Document:

Software License and Maintenance Agreement

 Exhibit 10.1 
 Confidential treatment requested. 
 Confidential portions of this document have been
redacted and have been separately filed with the Commission. 
  

			
	[Cadence logo]	  	                    SOFTWARE LICENSE AND MAINTENANCE
AGREEMENT

  

			
	 Agreement No.:
	 	 07INPH0629

	 Date of Agreement:
	 	  

This Software License and Maintenance Agreement (“Agreement”), entered into as of the date
specified above, is by and between Cadence Design Systems, Inc., a Delaware corporation having a principal place of business at 2655 Seely Avenue, San Jose, California 95134-1937, USA (“Cadence”), and Inphi
Corporation, having a place of business at 2393 Townsgate Road #101, Westlake Village, CA 91361 (“Customer”). Customer desires to obtain from Cadence, either directly or through an authorized Cadence reseller, rights to Use
certain Licensed Materials on either a Subscription or 99-year License basis, as defined below. License Keys to the Licensed Materials may be purchased either from Cadence or an authorized Cadence reseller. Therefore, Cadence and Customer agree as
follows: 

 

 1. DEFINITIONS 

The following definitions apply herein: 

(a) “Acquired Cadence Software” means Software acquired by Cadence after the commencement of
the Term of Use in a Product Quotation as the result of an acquisition by Cadence of either a third party, or the technology of a third party. 
 (b) “Design Elements” means library elements, libraries, symbols, simulation or behavioral models, circuit and logic elements and any Updates thereto included with, and used in
conjunction with Software. 
 (c) “Designated Equipment” means either: (i) a
server identified by serial number, or host I.D. on which the Licensed Materials are stored, or (ii) a computer or workstation, as identified by its serial number, host I.D. number or ethernet address, to which the Licensed Materials are
downloaded and Used only upon the issuance of a License Key. The Designated Equipment shall be of a manufacture, make and model, and have the configuration, capacity, (i.e., memory/disk), operating software version level and pre-requisite and
co-requisite applications, prescribed in the documentation as necessary or desirable for the operation of the Software. 
 (d) “Documentation” means the user manuals and other written materials that describe the Software, its operation and matters related to its Use, which Cadence generally makes
available to its commercial licensees for use with the Software and any Updated, improved or modified version(s) of such materials, whether provided in published written material, on magnetic media or communicated by electronic means. 

(e) “Effective Date” means the date specified in each Product Quotation representing the
commencement of the Term of Use for the Licensed Materials. 
 (f) “Initial
Configuration” means the specific group of Licensed Materials listed in each Product Quotation that represents the Licensed Materials available for Use by the Customer on the Effective Date. 

        (g) “License Key” means a physical or electronic activation key
provided to a Customer that authorizes: (i) the Licensed Materials, including version number and quantity that is licensed to a Customer; (ii) the Designated Equipment; and (iii) the codes that Customer must input to

 
access the Licensed Materials on the Designated Equipment. 
 (h) “Licensed Materials” means the specific group of Software, Design Elements and the associated Documentation licensed to Customer. Unless otherwise specified in the Product
Quotation, Licensed Materials excludes New Technology, Upgrades and Acquired Cadence Software. 
 (i)
“Maintenance Service(s)” shall mean the services which Cadence makes available to Customer related to the Licensed Materials as is more particularly described in Section 9 (Technical Support) herein. 

(j) “New Technology or Upgrade” means any enhancement(s) or addition(s) to Software (other than
an Update) which Cadence does not make available to its commercial customers as a part of the standard Maintenance Service offering, but rather is only provided subject to payment of a separate fee. Neither New Technology, Acquired Cadence Software
nor Upgrades are covered by, and will not be provided in consideration of the Fees already paid by Customer unless otherwise specified in a Product Quotation. 

(k) “Product Quotation” means a written quotation from Cadence (or one of its affiliates) to
Customer identifying the Licensed Materials, Initial Configuration, quantity, charges, Term of Use and other information relevant to a specific transaction which Cadence is quoting to Customer. Each Product Quotation will be included as an
attachment to this Agreement and incorporated herein by reference. 
 (l) “Remix”
means the exchange of Licensed Materials for other or additional Licensed Materials subject to the limitations set forth in the applicable Product Quotation. 
 (m) “Software” means any applications programming code or executable computer program(s), and any Updates thereto. 

(n) “Subscription” means the license of Software for a fixed period of time that is less than
99 years in which the Fee for Maintenance Services is included within the Fee quoted for the entire Term of Use. 

        (o) “Term of Use” means that period of time Customer has Use of
the Licensed Materials as specified in each Product Quotation. 

 

 
 (p) “Then Current Configuration” means the
specific group of Licensed Materials being Used by Customer after Remix. 
 (q)
“Update” means a Software modification released by Cadence on a general, regularly scheduled basis as a standard Maintenance Service offering to its other commercial customers. Updated may include revisions to the Documentation.
Updates do not include any Acquired Cadence Software, Upgrades or New Technology. 
 (r)
“Use” means copying all or any portion of Software, Design Elements and/or License Key into the Designated Equipment or transmitting it to the Designated Equipment for; (i) executing or processing instructions contained in
the Software, (ii) using, executing or modifying any of the Design Elements, or (iii) loading data into or displaying, viewing or extracting output results from or otherwise operating any portion of the Software or Design Elements, solely
for the purpose of Customer’s internal design and manufacture of electronic circuits and systems. 

(s) “99-year License” means the license of Software for a period of 99 years in which the
Licensee Fees are quoted separately from Maintenance Fees and in which Maintenance Services are not automatically included during the Term of Use, except for the first year. 
 2. SCOPE AND BACKGROUND 
 Under this Agreement
Customer can: (i) acquire licenses for a specific number of Licensed Materials and related Documentation on either a Subscription or 99-year License basis, and (ii) obtain Maintenance Services for the Licensed Materials pursuant to the
provisions of this Agreement. For Software licensed on a Subscription basis, Customer shall be permitted to Use the Software on a wide area network (“WAN”) basis as described in the applicable Product Quotation. For any Software acquired
by Customer through an authorized Cadence reseller the following provisions of this Agreement shall not apply: 4, 6, 13.3(b) and 13.3(c). While Cadence shall remain the “licensor” for purposes of the grant of the licenses and other rights
hereunder, and Customer shall remain the “licensee” for purposes of the obligations contained herein, Customer shall contract directly with the reseller for the purchase of License Keys and any Maintenance Services on Software provided by
such authorized Cadence reseller. 
 3. LICENSE GRANT 
         (a) Grant: Subject to Customer’s timely payment of the Fees as set forth in Section 4 and subject to the limitations set forth in
Sections 3(b) and 3(c), Cadence, either directly or by and through one of its affiliates, hereby grants Customer, for the Term of Use as specified in each Product Quotation, a non-transferable, non-exclusive, license to: (i) Use the
quantity of Licensed Materials identified in the applicable Product Quotation on the Designated Equipment as established by the number of License Keys issued for the Licensed Materials; and (ii) Use the Documentation as is reasonably necessary
for Customer’s licensed Use of the Licensed Materials. All

 
rights not expressly granted to Customer pursuant to this Agreement are reserved by Cadence. 
 (b) Limitations: All rights, title and interest in the Licensed Materials shall remain the exclusive property of Cadence and/or its licensors. The Licensed Materials are the confidential and
proprietary property of Cadence or third parties from whom Cadence has obtained the appropriate rights. Customer shall not Use or copy the Licensed Materials except as expressly permitted herein. Customer may only Use those Licensed Materials
specified in the applicable Product Quotation. Customer shall not modify, disassemble, decompile or reverse translate or create derivative works from the Licensed Materials or otherwise attempt to derive the source code, or let any third party do
so. No right or license is granted or implied under any of Cadence, or its licensors’, patents, copyrights, trademarks, trade names, service marks or other intellectual property rights to Use the Licensed Materials or to authorize others to Use
the Licensed Materials beyond the rights and restrictions set forth in this Agreement. By the way of example and not limitation, Customer shall neither use the Software or Design Elements or output of any Software or Design Elements for benchmarking
purposes (which means any form of competitive analysis of the Licensed Materials versus competitive tool products), nor permit any third party to do so. Customer shall not remove or alter any of Cadence’s or its licensors’ restrictive or
ownership legends appearing on or in the Licensed Materials and shall reproduce such legends on all copies permitted to be made. Customer may periodically Remix the Initial Configuration or the Then Current Configuration only if specified in the
Product Quotation and subject to the limitations set forth in the Product Quotation. Upon request by Cadence, Customer shall execute a Certificate of Discontinued Use upon the completion of each Remix for those Licensed Materials that are exchanged
or terminated in the Remix. 
 (c) Restrictions: Customer shall not let the Licensed Materials
be accessed or used by third parties or anyone other than Customer’s employees whose duties require such access or use. Notwithstanding the foregoing, Customer’s authorized consultants and subcontractors (excluding any direct competitors
of Cadence) may Use the Licensed Materials on the Designated Equipment at a Customer facility only, where such Use is incidental to their performing services on Customer’s behalf. Such Use by authorized consultants and subcontractors must be
consistent with the license granted to Customer hereunder and Customer must first require such authorized consultants and subcontractors to sign written agreements obligating them to observe the same restrictions concerning the Licensed Materials as
are contained in this Agreement. In connection with activities under this Agreement, Customer may provide to Cadence suggestions, descriptions, data feedback and other information, either orally or in writing (collectively, “Feedback”)
concerning the Licensed Materials. Customer hereby grants to Cadence and its affiliates, a non-exclusive, perpetual, irrevocable,

 

  
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royalty-free, worldwide right and license to make, use, sell, reproduce, modify, sublicense, disclose, distribute and otherwise exploit any such Feedback. In addition, Cadence shall be the sole
owner of any modifications, additions or other changes made to the Licensed Materials based upon such Feedback. The Licensed Materials may contain certain software applications and portions of applications which are provided to Customer under terms
and conditions which are different from this Agreement (such as open source or community source), or which require Cadence to provide Customer with certain notices and/or information (“Excluded Code”). Cadence will identify such Excluded
Code in a text file or about box or in a file or files referenced thereby (and shall include any associated license agreement, notices and other related information therein), or the Excluded Code will contain or be accompanied by its own license
agreement. Customer’s Use of the Excluded Code will be subject to the terms and conditions of such other license agreement solely to the extent such terms and conditions are inconsistent with the terms and conditions of this Agreement or are
required by such other license agreement. By using or not uninstalling such Excluded Code after the initial installation of the Excluded Code Customer acknowledges and agrees to all such license agreements, notices and information. 

(d) Records; Audit. Customer shall keep full, clear and accurate records to confirm its authorized Use of
the Licensed Materials hereunder, including but not limited to ensuring that Customer has not exceeded the number of authorized copies of Licensed Materials and other obligations hereunder. Cadence shall have the right to audit such records during
regular business hours to confirm Customer’s compliance with its obligations hereunder. Customer shall promptly correct any deficiencies discovered by such audit including payment to Cadence of the amount of any shortfall in Fees uncovered by
such audit plus interest at the rate set forth in Section 4(a) below. If the audit uncovers any shortfall in payment of more than five percent (5%) for any quarter, then Customer shall also promptly pay to Cadence the costs and expenses of
such audit, including fees of auditors and other professionals incurred by Cadence in connection with such audit. 
 4. FEES; TAXES

 (a) Fees and Payment: Customer shall pay Cadence the license fees
(“License Fees”) and maintenance service fees (“Maintenance Service Fees”) (collectively, the “Fees”). Such Fees shall be remitted so that they are received by Cadence by the dates and in the
amounts set forth in the Product Quotation and, except as expressly provided herein, are non-refundable. In addition, Customer’s obligation to remit License Fee payments to Cadence in accordance with the payment schedule set forth in the
Product Quotation shall be absolute, unconditional, noncancelleable and nonrefundable, and shall not be subject to any abatement, set-off, claim, counterclaim, adjustment, reduction, or defense for any reason, including, but not limited to, any
claims that Cadence failed to perform under this Agreement or termination of this Agreement. Past due amounts shall be subject to a monthly service charge of one and one-half percent (1 1/2%) per month of the unpaid

 
balance or the maximum rate allowable by law. In addition to all other sums payable hereunder, Customer shall pay all reasonable out-of-pocket expenses incurred by Cadence, including fees and
disbursements of counsel, in connection with collection and other enforcement proceedings resulting therefrom or in connection therewith. 
 (b) Taxes: All Fees are net. Customer will pay or reimburse all taxes, duties and assessments, if any due, based on or measured by amounts payable to Cadence in any transaction between
Customer and Cadence under this Agreement (excluding taxes based on Cadence’s net income) together with any interest or penalties assessed thereon, or furnish Cadence with evidence acceptable to the taxing authority to sustain an exemption
therefrom (collectively, “Taxes”). 
 5. TERM AND TERMINATION 

(a) Term: This Agreement is entered into as of the date specified on the initial page and shall continue
unless terminated as provided in Section 5(c) (“Term”). The Term of Use for Licensed Materials shall continue unless the applicable Product Quotation is terminated as provided in Section 5(b). For Software licensed on a
99-year basis, Maintenance Services are only provided for the initial year. Maintenance Services are thereafter renewable by Customer for additional periods upon issuance of a Product Quotation by Cadence and payment by Customer of the Maintenance
Services Fees. 
 (b) Termination of Product Quotation: Any Product Quotation hereunder may be
terminated by Cadence: (i) if Customer fails to pay when due all or any portion of any amounts payable under such Product Quotation, and such failure is not cured within ten (10) days after written notice; or (ii) in the event of a
breach by Customer of any other material provision of the Product Quotation where Customer fails to correct such breach within thirty (30) days of its receipt of written notice thereof. In addition, in the event Customer fails to pay any Fees
due under a Product Quotation, Cadence may delay delivery of any License Key until Customer pays such past due amounts. 
 (c) Termination of Agreement: This Agreement may be terminated by Cadence immediately if; (i) Customer breaches any provisions of Section 3 herein, or (ii) Customer becomes
insolvent or makes an assignment for the benefit of creditors, or a trustee or receiver is appointed for Customer or for a substantial part of its assets, or bankruptcy, reorganization or insolvency proceedings shall be instituted by or against
Customer; or (iii) if Customer breaches any other material provision of this Agreement and fails to correct such breach within thirty (30) days of its receipt of written notice thereof; or (iv) if an “Event of Default” (as
defined in the Installment Payment Agreement “IPA”) occurs and is continuing under any IPA in favor of Cadence or Cadence Credit (if Customer enters into such an IPA in order to finance the

 

  
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License Fees). Termination of this Agreement shall immediately terminate any Product Quotations then in effect. 

(d) Effect of Termination: Expiration or termination of a Product Quotation or the Agreement as specified
in Sections 5(b) or 5(c) above, shall simultaneously terminate all Customer’s rights for licenses and Cadence’s obligations with respect thereto. Within thirty (30) days after such expiration or termination, Customer shall:
(i) furnish Cadence written notice certifying that the original and all copies, including partial copies, of the Licensed Materials furnished by Cadence under this Agreement or made by Customer as permitted by this Agreement, have either been
returned to Cadence or destroyed and no copies or portions thereof remain in the possession of Customer, its employees or agents; and (ii) make prompt payment in full to Cadence for all amounts then due plus the present value (discounted at the
lesser of; (a) the then current one year U.S. Treasury Bill Rate and, (b) the one year U.S. Treasury Bill Rate as of the Effective Date) of the unpaid balance of the License Fees as set forth in the Product Quotation, together with any
applicable Taxes. Sections 3(c), 4, 5(d), 11(b), 12, 13.6, 13.7 and 13.8 shall survive expiration or termination of this Agreement. 

6. ORDERING 
 If required by Customer, Customer shall order Licensed Materials and Maintenance Services using its standard purchase order forms. All Customers orders shall: (i) conform to and cite this Agreement;
and (ii) describe the Licensed Materials and/or Maintenance Services ordered (by Cadence’s product numbers and nomenclature), and (iii) identify the quantity, price, ship and bill to addresses and (iv) include such other data as
Cadence may reasonably require. This Agreement shall govern all Customer purchase orders accepted by Cadence during the Term and within the scope of this Agreement. Any terms and conditions contained or incorporated by reference in purchase orders,
acknowledgements, invoices, confirmations or other business forms of either party which add to or differ from the terms and conditions of this Agreement or the attachments made a part hereof shall be of no force or effect whatsoever concerning the
subject matter of this Agreement, and either party’s failure to object thereto shall not be deemed a waiver of such party’s rights hereunder. Cadence has the right to discontinue the sale of licenses of the Licensed Materials at any time.
Discontinued Licensed Materials, or Licensed Materials for which Maintenance Services are no longer available, may no longer be Remixed by Customer or acquired during the Term of Use under a Product Quotation. 

7. SHIPMENT 

        Upon execution of this Agreement and acceptance of an order by Cadence or an authorized
Cadence reseller, all Cadence Software is available fore download by Customer from Cadence, provided however Customer shall only Use Cadence Software for which a License Key has been purchased from either Cadence or an authorized Cadence reseller.
Delivery of any tangible media requested by Customer hereunder shall be made F.O.B. point of shipment. Customer shall pay all shipping charges,

 
including insurance. Risk of loss shall pass to Customer upon delivery to carrier. 

8. COPIES AND TRANSFER 
 (a) Copies: Customer may make a reasonable number of copies of Software for either of the following purposes only: (i) archival purposes; or (ii) for Use as a back-up when the Software is
not operational. Customer may make a reasonable number of copies of Design Elements in connection with its authorized Use of such Design Elements. All legends, trademarks, trade names, copyright legends and other identifications must be copied when
copying the Licensed Materials. Documentation may not be copied except for a reasonable number of printed copies from the Documentation provided by Cadence. 
 (b) Relocation: The Licensed Materials may only be moved from the Designated Equipment with Cadence’s prior written consent. Customer will immediately return Cadence’s Rehost Certificate
when the Licensed Materials are moved. Customer shall completely remove the Licensed Materials from the previous Designated Equipment. 
 9.
TECHNICAL SUPPORT 
 Subject to the terms and conditions of this Agreement, and Customer’s
timely payment of applicable Fees, Cadence agrees to use commercially reasonable efforts to perform, or have provided, during the Term of Use specified in a Product Quotation, the following technical assistance with respect to the Licensed
Materials: 

	 	(a)	 Maintenance Services: 

 (1) Technical Support: Cadence will make technical assistance available to Customer through Cadence Customer Support between 8:00 a.m. and 5:00 p.m., local time (the “Prime
Shift”), Monday through Friday excluding Cadence’s holidays. 
 (2) Issue Resolution
Assistance: Cadence will acknowledge receipt of Customer’s service request (a “SR”) within four (4) Prime Shift hours. Customer’s SR shall include a detailed description of the nature of the issue, the
conditions under which it occurs and other relevant data sufficient to enable Cadence to reproduce a reported error in order to verify its existence and diagnose its cause. Upon completion of diagnosis Cadence will provide Customer appropriate
assistance in accordance with Cadence’s standard commercial practices, including furnishing Customer with an avoidance procedure, bypass, work-around, patch or hot-fix (i.e., a Customer specific release for a production stopping problem with no
work-around) to correct or alleviate the condition reported. 
 (3) Update(s): Cadence will
provide Customer Update(s) for the Licensed Materials. Cadence will also provide instructions and/or Documentation that Cadence considers reasonably necessary to assist in a smooth transition for Use of an Update.

 

  
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 (4) Communication: Cadence will provide
Customer: (i) access to Cadence’s SourceLinkTM online Customer support service; and, (ii) such
newsletters and other publications, as Cadence routinely provides or makes accessible to all Maintenance Service customers to furnish information on topics such as Software advisories, known problem and solution summaries, product release notes,
application notes, product descriptions, removal of an item from a product line, training class descriptions and schedules, bulletins about user group activity and the like. 

(5) Versions Support: Customer acknowledges that, subject to Cadence’s End Sale/End Support Process,
Cadence will maintain only the most current version of the Licensed Materials. Cadence shall also maintain the last prior version of the Licensed Materials until the earlier of six (6) months from the release of each new version release, or
termination of this Agreement. 
  

	 	(b)	 Customer’s Responsibilities: 

Customer shall: 
 (1) Notification: Notify Cadence promptly through Cadence’s electronic problem reporting software available via SourceLink. If Customer does not receive Cadence’s acknowledgment of
its receipt of such report within four (4) PrimeShift hours, Customer shall promptly re-transmit such report. 
 (2) Access: If requested by Cadence, allow Cadence access to the Designated Equipment and communication facilities during the Prime Shift and subject to Customer’s security and safety
procedures and provide Cadence reasonable work space and other normal and customary facilities. 
 (3)
Assistance: Provide Cadence with reasonable assistance as requested if Maintenance Services are performed on site at customer’s facility and ensure that a Customer employee is present. 

(4) Test Time: Provide sufficient support and test time on Customer’s Designated Equipment to allow
Cadence to duplicate an error and verify if it is due to Licensed Materials, and when corrections are complete, acknowledge that the error has been resolved. 
 (5) Standard of Care: Provide the same standard of care for the Licensed Materials that Customer applies to its own products or data or like value to its business and return any defective
Licensed Materials or attest in writing to the destruction of same as directed by Cadence. 
 (6)
Support: Promptly inform Cadence in writing if Customer develops interfaces to the Licensed Material, and provide such information as Cadence determines necessary to properly maintain the Licensed Material. 

(7) Data Necessary: Provide data sufficient to enable Cadence to replicate a reported error on its own
computers as the CRC. 
 (c) Excluded Services: Maintenance Services required in connection with
or resulting from the following are excluded from this Agreement: 

 

 (1) abuse, misuse, accident or neglect; or, repairs, alterations,
and/or modifications which are not permitted under this Agreement and which are performed by other than Cadence or its agents; or 
 (2) the relocation of Licensed Materials from one unit of Designated Equipment to another or from the Customer location; or making changes due to Customer’s decision to reconfigure the
Licensed Material or the system or network upon which it is installed; or 
 (3) maintenance,
malfunction, modification of the Designated Equipment or its operating system; or 
 (4) Use of the
Licensed Material on a hardware platform other than the Designated Equipment; or use of other than the most current or last prior release of the Licensed Material as specified in Section 9(a)(5); or 

(5) Customer’s failure to maintain configuration environment (i.e., memory disk capacity, operating system
revision level, prerequisite or co-requisite items, etc.) specified in the Documentation or to supply adequate backups. 
 (d) Additional Services: If Cadence agrees to perform services requested by Customer which are not included as part of this Agreement, such services shall be billed to Customer at prices and
terms to be agreed by the parties. 
 10. PROPRIETARY RIGHTS INDEMNITY 

Cadence will defend at its own expense, or its option reimburse Customer for reasonable costs of defense, in connection
with any legal action brought against Customer to the extent that it is based on a claim or allegation that any Software infringes a U.S. patent or copyright of any third party, and Cadence will pay any costs and damages finally awarded against
Customer in any such action that are attributable to any such claim or incurred by Customer through settlement thereof, but shall not be responsible for any compromise made or expense incurred without its consent. However, such defense and payments
are subject to the condition that Customer gives Cadence prompt written notice of such claim, allows Cadence to direct the defense and settlement of the claim, and cooperates with Cadence as necessary for defense and settlement of the claim. Should
any Licensed Materials, or the operation thereof, become or in Cadence’s opinion be likely to become, the subject of such claim, Cadence may, at Cadence’s option and expense, procure for Customer the right to continue using the Licensed
Materials, replace or modify the Licensed Materials so that they become non-infringing, or terminate the license granted hereunder for such Licensed Materials and refund to Customer the Fees (less a reasonable charge for the period during which
Customer has had availability of such Licensed Materials for Use and of the Maintenance Services). Cadence will have no liability for any infringement claim to the extent it; (i) is based on modification of Licensed Materials other than by
Cadence, with or without authorization; or (ii) results from failure of Customer to Use and Updated version of the Licensed Materials; or (iii) is based on the combination or Use of a Licensed Materials with any other

 

  
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 software, program or device not provided by Cadence if such infringement would not have
arisen but for such use or combination; or (iv) results from compliance by Cadence with designs, plans or specifications furnished by Customer, or (v) is based on any products, devices, software or applications designed or developed
through Use of the Licensed Materials. THE FOREGOING STATES CADENCE’S ENTIRE LIABILITY AND CUSTOMER’S EXCLUSIVE REMEDY FOR PROPRIETARY RIGHTS INFRINGEMENTS. 
 11. LIMITED WARRANTY 
 (a) Cadence warrants
for thirty (30) days after shipment that the recording media by which the Licensed Materials are furnished is free of manufacturing defects and shipping damage if the media has been properly installed on the Designated Equipment. Cadence does
not warrant that Licensed Materials will meet Customer’s requirements or that Use of the Licensed Materials will be uninterrupted or error free. As Customer’s exclusive remedy and Cadence’s entire liability for breach of the warranty
herein, Cadence will provide a replacement magnetic media containing the Licensed Materials ordered by Customer. 
 (b) EXCEPT AS PROVIDED ABOVE CADENCE MAKES NO WARRANTIES TO CUSTOMER WITH RESPECT TO THE LICENSED MATERIALS OR ANY SERVICE, ADVICE, OR ASSISTANCE FURNISHED HEREUNDER, AND NO WARRANTIES OF ANY KIND,
WHETHER WRITTEN, ORAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR ARISING FROM COURSE OF DEALING OR USAGE IN TRADE SHALL APPLY. 

12. LIMITATION OF LIABILITY 
 Cadence’s cumulative liability to Customer for all claims of any kind resulting from Cadence’s performance or breach of this Agreement or the Licensed Materials or Maintenance Services furnished
hereunder shall not exceed, to the extent collected by Cadence, the Fees actually received by Cadence from Customer under a Product Quotation for the Licensed Materials or Maintenance Services which are the subject of such claim, regardless of
whether Cadence has been advised of the possibility of such damages or whether any remedy set forth herein fails of its essential purpose or otherwise. CADENCE SHALL NOT BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTES, LOSS OF PROFITS,
INTERRUPTION OF BUSINESS, OR FOR ANY OTHER SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED, WHETHER FOR BREACH OF WARRANTY, CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. 

13. GENERAL PROVISIONS 
  

	 	13.1	 	NOTICES 

        Notices to Customer shall be sent to the address on the initial page and to Cadence at
2655 Seely Avenue, San Jose, 

 California 95134 USA, Attn: Legal Department or such new address as a party specifies to
the other in writing. 
  

	 	13.2	 	EXPORT 

 The Licensed Materials may not be exported without the prior written consent of Cadence. The Licensed Materials and all related technical information or materials are subject to export controls and (are
or may be) licenseable under the U.S. Government export regulations. Customer will not export, re-export, divert, transfer or disclose, directly or indirectly the Licensed Materials and any related technical information or materials without
complying strictly with all legal requirements including without limitation obtaining the prior approval of the U.S. Department of Commerce and, if necessary, other agencies or departments of the U.S. Government. Licensee will execute and deliver to
Cadence such “Letters of Assurance” as may be required under applicable export regulations. Customer shall indemnify Cadence against any loss related to Customer’s failure to conform to these requirements. 

 

	 	13.3	 	ASSIGNMENT 

 (a) No Assignment: Customer may not delegate, assign or transfer this Agreement, or any of its rights and obligations under this Agreement, and any attempt to do so shall be void. Customer
agrees that this Agreement binds Customer and each of its affiliates and the employees, agents, representatives and persons associated with any of them. Without limitation of the foregoing, an assignment, delegation or transfer shall include, but
not be limited to a sale of substantially all of the assets of Customer, a merger, a re-organization, or change in control of fifty percent (50%) or more of the equity of Customer (a “Change in Control”). No transfer,
delegation or assignment (including, without limitation, an assignment by operation of law) of this Agreement may be made without the prior written consent of Cadence. Such prior written consent by Cadence may be withheld at Cadence’s sole
discretion. As used in this Agreement, assignment shall not include, and no consent shall be required, (1) if Customer raises additional capital through sale of equity (either privately or through a public offering) or debt instruments,
provided that the additional equity issued does not result in a Change in Control, (2) if Customer changes its state of incorporation, or (3) if Customer reorganizes its corporate structure without a change in its equity structure.

 (b) Assignment of License Fees: Cadence may sell or assign the Licensee Fees owing under this
Agreement to third-parties (“Assignee”). Upon written notice to Customer that the right to the Licensee Fees hereunder has been assigned, in whole or in part, Customer shall, if requested, pay all assigned amounts directly to
Assignee. Customer waives and agrees it will not assert against Assignee any abatement, set-off, claim, counterclaim, 

 

  
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 adjustment, reduction, or defense it may have against Cadence for any reason, including,
but not limited to, any claims that Cadence failed to perform under this Agreement or termination of this Agreement. Customer waives all rights to make any claim against Assignee for any loss or damage to the Licensed Materials or breach of any
warranty, express or implied, as to any matter whatsoever, including but not limited to the Licensed Materials and service performance, functionality, features, merchantability or fitness for a particular purposes, or any indirect, incidental or
consequential damages or loss of business. 
 (c) Obligations: In the event Cadence assigns the
Fees due hereunder, Customer shall pay Assignee all Licensee Fees due and payable under this Agreement, but shall pursue any claims under this Agreement against Cadence. Except as provided in Section 5, neither Cadence nor its Assignees will
interfere with Customer’s quiet enjoyment or Use of the Licensed Materials in accordance with this Agreement’s terms and conditions. Notwithstanding any assignment of the Fees by Cadence, Cadence shall remain obligated to perform all of
its obligations under this Agreement. 
  

	 	13.4	 	U.S. GOVERNMENT CONTRACT PROVISIONS 

 This Agreement is for Customer’s temporary acquisition of Licensed Materials for its internal Use. No Government procurement regulation or contract clauses or provision shall be deemed a part of any
transaction between the parties under this Agreement unless its inclusion is required by law, or mutually agreed upon in writing by the parties in connection with a specific transaction. Customer acknowledges that Cadence represents that the
Licensed Materials and Documentation consist of “commercial computer software” and “commercial computer software documentation” as such terms are defined in 48 C.F.R. 252.227-7014(a)(1) (JUN 1995) and such Licensed Materials
are “commercial computer software” and “commercial computer software documentation” as such terms are used in 48 C.F.R. 12.212 (OCT 1995); that such Licensed Materials and Documentation constitute trade secrets of Cadence
for all purposes of the Freedom on Information Act an dif provided to the Government for; (i) acquisition by or on behalf of civilian agencies, are

 provided in accordance with the policy set forth in 48 C.F.R. 12.212; or
(ii) acquisition by or on behalf of units of the Department of Defense, in accordance with the policies set forth in 48 C.F.R. 227.7202-1 (JUN 1995) and 227.7202-3 (JUN 1995). 

 

	 	13.5	 	FORCE MAJEURE 

 Except for Customer’s payment obligations pursuant to Section 4, neither party shall be liable to the other party for delay in performing its obligations, or failure to perform any such
obligations under this Agreement, if the delay or failure results from circumstances beyond the reasonable control of the party, including but not limited to, any acts of God, governmental act, fire, explosion, accident, war, armed conflict or civil
commotion. 
  

	 	13.6	 	WAIVER and SEVERABILITY 

 Failure by either party to enforce at any time any provision of this Agreement, or to exercise any election of options provide herein, shall not constitute a waiver of such provision or option, nor affect
the validity of this Agreement or any part thereof, or the right of the waiving party to thereafter enforce each and every such provisions. If any provision of this Agreement is held invalid or unenforceable, the remainder of the Agreement shall
continue in full force and effect. 
  

	 	13.7	 	GOVERNING LAW 

 The procedural and substantive laws of the State of California, U.S.A., without regard to its conflicts of laws principles, will govern this Agreement. Any action brought to enforce this Agreement or its
terms shall be brought within the state or federal courts of Santa Clara County, California. The parties agree that the United Nations Conventions on Contracts for the International Sale of Goods (1980) is specifically excluded from and shall
not apply to this Agreement. 
  

	 	13.8	 	ENTIRE AGREEMENT 

 This Agreement and the attachments hereto are the complete and exclusive statement of the agreement between the parties and supersede all proposals, oral or written, and all other communications between
the parties relating to the subject matter of this Agreement. Only a written instrument duly executed by authorized representatives of Cadence and Customer may modify this Agreement.

 

  
 IN WITNESS
WHEREOF, THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT AS OF THE DATE OF AGREEMENT SET FORTH ABOVE. 
  

									
	CUSTOMER	 		 	CADENCE DESIGN SYSTEMS, INC.
					
	By:	 	 /s/ Tim D. Semones
	 		 	 By:
	 	/s/ Michael J. Williams
					
	Name:	 	 Tim D. Semones
	 		 	 Name:
	 	 Michael J. Williams

					
	Title:	 	 CFO
	 		 	 Title:
	 	 VP and Associate General Counsel

					
	Date:	 	 6/29/07
	 		 	 Date:
	 	6/29/07

  
 7 

 CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION. 

REDACTED MATERIAL IS MARKED WITH ASTERISKS (“***”). 
 PRODUCT QUOTATION 
 eDAcard 

Attachment A to the Software License and Maintenance Agreement 

SLMA-07INPH0629 (“Agreement”) 
  

			
	 eDAcard Platinum number:
	  	TDB
	 Quotation Number:
	  	IJR062007
	 Quotation Expiration Date:
	  	29-Jun-07

  

			
	 Inphi Corporation (“CUSTOMER”)

 
 Tim Semones

 
 2393 Townsgate Road, Suite 101

 
 Westlake Village, CA 91361
	  	 CADENCE DESIGN SYSTEMS, INC.
  

2655 Seely Avenue
  
 San Jose, California 95134

		
	 Attachment Effective Date: 29-Jun-07

 
 Attachment Expiry
Date:           ***
	  	

  

							
	 eDA PLATINUM card
	  		  			
	 eDAcard Activation Period
	  		  			
	 Activation Period Effective Date:
	  	29-Jun-07	  			
	 Activation Period Expiry Date:
	  	 ***
	  			
	 Termination Date:
	  	 ***
	  			
	 eDAcard Balance:
	  		  	 	$7,000,000	  
	 eDAcard Site(s):
	  		  			
	 Distribution of eDAcard Balance:
	  		  			
	 The following authorized users & specific site(s) will be issued eDAcard(s) as indicated
below
	  			
	 Ed Miller – Westlake Village, CA
91361    $7,000,000    emiller@inphi-corp.com
	  			
	 eDAcard WAN Premium: ***% LOCAL; ***% REGION; ***% MULTI-REGION
	  			
	 eDAcard Platinum Discount Rate: ***%
	  			
	 Note: All other Licensed Materials not listed in Addendum A may be drawn down
as their respective list price less
 ***% discount. 
	   

  

	 eDAcard Platinum
number:                TBD
	  		  			
	 eDAcard Fees
	  		  	 	$7,000,000	  

  

					
	 Payment Terms
	  	 	Total	  
	 Total Fees Due
	  	$	7,000,000	  

 Payment Schedule 

 

											
	 Payment
	  	Invoice Date	 	 	 Due Date
	  	Total Amount	 
	 1
	  	 	***	  	 	 ***
	  	$	*	** 
	 2
	  	 	***	  	 	 ***
	  	$	*	** 
	 3
	  	 	***	  	 	 ***
	  	$	*	** 
	 4
	  	 	***	  	 	 ***
	  	$	*	** 
	 5
	  	 	***	  	 	 ***
	  	$	*	** 
	 6
	  	 	***	  	 	 ***
	  	$	*	** 
	 7
	  	 	***	  	 	 ***
	  	$	*	** 
	 8
	  	 	***	  	 	 ***
	  	$	*	** 
	 9
	  	 	***	  	 	 ***
	  	$	*	** 
	 10
	  	 	***	  	 	 ***
	  	$	*	** 
	 11
	  	 	***	  	 	 ***
	  	$	*	** 
	 12
	  	 	***	  	 	 ***
	  	$	*	** 
	 13
	  	 	***	  	 	 ***
	  	$	*	** 
	 14
	  	 	***	  	 	 ***
	  	$	*	** 
	 15
	  	 	***	  	 	 ***
	  	$	*	** 
	 16
	  	 	***	  	 	 ***
	  	$	*	** 
	 Total [USD]
	  				 		  	$	7,000,000	  

  

									
	The parties hereby agree to the foregoing terms and conditions in addition to the terms and conditions attached hereto which are hereby incorporated by reference.	  	 
 	Inphi Corporation
Initials	  
  	  	 	    TDS    	  

 Product
quotation 

  
 Page 1

 CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION. 

REDACTED MATERIAL IS MARKED WITH ASTERISKS (“***”). 
 Product Quotation 
 Terms and Conditions 

For Floating Pool 

eDAcard License Model 
 Customer and Cadence entered into a Fixed Term License Agreement (Agreement No. FTLA-00TCOM1218) on or about December 18, 2000 (“FTLA”) Customer and Cadence have also entered into
the following Product Quotations: Product Quotation Attachment G effective August 31, 2005 (“Attachment G”), Product Quotation Attachment H effective September 26, 2006
(“Attachment H”), and Product Quotation Attachment J effective September 30, 2006 (“Attachment J”). The parties are entering into a new Software License and Maintenance Agreement (Agreement
No. SLMA-07INPH0629) of even date herewith (“Agreement”), which will supersede the FTLA. Upon the Effective date of this Product Quotation Attachment (“Attachment”), the FLTA and Attachments G, H, J and all
rights, duties and obligations thereunder (except those provisions that survive termination on their own terms, if any, will automatically terminate). Customer understands and agrees that its right to Use any Licensed Programs (as defined in the
FLTA) licensed under Attachments G, & J shall immediately terminate upon the effective date of this Attachment, except that Customer shall have a reasonable period of time, not to exceed thirty (30) days, to transition from the
license keys issued under Product Quotation Attachments G, & J to the license key issued under this Attachment. Customer understands and agrees that upon execution of this Attachment, the rights and obligations of the parties under
Attachment H shall immediately terminate except for; (i) License Keys for Licensed Programs which have not yet expired the Use of which shall continue to be governed by the FTLA, and (ii) those provisions that survive termination on
their own terms, if any. Customer understands and agrees that its right to select and Use any additional licensed Programs licensed under Attachment H is immediately terminated. Upon execution of this Attachment Customer shall make payment of
$*** to Cadence in connection with termination of Attachments G, H, and J. 
 This Product Quotation Attachment
(“Attachment”) contains the terms and conditions for Customer’s Use of Licensed Materials based upon Cadence’s eDAcard Platinum license model. This Attachment is a Product Quotation as defined in the Software License and
Maintenance Agreement (“Agreement”) between the parties hereto. 
  

	A.	 eDAcard LICENSING MODEL 

  

	1.	 Availability of Licensed Materials: Cadence’s eDAcard licensing model establishes a mechanism whereby Customer may access, select and
Use Licensed Materials through Cadence’s web site (“eDAcard Web Site”) during the eDAcard activation period. The activation period is defined as beginning on the Activation Period Effective Date and ending on the Activation
Period Expiry Date (“eDAcard Activation Period”) as set forth on page 1 of this Attachment. Use of the Licensed Materials will be pursuant to the terms and conditions of the Agreement and this Attachment. A list of the
available Licensed Materials can be viewed in the eDAcard Web Site. Licenses for the Licensed Materials, which includes Maintenance Services, can be selected for a pre-determined duration (i.e. weekly, monthly, quarterly, yearly or any combination
thereof) (“Term of Use”). In no event, however, shall the Term of Use for any Licensed Materials licensed during the eDAcard Activation Period extend beyond the Attachment Expiry Date. 

 

	2.	 Licensed Materials: Under this Attachment Customer shall only use Licensed Materials available through the eDAcard Web Site.

  

	3.	 Accessibility of Licensed Materials: Within the later of five (5) days after: (i) the Activation Period Effective Date or
(ii) execution of this Attachment by Cadence, Cadence shall forward Customer an eDAcard number (“eDAcard number”) to those Customer employees who will be allowed to access the eDAcard Web Site (“Authorized
Users”). Upon account activation, the Authorized Users will be issued individual login names and passwords (“Authorized User ID”) to be used in conjunction with the eDAcard Number. The Authorized User ID will allow the
Authorized Users access to the Licensed Materials on the eDAcard Web Site. Following 

  
 2 

 the authorized Users selection of Licensed Materials over the eDAcard Web
Site, the applicable Fees will be deducted from the eDAcard Balance set forth on page 1 of this Attachment. Customer shall be provided with instructions on how to obtain an authorization key for the Licensed Materials. The ability of the
Authorized Users to access the eDAcard Web Site for the purpose of selecting additional Licensed Materials shall terminate on the earlier of: (i) the depletion of the eDAcard Balance; (ii) the Activation Period Expiry Date set forth on
page 1 of this Attachment; (iii) termination of the Agreement pursuant to Section 5 thereof. 
  

	4.	 eDAcard Balance: The Fee structure for Use of the Licensed Materials implementing the eDAcard licensing model are set forth on the Cadence
eDAcard Datasheet available on the eDAcard Web Site. The Fees are based upon the one year time-based license (“TBL”) reference price. The Licensed Material price is then adjusted per the eDAcard rate table set forth in the eDAcard
Datasheet based upon; (1) the type of Licensed Material licensed, and (2) the Term of Use. Finally, the applicable Customer discount is applied to arrive at the final Fee for the applicable Licensed Materials. The dollar value as set forth
in the eDAcard Balance on page 1 of this Attachment represents the amount the Customer has allocated for selecting and Using Licensed Materials accessing the eDAcard Web Site. Upon selection of both the Licensed Materials and the Term of Use,
the Fee shall be automatically calculated and debited from the remaining eDAcard Balance. Customer may continue to access the eDAcard Web Site for the purpose of selecting additional Licensed Materials until the eDAcard Balance is depleted. Customer
shall forfeit any remaining portion of the eDAcard Balance not utilized during the eDAcard Activation Period. The one year reference (TBL) price for Licensed Materials and/or the eDAcard rate table may be modified at any time by Cadence.

  

	5.	 General Terms: Customer is solely responsible for: (i) managing its Authorized User; and (ii) maintaining the security of all
passwords, user IDs and access keys made available by Cadence. Customer acknowledges and agrees that any person who enters an Authorized User ID will be presumed by Cadence to be an Authorized User and have the power and authority to bind Customer
to the terms of this Attachment and the Agreement. Cadence will not be under any obligation to verify the identity of any such person. Customer agreed that an order placed through the eDAcard Web Site is the equivalent of a signed Customer purchase
order. Customer shall have the right to change, add, or delete Authorized Users upon prior written notice to Cadence. In no event are any licenses issued hereunder cancelable nor are any Fees payable hereunder refundable. Customer hereby waives any
future challenge to the validity and enforceability of any order submitted via the eDAcard licensing model on the grounds that it was electronically transmitted and authorized. Customer is responsible for all costs and charges, including without
limitation, phone charges and telecommunications equipment, incurred in order to use the eDAcard licensing model. 

  

	B.	 MAINTENANCE SERVICES 

 Maintenance Services are provided by Cadence during the Term of Use. 
  

	C.	 PAYMENT SCHEDULE 

 Customer shall remit payment for the Fees as set forth on the page 1 of this Attachment. Cadence shall provide an invoice approximately thirty (30) days prior to the scheduled payment date.
Customer shall make payment to Cadence on or before the payment due date identified on page 1 of this Attachment. Notwithstanding the foregoing, in the event that the eDAcard Balance is depleted and the Term of Use for all Licensed Materials
ends prior to the Activation Period Expiry Date, any remaining payments shall become due and payable immediately upon the expiration of the Term of Use for all Licensed Materials. Customer understands and agrees that the obligation to make payments
hereunder is not contingent upon a purchase order being issued by Customer. If required by Cadence, the obligation to pay the Fees shall be additionally evidenced by an Installment Payment Agreement (“IPA”) executed by Customer.

  

	D.	 ELECTRONIC TRANSFER 

  
 3 

 Upon execution of the Electronic Transmission Agreement, all products under
this Agreement will be shipped via electronic transfer per the terms and conditions of such Electronic transmission Agreement. 
  

	E.	 WIDE AREA NETWORK 

 Subject to Section 13.2 (“Export”) of the Agreement between the parties hereto and payment of any applicable Fees, Customer is granted the right to allow its employees to remotely access
the Licensed Materials through a wide area network (“WAN”). The Licensed Materials must be located on Designated Equipment within the same time zone (or Region(s) if Regional WAN rights are acquired) as such employees are located and must
only be accessed by employees within such time zone or Region(s). Customer may select the following options for WAN rights at the time of acquiring the Licensed Materials under this Attachment: (1) “None (no WAN rights permitted),
(2) “Local (WAN rights only permitted within the same time zone as the Designated Equipment, (3) “Region” (WAN rights only permitted within the specific Region selected), and (4) “Multi-Region” (WAN rights
permitted in more than one Region as selected by Customer. Customer’s WAN selection is specified on page 1 of this Attachment. The Regions for such WAN rights are: (i) the Americas, (2) Europe and Middle East, (3) India, and
(4) Asia and Australia (excluding Japan). 
 The parties hereby agree to the foregoing terms and conditions. 

 

									
	INPHI CORPORATION	 		 	CADENCE DESIGN SYSTEMS, INC.
					
	By:	 	 /s/ Tim D. Semones
	 		 	By:	 	/s/ Michael J. Williams
	Name:	 	 Tim D. Semones
	 		 	Name:	 	 Michael J. Williams

	Title:	 	 CFO
	 		 	Title:	 	 VP & Associate General Counsel

	Date:	 	 6/29/07
	 		 	Date:	 	6/29/07

 Please return originals to: 
 Cadence Design Systems, Inc. 

Attn: Michael J. Williams 
 VP & Associate General Counsel 
 2655 Seely Avenue 

San Jose, CA 95134 

  
 4 

 CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION. 

REDACTED MATERIAL IS MARKED WITH ASTERISKS (“***”). 
 Product Quotation 
 eDAcard 

Attachment B to the Software License and Maintenance Agreement 

             
 SLMA-071NPH0629 (“Agreement”) 
 eDAcard PLATINUM number:
      TBD         

        Quotation Number:   INPH1 101111 DEW 
 Quotation Expiration Date:   15-Dec-10 
  

					
	Inphi Corporation (“CUSTOMER”)	  	            Inphi Corporation	  	CADENCE DESIGN SYSTEMS, INC.
	Robb Johnson	  	            Ship-To Address: 100%	  	2655 Seely Avenue
	112 S. Lakeview Canyon Road, Suite 100	  	112 S. Lakeview Canyon Road, Suite 100	  	San Jose, California 95134
	Westlake Village, CA 91362	  	            Westlake Village, CA 91362	  	

  

			
	 Attachment Effective Date:	 	 15-Dec-10
	 Attachment Expiry Date:	 	 16-Mar-12

  

									
	 	 	eDAcard	 	 	  	 	  	 
	 	 	eDAcard Activation Period:	 		  		  	 
	 	 	Activation Period Effective Date:	 	        15-Dec-10	  		  	 
	 	 	Activation Period Expiry Date:	 	        9-Mar-12	  		  	 
	 	 	Termination Date:	 	        16-Mar-12	  		  	 
	 	 	eDAcard Balance:	 		  		  	$250,000
	 	 	eDAcard Site(s):	 		  		  	 
	 	 	Distribution of eDAcard Balance	 		  		  	 
	 	 	The following authorized users & specific(s) will be issued eDAcard(s) as indicated below.	  	 
	 	 	Robb Johnson – Westlake Village, CA 91362	 	        $250,000	  	rjohnson@inphi-corp.com	  	 
	 	 	 eDAcard WAN Premium: ***% LOCAL; ***% REGION; *** MULTI-REGION

eDAcard Discount Rate: ***%
	  	 
	 	 	 Note: The
Licensed Materials may be drawn down at their respective list price less a ***% discount except for the Licensed Materials listed in Addendum A.
     The Licensed Materials listed in Addendum A may be drawn down at their respective list price less the applicable discount set forth in Addendum A.

	 	 	eDAcard PLATINUM number:	 	        TBD                    
    	  		  	 
	 	 	eDAcard Fees	 	 	  	 	  	$250,000

 

							
	 	 	  
 Payment
Terms
	  	  

 
	  

Total
	  
   

	 		 
	 	 	 Total Fees Due
  
	  	$  
	250,000
 
	  
 

  

											
	 	 	  
 Payment
Schedule
  
	  	 	  	 	  	 	  	 
	 	 	Payment	  	Invoice Date	  	Due Date	  	Total Amount	  	 
	 	 	1	  	***	  	***	  	$***	  	 
	 	 	2	  	***	  	***	  	$***	  	 
	 	 	3	  	***	  	***	  	$***	  	 
	 	 	4	  	***	  	***	  	$***	  	 
	 	 	 Total [USD]

 
	  	 	  	 	  	 $***

 
	  	 

   The parties hereby agree to the foregoing terms and conditions 

  in addition to the terms and conditions attached hereto which are hereby incorporated by reference. 

  

					
	Cadence Design Systems Confidential	 	Product Quotation	 	12/7/2010 3:52 PM
	 	Page 1	 

 Production Quotation 

Terms and Conditions 
 For Floating Pool 
 eDAcard License Model 

This Product Quotation Attachment (“Attachment”), which is appended to the Software License and Maintenance Agreement
referenced on page 1 of this Attachment (“Agreement”), contains the terms and conditions for Customer’s Use of Licensed Materials based upon Cadence’s eDAcard Platinum licensing model. This Attachment is a Product
Quotation as defined in the Agreement. All capitalized terms not otherwise defined herein shall have the same meaning as ascribed to them in the Agreement. In the event of any conflict between the terms of the Agreement and the terms of this
Attachment, the terms of the Agreement shall prevail. 
  

	A.	 eDAcard LICENSING MODEL 

  

	1.	 Availability of Licensed Materials: Cadence’s eDAcard licensing model establishes a mechanism whereby Customer may access, select and
Use Licensed Materials through Cadence’s web site (“eDAcard Web Site”) during the eDAcard activation period. The activation period is defined as beginning on the Activation Period Effective Date and ending on the Activation
Period Expiry Date (“eDAcard Activation Period”) as set forth on page 1 of this Attachment. Use of the Licensed Materials will be pursuant to the terms and conditions of the Agreement and this Attachment. A list of the available
Licensed Materials can be viewed on the eDAcard Web Site. The Term of Use for licenses for the Licensed Materials, which includes Maintenance Services, can be selected for a pre-determined duration (i.e. weekly, monthly, quarterly, yearly or any
combination thereof). In no event, however, shall the Term of Use for any Licensed Materials licensed during the eDAcard Activation Period extend beyond the Attachment Expiry Date. 

 

	2.	 Licensed Materials:   Customer shall only Use Licensed Materials available through the eDAcard Web Site.

  

	3.	 Accessibility of Licensed Materials: Within the later of five (5) days after: (i) the Activation Period Effective Date or,
(ii) execution of this Attachment by Cadence. Cadence shall activate and forward an eDAcard number (“eDAcard number”) to those Customer employees who will be allowed to access the eDAcard Web Site (“Authorized
Users”). Upon account activation, the Authorized Users will be issued individual login names and passwords (“Authorized User 1D”) to be used in conjunction with the eDAcard Number. The Authorized User ID will allow the
Authorized Users access to the Licensed Materials on the eDAcard Web Site. Following the Authorized Users selection of Licensed Materials over the eDAcard Web Site, the applicable Fees will be deducted from the eDAcard Balance set forth on page I of
this Attachment. Customer shall be provided with instructions on how to obtain an authorization key for the Licensed Materials. The ability of the Authorized Users to access the eDAcard Web Site for the purpose of selecting additional Licensed
Materials shall terminate on the earlier of: (i) the depletion of the eDAcard Balance; (ii) the Activation Period Expiry Date set forth on page 1 of this Attachment; or (iii) termination of the Agreement pursuant to Section 5
(Term and Termination) thereof. 

  

	4.	 eDAcard Balance: The Fee structure for Use of the Licensed Materials implementing the eDAcard licensing model is set forth on the Cadence
eDAcard Datasheet available on the eDAcard Web Site. The Fees are based upon the one year time-based license (“TBL”) reference price. The Licensed Materials price is then adjusted per the eDAcard rate table set forth in the
eDAcard Datasheet based upon: (1) the type of Licensed Materials licensed plus any applicable regional list price adjustments, and (2) the Term of Use. Finally, the applicable Customer discount is applied to arrive at the final Fee for the
applicable Licensed Materials. The dollar value as set forth in the eDAcard Balance on page I of this Attachment represents the amount the Customer has allocated for selecting and Using Licensed Materials accessing the eDAcard Web Site. Upon
selection of both the Licensed Materials and the Term of Use, the Fee shall be automatically calculated and debited from the remaining eDAcard Balance. Customer may continue to access the eDAcard Web Site for the purpose of selecting additional
Licensed Materials until the eDAcard Balance is depleted. Customer shall forfeit any remaining portion of the eDAcard Balance not utilized during the eDAcard Activation Period. The TBL price for Licensed Materials and/or the eDAcard rate table may
be modified at any time by Cadence. 

  

					
	  
 Product Quotation eDAcard Platinum (SLMA)
3-22-10
	  	2	  	

	5.	 General Terms: Customer is solely responsible for: (i) managing its Authorized Users; and (ii) maintaining the security of all
passwords, user IDs and access keys made available by Cadence. Customer acknowledges and agrees that any person who enters an Authorized User ID will be presumed by Cadence to be an Authorized User and have the power and authority to bind Customer
to the terms of this Attachment and the Agreement. Cadence will not be under any obligation to verify the identity of any such person. Customer agrees that an order placed through the eDAcard Web Site is the equivalent of a signed purchase order.
Customer shall have the right to change, add, or delete Authorized Users upon prior written notice to Cadence. In no event are any licenses issued hereunder cancelable nor are any Fees payable hereunder refundable. Customer hereby waives any future
challenge to the validity and enforceability of any order submitted via the eDAcard licensing model on the grounds that it was electronically transmitted and authorized. Customer is responsible for all costs and charges, including without
limitation, phone charges and telecommunications equipment, incurred in order to use the eDAcard licensing model. 

  

	B.	 MAINTENANCE SERVICES 

 Maintenance Services are provided by Cadence during the Term of Use. 
  

	C.	 PAYMENT SCHEDULE 

 Customer shall remit payment for the Fees in accordance with the schedule set forth on page 1 of this Attachment. Notwithstanding the foregoing, in the event that the eDAcard Balance is depleted and the
Term of Use for all Licensed Materials ends prior to the Activation Period Expiry Date, any remaining payments shall become due and payable immediately upon the expiration of the Term of Use for all Licensed Materials. Customer understands and
agrees that the obligation to make payments hereunder is not contingent upon a purchase order being issued by Customer. If required by Cadence, the obligation to pay the Fees shall be additionally evidenced by an Installment Payment Agreement
(“IPA”) executed by Customer. 
  

	D.	 WIDE AREA NETWORK 

 Subject to Section 13.2 (Export) of the Agreement and payment of any applicable Fees, Customer is granted the right to allow its employees to remotely access the Licensed Materials through a wide
area network (“WAN”). Customer may select the following options for WAN rights at the time of acquiring the Licensed Materials under this Attachment: (I) “None” (no WAN rights permitted), (2) “Local”
(WAN rights only permitted within the same time zone as the Designated Equipment, or if outside the Americas, within the same country), (3) “Region” (WAN rights only permitted within the specific Region selected with access through
Designated Equipment in the Region). and (4) “Multi-Region” (WAN rights permitted in more than one Region as selected by Customer). Customer’s WAN selection will be determined at time of selection of the Licensed Materials. The
available Regions for such Multi-Region WAN rights are: (1) the Americas, (2) Europe and Middle East, (3) India, and (4) Australia and Asia (excluding Japan). 

The parties hereby agree to the foregoing terms and conditions. 

 

											
	CUSTOMER: INPHI CORPORATION	 		 	CADENCE DESIGN SYSTEMS, INC.

											
						
	 By:
	 	 /s/ John S. Edmunds
	 		 	 By:
	 	  
	 	

											
	 Name:
	 	   John S. Edmunds
	 		 	 Name:
	 	 Gabrielle L. Walker
	 	

											
	 Title:
	 	   CFO
	 		 	 Title:
	 	 Associate General Counsel
	 	

											
	 Date:
	 	   12/10/10
	 		 	 Date:
	 	  
	 	

 Please return originals to: 
 Cadence Design Systems, Inc. 
 Attn: Gabrielle L. Walker 

Associate General Counsel 
 2655 Seely Avenue 
 San Jose, CA 95134 

  

					
	  
 Product Quotation eDAcard Platinum (SLMA)
3-22-10
	  	3	  	

 CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION. 

REDACTED MATERIAL IS MARKED WITH ASTERISKS (“***”). 
 Addendum A To Attachment B 
 to the Software License and Maintenance
Agreement SLMA-071NPHO629 
  

					
	 3rd Party & Exception
Product(s)
	  	 Discount(s)
	 	  
	 72010;
RET MaskWeaver Base Level
	  	***%	 	 
	 72011:
RET Scatter Bar OPC
	  	***%	 	 
	 72014;
RET Model-based OPC
	  	***%	 	 
	 72015;
RET ModelTuner
	  	***%	 	 
	 72017;
RET MaskWeaver MultiThreading
	  	***%	 	 
	 72018;
RET MaskWeaver Distributed Processing ModelServer Pack
	  	***%	 	 
	 72019;
RET CPL Gate Mask Synthesis
	  	***%	 	 
	 72020;
Virtuoso Phase Designer
	  	***%	 	 
	 72021;
RET DDL Gate Mask Synthesis
	  	***%	 	 
	 72023;
Virtuoso RET Analyser (VRA)
	  	***%	 	 
	 72024;
RET MaskWeaver Hitachi 700 Fracture Option
	  	***%	 	 
	 72025;
RET MaskWeaver Hitachi HL-800 Fracture Option
	  	***%	 	 
	 72026;
RET MaskWeaver Hitachi HL-950 Fracture Option
	  	***%	 	 
	 72027;
RET MaskWeaver VSB1 1 Fracture Option
	  	***%	 	 
	 72030;
RET LithoCruiser with GUI Option
	  	***%	 	 
	 72031;
RET LithoCruiser without GUI Option
	  	***%	 	 
	 72032;
RET LithoCruiser AutoRuleOPC
	  	***%	 	 
	 72034;
Virtuoso RET Designer (VRD)
	  	***%	 	 
	 72035;
Virtuoso RET Designer -DP (VRD-DP)
	  	***%	 	 
	 72036;
Virtuoso RET Verifier
	  	***%	 	 
	 72037;
Virtuoso RET Verifier DP (VRV DP)
	  	***%	 	 
	 72039;
Virtuoso(R) RET Imager
	  	***%	 	 
	 CPS100;
Cadence InCyte Chip Estimator L
	  	***%	 	 
	 CPS200;
Cadence InCyte Chip Estimator XL
	  	***%	 	 
	
CPS200UG1; Upgrade from Cadence InCyte Chip Estimator L to XL
	  	***%	 	 
	 PA1220;
Allegro(R) Design Publisher - XL
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	 PA8210;
Allegro FPGA System Planner - L
	  	***%	 	 
	 PA8215;
Allegro FPGA System Planner Two FPGA Option - L
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	 PA8610;
Allegro FPGA System Planner - XL
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PA8610UG1; Upgrade from PA8210 to PA8610
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PA8610UG2; Upgrade from PA8210 + PA8215 to PA8610
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	 PA8630;
Allegro FPGA System Planner - GXL
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PA8630UG1; Upgrade from PA8610 to PA8630
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 Inphi Corporation               
 Initials:   JSE     

  
 1 of 1

 CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION. 

REDACTED MATERIAL IS MARKED WITH ASTERISKS (“***”). 
 Product Quotation 
 eDAcard 

Attachment C to the Software License and Maintenance Agreement 
 SLMA-071NPH0629 (“Agreement”) 
 eDAcard PLATINUM number: TBD

 Quotation number: INPH1_101111_DEW 
 Quotation Expiration Date: 31-Dec-10 
  

							
	 Inphi Corporation (“CUSTOMER”)
 Robb Johnson
 112 S. Lakeview Canyon Road. Suite 100

Westlake Village, CA91362
	  	 Inphi Corporation
 Ship-To
Address: 79%
 112 S. Lakeview Canyon Road. Suite 100
 Westlake Village, CA91362
	  	 Inphi Corporation
 Bill-To
Address:
 112 S. Lakeview Canyon Road. Suite 100
 Westlake Village, CA91362
	  	 Cadence Design Systems, Inc.
 2655 Seely Avenue
 San Jose, CA 94234

Attachment Effective Date: 30-June-11 
 Attachment Expiry Date: 29-Dec-13 
  

					
	eDAcard PLATINUM	  	 	 	 
	eDAcard Activation Period:	  			 
	Activation Period Effective Date           30-Jun-11	  			 
	Activation Period Expiry date:              
22-Dec-13	  			 
	Termination Date:
                                  29-Dec-13	  	$	5,000,000	  
	eDAcard Balance:	  			 
	eDAcard Site(s):	  			 
	Distribution of eDAcard Balance:	  			 
	The following authorized users & specific site(s) will be issued eDAcard(s) as indicated below:	  			 
	Robb Johnson – Wesstlake Village, CA 91362    
$5,000,000                     rjohnson@inphi-corp.com	  			 

							
	  
  

Note:
  
	 	 eDAcard WAN Premium ***% LOCAL:***% REGION, ***% MULTI-REGION

eDAcard Discount Rate: ***%
 The Licensed Materials may be drawn down at their respective list price less ***% discount
 except for the Licensed Materials listed in Addendum A.
 The Licensed Materials
Listed in Addendum A may be drawn down at their respective list
 price less the applicable discount set forth in Addendum
A.
	  			 
	 eDAcard PLATINUM
number                   TBD    
 eDAcard Fees
	  	$	5,000,000	  

 

					
	 Payment Terms
	  	 	Total    	  
	 Total Fees Due
	  	$	5,000,000	  

 

									
	Payment Schedule	  	 	  	 	  	 	  	 
	 				 
	Payment	  	Invoice Date	  	Due Date	  	Total Amount	  	 
	1	  	 ***
	  	***	  	$***	  	 
	2	  	***	  	***	  	$***	  	 
	3	  	***	  	***	  	$***	  	 
	4	  	***	  	***	  	$***	  	 
	5	  	***	  	***	  	$***	  	 
	6	  	***	  	***	  	$***	  	 
	7	  	***	  	***	  	$***	  	 
	8	  	***	  	***	  	$***	  	 
	9	  	***	  	***	  	$***	  	 
	10	  	***	  	***	  	$***	  	 
	Total [USD]	  	 	  	 	  	$***	  	 

 Additional Ship-To addresses provided by CUSTOMER with estimated percentage expected Use: 
 3945
Freedom Circle Suite 11D, Santa Clara, CA 95054     21% 
  

			
	 The parties hereby agree to the foregoing terms and conditions

In addition to the terms and conditions attached hereto which are hereby incorporated by
reference.
	  	 Inphi Corporation

Initials:   JSE

                                  
                

  

					
	Cadence Design Systems Confidential	 	Product Quotation	 	12/23/2010 9:17 AM
		 	Page 16	 	

 Product Quotation 

Terms and Conditions 
 For Floating Pool 
 eDAcard License Model 

This Product Quotation Attachment (“Attachment”), which is appended to the Software License and Maintenance Agreement
referenced on page 1 of this Attachment (“Agreement”), contains the terms and conditions for Customer’s Use of Licensed Materials based upon Cadence’s eDAcard Platinum licensing model. This Attachment is a
Product Quotation as defined in the Agreement. All capitalized terms not otherwise defined herein shall have the same meaning as ascribed to them in the Agreement. In the event of any conflict between the terms of the Agreement and the terms of this
Attachment, the terms of the Agreement shall prevail. 
  

	A.	 eDAcard LICENSING MODEL 

  

	1.	 Availability of Licensed Materials: Cadence’s eDAcard licensing model establishes a mechanism whereby Customer may access, select
and Use Licensed Materials through Cadence’s web site (“eDAcard Web Site”) during the eDAcard activation period. The activation period is defined as beginning on the Activation Period Effective Date and ending on the Activation
Period Expiry Date (“eDAcard Activation Period”) as set forth on page 1 of this Attachment. Use of the Licensed Materials will be pursuant to the terms and conditions of the Agreement and this Attachment. A list of the
available Licensed Materials can be viewed on the eDAcard Web Site. The Term of Use for licenses for the Licensed Materials, which includes Maintenance Services, can be selected for a pre-determined duration (i.e. weekly, monthly, quarterly, yearly
or any combination thereof). In no event, however, shall the Term of Use for any Licensed Materials licensed during the eDAcard Activation Period extend beyond the Attachment Expiry Date. 

 

	2.	 Licensed Materials: Customer shall only Use Licensed Materials available through the eDAcard Web Site. 

 

	3.	 Accessibility of Licensed Materials: Within the later of five (5) days after: (i) the Activation Period Effective Date or,
(ii) execution of this Attachment by Cadence, Cadence shall activate and forward an eDAcard number (“eDAcard number”) to those Customer employees who will be allowed to access the eDAcard Web Site (“Authorized
Users”). Upon account activation, the Authorized Users will be issued individual login names and passwords (“Authorized User ID”) to be used in conjunction with the eDAcard Number. The Authorized User ID will allow the
Authorized Users access to the Licensed Materials on the eDAcard Web Site. Following the Authorized Users selection of Licensed Materials over the eDAcard Web Site, the applicable Fees will be deducted from the eDAcard Balance set forth on
page 1 of this Attachment. Customer shall be provided with instructions on how to obtain an authorization key for the Licensed Materials. The ability of the Authorized Users to access the eDAcard Web Site for the purpose of selecting additional
Licensed Materials shall terminate on the earlier of: (i) the depletion of the eDAcard Balance; (ii) the Activation Period Expiry Date set forth on page 1 of this Attachment; or (iii) termination of the Agreement pursuant to
Section 5 (Term and Termination) thereof. 

  

	4.	 eDAcard Balance: The Fee structure for Use of the Licensed Materials implementing the eDAcard licensing model is set forth on the Cadence
eDAcard Datasheet available on the eDAcard Web Site. The Fees are based upon the one year time-based license (“TBL”) reference price, The Licensed Materials price is then adjusted per the eDAcard rate table set forth in the
eDAcard Datasheet based upon: (1) the type of Licensed Materials licensed plus any applicable regional list price adjustments, and (2) the Term of Use. Finally, the applicable Customer discount is applied to arrive at the final Fee for the
applicable Licensed Materials. The dollar value as set forth in the eDAcard Balance on page 1 of this Attachment represents the amount the Customer has allocated for selecting and Using Licensed Materials accessing the eDAcard Web Site. Upon
selection of both the Licensed Materials and the Term of Use, the Fee shall be automatically calculated and debited from the remaining eDAcard Balance. Customer may continue to access the eDAcard Web Site for the purpose of selecting additional
Licensed Materials until the eDAcard Balance is depleted. Customer shall forfeit any remaining portion of the eDAcard Balance not utilized during the eDAcard Activation Period. The TBL price for Licensed Materials and/or the eDAcard rate table may
be modified at any time by Cadence. 

  

	5.	 General Terms: Customer is solely responsible for: (i) managing its Authorized Users; and (ii) maintaining the security of
all passwords, user IDs and access keys made available by Cadence. Customer acknowledges and 

  

					
	Product Quotation eDAcard Platinum (SLMA) 3-22-10-MA	  	17	  	

	 	 
agrees that any person who enters an Authorized User ID will be presumed by Cadence to be an Authorized User and have the power and authority to bind Customer to the terms of this Attachment and
the Agreement. Cadence will not be under any obligation to verify the identity of any such person. Customer agrees that an order placed through the eDAcard Web Site is the equivalent of a signed purchase order. Customer shall have the right to
change, add, or delete Authorized Users upon prior written notice to Cadence. In no event are any licenses issued hereunder cancelable nor are any Fees payable hereunder refundable. Customer hereby waives any future challenge to the validity and
enforceability of any order submitted via the eDAcard licensing model on the grounds that it was electronically transmitted and authorized. Customer is responsible for all costs and charges, including without limitation, phone charges and
telecommunications equipment, incurred in order to use the eDAcard licensing model. 

  

	B.	 MAINTENANCE SERVICES 

 Maintenance Services are provided by Cadence during the Term of Use. 
  

	C.	 PAYMENT SCHEDULE 

 Customer shall remit payment for the Fees in accordance with the schedule set forth on page 1 of this Attachment. Notwithstanding the foregoing, in the event that the eDAcard Balance is depleted and
the Term of Use for all Licensed Materials ends prior to the Activation Period Expiry Date, any remaining payments shall become due and payable immediately upon the expiration of the Term of Use for all licensed Materials. Customer understands and
agrees that the obligation to make payments hereunder is not contingent upon a purchase order being issued by Customer. If required by Cadence, the obligation to pay the Fees shall be additionally evidenced by an Installment Payment Agreement
(“IPA”) executed by Customer. 
  

	D.	 WIDE AREA NETWORK 

 Subject to Section 13.2 (Export) of the Agreement and payment of any applicable Fees, Customer is granted the right to allow its employees to remotely access the Licensed Materials through a wide
area network (“WAN”). Customer may select the following options for WAN rights at the time of acquiring the Licensed Materials under this Attachment: (1) “None” (no WAN rights permitted), (2) “Local”
(WAN rights only permitted within the same time zone as the Designated Equipment, or if outside the Americas, within the same country), (3) “Region” (WAN rights only permitted within the specific Region selected with access through
Designated Equipment in the Region), and (4) “Multi-Region” (WAN rights permitted in more than one Region as selected by Customer). Customer’s WAN selection will be determined at time of selection of the Licensed Materials. The
available Regions for such Multi-Region WAN rights are: (1) the Americas, (2) Europe and Middle East, (3) India, and (4) Australia and Asia (excluding Japan). 

The parties hereby agree to the foregoing terms and conditions. 

 

											
	CUSTOMER: Inphi Corporation	  		  	CADENCE DESIGN SYSTEMS, INC.	  	

											
						
	By:	  	   /s/ John S. Edmunds
	  		  	By:	  	  
	  	

											
	Name:	  	   John S. Edmunds
	  		  	Name:	  	 Gabrielle L. Walker
	  	

											
	Title:	  	       CFO
	  		  	Title:	  	 Associate General Counsel
	  	

											
	Date:	  	       12/22/10
	  		  	Date:	  	  
	  	

  

					
	Product Quotation eDAcard Platinum (SLMA) 3-22-10-MA	  	18	  	

			
	 Cadence Design Systems (Ireland) Ltd.
	 	
	 Block P3, East Point Business Park,
	 	
	 Fairview, Dublin 3, Ireland
	 	
		
	
By:                       
                                         
        
	 	
		
	
Name:                       
                                         
   
	 	
		
	
Title:                       
                                         
     
	 	
		
	
Date:                       
                                         
     
	 	

 Please return originals to: 
 Cadence Design Systems, Inc. 
 Attn: Gabrielle L. Walker 

Associate General Counsel 
 2655 Seely Avenue

 San Jose, CA 95134 

  

					
	Product Quotation eDAcard Platinum (SLMA) 3-22-10-MA	  	19Support Agreement, dated as of March 27, 2011

 Exhibit 10.1 
 SUPPORT AGREEMENT 
 This SUPPORT AGREEMENT (the
“Agreement”) is made and entered into as of March 27, 2011, by and among Harry & David Holdings, Inc., a Delaware corporation, and its subsidiaries (collectively, “HD”); and each of the undersigned
holders (together the “Principal Holders”), which persons or entities are record or beneficial owners or investment advisors or managers of beneficial owners (each, a “Holder”), of the Senior Floating Rate Notes due
2012 and/or 9.0% Senior Notes due 2013 (the “Notes”) issued by HD pursuant to that certain indenture dated February 25, 2005 (the “Indenture”). HD, the Principal Holders and any subsequent person that becomes a
party hereto in accordance with the terms hereof are referred to herein as the “Parties” and individually as a “Party”. 
 RECITALS 
 WHEREAS, HD has determined that a prompt restructuring of HD
would be in the best interests of its creditors and stockholders; 
 WHEREAS, HD has issued and outstanding approximately $220.8
million in principal amount of Notes, of which HD holds approximately $22.4 million outstanding. 
 WHEREAS,
as of the date hereof, the Principal Holders hold, in the aggregate, at least 66 2/3% of the aggregate outstanding principal amount of the Notes not owned by HD; 
 WHEREAS, HD and the Principal Holders have engaged in good faith negotiations with the objective of reaching an agreement for a financial restructuring of HD, including the indebtedness outstanding under
the Notes; 
 WHEREAS, HD and the Principal Holders now desire to implement a restructuring of HD (the
“Restructuring”) on the terms and conditions set forth herein and in the term sheet attached hereto as Exhibit A (such term sheet, including the schedules and exhibits attached thereto, the “Term Sheet”);

 WHEREAS, each Party has reviewed, or has had the opportunity to review, the Term Sheet and this Agreement with the assistance
of professional legal advisors of its own choosing; 
 WHEREAS, the Parties intend to consummate the Restructuring on the terms
and conditions set forth in this Agreement and in the Term Sheet through a chapter 11 plan of reorganization, which plan of reorganization shall be consistent in all respects with the Term Sheet (the “Pre-Arranged Plan”) to be filed
after HD and each of its subsidiaries commences voluntary reorganization cases (the “Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (as amended, the “Bankruptcy
Code”), in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”); 

WHEREAS, HD has agreed to use its reasonable best efforts to effectuate the Restructuring, subject to the terms hereof, and to
(i) file the Pre-Arranged Plan and related Disclosure Statement (defined below) and (ii) exercise its reasonable best efforts to have the Disclosure Statement and the Pre-Arranged Plan approved by the Bankruptcy Court; 

 WHEREAS, to expedite and support the implementation of the Restructuring, each of the
Principal Holders is prepared to commit, on the terms and subject to the conditions of this Agreement and applicable law, if and when lawfully solicited, following the receipt of a Bankruptcy Court approved disclosure statement that is consistent
with the Pre-Arranged Plan and other solicitation materials in respect of the Pre-Arranged Plan, in form and substance reasonably acceptable to the Requisite Principal Holders (the “Disclosure Statement”), to vote, or cause to be
voted, all of its Notes, any additional Notes and all related claims, rights and causes of action arising out of or in connection with or otherwise relating to such Notes held by such Principal Holder (collectively, the “Note
Claims”), to accept the Pre-Arranged Plan. 
 NOW THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 

1. Term Sheet. The Term Sheet is incorporated by reference herein and is made part of this Agreement as if fully set forth
herein. The material terms and conditions of the Restructuring are set forth in the Term Sheet; provided, however, that (i) the Term Sheet is supplemented by the terms and conditions of this Agreement, (ii) to the extent
there is a conflict between the Term Sheet and this Agreement, the terms and provisions of this Agreement will govern and (iii) to the extent there is a conflict between the Term Sheet or this Agreement and the Restructuring Documents (as
defined below), the terms and provisions of the Term Sheet or this Agreement shall govern.  
 2. Means for
Effectuating the Restructuring. HD shall effectuate the Restructuring through commencement of the Cases and use its reasonable best efforts to effectuate confirmation of the Pre-Arranged Plan. HD and each of its direct and indirect
subsidiaries (each a “Debtor” and collectively, the “Debtors”) shall file petitions for relief under chapter 11 of the Bankruptcy Code (collectively, the “Petitions”) commencing the Cases no later
than March 28, 2011 (such date, the “Petition Date”) and, together with such filings, on that date file (a) a motion to approve debtor-in possession financing consisting of a $100 million asset based facility and a
$55 million junior term note (the “DIP Financings”), as well as a $100 million asset based exit facility (the “ABL Exit Facility”), in each case, in form and substance reasonably satisfactory to the Requisite
Principal Holders (as defined below), and request that such motion be approved by the Bankruptcy Court on an interim basis (as to the DIP Financings) no later than three (3) calendar days after the Petition Date and receive final approval by
the Bankruptcy Court no later than thirty-five (35) calendar days after the Petition Date and (b) such other typical “first day” motions that are reasonably satisfactory to the Requisite Principal Holders. By no later than
eight (8) days after the Petition Date, the Debtors shall also file a motion to approve the backstop agreement (the “Backstop Agreement”), including authorization for the Debtors to perform their obligations under the Backstop
Agreement (including payment of any fees and expenses arising thereunder) in connection with the HD Rights Offering (as defined in the Term Sheet), in form and substance reasonably satisfactory to the Requisite Principal Holders and shall obtain
entry of an order from the Bankruptcy Court approving the Backstop Agreement no later than thirty-five (35) calendar days after the Petition Date. HD shall use its reasonable best efforts to file the Pre-Arranged Plan and the Disclosure
Statement by no later than May 16, 2011. The Debtors shall use their reasonable best efforts to ensure that (i) entry of an order, in 

  
 - 2 -

 
form and substance reasonably satisfactory to Requisite Principal Holders, approving the Disclosure Statement will occur on or before June 29, 2011, (ii) entry of an order in form and
substance reasonably satisfactory to Requisite Principal Holders, confirming the Pre-Arranged Plan will occur on or before September 12, 2011, and (iii) the effective date of the Pre-Arranged Plan (the “Effective
Date”) will be no later than the earlier of (x) October 1, 2011 and (y) the fifteenth
(15th) calendar day following the entry of an order
confirming the Pre-Arranged Plan (the “Outside Date”); provided, however, that the dates set forth above may be extended in writing by the Requisite Principal Holders. For purposes of this Agreement, the term
“Requisite Principal Holders” means, as of the applicable reference date, Principal Holders holding at least 65% of the aggregate outstanding principal amount of the Notes (not including accrued but unpaid interest) held, in the aggregate,
by the Principal Holders as to whom this Agreement remains in effect. 
 3. Preparation of Restructuring Documents.
Promptly upon execution of this Agreement, representatives of HD and the Principal Holders, together with their respective advisors, shall negotiate in good faith to prepare all definitive documentation related to the Restructuring, including,
without limitation, the Pre-Arranged Plan and related Disclosure Statement, Backstop Agreement and any documents and agreements related to the HD Rights Offering, Charter Documents, Schedule of Assumed Executory Contracts and Releases (each
as defined herein or in the Term Sheet), all of which shall contain provisions consistent in all material respects with the Term Sheet and this Agreement and such other provisions as are mutually acceptable to HD and the Requisite Principal Holders
(collectively, the “Restructuring Documents”). 
 4. HD Undertakings. 

(a) Affirmative Covenants: HD agrees, unless and until such time as this Agreement has expired or terminated, to do the following:

 (i) Use its reasonable best efforts to, as applicable, take all actions necessary to effectuate and consummate the
Restructuring and implement all steps necessary to obtain an order of the Bankruptcy Court confirming the Pre-Arranged Plan and not take any actions inconsistent with this Agreement and the Restructuring, or that would delay confirmation or
consummation of the Pre-Arranged Plan, in each case, as expeditiously as practicable; 
 (ii) Complete the preparation, as soon
as reasonably practicable of each of the Pre-Arranged Plan, the Disclosure Statement and the other Restructuring Documents, and afford reasonable opportunity of comment and review to the respective advisors for the Principal Holders in advance of
any filing thereof; 
 (iii) Provide to the advisors to the Principal Holders, upon reasonable advance notice:
(i) reasonable access during normal business hours to HD’s books, records and facilities, (ii) reasonable access to the respective management and advisors of HD for the purposes of evaluating HD’s business plan and participating
in the planning process with respect to the Restructuring, and (iii) timely responses to all reasonable diligence requests; 

  
 - 3 -

 (iv)(1) No later than July 2, 2011, present to the Principal Holders a schedule of
executory contracts and unexpired leases the Debtors intend to assume, which schedule, prior to filing with the Bankruptcy Court, shall be in form and substance reasonably acceptable to the Requisite Principal Holders (the “Schedule of
Rejected Executory Contracts”) and (2) obtain an order of the Bankruptcy Court no later than August 3, 2011 approving the rejection of any and all executory contracts and unexpired leases that the Debtors shall seek to reject in
connection with the Cases; 
 (v) Timely file a formal objection to any motion filed with the Bankruptcy Court by a third party
seeking the entry of an order (A) directing the appointment of an examiner with expanded powers or a trustee, (B) converting the Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing the Cases; 

(vi) Timely file a formal objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order
modifying or terminating the Company’s exclusive right to file and/or solicit acceptances of a plan of reorganization; 

(vii) Unless otherwise agreed by the Debtors and the applicable firms, on the date that is at least one (1) day prior to the
Petition Date, pay in cash to each of Stroock & Stroock & Lavan LLP (“Stroock”) and Moelis & Company (“Moelis”) all amounts then due and outstanding under their respective pre-petition
letter agreements with HD, and pay all of the outstanding amounts owed to Munger, Tolles & Olson LLP and Akin Gump Strauss Hauer & Feld LLP in connection with the Restructuring; and 

(viii) Comply in all respects with the covenants contained in the DIP Financings (as defined in the Term Sheet), subject to any
applicable cure periods stated therein. 
 (b) Negative Covenants: HD agrees that, unless and until such time as this
Agreement has expired or terminated, HD shall not, and shall cause each of its direct and indirect subsidiaries to, directly or indirectly, not to do any of the following: 
 (i) Directly or indirectly, through another person or entity, seek, solicit, negotiate, support or encourage the formulation, preparation, filing or prosecution of any plan, plan proposal, restructuring
proposal or offer of dissolution, winding up, liquidation, sale or disposition, reorganization, merger or restructuring of HD, or take any other action that could reasonably be expected to prevent, interfere with, delay or impede the approval of the
Disclosure Statement, the solicitation of votes on the Pre-Arranged Plan or the implementation or consummation of the Pre-Arranged Plan (any such transaction, a “Competing Transaction”); 

(ii) Modify (other than technical, non-substantive modifications which changes shall not in any event be adverse to the holders of
Notes) or revoke the Pre-Arranged Plan or publicly announce its intention not to pursue the Pre-Arranged Plan; 
 (iii) File
any motion or pleading or other Restructuring Document with the Bankruptcy Court (including any modifications or amendments thereof) that is not consistent in any material respect with this Agreement, the Term Sheet or, after the Pre-Arranged Plan
is filed, the Pre-Arranged Plan; 

  
 - 4 -

 (iv) Later than July 15, 2011, move for an order from the Bankruptcy Court
authorizing or directing the rejection of an executory contract (including, without limitation, any employment agreement or employee benefit plan) or unexpired lease or move, other than in accordance with the Pre-Arranged Plan, for the assumption of
an executory contract (including, without limitation, any employment agreement or employee benefit plan) or unexpired lease absent the written consent of the Requisite Principal Holders; 

(v) Acquire or divest (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) (A) any corporation,
partnership, limited liability company, joint venture or other business organization or division or (B) assets of HD, other than in the ordinary course of business, in excess of $2.0 million in the aggregate without the written consent of the
Requisite Principal Holders; 
 (vi) Violate any covenant in the DIP Financings (without giving effect to any amendment
thereof, unless such amendment is consented to by the Requisite Principal Holders); 
 (vii) Enter into any commitment or
agreement with respect to debtor-in-possession financing, cash collateral and/or exit financing other than the DIP Financings or the ABL Exit Facility; or 
 (viii)(a) Enter into any collective bargaining agreements, (b) enter into or materially modify any existing employment agreements providing for base compensation in excess of $350,000 per year, or
(c) enter into or materially modify any employee benefit or compensation plans except in the ordinary course of business consistent with past practices. 
 5. Principal Holder Undertaking. Each of the Principal Holders agrees that unless and until such time as this Agreement has expired or terminated, it shall use its reasonable best efforts to,
as applicable, promptly take all actions relating to itself reasonably necessary to effectuate and consummate the Pre-Arranged Plan (it being understood that the Principal Holders shall not be required to incur any material costs or expense in
connection therewith) and shall not, directly or indirectly, through another person or entity, do any of the following 
  

	 	(a)	object to confirmation of the Pre-Arranged Plan or object to or otherwise commence any proceeding to oppose, alter, delay or impede or take any other action, directly
or indirectly, to interfere with entry of any order approving the Pre-Arranged Plan or any Restructuring Document; 

  

	 	(b)	seek, solicit, negotiate, vote for, consent to, support or participate in the formulation of any plan, other restructuring or transaction for HD other than the
Pre-Arranged Plan; 

  

	 	(c)	seek, solicit, negotiate, support or engage in any discussions regarding any chapter 11 plan other than the Pre-Arranged Plan or any sale or disposition of HD or any
dissolution, winding up, liquidation, merger, transaction, reorganization or restructuring of HD other than the Pre-Arranged Plan; or 

  
 - 5 -

	 	(d)	take any other action not required by law that is inconsistent with, or that would materially delay, the confirmation or consummation of the Pre-Arranged Plan or that
is otherwise inconsistent with this Agreement. 

 In addition, unless and until such time as this Agreement has expired or
terminated, when lawfully solicited, following the receipt of a Bankruptcy Court approved Disclosure Statement, each Principal Holder shall (i) vote, or cause to be voted, its Note Claims (as of the applicable plan voting record date) to accept
the Pre-Arranged Plan by delivering its duly executed and completed ballot accepting the Pre-Arranged Plan on a timely basis; and (ii) not change or withdraw (or cause to be changed or withdrawn) such vote (except to the extent set forth
herein). For the avoidance of doubt, unless otherwise specified herein, it is noted that any reference herein to a consent, approval, agreement or any similar action with respect to or on behalf of the Principal Holders shall mean the consent,
approval, agreement or similar action of each Principal Holder. 
 6. Termination of Agreement. 

(a) This Agreement shall terminate automatically upon the receipt of written notice from HD to the Principal Holders following the
occurrence of any Company Termination Event (defined below); provided, however, that in the case of an event described in clauses (i) or (ii) of the definition of “Company Termination Event,” such termination shall
only be effective with respect to the Principal Holder or Principal Holders who have breached any material covenant or provision as set forth in such section 6(c)(i) or as to which any representation or warranty is untrue as set forth in such
section 6(c)(ii), in each case, until such time as this Agreement ceases to remain in effect with respect to Principal Holders representing less than fifty percent (50%) the outstanding principal amount of Notes not owned by HD, whereupon such
termination shall be effective with respect to the remaining Principal Holders. In addition, this Agreement shall automatically terminate upon the receipt of written notice from the Requisite Principal Holders to HD following the occurrence of any
Agreement Termination Event; provided, however, that in the case of an event described in Section 6(b)(xxii) hereof, such termination shall only be effective to terminate the obligations of any Principal Holder that is the subject
of such event unless waived by such Principal Holder for itself. This Agreement shall terminate, as to WC only, automatically upon receipt of written notice from WC to HD and the Principal Holders (and this Agreement shall, automatically upon the
receipt of such notice, no longer be binding upon WC) upon any amendment to the Term Sheet, or upon any term of any of the Restructuring Documents or the MSA (as defined in the Term Sheet) being (whether due to an order of the Bankruptcy Court or
otherwise) inconsistent, in a manner adverse to WC, with the following, as set forth in the Term Sheet: (i) the number of WC Directors (as defined in the Term Sheet), the size of the Board of Directors of Reorganized HD or the classification or
the initial terms of such WC Directors, or (ii) the number of HD Shares that WC is entitled to receive on the Effective Date in connection with the MSA, or (iii) the amount, manner or timing of payment of the annual management fee payable
to WC under the MSA, or (iv) any material change in the services to be provided thereunder, each as contemplated in the section entitled “WC Post-Emergence Management Services and Fees” of the Term Sheet. Following the receipt of any
such termination notice by WC, WC agrees that it shall not prevent, interfere with or delay efforts by HD or the Principal Holders to replace WC’s backstop commitment under the 

  
 - 6 -

 
Backstop Agreement or obtain a Third Party Backstop Provider (as defined in the Backstop Agreement). Upon the expiration or termination of this Agreement, any and all acceptances in favor of the
Pre-Arranged Plan by the Principal Holders prior to such expiration or termination shall be deemed, for all purposes, to be null and void and shall not be considered or otherwise used in any manner by HD in connection with this Agreement and the
Term Sheet. 
 (b) An “Agreement Termination Event” shall mean any of the following: 

(i) Principal Holders shall not have entered into this Agreement prior to the Petition Date representing, or this Agreement ceases to
remain in effect at such date with respect to Principal Holders representing, more than fifty percent (50%) of the outstanding principal amount of Notes not owned by HD; 
 (ii)(A) HD shall have breached any affirmative or negative covenant contained in this Agreement, (B) HD shall have violated any other provision contained in this Agreement in any material respect and
the Requisite Principal Holders shall have delivered written notice to HD of any such breach and such breach remains uncured for a period of five (5) business days; 
 (iii) Each of HD and the Requisite Principal Holders, by mutual written consent, determine to terminate this Agreement; 
 (iv)(A) Any representation or warranty in this Agreement made by HD shall have been untrue in any material respect when made or shall have become untrue in any material respect, (B) the Requisite
Principal Holders shall have delivered written notice to HD of any such breach, and (C) such breach remains uncured for a period of five (5) business days; 
 (v)(A) Any material term or condition of any of the Restructuring Documents shall be (whether due to an order of the Bankruptcy Court or otherwise) materially different and adverse to the Principal
Holders than as contemplated by the Term Sheet, (B) the Requisite Principal Holders shall have delivered written notice to HD of any such event and (C) such event remains unremedied for a period of five (5) business days; 

(vi) There shall have been issued or reinstated any suspension order or similar order by a court or other governmental body of competent
jurisdiction that materially adversely affects the benefits intended to be received by the Principal Holders hereunder, or prevents HD from consummating the transactions contemplated by this Agreement and (A) such proceeding or order was issued
or reinstated at the request or with the acquiescence of HD or any of its affiliates, or (B) in all other circumstances, such order is not stayed, reversed or vacated within fifteen (15) calendar days after such issuance or reinstatement;

 (vii) There shall have been issued any order, decree or ruling by any court or governmental body having jurisdiction
restraining or enjoining the consummation of or rendering illegal the transactions contemplated by this Agreement and (A) such proceeding or order was issued at the request or with the acquiescence of HD or any of its affiliates or (B) in
all other circumstances, such order is not stayed, reversed or vacated within fifteen (15) calendar days after such issuance; 

  
 - 7 -

 (viii) HD shall have failed to file with the Securities Exchange Commission by the
Petition Date and time a Current Report on Form 8-K (or other form permitted by the Securities Exchange Commission) (the “Form 8-K”) to which this Agreement (including all exhibits) (with such redactions as may be reasonably
requested by counsel to the Principal Holders) and the Term Sheet are attached; provided, however, that the amount of Notes listed on each Principal Holder’s signature page shall be redacted and shall not be filed publicly;

 (ix) The Restructuring shall not have been approved by HD’s Board of Directors prior to the filing of the Cases;

 (x) The Cases shall not have been filed on or before the Petition Date; 

(xi) The motion to approve the DIP Financings (as defined in the Term Sheet) shall not have been filed on the Petition Date or shall not
receive interim approval within three (3) calendar days after the Petition Date or shall not have received final approval within thirty-five (35) calendar days after the Petition Date; 

(xii) An order approving the Backstop Agreement shall not have been entered within thirty-five (35) calendar days of the Petition
Date; 
 (xiii) The Pre-Arranged Plan and the Disclosure Statement shall not have been filed by May 16, 2011; 

(xiv) An order approving the Disclosure Statement shall not have been entered by June 29, 2011; 

(xv) An order confirming the Pre-Arranged Plan shall not have been entered by September 12, 2011; 

(xvi) The Pre-Arranged Plan and the transactions contemplated therein shall not have been consummated, and the Effective Date shall not
have occurred on or before the Outside Date; 
 (xvii) The Bankruptcy Court shall have granted relief resulting in the
termination, annulment, or modification of the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any assets of HD with a value in excess of $250,000; 

(xviii) A default or event of default shall have occurred under either of the DIP Financings (defined in the Term Sheet) that has not
been waived in accordance with the terms thereof; 
 (xix) On the Effective Date, priority claims under section 507(a) of the
Bankruptcy Code to be paid in cash by HD, expected assumed executory contract and unexpired lease cure claims, and section 503(b)(9) claims in the aggregate are not expected to exceed $7.0 million; 

  
 - 8 -

 (xx) HD’s exclusive periods to file and/or solicit acceptances to a plan of
reorganization are modified or terminated; 
 (xxi) Authorization is granted to HD to pay claims in excess of $10.0 million
under the following first day motions in the aggregate: (a) motion for authority to pay prepetition claims of certain “essential suppliers,” (b) motion for authority to pay prepetition claims of “foreign vendors” and
(c) motion for authority to pay prepetition claims of “distribution network vendors”; 
 (xxii) The Note Claims
held by any Principal Holder are subordinated pursuant to an order of the Bankruptcy Court (but the right to terminate this Agreement as a result thereof shall only apply to the Principal Holder whose Note Claims are subordinated and not to HD or
the other Principal Holders); 
 (xxiii) A trustee or examiner with enlarged powers shall have been appointed under sections
1104 or 1105 of the Bankruptcy Code for service in the Cases; or 
 (xxiv) One or more of the Cases shall have been converted
to a case under chapter 7 of the Bankruptcy Code or otherwise dismissed. 
 (c) A “Company Termination Event”
shall mean any of the following: 
 (i)(A) A Principal Holder shall have breached any material covenant or provision of this
Agreement, (B) HD shall have delivered written notice to the Principal Holders of any such breach, and (C) such breach remains uncured for a period of five (5) business days; 

(ii)(A) Any representation or warranty in this Agreement made by a Principal Holder shall have been untrue in any material respect when
made or shall have become untrue in any material respect, (B) HD shall have delivered written notice to the Principal Holders of any such breach, and (C) such breach remains uncured for a period of five (5) business days; 

(iii)(A) Any material term or condition of any of the Restructuring Documents shall be (whether due to an order of the Bankruptcy Court
or otherwise) materially different and adverse to HD than as contemplated by the Term Sheet, except to the extent such materially different and adverse term or condition is agreed by HD, (B) HD shall have delivered written notice to the
Principal Holders of any such event and (C) such event remains uncured for a period of five (5) business days; and 

(iv) There shall have been issued any order, decree or ruling by any court or governmental body having jurisdiction restraining or
enjoining the consummation of or rendering illegal the transactions contemplated by this Agreement and such order is not stayed, reversed or vacated within fifteen (15) calendar days after such issuance. 

  
 - 9 -

 (d) Automatic Stay. HD acknowledges and agrees and shall not dispute that after the
commencement of the Cases, the giving of notice of termination by any Party pursuant to this Agreement shall not be a violation of the automatic stay of section 362 of the Bankruptcy Code (and HD hereby waives, to the greatest extent possible, the
applicability of the automatic stay to the giving of such notice). 
 7. Representations and Warranties. 

(a) Each Party hereto represents and warrants to the other Parties hereto that (a) it is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its formation; (b) its execution, delivery, and performance of this Agreement are within the power and authority of such Party and have been duly authorized by such Party and that no other
approval or authorization is required; (c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with the terms hereof, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting the rights or remedies of creditors generally; and (d) none of the execution and delivery of this Agreement or compliance with the terms and provisions hereof will violate, conflict with or
result in a breach of, its certificate of incorporation or bylaws or other constitutive document, any applicable law or regulation, any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or
instrument to which it is a party or by which it is bound or to which it is subject. 
 (b) Each of the Principal Holders
further represents and warrants to HD, as to itself, that, as of the date of its execution and delivery of a signature page hereto, it is the beneficial owner of the aggregate principal amount of Notes set forth below its name on the signature pages
hereof (or below its name on the signature page of a joinder agreement for any Principal Holder that becomes a Party hereto after the date hereof), and has the sole investment or voting discretion with respect to such Notes, and full power and
authority to vote on and consent to matters concerning such Notes. 
 8. Restriction on Transfer. 

(a) For so long as this Agreement is in effect, or until such date as a Principal Holder ceases to be a Party hereto or this Agreement is
no longer in effect with respect to such Principal Holder, the Principal Holders may not sell, transfer or dispose of, directly or indirectly (“Transfer”), any of their Notes (other than ordinary course pledges and/or swaps); except
to (1) a party that is a Principal Holder as of the date thereof or (2) a transferee (each such transferee, a “Transferee”) that executes a joinder, in the form attached hereto as Exhibit B, without modification,
and becomes bound to the terms hereof and the Term Sheet and simultaneously with the transfer, executes a counterpart signature page to the joinder and delivers such counterpart signature page to counsel to HD and counsel to the Principal Holders
(identified in Section 16 hereof), in which case it shall be deemed to be a Principal Holder for all purposes herein from and after the time at which such counterpart signature page is executed, and, in each case, any and all Notes held or
controlled by it shall automatically become subject to the terms hereof. Any transfer of Notes that is not made in compliance with this Section 8(a) shall be deemed void ab initio. This Agreement shall in no way be construed to
preclude any Principal Holder from acquiring additional Notes; provided, however, that any such additional Notes shall, upon acquisition, automatically be deemed subject to all the terms of this Agreement. Each

  
 - 10 -

 
Principal Holder agrees to provide HD and counsel to the Principal Holders (identified in Section 16 hereof) with (i) a copy of any joinder and (ii) a notice of any Transfer or
acquisition of any Note Claims, in each case within two (2) business days after the consummation of such Transfer or acquisition. With respect to the aggregate principal amount of any Notes held by a Transferee, upon consummation of a Transfer
such Transferee, by executing and delivering the joinder, makes the representations and warranties of the Principal Holders set forth in Section 7 of this Agreement to each of the other Parties to this Agreement as of the date such joinder is
effective. 
 9. Public Disclosures. HD will submit to counsel for the Principal Holders for prior review all press
releases and public filings regarding, in any way, the Restructuring, this Agreement and any amendment to the terms of the Restructuring and/or this Agreement. Except as required by law (as determined in good faith by outside counsel to HD), HD
shall not (a) use the name of any Principal Holder in any public manner without such Principal Holder’s prior written consent or (b) disclose to any person (including, for the avoidance of doubt, any other Principal Holder but
specifically excluding legal, accounting and financial advisors to HD who have a need to know such information in order to render their advisory services to HD and who are bound by confidentiality restrictions regarding the disclosure and use of
such information) the principal amount or percentage of any Notes or any other securities of HD or any of their respective subsidiaries held by any Principal Holder; provided, however, that (i) if such disclosure is required by law,
subpoena or other legal process or regulation, the disclosing Party shall, if permitted by law, subpoena or other legal process or regulation, afford the relevant Principal Holder a reasonable opportunity to review and comment in advance of such
disclosure and shall take all measures to limit such disclosure and (i) HD shall be permitted to disclose at any time the aggregate principal amount of, and aggregate percentage of, Notes that are held by the Principal Holders. Notwithstanding
anything to the contrary herein, the terms and conditions set forth in this Section shall survive any termination of this Agreement. 
 10. Governing Law; Jurisdiction. 
 (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction (except for Sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York). By its execution and delivery of this Agreement, each of the parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any
matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in any federal or state court of competent jurisdiction in the
District of New York. 
 (b) By execution and delivery of this Agreement, each of the Parties irrevocably accepts and submits
itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceeding. Notwithstanding the foregoing consent to New York jurisdiction, upon the commencement of the Cases, each of
the Parties hereby agrees that the Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of or in connection with this Agreement. 

  
 - 11 -

 11. Effectiveness. This Agreement shall become effective and binding on the Parties
on such date on which counterpart signature pages to this Agreement shall have been executed by HD and the Principal Holders holding at least fifty percent (50%) in aggregate outstanding principal amount of the outstanding Notes not owned by
HD, and such signature pages are delivered to each of the Parties hereto; provided, however, that signature pages executed by Principal Holders shall be delivered to (a) other Principal Holders in a redacted form that removes such
Principal Holders’ holdings of Notes, and (b) HD and the advisors to the Principal Holders in an unredacted form. 

12. Specific Performance. It is understood and agreed by each of the Parties hereto that money damages would not be a sufficient
remedy for any breach of this Agreement by any each party and each non-breaching party hereto shall be entitled to seek specific performance and injunctive or other equitable relief, without the posting of a bond, as a remedy of any such
breach. 
 13. Reservation of Rights. This Agreement and all transactions contemplated herein are part of a proposed
settlement of disputes among the parties hereto. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of each of the Principal Holders to protect and
preserve its rights, remedies and interests, including, without limitation, its claims against HD or its full participation in the Cases. If the transactions contemplated herein are not consummated, or if this Agreement is terminated, the Parties
fully reserve any and all of their rights. Pursuant to Rule 408 of the Federal Rules of Evidence and any applicable state rules of evidence, this Agreement shall not be admitted into evidence in any proceeding other than a proceeding to enforce its
terms. 
 14. Fees and Expenses. HD agrees to pay promptly after receipt of an invoice (a) all reasonable and
documented fees, costs, expenses and disbursements of (i) Stroock & Stroock & Lavan LLP and its local counsel, (ii) Munger, Tolles & Olson LLP and its local counsel, (iii) Akin Gump Strauss Hauer &
Feld LLP, and (iv) Moelis & Company (it being understood that, notwithstanding anything contained herein to the contrary, with respect to Moelis, on the Effective Date, HD shall pay in cash all monthly fees accrued during the Cases, to
the extent not already paid, at the rate of $125,000 per month, as well as a transaction fee in the amount of $1.25 million (subject to the “Monthly Fee Credit” contained in clause 2(a)(ii) of the prepetition letter agreement between
Moelis and HD)), and (b) all documented and out-of-pocket fees, costs and expenses of each of the Principal Holders (but not legal, financial advisor or other consulting or professional fees), in each case, solely in connection with the
negotiation, formulation, preparation, execution, delivery and consummation of this Agreement, the Restructuring Documents, the Pre-Arranged Plan, the transactions contemplated hereunder and the Restructuring Documents and all transactions related
thereto. None of such fees, costs and expenses shall be subject to Court approval or U.S. Trustee guidelines, and no recipient of any such payment shall be required to file with respect thereto any interim or final fee application with this Court.
Copies of any such invoices shall be provided to the U.S. Trustee and counsel to any Committee, as redacted to protect against the disclosure of privileged and/or confidential information. 

  
 - 12 -

 15. Survival. Notwithstanding the termination of this Agreement pursuant to
Section 6 hereof, the agreements and obligations of the Parties in this Section 15, and in Sections 6 (with respect to termination as to any Principal Holder or HD), 9 (regarding disclosure of Note holdings), 10, 11, 13 and 14 (with
respect to fees accrued or incurred prior to termination) hereof (and any defined terms used in any such Sections) shall survive such termination and shall continue in full force and effect for the benefit of the Principal Holders in accordance with
the terms hereof. 
 16. Headings. The headings of the sections, paragraphs, and subsections of this Agreement are
inserted for convenience only and shall not affect the interpretation hereto. 
 17. Successors and Assigns. This
Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, administrators, and representatives; provided, however, that nothing in this Section 17 shall
be deemed to permit sales, assignments, or transfers other than in accordance with Section 8 hereof. The agreements, representations and obligations of the Parties are, in all respects, ratable and several and neither joint nor joint and
several. 
 18. Notice. All demands, notices, requests, consents and other communications under this Agreement shall be
in writing, sent contemporaneously to all of the notice parties set forth below (unless otherwise stated in the Agreement) and deemed given when delivered, if delivered by hand or upon confirmation of transmission, if delivered by facsimile, or if
no response to the effect that an email cannot be delivered to the sender is received within 2 hours, if delivered by email, during standard business hours (from 8:00 A.M. to 6:00 P.M. at the place of receipt) at the addresses and
facsimile numbers set forth below: 
 If to HD: 
 Harry & David 
 Attn: Kay Hong, Interim CEO 

2500 South Pacific Highway 
 Medford, OR 97501-2675 
 Fax: (541) 864-2742 

email: KHong@alvarezandmarsal.com 
 With a copy (which copy shall not constitute notice unless permitted under another section of this Agreement to): 
 Jones Day - Chicago 
 Attn: Brad Erens 

77 West Wacker 

Chicago, Illinois 60601-1692 
 Fax: (312) 782-8585 
 email: bberens@jonesday.com 

  
 - 13 -

 If to Any Principal Holder: 
 To the names and addresses set forth on the signature pages hereto (with all note holdings information redacted). 
 With a copy (which copy shall not constitute notice unless permitted under another section of this Agreement to): 
 Stroock & Stroock & Lavan LLP 
 Attn: Kristopher M. Hansen

 Attn: Erez E. Gilad 
 180 Maiden Lane 
 New York, NY 10038 

Fax: (212) 806-7133 
 email : khansen@stroock.com 
 email : egilad@stroock.com 

and: 
 Munger,
Tolles & Olson LLP. 
 Attn: Thomas B. Walper 
 355 South Grand Avenue, 35th Floor 
 Los Angeles, CA 90071-1560 

Fax: (213) 683-5193 
 email: thomas.walper@mto.com 
 and: 

Akin Gump Strauss Hauer & Feld LLP 
 Attn: Ira S. Dizengoff 
 One Bryant Park 

New York, NY 10036 
 Fax: (212) 872-1002 
 email: idizengoff@akingump.com 

19. Prior Negotiations. This Agreement and Exhibit A supersede all prior negotiations with respect to the subject matter
hereof. 
 20. Consideration. It is hereby acknowledged by the parties hereto that, other than the agreements, covenants,
representations and warranties set forth herein and in the Term Sheet and to be included in the Restructuring Documents, no consideration shall be due or paid to the Holders for their agreement to vote to accept the Pre-Arranged Plan in accordance
with the terms and conditions of this Agreement. 
 21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. 

  
 - 14 -

 22. No Third Party Beneficiaries. Unless expressly stated herein, this Agreement
shall be solely for the benefit of the Parties hereto and no other person or entity. 
 23. No Solicitation; Representation
by Counsel; Adequate Information. This Agreement is not and shall not be deemed to be a solicitation for votes in favor of the Pre-Arranged Plan in the Cases. Each of the Principal Holders’ votes with respect to the Pre-Arranged Plan will
not be solicited until such Principal Holder has received the Disclosure Statement. Each Party acknowledges that it has had an opportunity to receive information from HD, and that it has been represented by counsel in connection with this Agreement
and the transactions contemplated hereby. The provisions of this Agreement shall be interpreted in a reasonable manner to effectuate the intent of the Parties. 
 Although none of the Parties intends that this Agreement should constitute, and they each believe it does not constitute, a solicitation or acceptance of a chapter 11 plan of reorganization or an offering
of securities, they each acknowledge and agree that each of the Principal Holders is (i) an “accredited investor” as such term is defined in Rule 501(a) of the Securities Act of 1933 or a registered investment advisor under the
Investment Advisors Act of 1940 and (ii) a “qualified institutional buyer” as such term is defined in Rule 144A of the Securities Act of 1933. 
 24. Severability. If any provision of this Agreement, or the application of any such provision to any person or circumstance, shall be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision hereof and this Agreement shall continue in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 

25. Amendment, Waiver or Modification. Except as otherwise expressly set forth herein, this Agreement (including all of its
exhibits, including the Term Sheet) and the Pre-Arranged Plan, and each of their respective terms and conditions, may not be amended, waived or modified in any respect except in a writing executed by HD and the Requisite Principal Holders;
provided, however, that any change to the definition of Requisite Principal Holders shall require the written consent of each Principal Holder; provided, further, that any change, modification or amendment to this
Agreement, the Term Sheet or the Pre-Arranged Plan that materially adversely affects the economic recoveries of any Principal Holder, as compared to the recoveries expected from the Term Sheet attached hereto as of the date hereof, may not be made
without the written consent of each such adversely affected Principal Holder. 
 26. Fiduciary Duties. Notwithstanding
anything to the contrary in this Agreement or any document related hereto, nothing in this Agreement or otherwise shall require (a) the Debtors to take any action, or to refrain from taking any action, to the extent that the Debtors determine
in good faith after consultation with outside counsel that so doing, or not so doing, would be required to comply with their, or their officers’ or directors’, fiduciary obligations 

  
 - 15 -

 
under applicable law, or (b) any Principal Holder or representative of a Principal Holder that becomes a member of a statutory committee established in the Cases to take any action, or to
refrain from taking any action, in such person’s capacity as a statutory committee member, to the extent that such Principal Holder determines in good faith after consultation with counsel that so doing, or not so doing, would be required to
comply with its or their fiduciary obligations applicable under the Bankruptcy Code; provided however, that nothing in this Agreement shall be construed as requiring any Principal Holder to serve on any statutory committee in the Cases. Nothing in
this Agreement or any document related thereto imposes any liability for actions taken, or not taken, in order to discharge fiduciary obligations described in this Section 26. 

Without limiting the generality or effect of the foregoing, notwithstanding any provision of this Agreement or any document related
thereto to the contrary, the Debtors may furnish information to or conduct any discussions with any other person or entity or, upon notice given hereunder, may terminate this Agreement and any other agreement between the Parties (or any of them) if
the Debtors determine in good faith after consultation with outside counsel that doing so is necessary to comply with their fiduciary duties under applicable law; provided, however, that such transaction will not affect the rights of the
Principal Holders to the payment of the Break-up Fee (as defined in the Term Sheet) set forth in the Term Sheet. 

  
 - 16 -

 IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first above written. 
  

			
	HARRY & DAVID HOLDINGS, INC.
		
	By:	 	     /s/ Kay Hong

	Name:	 	Kay Hong
	Title:	 	Interim Chief Executive Officer and Chief Restructuring Officer
	
	HARRY AND DAVID
		
	By:	 	     /s/ Kay Hong

	Name:	 	Kay Hong
	Title:	 	Interim Chief Executive Officer and Chief Restructuring Officer
	
	HARRY & DAVID OPERATIONS, INC.
		
	By:	 	     /s/ Kay Hong

	Name:	 	Kay Hong
	Title:	 	Interim Chief Executive Officer and Chief Restructuring Officer
	
	BEAR CREEK ORCHARDS, INC.
		
	By:	 	     /s/ Kay Hong

	Name:	 	Kay Hong
	Title:	 	Interim Chief Executive Officer and Chief Restructuring Officer

  
 - 17 -

			
	Normandy Hill Capital, LP
	
	By: Normandy Hill S. Corp. TTS General Partner
		
	By:	 	 /s/ Michael Connell

	Name:	 	 Michael Connell

	Title:	 	 Vice President

			
	CC Arbitrage, Ltd.
	
	By: Castle Creek Arbitrage LLC, its Investment Manager
		
	By:	 	 /s/ Allan Weine

	Name:	 	 Allan Weine

	Title:	 	 Managing Member

			
	CC ARB SIF I, Ltd.
	
	By: Castle Creek Arbitrage LLC, its Investment Manager
		
	By:	 	 /s/ Allan Weine

	Name:	 	 Allan Weine

	Title:	 	 Managing Member

			
	Lloyd I. Miller Trust A-4
		
	By:	 	 /s/ Lloyd I. Miller

	Name:	 	 Lloyd I. Miller

	Title:	 	
Investment Advisor for Lloyd I Miller Trust A-4

			
	Litespeed Master Fund Ltd
		
	By:	 	 /s/ Charles Murphy

	Name:	 	 Charles Murphy

	Title:	 	 Chief Financial Officer

 

			
	LC Capital Master Fund, Ltd.
		
	By:	 	 /s/ Richard F. Conway

	Name:	 	 Richard F. Conway

	Title:	 	 Director

  

			
	Oppenheimer Distressed Opportunities, LP
		
	By:	 	 /s/ Nicholas W. Tell, Jr.

	Name:	 	 Nicholas W. Tell, Jr.

	Title:	 	 Chief Executive Officer

 

			
	2B LLC
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Investin Pro FMBA Dalton Distressed Debt
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

			
	Dalton Distressed Credit
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Ellen T. Horing
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Citigroup Pension
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Joel D. Tauber
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Steinberg Joseph S. and Diane H., Trustees
		
	By:	 	 /s/ Steve Persky

	Name:	 	 Steve Persky

	Title:	 	 Managing Partner

 

			
	Ore Hill Hub Fund Ltd.
	
	By:    Ore Hill Partners LLC
	
	Its Investment Advisor
		
	By:	 	 /s/ Claude A. Baum, Esq.

	Name:	 	 Claude A. Baum

	Title:	 	 General Counsel

 

			
	Prospect Mountain Fund Ltd.
	
	By:    Ore Hill Partners LLC
	
	Its Investment Advisor
		
	By:	 	 /s/ Claude A. Baum, Esq.

	Name:	 	 Claude A. Baum

	Title:	 	 General Counsel

 

			
	UBS Securities LLC
		
	By:	 	 /s/ Gregory Cass

	Name:	 	 Gregory Cass

	Title:	 	 Executive Director

 

			
	Singer Children’s Management Trust
		
	By:	 	 /s/ Karen Singer

	Name:	 	 Karen Singer

	Title:	 	 Trustee

  

			
	Newport Global Advisors LP
		
	By:	 	 /s/ Roger A. May

	Name:	 	 Roger A. May

	Title:	 	 COO

  

			
	Northeast Investors Trust
		
	By:	 	 /s/ Ernest B. Monrad

	Name:	 	 Ernest B. Monrad

	Title:	 	 Trustee

  

			
	Scoggin Capital Management II LLC
	
	By: Scoggin LLC its Investment Manager
		
	By:	 	 /s/ Craig Effron

	Name:	 	 Craig Effron

	Title:	 	 President

			
	Scoggin Worldwide Fund, Ltd.
	
	By: Old Bellows Partners LP its Investment Manager
	
	By: Old Bell Associates LLC its General Partner
		
	By:	 	 /s/ Dev Chodry

	Name:	 	 Dev Chodry

	Title:	 	 Managing Member

			
	Scoggin International Fund, Ltd.
	
	By: Scoggin LLC its Investment Manager
		
	By:	 	 /s/ Craig Effron

	Name:	 	 Craig Effron

	Title:	 	 Managing Member

			
	Wasserstein Partners, LP
		
	By:	 	 /s/ George Majoros

	Name:	 	 George Majoros

	Title:	 	 President

 EXHIBIT A 
 THIS TERM SHEET IS NOT A SOLICITATION OF ACCEPTANCES OR REJECTIONS WITH 

RESPECT TO ANY RESTRUCTURING OR PRE-ARRANGED PLAN OR AN OFFER OR 

SOLICITATION FOR THE SALE OF SECURITIES OF ANY KIND. 
 TERMS FOR PROPOSED RESTRUCTURING OF HARRY & DAVID HOLDINGS, INC. 
 March 27, 2011 
 This term sheet (“Term Sheet”), which is
Exhibit A to the Support Agreement dated March 27, 2011 (the “Support Agreement”), describes certain of the principal terms of a proposed restructuring (the “Restructuring”) for Harry & David Holdings,
Inc., and its direct and indirect subsidiaries (together “HD”). As described in greater detail herein, the Restructuring shall be consummated through the “Pre-Arranged Plan” (as defined in the Support Agreement) pursuant
to voluntary chapter 11 cases (the “Cases”) to be filed with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

As used herein, the term “Holders” refers to holders of HD’s outstanding Senior Floating Rate Notes due 2012 and
9.0% Senior Notes dues 2013 (the “Notes”) issued under that certain indenture dated February 25, 2005 (the “Indenture”), and the term “Principal Holders” refers to those Holders set forth on
Attachment 1, who have engaged in discussions with HD with respect to the Restructuring, which discussions are reflected in this Term Sheet and the Support Agreement. 

 

			
	The Restructuring	  	 The Restructuring set forth in this Term Sheet is intended to be effected through the Pre-Arranged Plan, pursuant to
which:
  
 (a) each Holder shall receive its pro rata share (together with
Unsecured Creditors (defined below)) of approximately 166,667 shares of new common stock (the “HD Shares”) of the reorganized parent company (“Reorganized Holdings”) of the reorganized debtors (the
“Reorganized Debtors”) to be issued and outstanding as of the effective date of the Pre-Arranged Plan (the “Effective Date”), plus non-transferable subscription rights (“Subscription Rights”) to
acquire up to approximately 733,333 HD Shares in connection with the HD Rights Offering (as defined below); and
  
 (b) each holder of an allowed general unsecured claim (other than the Holders) against the Debtors (“Unsecured Creditors”) shall receive, at the option of each Unsecured Creditor,
its pro rata share (together with the Holders) of any one of the following: (1) approximately 166,667 HD Shares to be issued and outstanding as of the Effective Date (the “GUC Shares”) plus Subscription Rights to acquire up to
approximately 733,333 HD Shares in connection with the HD Rights Offering; or (2) cash in an amount equal to 75% of the plan value of the GUC Shares (defined below) (subject to the availability of cash of HD on the Effective Date); or (3) the GUC
Promissory Notes (defined below), with option (1) being the default option in the event that such Unsecured Creditor does not make an election.
  

(c) the Reorganized Debtors shall raise approximately $55 million in equity capital through the HD Rights Offering described
herein.

			
	 Implementation of the
 Restructuring
	  	HD and the Principal Holders shall mutually agree upon the list of the definitive documentation required for the Restructuring, including, without limitation, the Pre-Arranged Plan,
Disclosure Statement and all other documents or forms related to solicitation, the HD Backstop Agreement and all other documents or forms related to the HD Rights Offering, DIP Financing Agreements and related documentation, Charter and By-laws and
other organizational documents for the Reorganized Debtors, Exit Financing Agreement and related documentation, MSA, Releases and Schedule of Assumed Executory Contracts (each as defined below or in the Support Agreement) and all of the documents,
notes, certificates or instruments related to each of the foregoing (as amended, modified, or supplemented from time to time in accordance with the terms hereof, the “Definitive Restructuring Documents”). Each of the Definitive
Restructuring Documents shall reflect the terms and conditions set forth herein and shall be reasonably acceptable to the Requisite Principal Holders (as defined in the Support Agreement) and HD.
		
		  	HD shall solicit acceptances of the Pre-Arranged Plan on the terms set forth herein and such other terms as are mutually acceptable to the Requisite Principal Holders and HD
pursuant to which HD shall emerge from bankruptcy as Reorganized Debtors. The Pre-Arranged Plan shall satisfy the requirements of the Bankruptcy Code with respect to all classes of claims and interests.
		
	 Documentation and

Timing
	  	All documentation prepared in connection with the Restructuring, including without limitation, the Definitive Restructuring Documents, and any documents, motions, pleadings, orders
or similar documentation prepared or filed by HD in connection with the Restructuring, shall be in form and substance reasonably satisfactory to the Requisite Principal Holders and reasonably acceptable to HD.
		
		  	The HD Backstop Agreement shall have been executed prior to the Petition Date and shall be consistent with the terms hereof and shall otherwise be satisfactory to the Requisite
Principal Holders.
		
		  	A $55 million junior term loan (“DIP Notes Facility”) to be provided by some or all of the Principal Holders (in their capacity as such, the “DIP
Lenders”) and $100 million senior asset based credit facility (“DIP ABL Facility” and together with the DIP Notes Facility, the “DIP Financings”) for debtor-in-possession financing shall have been agreed
upon and committed no later than the Petition Date on terms satisfactory to the Requisite Principal Holders, and shall be the subject of a motion for approval to be filed no later than the Petition Date, and shall receive interim approval within
three (3) calendar days after the Petition Date and final approval within thirty-five (35) calendar days after the Petition Date.
		
	DIP Notes Facility	  	Estimated Allowed Amount: $55 million. Paid in full in cash on the Effective Date or satisfied on another basis agreed upon by HD and all of the DIP Lenders.
		
	DIP ABL Facility	  	The DIP ABL Facility shall replace the prepetition asset based facility (see below) pursuant to a credit agreement with UBS and Ally Commercial Finance (the “ABL
Lenders”) which shall provide a $100 million asset based facility, on the terms of the commitment letter dated March 25, 2011 provided by the ABL Lenders, and which shall convert into the Exit ABL Facility (defined below), and the
definitive documentation with respect thereto shall be reasonably satisfactory to the Requisite Principal Holders.

			
	Exit ABL Facility	  	On the Effective Date, the Reorganized Debtors shall enter into the $100 million Exit ABL Facility (as defined in the Support Agreement), on the terms of the commitment letter dated
March 25, 2011 provided by the ABL Lenders, and the definitive documentation with respect thereto shall be reasonably satisfactory to the Requisite Principal Holders.
		
	 Administrative Expense
 Claims and Priority Tax
 Claims
	  	Paid in full in cash on the Effective Date or on such other terms as a holder of such claim may agree upon the prior written consent of the Requisite Principal
Holders.
		
	Secured Claims	  	The holders of pre-petition Secured Claims shall receive, at the option of HD or Reorganized Holdings, as the case may be, one of the following treatments: (a) payment in full on
the Effective Date, (b) the return of the property securing such claim or (c) such other treatment that satisfies the requirements of section 1129 of the Bankruptcy Code, in each case as consented to by the Requisite Principal
Holders.
		
	 ABL Facility with UBS
 and Ally Commercial
 Finance
	  	Replaced by the DIP or Exit ABL Facility.
		
	 Trade and Other

Unsecured Claims
	  	 Each Unsecured Creditor shall be entitled, at the option of such creditor, to receive its pro-rata share (based on such Unsecured
Creditor’s claim relative to the allowed claims of Unsecured Creditors and Holders in the aggregate) of any one of the following, subject to the availability of cash of HD on the Effective Date) and with option (B) being the default option in
the event that such Unsecured Creditor does not make an election:
  
 (A) cash
on the Effective Date in an amount equal to 75% of the Pre-Arranged Plan’s implied equity value of $100 per share of the GUC Shares that such Unsecured Creditor would have otherwise been entitled to receive had it elected to receive equity
pursuant to clause (B) below,
  
 (B) (i) the GUC Shares plus (ii)
Subscription Rights to acquire up to approximately 733,333 HD Shares in the HD Rights Offering to the extent that such General Unsecured Creditor demonstrates that it is an Accredited Investor for purposes of the Securities Act of 1933 and otherwise
complies with the Rights Offering Procedures (defined below); or
  
 (C)
unsecured promissory notes issued by Reorganized Holdings in a principal amount equal to the value of the GUC Shares such Unsecured Creditor would have otherwise been entitled to receive had it elected to receive equity pursuant to clause (C)
hereof, using the Pre-Arranged Plan’s implied valuation of $100 per HD Share as of the Effective Date, which promissory notes shall (a) bear interest at the annual rate of 6%, payable semi-annually in cash, (b) mature in seven years from the
Effective Date, (c) contain no covenants, (d) be redeemable by Reorganized Holdings at its option at any time without penalty or premium, and (e) contain such other terms or conditions as are satisfactory to HD and the Requisite Principal
Holders.

		
	Convenience Class	  	A convenience class may exist under the Pre-Arranged Plan to pay in cash certain claims not to exceed such dollar thresholds, and in such percentage recovery amounts, as the
Requisite Principal Holders and HD shall mutually agree prior to the filing of the Pre-Arranged Plan, or, if such parties so agree, there shall be no convenience class under the plan.

			
	 Senior Floating Rate
 Notes due 2012 and 9.0%
 Senior Notes dues 2013
	  	Estimated Allowed Amount: approximately $206.5 million (including approximately $8.1 million of accrued interest up to the Petition Date).
		
		  	Each Holder with an allowed Notes Claims shall be entitled to receive its pro rata share (based on such Holder’s allowed claim relative to the allowed claims of Unsecured
Creditors and Holders in the aggregate) of (a) 166,667 HD Shares outstanding as of the Effective Date, and (b) Subscription Rights to acquire up to approximately 733,333 HD Shares in connection with the HD Rights Offering to the extent such Holder
is an Accredited Investor and otherwise complies with the Rights Offering Procedures (defined below).
		
	Existing Common Equity	  	No distribution; cancelled.
		
	Intercompany Claims	  	Reinstated.
		
	Pension Plan	  	HD’s pension plan shall be terminated pursuant to a motion that HD shall file not later than 35 calendar days after the Petition Date and an order of the Bankruptcy Court, in
form and substance reasonably acceptable to the Requisite Principal Holders, that shall be entered no later than the date the order confirming of the Pre-Arranged Plan is entered.
		
	Executory Contracts	  	No later than July 2, 2011, HD (1) shall present to the Principal Holders a schedule of executory contracts and unexpired leases the Debtors intend to reject, which schedule, prior
to filing with the Bankruptcy Court, shall be in form and substance reasonably acceptable to the Requisite Principal Holders (the “Schedule of Rejected Executory Contracts”) and (2) obtain an order of the Bankruptcy Court no later
than August 3, 2011 approving the rejection of any and all executory contracts and unexpired leases that the Debtors shall seek to reject in connection with the Cases. All other executory contracts and unexpired releases shall be assumed as of the
Effective Date.
		
	New Common Shares	  	On the Effective Date and in connection with the HD Rights Offering (as defined herein), Reorganized Holdings, Inc. shall issue approximately 1 million HD shares. Each of the GUC
Shares that were otherwise distributable to an Unsecured Creditor that does not elect for the treatment specified in clause (B) of the treatment section for Unsecured Creditors described above shall not be issued and/or shall reduce the otherwise
issuable 1 million shares.
		
	 Equity Raise Upon

Bankruptcy Exit
	  	HD shall raise $55.0 million in capital through the consummation of a rights offering (the “HD Rights Offering”), pursuant to which Subscription Rights to acquire HD
Shares shall be made available to all eligible Holders of Notes and to all eligible Unsecured Creditors who elect to receive equity under clause (A) of the treatment section for Unsecured Creditors described above (collectively, the “RO
Participants”). Each of the RO Participants shall have the right to elect to participate in the HD Rights Offering and to subscribe to HD Shares pro-rata based on the dollar amount of such RO Participant’s allowed claim relative to
aggregate the dollar amount of all allowed claims of all RO Participants, for an exercise price of $75 per HD Share, reflecting a 25% discount to the Pre-Arranged Plan’s implied equity value of $100 per share as of the Effective
Date.

			
		  	The HD Rights Offering will be backstopped in an amount of $55 million by those Principal Holders (the “Backstop Parties”) that enter into a backstop agreement in
form and substance satisfactory to HD and the Backstop Parties (the “HD Backstop Agreement”). The Backstop Fee will become payable to the Backstop Parties only upon completion of the HD Rights Offering and, if necessary, the
purchase of HD Shares by the Backstop Parties pursuant to their obligations under the HD Backstop Agreement. The Backstop Parties shall subscribe to any HD Shares not purchased by the exercise deadline in the HD Rights Offering, subject to the terms
and conditions contained in the HD Backstop Agreement.
		
		  	 Backstop Fee: As consideration for the performance of their obligations under the HD Backstop Agreement, the Backstop Parties
shall receive back-stop consideration of 50,000 HD Shares, to be shared pro-rata based on each parties’ backstop commitment under the HD Backstop Agreement. In addition, the Backstop Parties shall be entitled to the reimbursement of all of
their reasonable fees and expenses pursuant to the terms of the HD Backstop Agreement.
  
 Break-up Fee: $1.1 million (the “Break-Up Fee”), payable pro-rata in cash to the Backstop Parties in accordance with the terms of the HD Backstop Agreement.

		
		  	The rights offering procedures to be utilized in connection with the HD Rights Offering (the “Rights Offering Procedures”) shall be reasonably satisfactory to HD
and the Backstop Parties. HD shall, within eight (8) calendar days after the Petition Date, file motions seeking approval for (1) certain procedures related to the pre-screening of Accredited Investors in connection with the HD Rights Offering, (2)
entry into the HD Backstop Agreement and the payment of all fees thereunder, including the Break Up Fee, and (3) a bar date, each in form and substance reasonably acceptable to the Backstop Parties, and HD shall obtain entry of an order of the
Bankruptcy Court approving such motions within thirty-five (35) calendar days after the Petition Date.
		
	 Mechanics and

Conditions to

Effectiveness of Plan
	  	The Pre-Arranged Plan shall contain usual and customary conditions to confirmation and effectiveness, as well as such other conditions that are satisfactory to the Requisite
Principal Holders, including, without limitation, the following:
		
		  	(i) the Pre-Arranged Plan and Definitive Restructuring Documents shall be in form and substance reasonably satisfactory to HD and the Requisite Principal Holders;
		
		  	(ii) the Bankruptcy Court shall have entered an order, in form and substance satisfactory to HD and the Requisite Principal Holders, confirming the Pre-Arranged Plan and such order
shall not have been stayed or modified or subject to an appeal;
		
		  	(iii) the conditions to effectiveness of the HD Backstop Agreement shall have been satisfied and the HD Backstop Agreement shall be in full force and effect;
		
		  	(iv) all fees and expenses of the Principal Holders as set forth in the Support Agreement, this Term Sheet and the HD Backstop Agreement shall have been paid in full in
cash;
		
		  	(v) the Exit Facility, including all documentation related thereto, shall each be in form and substance reasonably satisfactory to the Requisite Principal Holders, and shall have
been consummated;
		
		  	(vi) the Debtors shall have paid all of the Backstop Parties’ fees and expenses under the HD Backstop Agreement;

			
		  	(vii) either (a) HD shall have obtained a final non-appealable order of the Bankruptcy Court (which order shall not have been stayed or modified or subject to an appeal) terminating
its qualified pension plan (the “Pension Plan”), which order shall be reasonably satisfactory to HD and the Requisite Principal Holders, or (b) the treatment of the Pension Plan shall otherwise be satisfactory to the Requisite
Principal Holders;
		
		  	(viii) All employment arrangements of senior management as of the Effective Date shall be reasonably satisfactory to the Requisite Principal Holders; and
		
		  	(ix) all governmental and third party approvals and consents, including Bankruptcy Court approval, necessary in connection with the transactions contemplated by this Term Sheet
shall have been obtained, not be subject to unfulfilled conditions and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose materially adverse conditions on such transactions.
		
	Releases	  	To the fullest extent permitted by applicable law, each of (a) the Debtors, (b) the Reorganized Debtors, (c) the DIP Lenders, (d) the Backstop Parties, (e) the Principal
Holders and (f) and the respective officers and directors, members, employees, agents, affiliates, and advisors of the persons or entities described in clauses (a) through (e), shall be released of any and all claims or causes of action, known or
unknown, of HD or its creditors or shareholders arising from or in connection with the Pre-Arranged Plan or arising at any time on or before the Effective Date of the Pre-Arranged Plan in connection with or related to HD, subject to standard
exceptions for gross negligence or willful misconduct (collectively, the “Releases”). In addition, the Pre-Arranged Plan shall contain standard exculpation provisions.
		
	Tax Issues	  	Parties shall discuss methods to preserve value of any available NOLs and other tax considerations, including such other restructuring transactions as necessary to maximize value of
the Reorganized Debtors
		
	Fees & Expenses	  	HD agrees to pay promptly after receipt of an invoice (a) all reasonable and documented fees, costs, expenses and disbursements of (i) Stroock & Stroock & Lavan LLP and its
local counsel, (ii) Munger, Tolles & Olson LLP and its local counsel, (iii) Akin Gump Strauss Hauer & Feld LLP, and (iv) Moelis & Company (“Moelis”) (it being understood that, notwithstanding anything contained
herein to the contrary, with respect to Moelis, on the Effective Date, HD shall pay in cash all monthly fees accrued during the Cases, to the extent not already paid, at the rate of $125,000 per month, as well as a transaction fee in the amount of
$1.25 million (subject to the “Monthly Fee Credit” contained in clause 2(a)(ii) of the pre-petition letter agreement between Moelis and HD)), and (b) all documented and out-of-pocket fees, costs and expenses of each of the Principal
Holders (but not legal, financial advisor or other consulting or professional fees), in each case, solely in connection with the negotiation, formulation, preparation, execution, delivery and consummation of this Agreement, the Restructuring
Documents, the Pre-Arranged Pan, the transactions contemplated hereunder and the Restructuring Documents and all transactions related thereto. None of such fees, costs and expenses shall be subject to Court approval or U.S. Trustee guidelines, and
no recipient of any such payment shall be required to file with respect thereto any interim or final fee application with this Court. Copies of any such invoices shall be provided to the U.S. Trustee and counsel to any Committee, as redacted to
protect against the disclosure of privileged and/or confidential information.

			
		  	The Principal Holders are familiar and with, and, where applicable and requested, have been provided with a copy of the engagement agreements or reimbursement agreements (as
applicable) signed by HD with Rothschild Inc., Alvarez & Marsal, and Moelis & Company. Each of the Principal Holders acknowledge the terms of these engagements as in effect of the date hereof (and, in the case of Moelis, as modified by the
terms hereof) and waives any objection to the structure thereof. Each of the Principal Holders, however, expressly preserve all other fee or expense related objections.
		
	 Management Incentive
 Plan
	  	Up to 10% of the HD Shares (or options to purchase HD Shares that would have the effect of diluting Reorganized Holdings’ then existing stock by no more than 10% on a fully
diluted basis) will be reserved to provide to management in connection with a management incentive plan after giving effect to all transactions contemplated herein (“MIP”). The terms of the MIP will be established by the Board of
Directors of the Reorganized Debtors.
		
	Avoidance Actions	  	To be preserved by the Reorganized Debtors, unless otherwise determined by the Requisite Principal Holders prior to confirmation, with the right of the Reorganized Debtors to
commence or not commence such avoidance actions in their discretion.
		
	Classification	  	Classification under the Pre-Arranged Plan shall be satisfactory to the Requisite Principal Holders and HD.
		
	 Board of Directors of
 Restructured HD
	  	 Upon the Effective Date, the initial Board of Directors of Reorganized Holdings shall be comprised of five members, of which 2 shall be
selected by Wasserstein & Co. (the “WC Directors”) and 2 shall be selected by the other Principal Holders (the “Principal Holder Directors”), and one shall be the then CEO of Reorganized Holdings (except during
any period in which there is an interim CEO, in which event such fifth director shall be a person acceptable to WC and to the Requisite Principal Holders) with any future CEO who replaces the then-CEO as of the Effective Date shall fill the CEO
board seat. The CEO shall be acceptable to the Requisite Principal Holders. Each new Board member shall be entitled to a D & O Indemnification Agreement in form reasonably acceptable to such member and Reorganized HD upon his or her
appointment.
  
 The Board of Directors will be divided into three classes.
The initial directors will serve terms of 1, 2 or 3 years each (each term expiring immediately after the annual stockholder meeting in the year indicated below), as follows:

 
 Class III (Term expiring in three years) 2 directors

Class II (Term expiring in two years) 2 directors

Class I (Term expiring in one year) 1 director
  

On and after the Effective Date, the Board of Directors will be constituted as follows:

 
 (a) Class III will consist of one of the WC Directors and one of the Principal Holder
Directors;
  
 (b) Class II will consist of one of the WC Directors and one of
the Principal Holder Directors; and (c) Class I will consist of HD’s then-CEO.

			
	 Protective Voting
 Provisions
	  	The consent of four (4) of five (5) members of the Board of Directors shall be required for actions requiring supermajority approval, including, but not limited to, the
following::
		
		  	 i.        enter into a transaction for a sale of all or substantially all of the
Reorganized Debtors’ parent company or its subsidiaries by way of an asset sale, stock sale, tender offer, merger or other business combination;

		
		  	 ii.       declare or pay any dividend or any other distribution on, or repurchase, any of the
HD Shares or other of its equity securities; provided that any such distribution or repurchase shall be on a pro rata basis;

		
		  	 iii.     enter into transactions with affiliates (as defined in the Securities and Exchange Act of 1933)
involving the acquisition by any of the Reorganized Debtors of any entity controlled by an affiliate, the sale of material assets of any of the Reorganized Debtors to an affiliate or any entity controlled by an affiliate, or the payment of a fee to
an affiliate for the provision of services to any of the Reorganized Debtors; provided, however, that this section shall not apply to the MSA (defined below); and

		
		  	 iv.      take other material actions to be set forth in the by-laws and/or Stockholder Agreement as
shall be agreed upon by the Principal Holders and any other parties thereto no later than the Effective Date, including but not limited to new equity issuances, material acquisitions, material debt incurrence, and public/private
decisions.

		
	 Charter Documents and
 Shareholders Agreement
	  	 All organizational and charter documents for the Reorganized Debtors shall be satisfactory to HD and the Requisite Principal Holders and
consistent herewith. The certificate of incorporation shall provide for a staggered board (as described above).
  
 As of the Effective Date, Reorganized HD shall post on its website all information required under Rule 144A(d)(4) under the Securities Act of 1933 for shareholders that are qualified institutional buyers,
and, after one year from the Effective Date, all information required under Rule 144(c) under the Securities Act of 1933.

		
	 WC Post-Emergence

Management Services and

Fees
	  	Notwithstanding that Wasserstein & Co. (“WC”) shall be only a minority owner of the Reorganized Debtors, following the Effective Date, WC shall provide to the
Reorganized Debtors full oversight and management services commensurate with those resources customarily dedicated to an actively managed portfolio company, as mutually agreed upon by the Requisite Principal Holders and to be set forth in a
management services agreement (“MSA”), which shall be consistent with this Term Sheet and otherwise in form and substance satisfactory to the Requisite Principal Holders. The services shall include the following:
		
		  	 i.        Provide assistance and oversight in the execution of the purchasing and vendor
optimization, supply chain optimization, SKU rationalization, IT migration, outsourcing and other operational initiatives outlined in the Reorganized Debtor’s business plan;

		
		  	 ii.       Provide assistance and analysis for preparation of budgets, forecasts and capital
spending plans, and assess and monitor the Reorganized Debtors’ performance against the Reorganized Debtors’ business plan;

			
		  	 iii.      Assistance in management recruitment and compensation review;

		
		  	 iv.      Assistance in the preparation of reporting to
constituencies; and
  

v.       At the direction of the Board of Directors, analytical and strategy
assistance, including identification, evaluation and execution of acquisition or divestiture opportunities, and debt financings / refinancings.

		
		  	 In consideration of WC providing the foregoing services under the MSA to the Reorganized Debtors following the Effective Date, WC shall
receive the following compensation: (a) 50,000 HD Shares on the Effective Date, and (b) following the Effective Date, an annual management fee, as described below, in accordance with and subject to the terms and conditions of the
MSA.
  
 Annual Management Fee: WC shall be entitled to receive a percentage
of an annual base fee of $625,000 (the “Base Fee”) based on the Reorganized Debtors’ achievement of Adjusted EBITDA targets as follows:
  

Plan Targets for Adjusted EBITDA:
  

FY12: $21.03 million
 FY13: $26.28
million
 FY14: $32.09 million
 FY15:
$39.16 million
 FY16: $45.68 million

FY17 and thereafter, if necessary, to be determined by amendment to the MSA

 

					
	
Percentage of Plan Target

 
	  	
Percentage of Base Fee
Payable
  
	 
	 100% or more
	  	 	100	% 
	 At least
90% but less than 100%
	  	 	80	% 
	 At least 80% but less than
90%
	  	 	60	% 
	 Less than 80%
	  	 	0	% 

 

			
		  	 The plan targets are based on Adjusted EBITDA as calculated and used in a manner that is consistent with past practice of HD and
HD’s business plan.
  
 The Base Fee shall be paid 50% (i.e., $312,500)
upon the closing of the books and records for the second quarter of each fiscal year (subject to a true-up adjustment at the end of the fiscal year), and the balance paid upon completion of HD’s annual audited financial statements;
provided, however, that no fee shall be payable at any time for any period after WC (including its affiliates and investment funds and its/their limited partners who received HD Shares in a distribution) owns less than 90% of the HD
Shares that WC receives on the Effective Date under or in connection with the Pre-Arranged Plan.

		
	No Waiver	  	Nothing herein shall affect in any way, nor be deemed a waiver of, any of the rights of HD or any Holder under the Indenture or any other document or under applicable
law. Nothing herein is intended to waive, limit, or restrict the ability of any of the foregoing parties, in whatever capacity, to protect and preserve their rights, remedies against, and interests in HD or any third party, whether under the
Indenture, any other document or applicable law.
		
	Indenture Trustee	  	All documented fees and expenses of the Indenture Trustee, to the extent reimbursable under the Indenture, shall be paid in full in cash on the Effective
Date.

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