Document:

Exhibit 10.5

Exhibit 10.5

March 7, 2011

Western Digital Corporation

Western Digital Technologies, Inc.

Western Digital Ireland, Ltd.

3355 Michelson Drive

Irvine, California 92612

Attention: Mr. Wolfgang Nickl, Senior Vice President and Chief Financial Officer

Project Newport Commitment Letter

$2,500,000,000 Senior Credit Facilities

Ladies and Gentlemen:

Western Digital Corporation, a Delaware corporation (“Holdings”), Western Digital Technologies,
Inc., a Delaware corporation (“WDT”), and Western Digital Ireland, Ltd., a limited liability
company organized under the laws of the Cayman Islands (the “Cayman Borrower” and, together with
WDT, the “Borrowers” and the Borrowers together with Holdings individually or collectively, as the
context may indicate, referred to herein as “you”), have entered into that certain Stock Purchase
Agreement, dated as of March 7, 2011 with Hitachi, Ltd., a company incorporated under the laws of
Japan (the “Seller”), and Viviti Technologies Ltd., a company incorporated under the laws of the
Republic of Singapore (the “Target”) and a wholly owned subsidiary of the Seller, and have also
advised Bank of America, N.A. (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“MLPFS”) that the Cayman Borrower intends to acquire all of the outstanding equity
interests of the Target for an aggregate consideration of not more than approximately
$4,500,000,000, subject to adjustment as provided in the Acquisition Agreement (as defined in the
Conditions Annex (as defined below)) (the “Acquisition”), a portion of which will be paid in cash
and a portion of which will be paid with common equity of Holdings.

You have also advised Bank of America and MLPFS that you intend to finance the Acquisition,
refinance certain existing indebtedness of Holdings and its subsidiaries (including indebtedness of
WDT under that certain Credit Agreement dated as of February 11, 2008 (as amended, restated,
supplemented or otherwise modified through the Closing Date (as defined in the Summary of Terms (as
defined below)), the “Existing Credit Agreement”) by and among WDT, as borrower, certain lenders
party thereto and JPMorgan Chase Bank, N.A., as administrative agent) (collectively, all such
indebtedness refinancing, the “Refinancing”), pay certain costs and expenses related to the
Transactions (as defined below) and provide for certain ongoing working capital and other general
corporate purposes of the Borrowers and their respective subsidiaries after consummation of the
Acquisition from the following

 

 

 

sources (and that no material financing other than the financing
described herein will be required in connection with the Transactions): (a) common equity of Holdings, which will be purchased from Holdings by the Cayman
Borrower for cash in accordance with the Acquisition Agreement (the “Stock Consideration”), (b)
cash on hand of the Cayman Borrower in accordance with the Acquisition Agreement (the “Cash on Hand
Consideration”) and (c) a portion of up to $2,500,000,000 in senior credit facilities (the “Senior
Credit Facilities”) of the Borrowers, composed of (i) term loan facilities aggregating up to
$2,000,000,000, of which $1,725,000,000 shall be available to the Cayman Borrower and $275,000,000
shall be available to WDT (provided that the allocation of the $2,000,000,000 aggregate
principal amount of the term loan facilities between WDT and the Cayman Borrower may be adjusted by
Holdings and the Borrowers on the Closing Date, at their option) and (ii) a revolving credit
facility of up to $500,000,000 which shall be available to either Borrower. The Acquisition
(including the payment of all amounts, including the Stock Consideration and the Cash on Hand
Consideration), the Refinancing, the entering into and funding of the Senior Credit Facilities and
all related transactions are hereinafter collectively referred to as the “Transactions.” The
anticipated sources and uses for the financing for the Transactions are as set forth on
Schedule 1 hereto, subject to adjustment as contemplated by the Acquisition Agreement or
otherwise agreed. Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Summary of Terms and Conditions attached as Exhibit A hereto and
incorporated herein by this reference (the “Summary of Terms”) and the Conditions Annex attached
hereto as Exhibit B (the “Conditions Annex” and, collectively with this letter and the
Summary of Terms, this “Commitment Letter”)

In connection with the foregoing, Bank of America is pleased to advise you of its commitment to
provide the full principal amount of the Senior Credit Facilities and to act as the sole
administrative agent (in such capacity, the “Administrative Agent”) for the Senior Credit
Facilities, all upon and subject to the terms and conditions set forth in this Commitment Letter.
MLPFS is pleased to advise you of its willingness, as the sole lead arranger and sole book manager
(in such capacities, the “Lead Arranger”) for the Senior Credit Facilities, to form a syndicate of
financial institutions (including Bank of America) (collectively, the “Lenders”) for the Senior
Credit Facilities, all upon and subject to the terms and conditions set forth in this Commitment
Letter.

Subject to the succeeding sentence, the commitment of Bank of America hereunder and the undertaking
of MLPFS to provide the services described herein are subject solely to the satisfaction of each of
the conditions set forth in the Conditions Annex. Notwithstanding anything in this Commitment
Letter, the fee letter among you, Bank of America and MLPFS of even date herewith (the “Fee
Letter”), the definitive loan documentation or any other letter agreement or other undertaking
concerning the financing of the Transactions to the contrary, (i) the only representations relating
to Holdings, the Target and/or either of their respective subsidiaries and businesses the accuracy
of which shall be a condition to the availability of the Senior Credit Facilities on the Closing
Date shall be (A) such of the representations made by the Target and/or the Seller with respect to
the Target and/or its subsidiaries in the Acquisition Agreement (as defined in the Summary of
Terms) as are material to the interests of the Lenders, but only to the extent that any of you or
your affiliates have the right to terminate your or their respective obligations under the
Acquisition Agreement as a result of a breach of such representations in the Acquisition Agreement,
determined without regard to whether any notice is required to be delivered by you or any of your
affiliates (such representations, the “Specified Acquisition Agreement Representations”) and

 

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(B)
the Specified Representations (as defined below) and (ii) the terms of the definitive loan documentation shall be in a form such that they do
not impair the availability of the Senior Credit Facilities on the Closing Date if the conditions
set forth in this paragraph of the Commitment Letter and the Conditions Annex are satisfied. For
purposes hereof, “Specified Representations” means the representations and warranties referred to
in the Summary of Terms relating to legal existence of the Credit Parties (as defined in the
Summary of Terms); organizational power and authority, due authorization, execution and delivery
and enforceability, in each case relating to the entering into and performance of the definitive
loan documentation by the Credit Parties party thereto; no conflict of the definitive loan
documentation with the Credit Parties’ organizational documents or material applicable law;
solvency as of the Closing Date (after giving effect to the Transactions) of Holdings and its
subsidiaries on a consolidated basis; use of proceeds; Federal Reserve margin regulations; the
Investment Company Act; and the Act (as defined below). This paragraph, and the provisions herein,
shall be referred to as the “Certain Funds Provision.”

MLPFS intends to commence syndication of the Senior Credit Facility promptly upon your acceptance
of this Commitment Letter and the Fee Letter, and notwithstanding anything to the contrary
contained in this Commitment Letter or the Fee Letter, you agree to provide Bank of America and
MLPFS a period of 30 consecutive days (excluding traditional blackout and holiday periods in the
bank market) following the date of delivery of the Information Materials (as defined below),
including the financial statements described in paragraph 2 of the Conditions Annex in a form
customarily delivered in connection with senior credit facilities, to syndicate the Senior Credit
Facilities; provided that, unless you consent in writing, Bank of America shall not be
relieved or novated from its commitments and other obligations hereunder in connection with any
such syndication or assignment until the Closing Date has occurred and Bank of America shall retain
exclusive control over all rights and obligations with respect to its commitments, including all
rights with respect to consents, modifications and amendments, until the Closing Date has occurred.

You agree to actively assist, and to use your commercially reasonable efforts to cause the Target
and its relevant subsidiaries, and appropriate members of the management teams of any of them, to
actively assist, MLPFS in achieving a Successful Syndication (as defined in the Fee Letter). Such
assistance shall include your (a) providing, causing your advisors to provide and using your
commercially reasonable efforts to cause the Target, and appropriate members of its management
team, to provide Bank of America and MLPFS and the other Lenders upon request with all information
reasonably deemed necessary by Bank of America and MLPFS to complete syndication, including, but
not limited to, information and evaluations prepared by you and your advisors, or on your behalf,
relating to the transactions contemplated hereby (including the Projections (as defined below), the
“Information”), (b) assisting, and using your commercially reasonable efforts to cause the Target,
and appropriate members of its management team, to assist in the preparation of Information
Memoranda and other materials to be used in connection with the syndication of the Senior Credit
Facilities (collectively with the Summary of Terms and any additional summary of terms prepared for
distribution to Public Lenders (as defined below), the “Information Materials”), (c) using your
commercially reasonable efforts to ensure that the syndication efforts of MLPFS benefit materially
from your existing banking relationships, (d) your ensuring that there is no competing offering,
placement or arrangement of any debt securities or bank financing by or on behalf of Holdings or
any of its subsidiaries or

 

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affiliates (after giving effect to the Acquisition) and (e) otherwise
assisting Bank of America and MLPFS in their syndication efforts, including by making your officers, and accounting and legal advisors
available and using your commercially reasonable efforts (and to the extent reasonable and
practical) to make officers and accounting and legal advisors of the Target (or its subsidiaries)
available, from time to time to attend and make presentations regarding the business and prospects
of Holdings and its subsidiaries (including the Target and its subsidiaries), as appropriate, at
one or more meetings of prospective Lenders. Notwithstanding any earlier termination of this
Commitment Letter, the provisions of this paragraph and the next following paragraph shall remain
in full force and effect until the earliest of (i) sixty (60) days following the Closing Date, (ii)
completion of a Successful Syndication and (iii) the termination of this Commitment Letter pursuant
to the last paragraph hereof other than as a result of the occurrence of the Closing Date (such
earliest date, the “Syndication Assistance Termination Date”).

It is understood and agreed that MLPFS will manage and control all aspects of the syndication in
consultation with you and in a manner reasonably acceptable to you, including (a) decisions as to
the selection of prospective Lenders and any titles offered to proposed Lenders, (b) when
commitments will be accepted, (c) the final allocations of the commitments among the Lenders, and
(d) subject to the limitations with respect thereto in the Fee Letter, the amount and distribution
of the fees among the Lenders. It is understood that no Lender participating in the Senior Credit
Facilities will receive compensation from you, the Target or any of your or their respective
subsidiaries or affiliates in order to obtain its commitment, except on the terms contained herein
and in the Summary of Terms or the Fee Letter. MLPFS agrees not to syndicate any of the
commitments with respect to the Senior Credit Facilities to those financial institutions and other
entities that have been specified by you in a separate letter dated the date hereof by and among
the parties hereto and which references this Commitment Letter (such institutions, the “Excluded
Lenders”).

You represent, warrant and covenant that (with respect to information relating to the Target, the
Seller and their subsidiaries, to your knowledge) (a) all financial projections concerning the
Borrowers and their subsidiaries or Holdings and its subsidiaries (in each case, after giving
effect to the Transactions) that have been or are hereafter made available to Bank of America,
MLPFS or the Lenders by you, the Target, the Seller or any of your or their representatives (or on
your or their behalf) (the “Projections”) have been or will be prepared in good faith based upon
assumptions believed by you or the Seller or the Target, as applicable, to be reasonable at the
time made and at the time furnished to Bank of America, MLPFS or any Lender (it being understood
that such Projections are subject to significant uncertainties and contingencies, many of which are
beyond the control of you, the Target or the Seller and no assurances can be given that such
Projections will actually be realized) and (b) all Information, other than Projections, which has
been or is hereafter made available to Bank of America, MLPFS or the Lenders by you, the Target,
the Seller or any of your or their respective representatives (or on your or their behalf) in
connection with any aspect of the Transactions, as and when furnished, taken as a whole, is and
will be complete and correct in all material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements
contained therein not misleading in light of the circumstances under which such statements were
made. You agree to furnish us (or, with respect to information relating to the Seller, the Target
or any of their subsidiaries furnished prior to the Closing Date, use commercially reasonable
efforts to furnish us) with further and supplemental

 

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information from time to time until the
Closing Date, and, if a Successful Syndication has not been achieved
as of the Closing Date, for a reasonable period (not later than the Syndication Assistance Termination
Date) thereafter as is necessary to achieve a Successful Syndication so that the representation,
warranty and covenant in the immediately preceding sentence are correct in all material respects on
the Closing Date and such later date as if the Information were being furnished, and such
representation, warranty and covenant were being made, on each such date (except to the extent such
representation, warranty and covenant relates to an earlier date, on and as of such earlier date).
The provisions of the immediately preceding sentence shall remain in full force and effect until
the occurrence of the Syndication Assistance Termination Date. In issuing this commitment and in
arranging and syndicating the Senior Credit Facilities, Bank of America and MLPFS are and will be
using and relying on the Information without independent verification thereof.

You acknowledge that (a) MLPFS and/or Bank of America on your behalf will make available
Information Materials to the proposed syndicate of Lenders by posting the Information Materials on
IntraLinks or another similar electronic system and (b) certain prospective Lenders (such Lenders,
“Public Lenders”; all other Lenders, “Private Lenders”) may have personnel that do not wish to
receive material non-public information (within the meaning of the United States federal securities
laws, “MNPI”) with respect to the Credit Parties or their respective affiliates (including the
Target and its affiliates) and/or the Seller, or the respective securities of any of the foregoing,
and who may be engaged in investment and other market-related activities with respect to such
entities’ securities. If requested, you will assist us in preparing an additional version of the
Information Materials not containing MNPI (the “Public Information Materials”) to be distributed to
prospective Public Lenders.

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

You agree that MLPFS and/or Bank of America on your behalf may distribute the following documents
to all prospective Lenders, unless you advise MLPFS and Bank of America in writing (including by
email) within a reasonable time prior to their intended distributions that such material should
only be distributed to prospective Private Lenders: (a) administrative materials for prospective
Lenders such as lender meeting invitations and funding and closing memoranda, (b) notifications of
changes to Senior Credit Facilities’ terms and (c) drafts and final versions of definitive
documents with respect to the Senior Credit Facilities. If you advise us that any of the foregoing
items should be distributed only to Private Lenders, then MLPFS and Bank of America will not
distribute such materials to Public Lenders without further discussions with you. You agree
(whether or not any Information Materials are marked “PUBLIC”) that Information Materials made
available to prospective Public Lenders in accordance with this Commitment Letter shall not contain
MNPI.

 

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By executing this Commitment Letter, you agree to reimburse Bank of America and MLPFS from time to
time on demand for all reasonable out-of-pocket fees and expenses (including, but not limited to,
(a) the reasonable fees, disbursements and other charges of one lead counsel,
Winston & Strawn LLP, as counsel to the Lead Arranger and the Administrative Agent, and of
appropriate local counsel, if any, limited to one such counsel in each jurisdiction, to the Lenders
retained by the Lead Arranger or the Administrative Agent and (b) reasonable due diligence
expenses) incurred in connection with the Senior Credit Facilities, the syndication thereof, the
preparation of the definitive loan documentation and with any other aspect of the Transactions. You
acknowledge that we may receive a benefit, including without limitation, a discount, credit or
other accommodation, from any of such counsel based on the fees such counsel may receive on account
of their relationship with us including, without limitation, fees paid pursuant hereto.

You agree to indemnify and hold harmless Bank of America, MLPFS, each Lender and each of their
affiliates and their respective officers, directors, employees, agents, advisors and other
representatives (each, an “Indemnified Party”) from and against (and will reimburse each
Indemnified Party as the same are incurred for) any and all claims, damages, losses, liabilities
and reasonable and documented out-of-pocket expenses (including, without limitation, the reasonable
fees, disbursements and other charges of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (a) any aspect of the Transactions or any other
matters contemplated by this Commitment Letter or any related transaction or (b) the Senior Credit
Facilities and any other financings, or any use made or proposed to be made with the proceeds
thereof, except to the extent such claim, damage, loss, liability or expense is found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence, bad faith (including a material breach of this Commitment Letter) or
willful misconduct. In the case of an investigation, litigation or proceeding to which the
indemnity in this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by you, your equityholders or creditors, the
Target, any affiliate or creditor of the Target, the Seller or any affiliate or creditor of the
Seller or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated. You also agree that no
Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to you or your subsidiaries or affiliates or to your or their respective equity holders
or creditors or to the Target, the Seller or any of their respective affiliates or creditors
arising out of, related to or in connection with any aspect of the transactions contemplated
hereby, except to the extent of direct, as opposed to special, indirect, consequential or punitive,
damages determined in a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence, bad faith (including a material breach of
this Commitment Letter) or willful misconduct. Without derogating or in any manner limiting the
Indemnified Parties’ rights to indemnity under this paragraph, Holdings and the Borrower, on the
one hand, and the Indemnified Parties, on the other hand, shall not assert any claim for special,
indirect, consequential or punitive damages against each other, any of their affiliates, or any of
their respective directors, officers, partners, employees, attorneys and agents, on any theory of
liability, arising out of or otherwise relating to this Commitment Letter, the Fee Letter, the
Senior Credit Facilities, the Acquisition Agreement or the Transactions. Notwithstanding any other
provision of this Commitment Letter, (i) no Indemnified Party shall be liable for any damages
arising from the use by others of information or other materials obtained through electronic
telecommunications or other information transmission systems, other than for direct or actual
damages resulting from the gross negligence, bad faith or willful misconduct of such Indemnified
Party as determined by a final and nonappealable judgment of a court of competent jurisdiction and
(ii) the indemnity and reimbursement provisions of this Commitment Letter (including this paragraph
and the paragraph immediately preceding this paragraph) shall not be applicable in the case of
disputes solely between or among Indemnified Parties (provided that in the event of such a dispute
involving a claim or proceeding brought against the Administrative Agent or the Lead Arranger (in
each case, in its capacity as such) by other Indemnified Parties, the Administrative Agent or the
Lead Arranger (in each case, in its capacity as such), as applicable, shall be entitled (subject to
the other limitations and exceptions set forth in this and the preceding paragraph) to the benefit
of such indemnities) not relating to or in connection with acts or omissions by Holdings, any
Borrower or any of their respective affiliates.

 

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This Commitment Letter and the Fee Letter and the contents hereof and thereof are confidential and,
except for disclosure hereof or thereof (i) on a confidential basis to your officers, directors,
employees or affiliates or your accountants, attorneys and other professional advisors retained by
you in connection with the Senior Credit Facilities, (ii) in connection with the exercise of any
remedies under this Commitment Letter, the Fee Letter, the Senior Secured Facilities or any related
documents or the enforcement of rights hereunder or thereunder or (iii) as otherwise required in
any legal, judicial or administrative proceeding or as otherwise required by law or regulation, in
each case only to the extent such disclosure is determined on advice of your counsel so to be
required (and in each such case you agree, to the extent permitted by law, to inform us promptly in
advance thereof), may not be disclosed in whole or in part to any person or entity without our
prior written consent; provided, however, it is understood and agreed that you may disclose this
Commitment Letter (including the Summary of Terms) and only a redacted version of the Fee Letter
(redacted in a manner reasonably satisfactory to the Lead Arranger) after your acceptance of this
Commitment Letter and the Fee Letter, (a) on a confidential basis to the board of directors and
advisors of the Seller and the Target in connection with their consideration of the Transactions,
(b) in filings with the Securities and Exchange Commission and other applicable regulatory
authorities and stock exchanges and (c) to any rating agency. Bank of America and MLPFS hereby
notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56
(signed into law October 26, 2001) (the “Act”), each of them is required to obtain, verify and
record information that identifies you, which information includes your name and address and other
information that will allow Bank of America or MLPFS, as applicable, to identify you in accordance
with the Act.

You acknowledge that Bank of America and MLPFS or their affiliates (collectively, the “Commitment
Parties”) may be providing financing or other services to parties whose interests may conflict with
yours. The Commitment parties will not furnish confidential information obtained from you, the
Seller, the Target or any of their affiliates to any of their other customers and that they will
treat confidential information relating to you, the Seller, the Target and your and their
respective affiliates with the same degree of care as they treat their own confidential
information; provided, however, that in connection with any aspect of the Transactions and the
other services and transactions contemplated hereby, you agree that Bank of America and MLPFS are
permitted to access, use and share, on a confidential basis, with any of their bank or non-bank
affiliates, agents, advisors (legal or otherwise) or representatives any information concerning
you, the Target, the Seller or any of your or their respective affiliates that is or may
come into the possession of Bank of America, MLPFS or any of such affiliates. Bank of America and
MLPFS further advise you that they will not make available to you confidential information that
they have obtained or may obtain from any other customer. In connection with all aspects of the
Transactions and each other transaction contemplated by this Commitment Letter, you acknowledge and
agree, and acknowledge your affiliates’ understanding, that: (a) (i) the arranging and other
services described herein regarding the Senior Credit Facilities are arm’s-length commercial
transactions between you and your affiliates, on the one hand, and Bank of America and MLPFS, on
the other hand, (ii) you have consulted your own legal, accounting, regulatory and tax advisors to
the extent you have deemed appropriate, and (iii) you are capable of evaluating, and understand and
accept, the terms, risks and conditions of the Transactions and the other transactions contemplated
hereby; (b) (i) each of Bank of America and MLPFS, has been, is, and will be

 

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acting
solely as a principal and, except as otherwise expressly agreed in writing by the relevant parties, has not
been, is not, and will not be acting as an advisor, agent or fiduciary for you, any of your
affiliates or any other person or entity and (ii) neither Bank of America nor MLPFS has any
obligation to you or your affiliates with respect to the Transactions and the other transactions
contemplated hereby except those obligations expressly set forth herein; and (c) Bank of America
and MLPFS and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from yours and those of your affiliates, and Bank of America and
MLPFS have no obligation to disclose any of such interests to you or your affiliates. To the
fullest extent permitted by law, you hereby waive and release any claims that you may have against
Bank of America and MLPFS with respect to any breach or alleged breach of agency or fiduciary duty
in connection with any aspect of any transaction contemplated by this Commitment Letter.

This paragraph, the provisions of the immediately preceding five paragraphs, the provisions
regarding governing law and waiver of jury trial herein and the other provisions that are expressly
stated herein to survive termination of this Commitment Letter shall remain in full force and
effect regardless of whether any definitive documentation for the Senior Credit Facilities shall be
executed and delivered, and notwithstanding the termination of this Commitment Letter or any
commitment or undertaking of Bank of America or MLPFS hereunder; provided that you shall be
deemed released of your reimbursement and indemnification obligations hereunder upon the execution
of all definitive documentation for the Senior Credit Facilities and the initial extension of
credit thereunder.

This Commitment Letter and the Fee Letter may be executed in counterparts which, taken together,
shall constitute an original. Delivery of an executed counterpart of this Commitment Letter or the
Fee Letter by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall
be effective as delivery of a manually executed counterpart thereof.

 

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This Commitment Letter (including the Summary of Terms) and the Fee Letter shall be governed by,
and construed in accordance with, the laws of the State of New York. Each of you, Bank of America
and MLPFS hereby irrevocably waives any and all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this
Commitment Letter (including the Summary of Terms), the Fee Letter, the Transactions and the other
transactions contemplated hereby and thereby or the actions of Bank of America and MLPFS in the
negotiation, performance or enforcement hereof. This Commitment Letter (including the Summary of
Terms) and the Fee Letter embody the entire
agreement and understanding among Bank of America, MLPFS, you and your affiliates with respect to
the Senior Credit Facilities and supersedes all prior agreements and understandings relating to the
specific matters hereof. Those matters that are not covered or made clear herein or in the Summary
of Terms or the Fee Letter are subject to mutual agreement of the parties. No party has been
authorized by Bank of America or MLPFS to make any oral or written statements that are inconsistent
with this Commitment Letter. This Commitment Letter is not assignable by Holdings, WDT or the
Cayman Borrower without our prior written consent and is intended to be solely for the benefit of
the parties hereto and the Indemnified Parties.

This Commitment Letter and all commitments and undertakings of Bank of America and MLPFS hereunder
will expire at 8:00 a.m. (Eastern time) on March 7, 2011 unless you execute this Commitment Letter
and the Fee Letter and return them to us prior to that time (which may be by facsimile
transmission), whereupon this Commitment Letter (including the Summary of Terms) and the Fee Letter
(each of which may be signed in one or more counterparts) shall become binding agreements.
Thereafter, all commitments and undertakings of Bank of America and MLPFS hereunder will expire on
the earliest of (a) the date that is 12 months after the date hereof unless definitive
documentation for the Senior Credit Facilities is executed and delivered prior to such date, (b)
the closing of the Acquisition or the completion of the Refinancing without the use of the Senior
Credit Facilities, or (c) the termination or abandonment of the Acquisition Agreement without
consummation of the Acquisition.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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

	 	 	 	 	 
	 	Very truly yours,

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Sugeet Manchanda Madan
 	 
	 	 	Name:  	Sugeet Manchanda Madan 	 
	 	 	Title:  	Director 	 
	 
	 	MERRILL LYNCH, PIERCE, FENNER & 
SMITH
INCORPORATED

 	 
	 	By:  	/s/ Andrew M. Hensley
 	 
	 	 	Name:  	Andrew M. Hensley 	 
	 	 	Title:  	Director 	 

	 	 	 	 	 	 	 
	ACCEPTED AND AGREED TO	 	 
	AS OF THE DATE FIRST ABOVE WRITTEN:	 	 
	 
	 	 	 	 	 	 
	WESTERN DIGITAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Wolfgang U. Nickl	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Wolfgang U. Nickl	 	 
	 

	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	WESTERN DIGITAL TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Wolfgang U. Nickl	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Wolfgang U. Nickl	 	 
	 

	 	Title:
	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	WESTERN DIGITAL IRELAND, LTD.	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Michael C. Ray	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Michael C. Ray	 	 
	 

	 	Title:
	 	Vice President	 	 

Western Digital Corporation

Commitment Letter

Signature Page

 

 

 

SCHEDULE 1

SOURCES AND USES (in millions)

	 	 	 	 	 
	Term Loan proceeds
	 	$	2,000	 
	Revolving Loan Proceeds
	 	 	100	 
	Cash on hand of Cayman Borrower
	 	 	1,551	 
	Common Stock of Holdings
	 	 	750	 
	Unvested equity awards
	 	 	269	 
	 
	 	 	 
	Total Sources
	 	$	4,670	 
	 
	 	 	 
	 
	 	 	 	 
	Acquisition
	 	$	4,250	 
	Refinancing of existing debt
	 	 	350	 
	Estimated fees and expenses
	 	 	70	 
	 
	 	 	 
	Total Uses
	 	$	4,670	 
	 
	 	 	 

 

 

 

EXHIBIT A

SUMMARY OF TERMS AND CONDITIONS

WESTERN DIGITAL TECHNOLOGIES, INC.

$ 2,500,000,000 SENIOR CREDIT FACILITIES

Capitalized terms used but not otherwise defined herein shall have the meaning given thereto in the
Commitment Letter dated as of March 7, 2011 by and among Holdings, the Borrowers, Bank of America
and the Lead Arranger (the “Commitment Letter”) to which this Exhibit A is attached.

	 	 	 
	Holdings:

	 	Western Digital Corporation, a Delaware
corporation (“Holdings”).
	 
	 	 
	Borrowers:

	 	Western Digital Technologies, Inc., a
Delaware corporation (“WDT”) and Western
Digital Ireland, Ltd., a limited liability
company formed under the laws of the Cayman
Islands (the “Cayman Borrower” and, together
with WDT, the “Borrowers”).
	 
	 	 
	Guarantors:

	 	The obligations of (a) the Borrowers under
the Senior Credit Facilities and (b) any
Credit Party under any treasury management,
interest protection or other hedging
arrangements entered into with a Lender (or
any affiliate thereof) will be guaranteed by
Holdings and each existing and future direct
and indirect material domestic subsidiaries
of Holdings (collectively, in such capacity,
the “Guarantors”). All guarantees will be
guarantees of payment and not of collection.
	 
	 	 
	Administrative Agent:

	 	Bank of America, N.A. (“Bank of America”)
will act as sole administrative agent (in
such capacity, the “Administrative Agent”).
	 
	 	 
	Sole Lead Arranger and Sole Book Manager:

	 	Merrill Lynch, Pierce, Fenner & Smith
Incorporated will act as sole lead arranger
and sole book manager (in such capacity, the
“Lead Arranger”).
	 
	 	 
	Lenders:

	 	A syndicate of financial institutions
(including Bank of America) arranged by the
Lead Arranger, which institutions shall be
acceptable to the Borrowers and the
Administrative Agent (collectively, the
“Lenders”).

 

 

 

	 	 	 
	Senior Credit Facilities:

	 	An aggregate principal amount of up to
$2,500,000,000 will be available through the
following facilities:
	 
	 	 
	 

	 	Revolving Credit Facility: A $500,000,000
five-year revolving credit facility
available to be drawn by either of the
Borrowers (the “Revolving Credit Facility”).
The Revolving Credit Facility will include
a $50 million sublimit for the issuance of
standby letters of credit denominated in
U.S. dollars only (each a “Letter of
Credit”) and a $20 million sublimit for
swingline loans (each a “Swingline Loan”).
Letters of Credit will be issued by Bank of
America (in such capacity, the “Fronting
Bank”) and Swingline Loans will be made
available by Bank of America, in each case
as provided below, and each Revolving Lender
will purchase an irrevocable and
unconditional participation in each Letter
of Credit and each Swingline Loan. The
definitive documentation shall contain
customary protections for the Fronting Bank
and the provider of Swingline Loans with
respect to Defaulting Lenders (to be defined
in the definitive documentation). Letters of
Credit may be issued on the Closing Date to
backstop or replace letters of credit
outstanding of Holdings and any of its
subsidiaries on the Closing Date or for
other general corporate purposes.
	 
	 	 
	 

	 	Term A-1 Facility: A $1,750,000,000 term
loan facility, all of which will be drawn by
the Cayman Borrower on the Closing Date.
	 
	 	 
	 

	 	Term A-2 Facility: A $250,000,000 term loan
facility, all of which will be drawn by WDT
on the Closing Date (together with Term A-1
Facility, the “Term Loan Facilities”);
	 
	 	 
	 

	 	provided that the allocation of the
$2,000,000,000 aggregate principal amount of
the Term Loan Facilities between the Term
A-1 Facility and the Term A-2 Facility may
be adjusted by Holdings and the Borrowers on
the Closing Date, at their option.
	 
	 	 
	 

	 	The Revolving Credit Facility and the Term
Loan Facilities are collectively referred to
herein as the “Senior Credit Facilities”.

 

2

 

	 	 	 
	Increase Option:

	 	Senior Credit Facilities will include
provisions for increasing the principal
amount of the Revolving Credit Facility and
the Term Loan Facilities in amounts and
pursuant to other terms that are customary
and are mutually agreed by the
Administrative Agent and the Borrowers.
	 
	 	 
	Swingline Option:

	 	Swingline Loans will be made available at
Bank of America’s sole discretion on a same
day basis in an aggregate amount not
exceeding $20,000,000 and in minimum amounts
of $500,000 and integral multiples of
$100,000 in excess thereof. The Borrowers
must repay each Swingline Loan in full no
later than ten (10) business days after such
loan is made.
	 
	 	 
	Purpose:

	 	The proceeds of the Senior Credit Facilities
shall be used (i) to finance a portion of
the purchase price of the Acquisition, (ii)
to finance the Refinancing, (iii) to pay
fees, costs and expenses in connection with
the Transactions and (iv) for working
capital, capital expenditures, and other
lawful corporate purposes (including
permitted acquisitions).
	 
	 	 
	Closing Date:

	 	The execution of definitive loan
documentation, expected to occur on or about
July 5, 2011, but in no event to occur after
the date that is 12 months after the date of
the Commitment Letter (the “Closing Date”).
	 
	 	 
	Interest Rates:

	 	As set forth in Addendum I to this Exhibit A.
	 
	 	 
	Maturity:

	 	The Revolving Credit Facility shall
terminate and all amounts outstanding
thereunder shall be due and payable in full
five years after the Closing Date.
	 
	 	 
	 

	 	Each of the Term Loan Facilities shall be
subject to repayment according to the
Scheduled Amortization (as defined below),
with the final payment of all amounts
outstanding, plus accrued interest, being
due five years after the Closing Date.
	 
	 	 
	Availability/Scheduled Amortization:

	 	Revolving Credit Facility: Loans under the
Revolving Credit Facility may be made on a
revolving basis up to the full amount of the
Revolving Credit Facility (less any
outstanding Letters of Credit and related
unreimbursed reimbursement obligations), and
Letters of Credit may be issued up to the
sublimit for Letters of Credit.
	 
	 	 
	 

	 	Term Loan Facilities: Each of the Term Loan
Facilities will be subject to quarterly
amortization of principal of 2.5% of initial
aggregate principal amount thereof on the
Closing Date (subject to adjustment for
optional prepayments), with the remainder
paid on the maturity date of the applicable
Term Loan Facility (the “Scheduled
Amortization”).

 

3

 

	 	 	 
	Mandatory Prepayments and Commitment Reductions:

	 	None.
	 
	 	 
	Optional Prepayments and Commitment Reductions:

	 	The Borrowers may prepay any outstanding
amounts of the Revolving Credit Facility or
either of the Term Loan Facilities, at its
option, in whole or in part at any time
without premium or penalty, subject to
reimbursement of the Lenders’ breakage and
redeployment costs in the case of prepayment
of LIBOR borrowings. Each such prepayment
of a Term Loan Facility shall be applied as
the Borrowers may direct. The unutilized
portion of the commitments under the
Revolving Credit Facility may be irrevocably
reduced or terminated by the Borrowers at
any time without penalty.
	 
	 	 
	Security:

	 	None.
	 
	 	 
	Conditions Precedent to Closing:

	 	As set forth in the Conditions Annex
attached as Exhibit B to the Commitment
Letter.
	 
	 	 
	Conditions Precedent to All Extensions of Credit:

	 	Each extension of credit under the Senior
Credit Facilities, other than the initial
extensions of credit on the Closing Date,
will be subject to satisfaction of the
following conditions: (i) all of the
representations and warranties in
the loan documentation shall be true and
correct in all material respects (or, with
respect to representations and warranties
modified by materiality standards, in all
respects) as of the date of such extension
of credit (except to the extent such
representations and warranties relate to an
earlier date, as of such earlier date) and
(ii) no event of default under the Senior
Credit Facilities or incipient default shall
have occurred and be continuing, or would
result from such extension of credit.

 

4

 

	 	 	 
	Representations and Warranties:

	 	Only the following, which shall apply to
Holdings and each of its material
subsidiaries, subject to customary and other
exceptions and qualifications to be agreed
upon: (i) legal existence, qualification and
power; (ii) due authorization and no
contravention of law, contracts or
organizational documents; (iii) governmental
and third party approvals and consents; (iv)
enforceability; (v) accuracy and
completeness of specified financial
statements and other information; (vi) no
material litigation; (vii) use of proceeds
and not engaging in business of
purchasing/carrying margin stock; (viii)
status under Investment Company Act; (ix)
accuracy of disclosure; (x) compliance with
laws; and (xi) solvency.
	 
	 	 
	Affirmative and Negative Covenants:

	 	Only the following, which shall apply to
Holdings and each of its material
subsidiaries, subject to customary and other
exceptions and qualifications to be agreed
upon:
	 
	 	 
	 

	 	(a)    Affirmative
Covenants — (i) delivery of financial
statements, compliance certificates and
other information; (ii) delivery of notices
(of any default; material litigation,
government proceedings or investigations;
or material change in accounting or
financial reporting practices); (iii)
payment of taxes; (iv) preservation of
existence; (v) maintenance of books and
records, properties and insurance; (vi)
compliance with laws (including
environmental laws and ERISA); (vii)
inspection rights; (ix) use of proceeds; and
(x) covenant to guarantee obligations.

	 
	 	 
	 

	 	(b)   Negative Covenants
- Restrictions on (i) liens; (ii)
indebtedness, (including guarantees and
other contingent obligations); (iii) mergers
and other fundamental changes (including
sales and other dispositions of all or
substantially all of Holdings’ property or
assets); (iv) share repurchases, payments of
dividends and other distributions (A) on an
unlimited basis so long as the Consolidated
Leverage Ratio (pro forma for such event) is
less than 2.00 to 1.00 and (B) at any other
time not to exceed $100,000,000 during the
term of the Senior Credit Facilities (and
with certain other exceptions to be agreed);
(v) changes in the nature of business; (vi)
transactions with affiliates; (vii) use of
proceeds; (viii) amendments of
organizational documents; and (ix) changes
in accounting policies or reporting
practices.

 

5

 

	 	 	 
	Financial Covenants:

	 	Only the following:
	 
	 	 
	 

	 	•     Consolidated
Interest Coverage Ratio (with financial
definitions to be agreed upon) not to be
less than 3.0 to 1.0 as of the last day of
any fiscal quarter of Holdings.

	 
	 	 
	 

	 	•     Consolidated
Leverage Ratio (with financial definitions
to be agreed upon) not to be greater than
2.5 to 1.0 as of the last day of any fiscal
quarter of Holdings. 

	 
	 	 
	 

	 	Each of the ratios referred to above will be
calculated on a consolidated basis for
Holdings and its Subsidiaries for each
consecutive four fiscal quarter period, and
shall be computed on a pro forma basis for
the Transactions and for any other
acquisitions and dispositions made during
any four-quarter period.
	 
	 	 
	Events of Default:

	 	Only the following, which shall apply to the
Borrowers, and where applicable, Holdings
and each of their respective material
subsidiaries, subject to customary and other
exceptions and qualifications to be agreed
upon: (i) nonpayment of principal,
interest, fees or other amounts; (ii)
failure to perform or observe covenants set
forth in the loan documentation within a
specified period of time, where customary
and appropriate, after such failure; (iii)
any representation or warranty proving to
have been incorrect when made or confirmed
in any material respect (or, with respect to
representations and warranties qualified by
materiality standards, in any respect); (iv)
cross-default to other indebtedness in an
amount to be agreed; (v) bankruptcy and
insolvency defaults (with grace period for
involuntary proceedings); (vi) inability to
pay debts; (vii) monetary judgment defaults
in an amount to be agreed and material
nonmonetary judgment defaults; (viii)
customary ERISA defaults; (ix) actual or
asserted invalidity or impairment of any
loan documentation; and (x) change of
control.

 

6

 

	 	 	 
	Assignments and Participations:

	 	Revolving Credit Facility
Assignments: Subject to the consents described below
(which consents will not be unreasonably
withheld or delayed), each Lender will be
permitted to make assignments to other
financial institutions in respect of the
Revolving Credit Facility in a minimum
amount equal to $5 million.
	 
	 	 
	 

	 	Term Loan Facility Assignments: Subject to
the consents described below (which consents
will not be unreasonably withheld or
delayed), each Lender will be permitted to
make assignments to other financial
institutions in respect of either Term Loan
Facility in a minimum amount equal to $1
million.
	 
	 	 
	 

	 	Consents: The consent of Borrowers will be
required unless (i) an Event of Default has
occurred and is continuing or (ii) the
assignment is to a Lender, an affiliate of a
Lender or an Approved Fund (as such term
shall be defined in the loan documentation).
The consent of the Administrative Agent
will be required for any assignment (i) in
respect of the Revolving Credit Facility or
an unfunded commitment under either Term
Loan Facility to an entity that is not a
Lender with a commitment in respect of the
applicable Facility, an affiliate of such
Lender or an Approved Fund in respect of
such Lender or (ii) of any outstanding term
loan to an entity that is not a Lender, an
affiliate of a Lender or an Approved Fund.
The consent of the Fronting Bank and the
lender of any Swingline Loan will be
required for any assignment under the
Revolving Credit Facility.
	 
	 	 
	 

	 	Assignments Generally: An assignment fee in
the amount of $3,500 will be charged with
respect to each assignment unless waived by
the Administrative Agent in its sole
discretion. Each Lender will also have the
right, without consent of the Borrowers or
the Administrative Agent, to assign as
security all or part of its rights under the
loan documentation to any Federal Reserve
Bank.
	 
	 	 
	 

	 	Participations: Lenders will be permitted
to sell participations with voting rights
limited to significant matters such as
changes in amount, rate, maturity date and
releases of (a) the guaranty by Holdings,
(b) if relevant to such participation, the
guaranty of the obligations of the Cayman
Borrower by WDT, and (c) all or
substantially all of the value of the
guaranties of the Borrowers’ obligations
made by the other Guarantors.

 

7

 

	 	 	 
	Waivers and Amendments:

	 	Amendments and waivers of the provisions of
the loan agreement and other definitive
credit documentation will require the
approval of Lenders holding loans and
commitments representing more than 50% of
the aggregate amount of the loans and
commitments under the Senior Credit
Facilities (the “Required Lenders”), except
that (a) the consent of each Lender shall be
required with respect to (i) the waiver of
certain conditions precedent to the initial
credit extension under the Senior Credit
Facility, (ii) the amendment of certain of
the pro rata sharing provisions, (iii) the
amendment of the voting percentages of the
Lenders, and (iv) the release of (A) the
guaranty by Holdings or (B) all or
substantially all of the value of the
guaranties of the Borrowers’ obligations
made by the other Guarantors; (b) the
consent of each Lender directly and
adversely affected thereby shall be required
with respect to (i) increases or extensions
in the commitment of such Lender, (ii)
reductions of principal, interest (other
than waivers of default interest) or fees,
(iii) extensions of scheduled maturities or
times for payment of such Lender and (iv)
the release of WDT as guarantor of the
obligations of the Cayman Borrower and (c)
the consent of the Lenders holding more than
50% of the loans and commitments under the
applicable Senior Credit Facility shall be
required with respect to certain other
matters (including, without limitation,
requiring the consent of Lenders holding a
majority of the commitments and outstanding
loans under the Revolving Credit Facility in
order for any amendment, consent or waiver
to have the effect of permitting the
conditions precedent to a draw under the
Revolving Credit Facility to be satisfied
that would not otherwise be satisfied in the
absence of such amendment, consent or
waiver).
	 
	 

	 	Notwithstanding the foregoing, the
definitive loan documentation shall include
language to permit one or more “amend and
extend” transactions as mutually agreed
upon.

 

8

 

	 	 	 
	Indemnification:

	 	Holdings and the Borrowers will indemnify
and hold harmless the Administrative Agent,
the Lead Arranger, each Lender and their
respective affiliates and their partners,
directors, officers, employees, agents and
advisors (the “Indemnitees”) from and
against all losses, claims, damages,
liabilities and reasonable and documented
out-of-pocket expenses arising out of or
relating to the Senior Credit Facilities,
the Transactions, the Borrowers’ use of loan
proceeds or the commitments, including, but
not limited to, reasonable attorneys’ fees
(including the allocated cost of internal
counsel) and settlement costs, except to the
extent such loss, claim, damage, liability
or expense is found in a final,
nonappealable judgment by a court of
competent jurisdiction to have resulted from
such Indemnitee’s gross negligence, bad
faith (including, without limitation, a
material breach of the Senior Credit
Facilities) or willful misconduct. Such
indemnities (i) for fees and expenses of
legal counsel shall be limited to fees and
expenses of one outside legal counsel for
the Administrative Agent and one outside
legal counsel for the other Indemnitees,
taken together, absent a conflict of
interest, and any necessary local or foreign
counsel (limited to one or, in the case of a
conflict of interest, two such local or
foreign counsel in each jurisdiction) and
(ii) shall not be applicable in the case of
disputes solely between or among Indemnitees
(provided that in the event of such a
dispute involving a claim or proceeding
brought against the Administrative Agent or
the Lead Arranger (in each case, in its
capacity as such) by other Indemnitees, the
Administrative Agent or the Lead Arranger
(in each case, in its capacity as such), as
applicable, shall be entitled (subject to
the other limitations and exceptions set
forth above) to the benefit of such
indemnities) not relating to or in
connection with acts or omissions by
Holdings, any Borrower or any of their
respective affiliates. Without derogating
or in any manner limiting the Indemnitees’
rights to indemnity under this provision,
Holdings and the Borrower, on the one hand,
and the Indemnitees, on the other hand,
shall not assert any claim for special,
indirect, consequential or punitive damages
against each other, any of their affiliates,
or any of their respective directors,
officers, partners, employees, attorneys and
agents, on any theory of liability, arising
out of or otherwise relating to the Senior
Credit Facilities, the Acquisition Agreement
or the Transactions. This indemnification
shall survive and continue for the benefit
of all such persons or entities.
	 
	 	 
	Governing Law:

	 	State of New York.
	 
	 	 
	Pricing/Fees/ Expenses:

	 	As set forth in Addendum I.

 

9

 

	 	 	 
	Other:

	 	Each of the parties shall (i) waive its
right to a trial by jury and (ii) submit to
New York jurisdiction. The loan
documentation will contain customary
increased cost, withholding tax, capital
adequacy and yield protection, replacement
of lender and Defaulting Lender provisions,
it being understood that (a) the commitments
and loans of Defaulting Lenders shall be
excluded for the purpose of making a
determination of Required Lenders (as
defined below), (b) Defaulting Lenders will
have no vote under the loan documentation,
except that the commitment of Defaulting
Lenders may not be increased or extended
without the consent of such Defaulting
Lender and any waiver, amendment or
modification requiring the consent of all
Lenders or each affected Lender that by its
terms affects any Defaulting Lender more
adversely than other affected Lenders shall
require the consent of such Defaulting
Lender, (c) Defaulting Lenders may be
replaced by the Borrower, and (d) no Lender,
for so long as it is a Defaulting Lender,
shall be entitled to receive (and the
Borrower shall not be obligated to pay to
such Defaulting Lender) either (i) a Letter
of Credit fee on its pro rata share of any
issued and outstanding Letter of Credit
(except to the extent it has provided cash
collateral therefor, and though such Letter
of Credit fee may be payable to the Fronting
Bank) or (ii) a commitment fee.

 

10

 

ADDENDUM I

PRICING, FEES AND EXPENSES

	 	 	 
	Interest Rates:

	 	The interest rates per annum applicable to the
Senior Credit Facilities (other than in respect
of Swingline Loans) will be LIBOR plus the
Applicable Margin (as defined below) or, at the
option of the applicable Borrower, the Base Rate
(to be defined as the highest of (x) the Bank of
America prime rate, (y) the Federal Funds rate
plus 0.50% and (z) the LIBOR Rate applicable for
an interest period of one month plus 1.00%) plus
the Applicable Margin. “Applicable Margin” means
a percentage per annum to be determined in
accordance with the Pricing Grid (as defined
below). Each Swingline Loan shall bear interest
at the Base Rate plus the Applicable Margin for
Base Rate loans or such other rate as may be
agreed by the lender of Swingline Loans.
	 
	 	 
	 

	 	The applicable Borrower may select interest
periods of one, two, three or six months for
LIBOR loans, subject to availability. Interest
shall be payable at the end of the selected
interest period, but no less frequently than
quarterly.
	 
	 	 
	 

	 	During the continuance of any payment default
under the loan documentation, the Applicable
Margin on the unpaid principal amount of such
over-due loans under the Senior Credit Facilities
shall increase by 2% per annum.
	 
	 	 
	Commitment Fee:

	 	Commencing on the Closing Date, a commitment fee
of a percentage per annum determined in
accordance with the Pricing Grid shall be payable
on the actual daily unused portions of the Senior
Credit Facility. Such fee shall be payable
quarterly in arrears, commencing on the first
quarterly payment date to occur after the Closing
Date. Swingline Loans will not be considered
utilization of the Revolving Credit Facility for
purposes of this calculation.
	 
	 	 
	Letter of
	 	 
	Credit Fees:

	 	Letter of Credit fees shall be payable on the
maximum amount available to be drawn under each
Letter of Credit at a rate per annum equal to the
Applicable Margin from time to time applicable to
LIBOR loans under the Revolving Credit Facility.
Such fees will be (a) payable quarterly in
arrears, commencing on the first quarterly
payment date to occur after the Closing Date, and
(b) shared proportionately by the Lenders under
the Revolving Credit Facility. In addition, a
fronting fee shall be payable to the Fronting
Bank for its own account, in the amount and at
the times set forth in the Fee Letter.

 

 

 

	 	 	 
	Ticking Fees:

	 	You will pay to the Administrative Agent, for the
pro rata account of the Lenders (including Bank
of America) based on their commitments and
calculated during the relevant period of such
commitments, a commitment fee of 0.35% per annum
(calculated on the basis of actual number of days
elapsed in a year of 360 days) on the aggregate
principal amount of the Senior Credit Facilities
as set forth in the Commitment Letter, such fee
to accrue from and after the earlier of (a) the
date on which a Successful Syndication is
achieved and (b) April 20, 2011, and to be
payable in full upon the earlier of (i) the
Closing Date and (ii) the date of termination of
the commitment under the Commitment Letter in
accordance with its terms. Unless otherwise
consented to by the Administrative Agent, if the
Closing Date occurs then the commitment of each
Lender shall be computed based on such Lender’s
share of the Senior Credit Facilities funded by
it on the Closing Date.
	 
	 	 
	Pricing Grid:

	 	The Applicable Margin, the Commitment Fee and the
Letter of Credit fee shall, at the times
provided, be determined in accordance with the
following pricing grid (the “Pricing Grid”), with
the Consolidated Leverage Ratio at closing being
calculated pro forma for the Transactions:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 	 	 	 	 	 
	 	 	Margin for	 	 	Applicable	 	 	 	 
	 	 	LIBOR	 	 	Margin for 	 	 	 	 
	 	 	Loans/Letter of	 	 	Base Rate	 	 	Commitment	 
	Consolidated Leverage Ratio	 	Credit Fees	 	 	Loans	 	 	Fee	 
	Less than or equal to 0.50 to 1.00
	 	 	1.50	%	 	 	0.50	%	 	 	0.25	%
	Greater than 0.50 to 1.00, but less than or equal to 1.25 to 1.00
	 	 	2.00	%	 	 	1.00	%	 	 	0.35	%
	Greater than 1.25 to 1.00, but less than or equal to 2.00 to 1.00
	 	 	2.25	%	 	 	1.25	%	 	 	0.40	%
	Greater than 2.00 to 1.00
	 	 	2.50	%	 	 	1.50	%	 	 	0.50	%

 

2

 

	 	 	 
	Calculation of
	 	 
	Interest and Fees:

	 	Other than calculations in respect of
interest at the Bank of America prime
rate or the federal funds rate (which
shall be made on the basis of actual
number of days elapsed in a 365/366
day year), all calculations of
interest and fees shall be made on the
basis of actual number of days elapsed
in a 360 day year.
	 
	 	 
	Cost and Yield Protection;
	 	 
	Defaulting Lenders:

	 	Customary for transactions and
facilities of this type, including,
without limitation, in respect of
breakage or redeployment costs
incurred in connection with
prepayments, changes in capital
adequacy and capital requirements or
their interpretation, illegality,
unavailability, reserves without
proration or offset and payments free
and clear of withholding or other
taxes. The definitive loan
documentation shall also contain
provisions relating to cash
collateralization for, and/or
reallocation among other Lenders of
participations in, Letters of Credit
in the event any lender becomes a
Defaulting Lender (limited to the
Defaulting Lender’s pro rata
reimbursement obligations in respect
of Letters of Credit), as well as
certain other Defaulting Lender
provisions.
	 
	 	 
	Expenses:

	 	The Borrowers will pay all reasonable
costs and documented out-of-pocket
expenses of the Administrative Agent
and the Lead Arranger associated with
the preparation, due diligence,
administration, syndication and
closing of all loan documentation,
including, without limitation, the
legal fees of one lead counsel to the
Administrative Agent and the Lead
Arranger and of appropriate local
counsel, if any, limited to one such
counsel is each jurisdiction,
regardless of whether or not the
Senior Credit Facilities are closed.
The Borrowers will also pay the
expenses of the Administrative Agent,
the Lead Arranger and each Lender in
connection with the enforcement of any
of the loan documentation.

 

3

 

EXHIBIT B

(to Commitment Letter)

Conditions Annex

Capitalized terms used but not otherwise defined herein shall have the meaning given thereto in the
Commitment Letter dated as of March 7, 2011 by and among Holdings, the Borrowers, Bank of America
and the Lead Arranger (the “Commitment Letter”) to which this Exhibit B is attached, or if
not defined therein, in the Summary of Terms and Conditions attached to the Commitment Letter as
Exhibit A (the “Summary of Terms”).

Closing Conditions

The closing of the Senior Credit Facilities and the initial extension of credit under the Senior
Credit Facilities will be subject to satisfaction of the following conditions precedent:

1. The negotiation, execution and delivery of definitive documentation with respect to the Senior
Credit Facilities in customary form incorporating the terms and conditions outlined set forth in
the Commitment Letter and the Summary of Terms and, to the extent not inconsistent therewith,
otherwise reasonably satisfactory to Holdings, the Borrowers, the Lead Arranger, the Administrative
Agent and the applicable Lenders.

2. The Administrative Agent and the Lead Arranger shall have received:

a. such customary corporate resolutions, certificates and other documents as the Administrative
Agent shall customary and reasonably require and reasonably satisfactory opinions of (i) counsel to
Holdings, the Borrowers and the Guarantors (which shall cover, among other things, authority,
legality, validity, binding effect and enforceability of the documents for the Senior Credit
Facilities), and (ii) appropriate local counsel (which, in each case, shall expressly permit in a
customary manner reliance by successors and permitted assignees of the Administrative Agent and the
Lenders);

b. evidence of receipt of all material governmental, shareholder and third party consents
(including Hart-Scott-Rodino clearance) and approvals necessary in connection with the Transactions
expiration of all applicable waiting periods without any adverse action being taken by any
competent authority that prevents or imposes any material adverse conditions on Holdings, the
Borrowers, the Target or their respective subsidiaries taken as a whole or the consummation of the
Transactions;

c. a pro forma consolidated balance sheet as of the end of the most recently ended fiscal year and
fiscal quarter at least 45 days before the Closing Date and related statements of income and cash
flows of Holdings and its subsidiaries after giving effect to all elements of the Transactions to
be effected on or before the Closing Date for the most recently ended fiscal year and fiscal
quarter ended at least 45 days before the Closing Date, together with a certificate of the chief
financial officer of Holdings to the effect that such statements accurately present in all material
respects the pro forma financial position of the Holdings and its subsidiaries in accordance with
GAAP (and in any event after giving effect to the Transactions);

 

4

 

d. certification as to the solvency of Holdings and its subsidiaries on a consolidated basis (after
giving effect to the Transactions and the incurrence and repayment of indebtedness related thereto)
from the chief financial officer of Holdings, in form and substance satisfactory to the
Administrative Agent and demonstrating that after giving pro forma effect to the Transactions, the
Consolidated Leverage Ratio is not greater than 1.50 to 1.00;

e. all documentation and other information required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including, without
limitation, the PATRIOT Act, that has been reasonably requested not less than five business days
prior to the Closing Date;

f. payment of all accrued reasonable fees and expenses of the Lead Arranger, the Administrative
Agent (including the reasonable fees and expenses of counsel (including any reasonably necessary
local counsel) for the Administrative Agent and the Lead Arranger) to the extent a reasonably
detailed invoice has been delivered to the Borrowers at least two business days prior to the
scheduled Closing Date (except as otherwise reasonably agreed by the Borrowers); and

g. the audited consolidated balance sheets and related consolidated statements of income and cash
flows of the Target and its subsidiaries for the fiscal years ended December 31, 2007, 2008, 2009
and, if available, 2010, and, to the extent available, the unaudited consolidated balance sheets
and related consolidated statements of income and cash flows of the Target and its subsidiaries for
each fiscal quarter ended after December 31, 2010 but not less than 45 days prior to the Closing
Date.

3. The Acquisition shall be consummated pursuant to the Acquisition Agreement, substantially
concurrently with the initial funding of the Senior Credit Facilities, without giving effect to any
amendments thereto or any consents or waivers that, in any such case, are materially adverse to the
Lenders in their capacities as Lenders (it being understood that any modification or amendment to
the definition of “Material Adverse Effect” or equivalent term in the Acquisition Agreement shall
be deemed to be materially adverse to the Lenders in their capacities as Lenders), without the
consent of the Lead Arranger, such consent not to be unreasonably withheld or delayed. The Lead
Arranger hereby acknowledges that it is satisfied with the Stock Purchase Agreement dated as of the
date hereof by and among Holdings, the Cayman Borrower, the Seller and the Target (the “Acquisition
Agreement”), and the disclosure schedules and exhibits thereto.

4. There shall not have occurred any circumstance, development, event, condition, effect or change
(a) since July 2, 2010 that, individually or in the aggregate, has had an Acquisition Agreement
Material Adverse Effect (defined below) on Holdings or the Cayman Borrower or (b) since December
31, 2010 that, individually or in the aggregate, has had or could reasonably be expected to have an
Acquisition Agreement Material Adverse Effect on the Target.

 

5

 

“Acquisition Agreement Material Adverse Effect” means any event, condition, change, effect,
omission or occurrence which, individually or together with any other event, condition, change,
effect, omission or occurrence occurring or coming into being after the date of the Acquisition
Agreement that, (a) has had a material adverse effect or material adverse change on the assets,
liabilities, properties, business, financial condition or results of operations of the applicable
person and its subsidiaries, taken as a whole; except if due to (i) changes that adversely
affect either the United States or global economy generally or the industry in which Holdings or
the Target and their respective subsidiaries operate, except to the extent that such changes have a
materially disproportionate effect on the applicable Party and its subsidiaries, taken as a whole,
as compared to the impact on their principal competitors; (ii) the announcement, pendency or
consummation of the transactions contemplated by the Acquisition Agreement, including, any
resulting shortfalls or declines in unit sales, revenue, margins or profitability, loss of
employees, cancellations of or delays in work for customers or other adverse customer reactions to
the Acquisition Agreement; (iii) any decrease in the market price or trading volume of Holdings’
common stock, in and of itself (it being understood that the underlying cause of any such decrease
may be taken into consideration); (iv) any failure to meet published analyst estimates of revenue,
earnings or results of operations or failure to meet internal budgets, projects or forecasts of
revenue, earnings or other financial performance or results of operations (it being understood that
the underlying cause of any such failure may be taken into consideration); (v) acts of war or
terrorism, which do not have a materially disproportionate impact on such Party and its
subsidiaries, taken as a whole, as compared to the impact on its principal competitors; (vi) any
changes in GAAP, changes in the interpretation of GAAP, or changes in any laws; (vii) the failure
of the Cayman Borrower to consent to any of the actions proscribed in Section 6.1 of the
Acquisition Agreement where such failure to consent would be a breach by the Cayman Borrower of
Section 6.1 of the Acquisition Agreement or (ix) the performance of the Acquisition Agreement
(including compliance with the covenants therein) or the failure to take any action prohibited by
the Acquisition Agreement; or (b) has materially impaired the ability of the applicable person
and/or its subsidiaries to consummate the transactions contemplated by the Acquisition Agreement.

5. Prior to or substantially concurrently with the Closing Date, the Refinancing, including the
payment in full of all principal, interest, fees, expenses and other amounts outstanding under or
in connection with the Existing Credit Agreement shall have been consummated and all such
obligations and indebtedness shall be terminated and any liens securing any such obligations shall
have been terminated.

6. The Administrative Agent shall have been provided with the Information Materials (including the
Lender’s presentation) to be used in connection with the syndication of the Senior Credit
Facilities and shall have been afforded a period of at least 30 consecutive days (excluding
traditional blackout and holiday periods in the bank market), or such shorter time as may be agreed
to by the Administrative Agent, after receipt of the Information Materials (including the Lender’s
presentation) to syndicate the Senior Credit Facilities, with such syndication and assignments
resulting therefrom being expressly subject to the proviso in the fifth paragraph of the Commitment
Letter.

7. Prior to the occurrence of the Syndication Assistance Termination Date, unless consented to by
the Lead Arranger, there shall be no competing offering, placement or arrangement of any material
debt securities or bank financing by or on behalf of the Borrowers or any of their subsidiaries or
affiliates (after giving effect to the Acquisition).

8. Subject to the Certain Funds Provision, all of the Specified Representations in the definitive
loan documentation and all of the Specified Acquisition Agreement Representations shall be true and
correct in all material respects (or, with respect to representations and warranties modified by
materiality standards, in all respects) as of the date of such extension of credit (except to the
extent such representations and warranties relate to an earlier date, as of such earlier date).

 

6exv10w6

Exhibit 10.6

FORM OF

REGISTRATION RIGHTS AGREEMENT

BY AND BETWEEN

PROVIDENT MORTGAGE CAPITAL ASSOCIATES, INC.

AND

CERTAIN PERSONS LISTED ON SCHEDULE 1 HERETO

dated as of

                    , 2011

 

 

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of           , 2011, is made and entered into by and
between Provident Mortgage Capital Associates, Inc., a Maryland corporation (the
“Company”), and certain persons listed on Schedule 1 hereto (such persons, in their
capacity as holders of Registrable Shares, the “Holders” and each a “Holder”).

RECITALS

     WHEREAS, the Company has prepared a registration statement on Form S-11 (File No. 333-172670)
with respect to the issuance and sale of its common stock, par value $0.01 per share (the
“Common Stock”), with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to which the
Company intends to conduct an underwritten initial public offering of shares of the Company’s
Common Stock (the “IPO”);

     WHEREAS, concurrent with the consummation of the IPO, the Company desires to issue and sell,
and the Holders desire to purchase, upon the terms and conditions set forth in those certain
Private Placement Purchase Agreements, dated as of
                    ,
2011 (each, a “Private
Placement Purchase Agreement”),             shares of Common Stock (the “Private Placement
Shares”);

     WHEREAS, in order to induce the Holders to purchase the Private Placement Shares from the
Company, the Company has agreed to provide to the Holders the registration rights set forth in this
Agreement; and

     WHEREAS, the execution of this Agreement is a condition to the closing under the Private
Placement Purchase Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

     Section 1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

     “Agreement” shall mean this Registration Rights Agreement as originally executed and
as amended, supplemented or restated from time to time.

     “Board” shall mean the Board of Directors of the Company.

     “Business Day” shall mean Monday, Tuesday, Wednesday, Thursday, and Friday that is
not a day on which banking institutions in New York or other applicable places where such act is to
occur are authorized or obligated by applicable law, regulation or executive order to close.

     “Common Stock” shall have the meaning set forth in the Recitals hereof.

     “Commission” shall have the meaning set forth in the Recitals hereof.

     “Company” shall have the meaning set forth in the introductory paragraph hereof.

     “Controlling Person” shall have the meaning set forth in Section 5(a) of this
Agreement.

- 2 -

 

     “Depositary” shall mean The Depository Trust Company, or any other depositary
appointed by the Company, provided, however, that such depositary must have an address in the
Borough of Manhattan, in the City of New York.

     “End of Suspension Notice” shall have the meaning set forth in Section 3(b) of
this Agreement.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or any
corresponding provision of succeeding law) and the rules and regulations thereunder.

     “FINRA” shall mean the Financial Industry Regulatory Authority.

     “Holder” shall mean each holder of the Common Stock, listed in Schedule 1
hereto, in his, her or its capacity as a holder of Registrable Shares and their direct and indirect
transferees who agree to be bound by the terms and conditions of this Agreement. For purposes of
this Agreement, the Company may deem and treat the registered holder of a Registrable Share as the
Holder and absolute owner thereof, unless notified to the contrary in writing by the registered
Holder thereof.

     “IPO” shall have the meaning set forth in the Recitals hereof.

     “Liabilities” shall have the meaning set forth in Section 5(a)(i) of this
Agreement.

     “Management Agreement” shall mean the management agreement, dated as of                     ,
2011, by and among the Company, PMCA Asset I, LLC, PMCA Asset II, LLC and the Manager.

     “Manager” shall mean PMF Advisors, LLC, a Delaware limited liability company.

     “Manager Shares” means at any time the shares of Common Stock issued by the Company to
the Manager as payment for the base management fee and incentive fee pursuant to and in accordance
with the terms and provisions of the Management Agreement, together with any class of equity
securities of the Company or of a successor to the entire business of the Company which are issued
in exchange for the Manager Shares.

     “Maximum Threshold” shall have the meaning set forth in Section 2(b)(ii) of
this Agreement.

     “Non-Holder Securities” shall have the meaning set forth in Section 2(b)(iii)
of this Agreement.

     “Person” shall mean any individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization or other governmental or
legal entity.

     “Piggyback Registration” shall have the meaning set forth in Section 2(b)(i)
of this Agreement.

     “Private Placement Purchase Agreement” shall have the meaning set forth in the
Recitals hereof.

     “Private Placement Shares” shall have the meaning set forth in the Recitals hereof.

     “Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including without limitation, any prospectus subject to completion and a prospectus that
includes any information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the Securities Act and any term
sheet filed pursuant to Rule 434 under the Securities Act), as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion of the Registrable
Shares covered by such Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective

- 3 -

 

amendments and
all material incorporated by reference or deemed to be incorporated by reference in such
prospectus or prospectuses.

     “Registrable Shares” with respect to any Holder, shall mean at any time the Private
Placement Shares, together with any class of equity securities of the Company or of a successor to
the entire business of the Company which are issued in exchange for the Private Placement Shares;
provided, however, that such Registrable Shares shall cease to be Registrable Shares with respect
to any Holder upon the earliest to occur of (A) when a Registration Statement with respect to such
Holder’s Registrable Shares shall have been declared effective under the Securities Act and all of
such Holder’s Registrable Shares shall have been disposed of pursuant to such Registration
Statement, (B) when such Holder’s Registrable Shares may be sold without restriction pursuant to
Rule 144 under the Securities Act or (C) when such Holder’s Registrable Shares shall have ceased to
be outstanding.

     “Registration Expenses” shall mean (i) the fees and disbursements of counsel and
independent public accountants for the Company incurred in connection with the Company’s
performance of or compliance with this Agreement, including the expenses of any special audits or
“comfort” letters required by or incident to such performance and compliance, and any premiums and
other costs of policies of insurance obtained by the Company against liabilities arising out of the
sale of any securities and (ii) all registration, filing and stock exchange fees, all fees and
expenses of complying with securities or “blue sky” laws, all fees and expenses of custodians,
transfer agents and registrars, all printing expenses, messenger and delivery expenses and any fees
and disbursements of one common counsel retained by a majority of the Registrable Shares; provided,
however, that “Registration Expenses” shall not include any out-of-pocket expenses of the
Holders, transfer taxes, underwriting or brokerage commissions or discounts associated with
effecting any sales of Registrable Shares that may be offered, which expenses shall be borne by
each Holder of Registrable Shares on a pro rata basis with respect to the Registrable Shares so
sold.

     “Registration Statement” means any registration statement of the Company filed with
the Commission under the Securities Act which covers any of the Registrable Shares pursuant to the
provisions of this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and all materials
incorporated by reference or deemed to be incorporated by reference in such Registration Statement.

     “Securities Act” shall have the meaning set forth in the Recitals hereof.

     “Selling Holders’ Counsel” shall mean counsel for the Holders that is selected by the
Holders holding a majority of the Registrable Shares included in a Registration Statement and that
is reasonably acceptable to the Company.

     “Shelf Registration Statement” shall have the meaning set forth in Section
2(a) of this Agreement.

     “Suspension Event” shall have the meaning set forth in Section 3(b) of this
Agreement.

     “Suspension Notice” shall have the meaning set forth in Section 3(a) of this
Agreement.

     “Underwritten Offering” shall mean a sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.

     Section 2. Shelf Registrations and Piggy Back Registrations.

          (a) Shelf Registration.

- 4 -

 

          (i) The Company agrees to use commercially reasonable efforts to file with the
Commission, no earlier than 15 months following the closing of
the IPO and no later than 18
months following the closing of the IPO, one or more registration statements with respect to
the Registrable Shares under the Securities Act for the offering to be made on a continuous
basis pursuant to Rule 415 under the Securities Act (the “Shelf Registration
Statement”), provided that any such Shelf Registration
Statement shall not be used to offer or sell the Registrable Shares
prior to 18 months following the closing of the IPO. The Company
will use commercially reasonable efforts to cause such Shelf
Registration Statement to be declared
effective by the Commission as soon as practicable after the filing thereof. The Shelf
Registration Statement shall be on an appropriate form and the registration statement and
any form of prospectus included therein (or prospectus supplement relating thereto) shall
reflect the plan of distribution or method of sale as the Holders may from time to time
notify the Company.

          (ii) Effectiveness. The Company shall use commercially reasonable efforts to
keep the Shelf Registration Statement continuously effective for the period beginning on the
date on which the Shelf Registration Statement is declared effective and ending on the date
that all of the Registrable Shares registered under the Shelf Registration Statement cease
to be Registrable Shares. During the period that the Shelf Registration Statement is
effective, the Company shall supplement or make amendments to the Shelf Registration
Statement, if required by the Securities Act or if reasonably requested by the Holders
(whether or not required by the form on which the securities are being registered),
including to reflect any specific plan of distribution or method of sale, and shall use its
commercially reasonable efforts to have such supplements and amendments declared effective,
if required, as soon as practicable after filing.

          (iii) Selection of Underwriters. If any offering pursuant to a Shelf
Registration Statement is an underwritten offering, a majority-in-interest of the Holders
participating in such underwritten offering shall have the right to select the managing
underwriter or underwriters to administer any such offering, which managing underwriter or
underwriters shall be reasonably acceptable to the Company.

          (b) Piggyback Registrations.

          (i) Right to Piggyback. Subject to Section 2(b)(v), from and after the
18-month anniversary of the closing of the IPO, whenever the Company proposes to register
any of its common equity securities under the Securities Act (other than a registration
statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for
its own account or for the account of one or more stockholders of the Company, and the
registration form to be used may be used for any registration of Registrable Shares (a
“Piggyback Registration”), the Company shall give prompt written notice to all
Holders of its intention to effect such a registration and, subject to Sections
2(b)(ii) and
2(b)(iii), shall include in such registration all Registrable
Shares with respect to which the Company has received written requests for inclusion therein
within 20 days after the receipt of the Company’s notice. The Company may postpone or
withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion.

          (ii) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can be sold in such offering and/or
that the number of Registrable Shares proposed to be included in any such registration would
adversely affect the price per share of the Company’s equity securities to be sold in such
offering (such maximum number of securities or Registrable Shares, as applicable, the
“Maximum Threshold”), the underwriting shall be allocated among the Company and all
Holders as follows (A) first, the

- 5 -

 

shares of Common Stock or other securities that the
Company desires to sell that can be sold
without exceeding the Maximum Threshold; (B) second, to the extent that the Maximum
Threshold has not been reached under the foregoing clause (A), the shares of Common Stock or
other securities, if any, comprised of Registrable Shares, as to which registration has been
requested pursuant to the applicable written contractual piggy-back registration rights of
such Holders, pro rata, among the Holders who have elected to participate in such offering
that can be sold without exceeding the Maximum Threshold; (C) third, to the extent that the
Maximum Threshold has not been reached under the foregoing clauses (A) and (B), the shares
of Common Stock or other securities, if any, comprised of Manager Shares, as to which
registration has been requested pursuant to the applicable written contractual piggy-back
registration rights of the holders thereof, pro rata, among the holders of such Manager
Shares who have elected to participate in such offering that can be sold without exceeding
the Maximum Threshold; (D) fourth, to the extent that the Maximum Threshold has not been
reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other
securities for the account of other Persons that the Company is obligated to register
pursuant to written contractual piggy-back registration rights with such Persons and that
can be sold without exceeding the Maximum Threshold.

          (iii) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of a holder of the Company’s securities other
than Registrable Shares, including a holder of Manager Shares (“Non-Holder
Securities”), and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration exceeds the
number that can be sold in such offering and/or that the number of Registrable Shares
proposed to be included in any such registration would adversely affect the price per share
of the Company’s equity securities to be sold in such offering, the underwriting shall be
allocated among the holders of Non-Holder Securities and all Holders electing to participate
in such offering pro rata on the basis of the Non-Holder Securities and Registrable Shares
offered for such registration by the holder of Non-Holder Securities and each Holder,
respectively, electing to participate in such registration.

          (iv) Withdrawal. Any Holder may elect to withdraw such Holder’s request for
inclusion of Registrable Shares in any Piggyback Registration by giving written notice to
the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company (whether on its own determination or as the result of a withdrawal
by Persons making a demand pursuant to written contractual obligations) may withdraw a
Registration Statement at any time prior to the effectiveness of the Registration Statement
without thereby incurring any liability to the Holders of Registrable Shares.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the
Holders in connection with such Piggyback Registration as provided in Section 9(c).

          (v) Limitation on Piggy Back Registrations. Notwithstanding anything to the
contrary, no Holder shall be entitled to any rights under this Section 2(b),
including the right to receive notice of a Piggyback Registration, unless such Holder holds
in excess of            Registrable Shares.

     Section 3. Black-Out Periods.

          (a) Subject to the provisions of this Section 3, the Company shall be permitted, in
limited circumstances, to suspend the use, from time to time, of the Prospectus that is part of a
Shelf Registration Statement (and therefore suspend sales of the Registrable Shares under such
Shelf Registration Statement), by providing written notice (a “Suspension Notice”) to the
Selling Holders’

- 6 -

 

Counsel, if any, and the Holders and by issuing a press release, making a filing
with the Commission or
such other means that the Company reasonably believes to be a reliable means of communication,
for such times as the Company reasonably may determine is necessary and advisable (but in no event
for more than an aggregate of 90 days in any rolling 12-month period commencing on the date of this
Agreement or more than 45 consecutive days, except as a result of a refusal by the Commission to
declare any post-effective amendment to the Shelf Registration Statement effective after the
Company has used all commercially reasonable efforts to cause the post-effective amendment to be
declared effective by the Commission, in which case, the Company must terminate the black-out
period immediately following the effective date of the post-effective amendment) if any of the
following events shall occur: a majority of the Board determines in good faith that (i) (A) the
offer or sale of any Registrable Shares would materially impede, delay or interfere with any
proposed financing, offer or sale of securities, acquisition, corporate reorganization or other
material transaction involving the Company, (B) upon the advice of counsel, the sale of Registrable
Shares pursuant to the Shelf Registration Statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law, and (C) (x) the Company
has a bona fide business purpose for preserving the confidentiality of such transaction, (y)
disclosure would have a material adverse effect on the Company or the Company’s ability to
consummate such transaction, or (z) such transaction renders the Company unable to comply with
Commission requirements, in each case under circumstances that would make it impractical or
inadvisable to cause the Shelf Registration Statement (or such filings) to become effective or to
promptly amend or supplement the Shelf Registration Statement on a post effective basis, as
applicable; or (ii) upon the advice of counsel, it is in the Company’s best interest or it is
required by law, rule or regulation to supplement the Shelf Registration Statement or file a
post-effective amendment to the Shelf Registration Statement in order to ensure that the prospectus
included in the Shelf Registration Statement (1) contains the information required under Section
10(a)(3) of the Securities Act; (2) discloses any facts or events arising after the effective date
of the Shelf Registration Statement (or of the most recent post-effective amendment) that,
individually or in the aggregate, represents a material change in the information set forth
therein; or (3) discloses any material information with respect to the plan of distribution that
was not disclosed in the Shelf Registration Statement or any material change to such information.
Upon the occurrence of any such suspension, the Company shall use its commercially reasonable
efforts to cause the Shelf Registration Statement to become effective or to promptly amend or
supplement the Shelf Registration Statement on a post effective basis or to take such action as is
necessary to make resumed use of the Shelf Registration Statement as soon as possible.

          (b) In the case of an event that causes the Company to suspend the use of a Shelf Registration
Statement as set forth in paragraph (a) above (a “Suspension Event”), the Company shall
give a Suspension Notice to the Selling Holders’ Counsel, if any, and the Holders to suspend sales
of the Registrable Shares and such notice shall state generally the basis for the notice and that
such suspension shall continue only for so long as the Suspension Event or its effect is continuing
and the Company is using its commercially reasonable efforts and taking all reasonable steps to
terminate suspension of the use of the Shelf Registration Statement as promptly as possible. A
Holder shall not effect any sales of the Registrable Shares pursuant to such Shelf Registration
Statement (or such filings) at any time after it has received a Suspension Notice from the Company
and prior to receipt of an End of Suspension Notice (as defined below). If so directed by the
Company, each Holder will deliver to the Company (at the expense of the Company) all copies other
than permanent file copies then in such Holder’s possession of the prospectus covering the
Registrable Shares at the time of receipt of the Suspension Notice. The Holders may recommence
effecting sales of the Registrable Shares pursuant to the Shelf Registration Statement (or such
filings) following further written notice to such effect (an “End of Suspension Notice”)
from the Company, which End of Suspension Notice shall be given by the Company to the Holders and
to the Selling Holders’ Counsel, if any, promptly following the conclusion of any Suspension Event
and its effect.

- 7 -

 

     Section 4. Registration Procedures.

          (a) In connection with the filing of any Registration Statement as provided in this Agreement,
the Company shall use commercially reasonable efforts to, as expeditiously as reasonably
practicable:

          (i) prepare and file with the Commission the Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under the
Securities Act, which form (1) shall be selected by the Company, (2) shall be available for
the registration and sale of the Registrable Shares by the selling Holders thereof, (3)
shall comply as to form in all material respects with the requirements of the applicable
form and include or incorporate by reference all financial statements required by the
Commission to be filed therewith or incorporated by reference therein, and (4) shall comply
in all respects with the requirements of Regulation S-T under the Securities Act, and
otherwise comply with its obligations under Section 2 hereof;

          (ii) prepare and file with the Commission such amendments and post-effective amendments
to each Registration Statement as may be necessary under applicable law to keep such
Registration Statement effective for the applicable period; and cause each prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provision then in force) under the Securities Act and
comply with the provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof;

          (iii) (1) notify each Holder of Registrable Shares, at least five Business Days after
filing, that a Registration Statement with respect to the Registrable Shares has been filed
and advising such Holders that the distribution of Registrable Shares will be made in
accordance with any method or combination of methods legally available by the Holders of any
and all Registrable Shares; (2) furnish to each Holder of Registrable Shares and to each
underwriter of an Underwritten Offering of Registrable Shares, if any, without charge, as
many copies of each prospectus, including each preliminary prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may reasonably
request, including financial statements and schedules in order to facilitate the public sale
or other disposition of the Registrable Shares; and (3) hereby consent to the use of the
prospectus or any amendment or supplement thereto by each of the selling Holders of
Registrable Shares in connection with the offering and sale of the Registrable Shares
covered by the prospectus or any amendment or supplement thereto;

          (iv) use its commercially reasonable efforts to register or qualify the Registrable
Shares under all applicable state securities or “blue sky” laws of such jurisdictions as any
Holder of Registrable Shares covered by a Registration Statement and each underwriter of an
Underwritten Offering of Registrable Shares shall reasonably request by the time the
applicable Registration Statement is declared effective by the Commission, and do any and
all other acts and things which may be reasonably necessary or advisable to enable each such
Holder and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Shares owned by such Holder; provided, however, that the Company shall not be
required to (1) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this Section
4(a)(iv), or (2) take any action which would

- 8 -

 

subject it to general service of process or
taxation in any such jurisdiction where it is not then so subject;

          (v) notify promptly each Holder of Registrable Shares under a Registration Statement
and, if requested by such Holder, confirm such advice in writing promptly at the address
determined in accordance with Section 8(e) of this Agreement (1) when a Registration
Statement has become effective and when any post-effective amendments and supplements
thereto become effective, (2) of any request by the Commission or any state securities
authority for post-effective amendments and supplements to a Registration Statement and
prospectus or for additional information after the Registration Statement has become
effective, (3) of the issuance by the Commission or any state securities authority of any
stop order suspending the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (4) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Shares covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to the offering cease to be true and
correct in all material respects, (5) of the happening of any event or the discovery of any
facts during the period a Registration Statement is effective as a result of which such
Registration Statement or any document incorporated by reference therein contains any untrue
statement of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or, in the case of the
prospectus, contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (which information shall be
accompanied by an instruction to suspend the use of the Registration Statement and the
prospectus (such instruction to be provided in the same manner as a Suspension Notice) until
the requisite changes have been made, at which time notice of the end of suspension shall be
delivered in the same manner as an End of Suspension Notice), (6) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Registrable Shares, for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (7) of the filing of a post-effective amendment to such
Registration Statement;

          (vi) furnish Selling Holders’ Counsel, if any, copies of any comment letters relating
to the selling Holders received from the Commission or any other request by the Commission
or any state securities authority for amendments or supplements to a Registration Statement
and prospectus or for additional information relating to the selling Holders;

          (vii) make every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;

          (viii) furnish to each Holder of Registrable Shares, and each underwriter, if any,
without charge, at least one conformed copy of each Registration Statement and any
post-effective amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless requested);

          (ix) cooperate with the selling Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Shares to be sold and not bearing any
restrictive legends; and enable such Registrable Shares to be in such denominations and
registered in such names as the selling Holders or the underwriters, if any, may reasonably
request at least three Business Days prior to the closing of any sale of Registrable Shares;

- 9 -

 

          (x) upon the occurrence of any event or the discovery of any facts, as contemplated by
Sections 4(a)(v)(5) and 4(a)(v)(6) hereof, as promptly as practicable after
the occurrence of such an event, use its best efforts to prepare a supplement or
post-effective amendment to the Registration Statement or the related prospectus or any
document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such prospectus will not contain at
the time of such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or will remain so qualified, as applicable. At such
time as such public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a material fact or
to include any omitted material fact, the Company agrees promptly to notify each Holder of
such determination and to furnish each Holder such number of copies of the prospectus as
amended or supplemented, as such Holder may reasonably request;

          (xi) within a reasonable time prior to the filing of any Registration Statement, any
prospectus, any amendment to a Registration Statement or amendment or supplement to a
prospectus, provide copies of such document to the Selling Holders’ Counsel, if any, on
behalf of such Holders, and make representatives of the Company as shall be reasonably
requested by the Holders of Registrable Shares available for discussion of such document;

          (xii) obtain a CUSIP number for the Registrable Shares not later than the effective
date of a Registration Statement, and provide the Company’s transfer agent with printed
certificates for the Registrable Shares, in a form eligible for deposit with the Depositary,
in each case, to the extent necessary or applicable;

          (xiii) enter into agreements (including underwriting agreements) and take all other
customary appropriate actions in order to expedite or facilitate the disposition of such
Registrable Shares whether or not an underwriting agreement is entered into and whether or
not the registration is an underwritten registration:

          (A) make such representations and warranties to the Holders of such Registrable
Shares and the underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters in similar Underwritten Offerings as may be
reasonably requested by them;

          (B) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to any managing underwriter(s) and their counsel) addressed to the underwriters, if
any (and in the case of an underwritten registration, each selling Holder), covering
the matters customarily covered in opinions requested in Underwritten Offerings and
such other matters as may be reasonably requested by the underwriter(s);

          (C) obtain “comfort” letters and updates thereof from the Company’s independent
registered public accounting firm (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or are required to be,
included in the Registration Statement) addressed to the underwriter(s), if any, and
use reasonable efforts to have such letter addressed to the selling Holders in the
case of an underwritten registration (to the extent consistent with Statement on
Auditing Standards No. 72 of the American Institute of Certified Public Accounts),
such letters to be in

- 10 -

 

customary form and covering matters of the type customarily
covered in “comfort” letters to underwriters in connection with similar Underwritten
Offerings;

          (D) enter into a securities sales agreement with the Holders and an agent of
the Holders providing for, among other things, the appointment of such agent for
the selling Holders for the purpose of soliciting purchases of Registrable
Shares, which agreement shall be in form, substance and scope customary for similar
offerings;

          (E) if an underwriting agreement is entered into, cause the same to set forth
indemnification provisions and procedures substantially equivalent to the
indemnification provisions and procedures set forth in Section 5 hereof with
respect to the underwriters and all other parties to be indemnified pursuant to said
Section or, at the request of any underwriters, in the form customarily provided to
such underwriters in similar types of transactions; and

          (F) deliver such documents and certificates as may be reasonably requested and
as are customarily delivered in similar offerings to the Holders of a majority in
principal amount of the Registrable Shares being sold and the managing underwriters,
if any;

          (xiv) make available for inspection by any underwriter participating in any disposition
pursuant to a Registration Statement, Selling Holders’ Counsel and any accountant retained
by a majority in principal amount of the Registrable Shares being sold, all financial and
other records, pertinent corporate documents and properties or assets of the Company
reasonably requested by any such persons, and cause the respective officers, directors,
employees, and any other agents of the Company to supply all information reasonably
requested by any such representative, underwriter, counsel or accountant in connection with
a Registration Statement, and make such representatives of the Company available for
discussion of such documents as shall be reasonably requested by the Company; provided,
however, that the Selling Holders’ Counsel, if any, and the representatives of any
underwriters will use commercially reasonable efforts, to the extent reasonably practicable,
to coordinate the foregoing inspection and information gathering and to not materially
disrupt the Company’s business operations;

          (xv) a reasonable time prior to filing any Registration Statement, any prospectus
forming a part thereof, any amendment to such Registration Statement, or amendment or
supplement to such prospectus, provide copies of such document to the underwriter(s) of an
Underwritten Offering of Registrable Shares; within five Business Days after the filing of
any Registration Statement, provide copies of such Registration Statement to Selling
Holders’ Counsel; make such changes in any of the foregoing documents prior to the filing
thereof, or in the case of changes received from Selling Holders’ Counsel by filing an
amendment or supplement thereto, as the underwriter or underwriters, or in the case of
changes received from Selling Holders’ Counsel relating to the selling Holders or the plan
of distribution of Registrable Shares, as Selling Holders’ Counsel, reasonably requests; not
file any such document in a form to which any underwriter shall not have previously been
advised and furnished a copy of or to which the Selling Holders’ Counsel, if any, on behalf
of the Holders of Registrable Shares, or any underwriter shall reasonably object; not
include in any amendment or supplement to such documents any information about the selling
Holders or any change to the plan of distribution of Registrable Shares that would limit the
method of distribution of the Registrable Shares unless Selling Holders’ Counsel has been
advised in advance and has approved such information or change; and make the representatives
of the Company available for discussion of such document

- 11 -

 

as shall be reasonably requested by
the Selling Holders’ Counsel, if any, on behalf of such Holders, Selling Holders’ Counsel or
any underwriter;

          (xvi) furnish to each Holder, if it has a due diligence defense under the Securities
Act, and to each underwriter, if any, a signed counterpart, addressed to such Holder or
underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) if eligible
under
SAS 72, a comfort letter or comfort letters from the Company’s independent public
accountants, each in customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as the Holders of a majority of
the Registrable Shares included in such offering or the managing underwriter or underwriters
therefor reasonably requests;

          (xvii) use its best efforts to cause all Registrable Shares to be listed on any
national securities exchange;

          (xviii) otherwise comply with all applicable rules and regulations of the Commission
and make available to its security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;

          (xix) cooperate and assist in any filings required to be made with the FINRA and in the
performance of any due diligence investigation by any underwriter and its counsel (including
any “qualified independent underwriter” that is required to be retained in accordance with
the rules and regulations of the FINRA); and

          (xx) the Company may (as a condition to a Holder’s participation in a Shelf
Registration or Piggyback Registration) require each Holder of Registrable Shares to furnish
to the Company such information regarding the Holder and the proposed distribution by such
Holder of such Registrable Shares as the Company may from time to time reasonably request in
writing.

     Each Holder agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts of the type described in Section 4(a)(v) hereof, such
Holder will forthwith discontinue disposition of Registrable Shares pursuant to a Registration
Statement relating to such Registrable Shares until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(a)(v) hereof, and, if so
directed by the Company, such Holder will deliver to the Company (at the Company’s expense) all
copies in such Holder’s possession, other than permanent file copies then in such Holder’s
possession, of the prospectus covering such Registrable Shares current at the time of receipt of
such notice.

     Section 5. Indemnification.

          (a) Indemnification by the Company. The Company agrees to indemnify and hold harmless
each Holder, and the respective officers, directors, partners, employees, representatives and
agents of any such Person, and each Person (a “Controlling Person”), if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any of
the foregoing Persons, as follows:

          (i) against any and all loss, liability, claim, damage, judgment, actions, other
liabilities and expense whatsoever (the “Liabilities”), as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement

- 12 -

 

(or any amendment or supplement thereto) pursuant to which
Registrable Shares were registered under the Securities Act, including all documents
incorporated therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom at such date of a material fact
necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

          (ii) against any and all Liabilities, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 5(d) below) any such settlement is effected with
the written consent of the Company; and

          (iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by any indemnified party), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under subparagraph
(i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any Liabilities to the extent
arising out of any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the Company by the Holder
expressly for use in a Registration Statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto).

          (b) Indemnification by the Holders. Each Holder severally, but not jointly, agrees to
indemnify and hold harmless the Company and the other selling Holders, and each of their respective
officers, directors, partners, employees, representatives and agents, and each of their respective
Controlling Persons, against any and all Liabilities described in the indemnity contained in
Section 5(a) hereof, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement (or any amendment
thereto) or any prospectus included therein (or any amendment or supplement thereto) in reliance
upon and in conformity with written information with respect to such Holder furnished to the
Company by such Holder expressly for use in the Registration Statement (or any amendment thereto)
or such prospectus (or any amendment or supplement thereto); provided, however, that no such Holder
shall be liable for any claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Shares pursuant to such Registration Statement.

          (c) Notices of Claims, etc. Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding commenced against it
in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the indemnified party) also
be counsel to the indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel (in

- 13 -

 

addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whosoever in respect of which indemnification or contribution could be
sought
under this Section 5 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

          (d) Indemnification Payments. If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 5(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.

          (e) Contribution. If the indemnification provided for in this Section 5 is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any Liabilities referred to therein, then each indemnifying party shall contribute to the aggregate
amount of such Liabilities incurred by such indemnified party, as incurred, in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions which resulted in such Liabilities, as
well as any other relevant equitable considerations.

     The relative fault of the Company on the one hand and the Holders on the other hand shall be
determined by reference to, among other things, whether any such untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Holders and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to above in this
Section 5. The aggregate amount of Liabilities incurred by an indemnified party and
referred to above in this Section 5 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

     No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

     For purposes of this Section 5, each Person, if any, who controls the a Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as a Holder, and each director of the Company, and each Person, if any,
who controls the

- 14 -

 

Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Company.

     Section 6. Market Stand-Off Agreement. Each Holder hereby agrees that it shall not,
directly or indirectly sell, offer to sell (including without limitation any short sale), pledge,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right
or warrant for the sale of or otherwise dispose of or transfer any Registrable Shares or other
Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock
then owned by such Holder (other than to permitted transferees of the Holder who agree to be
similarly bound) for up to 90 days following the date of an underwriting agreement with respect to
an underwritten public offering of the Company’s securities or
such shorter period as the managing underwriters shall agree to; provided, however, that:

          (a) the restrictions above shall not apply to Registrable Shares sold on the Holder’s behalf
to the public in an Underwritten Offering pursuant to such Registration Statement;

          (b) all officers and directors of the Company then holding Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock enter into similar agreements for
not less than the entire time period required of the Holders hereunder; and

          (c) the Holders shall be allowed any concession or proportionate release allowed to any (i)
officer, (ii) director, (iii) other holder of the Company’s Common Stock that entered into similar
agreements (with such proportion being determined by dividing the number of shares being released
with respect to such officer, director or other holder of the Company’s Common Stock by the total
number of issued and outstanding shares held by such officer, director or holder).

     In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the securities subject to this Section
6 and to impose stop transfer instructions with respect to the Registrable Shares and such
other securities of each Holder (and the securities of every other Person subject to the foregoing
restriction) until the end of such period.

     Section 7. Termination; Survival. The rights of each Holder under this Agreement
shall terminate upon the date that all of the Registrable Shares cease to be Registrable Shares.
Notwithstanding the foregoing, the obligations of the parties under Sections 5 and
6 of this Agreement shall remain in full force and effect following such time.

     Section 8. Miscellaneous.

          (a) Covenants Relating To Rule 144. For so long as the Company is subject to the
reporting requirements of Section 13 or 15 of the Securities Act, the Company covenants that it
will file the reports required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the Commission thereunder. If
the Company ceases to be so required to file such reports, the Company covenants that it will upon
the request of any Holder of Registrable Shares (a) make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under
the Securities Act and it will take such further action as any Holder of Registrable Shares may
reasonably request, and (c) take such further action that is reasonable in the circumstances, in
each case to the extent required from time to time to enable such Holder to sell its Registrable
Shares without registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time,
(ii) Rule 144A under the Securities Act, as such rule may be amended from time to time, or (iii)
any similar rules or regulations hereafter adopted by the Commission. Upon the request of any

- 15 -

 

Holder of Registrable Shares, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements (at any time after 90 days after the effective date
of the first Registration Statement filed by the Company for an offering of its Common Stock to the
general public) and of the Securities Act and the Exchange Act (at any time after it has become
subject to the reporting requirements of the Exchange Act), a copy of the most recent annual and
quarterly report(s) of the Company, and such other reports, documents or stockholder communications
of the Company, and take
such further actions consistent with this Section 8(a), as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing a Holder to sell
any such Registrable Shares without registration.

          (b) No Inconsistent Agreements. The Company has not entered into and the Company will
not after the date of this Agreement enter into any agreement which is inconsistent with the rights
granted to the Holders of Registrable Shares pursuant to this Agreement or otherwise conflicts with
the provisions of this Agreement. The rights granted to the Holders hereunder do not and will not
for the term of this Agreement in any way conflict with the rights granted to the holders of the
Company’s other issued and outstanding securities under any such agreements.

          (c) Expenses. All Registration Expenses incurred in connection with any Registration
Statement shall be borne by the Company, whether or not any Registration Statement related thereto
becomes effective.

          (d) Amendments and Waivers. The provisions of this Agreement may be amended or waived
at any time only by the written agreement of the Company and the Holders of a majority of the
Registrable Shares; provided, however, that the provisions of this Agreement may not be amended or
waived without the consent of the Holders of all the Registrable Shares adversely affected by such
amendment or waiver if such amendment or waiver adversely affects a portion of the Registrable
Shares but does not so adversely affect all of the Registrable Shares; provided, further, that the
provisions of the preceding provision may not be amended or waived except in accordance with this
sentence. Any waiver, permit, consent or approval of any kind or character on the part of any such
Holders of any provision or condition of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in writing. Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each Holder of Registrable Shares and the
Company.

          (e) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand delivery, registered first-class mail, facsimile or any courier
guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this
Section 8(e) and (b) if to the Company, to Provident Mortgage Capital Associates, Inc.,
1633 Bayshore Highway, Suite 155, Burlingame, CA 94010, Attention: Mark Lefanowicz (facsimile:
650-652-1350).

     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; two Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party) and on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery.

          (f) Successor and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties, including, without
limitation and without the need for an express assignment, subsequent Holders; provided, however,
that nothing herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Shares in violation of the terms of the Private Placement Purchase Agreement. If any
transferee of any Holder shall

- 16 -

 

acquire Registrable Shares, in any manner, whether by operation of
law or otherwise, such Registrable Shares shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Shares such person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the
Private Placement Purchase Agreement, and such person shall be entitled to receive the benefits
hereof.

          (g) Specific Enforcement. Without limiting the remedies available to the Holders, the
Company acknowledges that any failure by the Company to comply with its obligations under
Section 2 hereof may result in material irreparable injury to the Holders for which there
is no adequate remedy at law, that it would not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, a Holder may obtain such relief as may be
required to specifically enforce the Company’s obligations under Section 2 hereof.

          (h) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

          (i) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          (k) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

[SIGNATURE PAGE FOLLOWS]

- 17 -

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date
first written above.

	 	 	 	 	 
	 	PROVIDENT MORTGAGE CAPITAL 

ASSOCIATES, INC.,

a Maryland corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HOLDER

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HOLDER

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HOLDER

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

SCHEDULE 1

HOLDERS

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Number of Shares of	 	 	 	 
	 	Name of the Holder	 	 	Common Stock Held	 	 	Address of the Holder	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 

Sch. 1-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]