offset against the proceeds of the Facilities).

 

10.                               The Administrative Agent shall have received (a) copies of the Facilities Documentation executed by you and all documents and instruments required to create or perfect the Administrative Agent’s security interest, on behalf of the Lenders and the other Secured Parties (to be defined in a manner to be mutually agreed upon), in the Collateral (in proper form for filing), which shall, in each case, be consistent with the Commitment Letter and the Term Sheet and subject to the Limited Conditionality Provisions and (b) customary legal opinions, customary evidence of authorization, customary officer’s and secretary’s certificates, good standing certificates (to the extent applicable) and customary lien searches.

 

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11.                               The Facilities shall have received a rating and the Borrower (on a pro forma basis for the Transactions) shall have received a public corporate credit rating and a public corporate family rating, in each case, from Standard & Poor’s Financial Services LLC and Moody’s Investors Service, Inc.

 

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Annex I to EXHIBIT B

 

Form of Solvency Certificate

 

Date:                , 201[]

 

To the Administrative Agent and each of the Lenders party to the Credit Agreement referred to below:

 

I, the undersigned, the Chief Financial Officer of Diplomat Pharmacy, Inc. (the “Borrower”), in that capacity only and not in my individual capacity (and without personal liability), do hereby certify as of the date hereof, and based upon facts and circumstances as they exist as of the date hereof (and disclaiming any responsibility for changes in such facts and circumstances after the date hereof), that:

 

1.             This certificate is furnished to the Administrative Agent and the Lenders pursuant to Section [·] of the Credit Agreement, dated as of [·], 201[ ] (as the same may be amended, supplemented, amended and restated or otherwise modified from time to time, the “Credit Agreement”), among [·]. Unless otherwise defined herein, capitalized terms used in this certificate shall have the meanings set forth in the Credit Agreement.

 

2.             For purposes of this certificate, the terms below shall have the following definitions:

 

(a)           “Fair Value”

 

The amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

 

(b)           “Present Fair Salable Value”

 

The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets (both tangible and intangible) of the Borrower and its Subsidiaries taken as a whole are sold on a going concern basis with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.

 

(c)           “Stated Liabilities”

 

The recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions (including the execution and delivery of the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof), determined in accordance with GAAP consistently applied.

 











 

(d)           “Identified Contingent Liabilities”

 

The maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of the Borrower and its Subsidiaries taken as a whole after giving effect to the Transactions (including the execution and delivery of the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof) (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities), as identified and explained in terms of their nature and estimated magnitude by responsible officers of the Borrower.

 

(e)           “Can pay their Stated Liabilities and Identified Contingent Liabilities as they mature”

 

The Borrower and its Subsidiaries taken as a whole after giving effect to the Transactions (including the execution and delivery of the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof) have sufficient assets and cash flow to pay their respective Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or (in the case of contingent liabilities) otherwise become payable.

 

(f)            “Do not have Unreasonably Small Capital”

 

The Borrower and its Subsidiaries taken as a whole after giving effect to the Transactions (including the execution and delivery of the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof) have sufficient capital to ensure that it is a going concern.

 

3.             For purposes of this certificate, I, or officers of the Borrower under my direction and supervision, have performed the following procedures as of and for the periods set forth below.

 

(a)           I have reviewed the financial statements (including the pro forma financial statements) referred to in Section [·] of the Credit Agreement.

 

(b)           I have knowledge of and have reviewed to my satisfaction the Credit Agreement.

 

(c)           As chief financial officer of the Borrower, I am familiar with the financial condition of the Borrower and its Subsidiaries.

 

4.             Based on and subject to the foregoing, I hereby certify on behalf of the Borrower that after giving effect to the consummation of the Transactions (including the execution and delivery of the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof), (i) each of the Fair Value and the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities; (ii) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; and (iii) the Borrower and its Subsidiaries taken as a whole can pay their Stated Liabilities and Identified Contingent Liabilities as they mature.

 

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IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed on its behalf by the Chief Financial Officer as of the date first written above.

 

	
 
    	
DIPLOMAT   PHARMACY, INC.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:   
    	
Chief   Financial Officer