Document:

biei_ex101.htm

EXHIBIT 10.1
 
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
Original Issue Date: March 11, 2016
 
$105,000.00
 
10% CONVERTIBLE PROMISSORY NOTE
DUE DECEMBER 11, 2016
 
THIS 10% CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued 10% Convertible Promissory Notes of Premier Biomedical Inc. (the "Company"), having its principal place of business at P.O. Box 31374, El Paso, TX 79930, designated as its 10% Convertible Notes due December 11, 2016 (this Note, the "Note" and, collectively with the other Notes of such series, the "Notes").
 
FOR VALUE RECEIVED, the Company promises to pay, in cash, to Redwood Management, LLC or its registered assigns (the "Holder"), or shall have paid pursuant to the terms hereunder, the principal sum of $105,000.00 on December 11, 2016 (the "Maturity Date") or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:
 
Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:
 
"Alternate Consideration" shall have the meaning set forth in Section 5(d).
 
	 
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"Alternative Conversion Price" means 50% of the lowest traded price of the Common Stock in the fifteen (15) Trading Days prior to the Conversion Date.
 
"Bankruptcy Event" means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
 
"Base Conversion Price" shall have the meaning set forth in Section 5(b).
 
"Beneficial Ownership Limitation" shall have the meaning set forth in Section 4(d). 
 
"Buy-In" shall have the meaning set forth in Section 4(c)(v).
 
"Change of Control Transaction" means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (c) above.
 
	 
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"Conversion" shall have the meaning ascribed to such term in Section 4. 
 
"Conversion Date" shall have the meaning set forth in Section 4(a).
 
"Conversion Price" shall have the meaning set forth in Section 4(b).
 
"Conversion Schedule" means the Conversion Schedule in the form of Schedule 1 attached hereto.
 
"Conversion Shares" means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.
 
"Dilutive Issuance" shall have the meaning set forth in Section 5(b).
 
"Dilutive Issuance Notice" shall have the meaning set forth in Section 5(b).
 
"DTC" means the Depository Trust Company.
 
"DTC/FAST Program" means the DTC's Fast Automated Securities Transfer Program.
 
"DWAC Eligible" means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC's Operational Arrangements, (b) the Company has been approved (without revocation) by the DTC's underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, and (d) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
 
"Event of Default" shall have the meaning set forth in Section 6(a).
 
"Fundamental Transaction" shall have the meaning set forth in Section 5(d). 
 
"Late Fees" shall have the meaning set forth in Section 2(c).
 
"Mandatory Default Amount" means the payment of 130% of the outstanding principal amount of this Note and accrued and unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.
 
"New York Courts" shall have the meaning set forth in Section 7(d).
 
"Note Register" shall have the meaning set forth in Section 2(b).
 
	 
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"Notice of Conversion" shall have the meaning set forth in Section 4(a).
 
"Original Issue Date" means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.
 
"Purchase Agreement" means the Securities Purchase Agreement, dated as of December 28, 2015 between the Company and the original Holder, as amended, modified or supplemented from time to time in accordance with its terms.
 
"Registration Rights Agreement" means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the Company and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.
 
"Registration Statement" means a registration statement covering the resale of the Underlying Shares by each Holder.
 
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
"Share Delivery Date" shall have the meaning set forth in Section 4(c)(ii).
 
"Successor Entity" shall have the meaning set forth in Section 5(d). 
 
Section 2. Interest. 
 
a) Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of 10% per annum, which interest amount shall be guaranteed. All interest payments hereunder will be payable in cash or Common Stock in the Holder's discretion. Accrued and unpaid interest shall be due and payable on each Conversion Date and on the Maturity Date, or as otherwise set forth herein. 
 
b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the "Note Register").
 
c) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the "Late Fees") which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. 
 
	 
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d) Prepayment. At any time upon ten (10) days written notice to the Holder, the Company may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. If the Company exercises its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Note and interest multiplied by 130%. The Holder may continue to convert the Note from the date notice of the prepayment is given until the date of the prepayment.
 
Section 3. Registration of Transfers and Exchanges. 
 
a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
 
b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations. 
 
c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
 
Section 4. Conversion.
 
a) Voluntary Conversion. At any time after ninety (90) days after the date of this Note, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, from time to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a "Notice of Conversion"), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the "Conversion Date"). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required.To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. 
 
	 
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b) Conversion Price. The conversion price (the "Conversion Price") in effect on any Conversion Date shall be equal to 60% of the lowest traded price of the Common Stock in the fifteen (15) Trading Days prior to the Conversion Date; provided that, except in the event the Alternative Conversion Price is applicable pursuant to the following sentence, the Conversion Price shall not be lower than $0.00005. Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may require the Company to, at such Holder's option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Note into Common Stock at the Alternative Conversion Price. All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 
 
c) Mechanics of Conversion.
 
i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and any accrued and unpaid interest to be converted by (y) the Conversion Price.
 

ii. Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the "Share Delivery Date"), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable to the Company (which opinion the Company will be responsible for obtaining) shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note, and (B) payment in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company under this Section 4(d) shall be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public information the Conversion Shares shall bear a restrictive legend in substantially the following form, as appropriate:
 
"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."
 
Notwithstanding the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under Rule 144.
 
	 
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iii. Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice. 
 
iv. Obligation Absolute; Partial Liquidated Damages. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1000 per Trading Day for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company's failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
 
	 
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v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder's brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a "Buy-In"), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder's total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.
 
vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will, beginning with the earlier of the Effectiveness Date (as defined in the Registration Rights Agreement) or the Rule 144 Date (as defined in the Purchase Agreement), at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 300% of the Required Minimumfor the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
 
	 
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vii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
 
viii. Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.
 
d) Holder's Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder's Affiliates, and any Persons acting as a group together with the Holder or any of the Holder's Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder's determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company's most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company's transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days' prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.
 
	 
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Section 5. Certain Adjustments.
 
a) Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.
 
b) Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the "Base Conversion Price" and such issuances, collectively, a "Dilutive Issuance") (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the "Dilutive Issuance Notice"). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder will be entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
 
	 
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c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
 
d) Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactionsconsummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "Successor Entity") to assume in writing all of the obligations of the Company under this Note and the Purchase Agreement in accordance with the provisions of this Section 5(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
 
	 
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e) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
 
f) Notice to the Holder.
 
i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 
 
ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein. 
 
	 
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Section 6. Events of Default. 
 
a) "Event of Default" means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
 
i. any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within 3 Trading Days;
 
ii. the Company shall materially fail to observe or perform any other material covenant or material agreement contained in the Notes (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (ix) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;
 
iii. a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);
 
iv. any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;
 
v. the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;
 
vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 
 
	 
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vii. the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository Trust Company System is no longer available or "chilled";
 
viii. the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);
 
ix. the Company does not meet the current public information requirements under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights Agreement);
 
x. if, during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness of the Registration Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration Rights Agreement) under the Registration Statement for a period of more than 20 consecutive Trading Days or 30 non-consecutive Trading Days during any 12 month period; provided, however, that if the Company is negotiating a merger, consolidation, acquisition or sale of all or substantially all of its assets or a similar transaction and, in the written opinion of counsel to the Company, the Registration Statement would be required to be amended to include information concerning such pending transaction(s) or the parties thereto which information is not available or may not be publicly disclosed at the time, the Company shall be permitted an additional 10 consecutive Trading Days during any 12 month period pursuant to this Section 6(a)(x);
 
xi. the Company shall fail for any reason to deliver certificates to a Holder on or prior to the third Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company's intention to not honor requests for conversions of any Notes in accordance with the terms hereof; 
 
xii. the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);
 
xiii. if the Company or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;
 
	 
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xiv. if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Significant Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;
 
xv. the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;
 
xvi. the Company shall fail to maintain sufficient reserved shares pursuant to Section 4(c)(vi);
 
xvii. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days; or 
 
xviii. the Company has not filed a Schedule 14C with the Commission to increase the number of authorized shares of Common Stock to a number reasonably acceptable to the Holder within thirty (30) days after the first Closing Date and has not used its reasonable best efforts to cause such increase to become effective.
 

b) Remedies Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(d), if any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to the lesser of 2% per month (24% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
 
	 
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Section 7. Miscellaneous. 
 
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder as set forth in the Purchase Agreement or as appearing on the books of the Company, or such other facsimile number or address as the Holder may specify for such purposes by notice to the Company delivered in accordance with this Section 7(a). Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
 
b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks paripassu with all other Notes now or hereafter issued under the terms set forth herein. 
 
c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
 
	 
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d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "New York Courts"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
 
e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing. 
 
	 
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f) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
 
g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note.
 
h) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
 
i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.
 
*********************
(Signature Pages Follow)

 
	 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
 
 
	 
	PREMIER BIOMEDICAL INC. 	 

	 	 	 	 
		By:	/s/ William A. Hartman 	 

	 
	Name:
	William A. Hartman	 

	 
	Title:
	President	 

	  
	  
	  
	 

	 
	 
	Facsimile No. for delivery of Notices: _______________
	 

 
	 
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ANNEX A
 
NOTICE OF CONVERSION
 
The undersigned hereby elects to convert principal under the 10% Convertible Promissory Note due December 11, 2016 of Premier Biomedical Inc.(the "Company"), into shares of common stock (the "Common Stock"), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 
 
By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
 
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 
 
Conversion calculations:
	 
	Date to Effect Conversion:
 
Principal Amount of Note to be Converted:
 
Payment of Interest in Common Stock __ yes __ no
If yes, $_____ of Interest Accrued on Account of Conversion at Issue.
 
Number of shares of Common Stock to be issued:
 
Signature:
 
Name:
 
Delivery Instructions:

 
	 
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Schedule 1
 
CONVERSION SCHEDULE
 
This 10% Convertible Promissory Note due on December 11, 2016 in the original principal amount of $105,000 is issued by Premier Biomedical Inc. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.
 
Dated: 
 
	Date of Conversion
(or for first entry, Original Issue Date)
	 
	Amount of Conversion
	 
	Aggregate Principal Amount Remaining Subsequent to Conversion
(or original Principal Amount)
	 
	Company Attest

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

	 	 
	 
	 
	 
	 
	 

 
 
21Exhibit 10.1

 

EXECUTION VERSION

 

BARCLAYS
  745 Seventh Avenue
 New York, NY 10019

 

March 16, 2016

 

Coherent, Inc.
 5100 Patrick Henry Drive 
 Santa Clara, California 95054

 

Attention: Kevin Palatnik

 

Project Rembrandt
  Commitment Letter

 

Ladies and Gentlemen:

 

Coherent, Inc., a Delaware corporation (“you” or the “US Borrower”) has advised Barclays Bank PLC (“Barclays”) and any Additional Arranger (as defined below) appointed pursuant to Section 1 below (together with Barclays, each a “Commitment Party” and together, the “Commitment Parties”, “we” or “us”) that you intend to acquire (the “Acquisition”) ROFIN-SINAR Technologies Inc., a Delaware corporation (the “Acquired Business”). The Acquisition will be effected through the merger of a newly created wholly-owned subsidiary of yours (“Merger Sub”) with and into the Acquired Business, with the Acquired Business surviving such merger as your wholly-owned subsidiary pursuant to the terms of the Agreement and Plan of Merger, dated as of the date hereof (the “Acquisition Agreement”), by and among the US Borrower, Merger Sub and the Acquired Business. The US Borrower, the Euro Borrower (as defined in Annex I), the Acquired Business and their respective subsidiaries are sometimes collectively referred to herein as the “Companies.”

 

You have also advised us that you intend to finance the Acquisition, the repayment of certain existing indebtedness (to be mutually agreed upon) of the Companies (the “Refinancing”), the costs and expenses related to the Transaction (as hereinafter defined) and the ongoing working capital and other general corporate purposes of the Companies after consummation of the Acquisition from the following sources (and that no financing other than the financing described herein will be required in connection with the Transaction): $850,000,000 in senior secured credit facilities of the Borrowers (collectively, the “Facilities”), comprised of (i) (a) a term loan B facility of $375,000,000, made available to the US Borrower (the “US Term Facility”) and (b) a term loan B facility of the Euro equivalent of $375,000,000, made available to the Euro Borrower (the “Euro Term Facility” and together with the US Term Facility, the “Term Facility”) and (ii) a revolving credit facility of $100,000,000 (the “Revolving Credit Facility”). The Acquisition, the Refinancing, the entering into and funding of the Facilities and all related transactions are hereinafter collectively referred to as the “Transaction.” The date of consummation of the Acquisition is referred to herein as the “Closing Date.”

 

1.                                      Commitments. In connection with the foregoing, Barclays is pleased to advise you of (a) its commitment to provide the entire principal amount of each of the Facilities (in such capacity, an “Initial Lender” and, together with any other Initial Lender joined in accordance with this Section 1, the “Initial Lenders”), (b) its willingness to act as the sole and exclusive administrative agent (in such capacity, the “Administrative Agent”) for the Facilities, in each case subject to the conditions set forth in this letter and in Annexes I and II hereto (collectively, the “Summary of Terms” and together with this letter, the “Commitment Letter”), (c) its willingness, and you hereby engage Barclays, together with any

 

 

other lead arrangers appointed as contemplated below, to act as joint lead arrangers and joint bookrunning managers (each, in such capacity, a “Lead Arranger” and collectively, the “Lead Arrangers”) for the Facilities, and in connection therewith to form a syndicate of lenders for the Facilities (collectively, the “Lenders”) reasonably acceptable to you. Notwithstanding anything to the contrary contained herein, the commitment of the Initial Lenders with respect to the initial fundings of the Facilities will be subject only to the satisfaction (or waiver by the Initial Lenders) of the conditions precedent set forth in paragraph 5 hereof. All capitalized terms used and not otherwise defined herein shall have the same meanings as specified therefor in the Summary of Terms.

 

At any time on or prior to the 21st day following the date of this Commitment Letter, you may (in consultation with Barclays) appoint up to three additional joint lead arrangers and joint bookrunning managers and appoint additional agents or co-agents or confer other titles in a manner and with economics determined by you and reasonably acceptable to Barclays for each of the Facilities (the “Additional Arrangers”); provided that the aggregate economics payable to the Additional Arrangers for each of the Facilities shall not exceed 40% of the total economics which would otherwise be payable to Barclays pursuant to the Facilities Fee Letter (as hereinafter defined), exclusive of any fees payable to an administrative agent or collateral agent in its capacity as such; provided, further that (i) each Additional Arranger’s aggregate commitment shall be allocated pro rata among the Facilities, (ii) the commitments of each Initial Lender hereunder will be reduced by the amount of the commitments of each Additional Arranger (or its relevant affiliate) under the applicable Facility, upon the execution of customary joinder documentation reasonably satisfactory to the Lead Arrangers, (iii) the commitments assumed by such Additional Arranger for each of the Facilities will be in proportion to the economics allocated to such Additional Arranger, and (iv) no Additional Arrangers (nor any affiliate thereof) shall receive greater economics in respect of any of the Facilities than that received by Barclays. Subject to the preceding sentence, no other agents, co-agents, arrangers, co-arrangers, bookrunners, managers or co-managers will be appointed, no other titles will be awarded and no compensation (other than as expressly contemplated by this Commitment Letter and the Fee Letters (as hereinafter defined)) will be paid to any Lender as consideration for its participation in the Facilities unless you and we shall agree. You agree further that Barclays will have “lead left” placement on all marketing materials relating to each of the Facilities and will perform the duties and exercise the authority customarily performed and exercised by it in such role, including acting as sole manager of the physical books.

 

2.                                      Syndication. The Lead Arrangers intend to commence syndication of the Facilities promptly after your acceptance of the terms of this Commitment Letter and the Fee Letters. Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that the Initial Lenders’ commitments hereunder are not conditioned upon the syndication of, or receipt of commitments or participations in respect of, the Facilities and in no event shall the commencement or successful completion of syndication of the Facilities constitute a condition to the availability of the Facilities on the Closing Date. You agree, prior to the Syndication Date (as hereinafter defined), to actively assist, and to use your commercially reasonable efforts to cause the Acquired Business and its subsidiaries to actively assist, the Lead Arrangers in achieving a syndication of each Facility that is reasonably satisfactory to the Lead Arrangers and you; provided that, notwithstanding each Lead Arranger’s right to syndicate the Facilities and receive commitments with respect thereto, it is agreed that (i) except in the case of an assignment to an Additional Arranger or as you otherwise agree in writing, (A) no Initial Lender shall be relieved, released or novated from its obligations hereunder (including its obligation to fund the Facilities on the Closing Date) in connection with any syndication, assignment or participation of the Facilities, including its commitments in respect thereof, until after the initial funding of the Facilities has occurred; and (B) no assignment or novation shall become effective with respect to all or any portion of an Initial Lender’s commitments in respect of the Facilities until after the initial funding of the Facilities; and (ii) each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Facilities, including all rights with respect to

 

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consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred and the initial funding under the Facilities has been made. Notwithstanding anything to the contrary contained herein, any resales or assignments of the Facilities by any Lender (including any Initial Lender) on or following the Closing Date shall be governed by the provisions of the Facilities as set forth in the Summary of Terms. We agree not to syndicate our commitments to (i) competitors of the Companies specified to us by you in writing from time to time, (ii) any persons that are engaged as principals primarily in private equity, mezzanine financing or venture capital and certain banks, financial institutions, other institutional lenders and other entities, in each case that have been specified to us by you in writing on or prior to the date hereof and (iii) as to any entity referenced in each case of clauses (i) and (ii) above (the “Primary Disqualified Institution”), any of such Primary Disqualified Institution’s known affiliates readily identifiable by name, but excluding any affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Institution does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity (clauses (i), (ii) and (iii) above collectively, the “Disqualified Institutions”) and that no Disqualified Institutions may become Lenders. Such assistance shall include (a) your providing, and using your commercially reasonable efforts to cause your advisors, the Acquired Business, its subsidiaries and its advisors to provide, the Lead Arrangers and the Lenders promptly upon request with all customary information reasonably deemed necessary by the Lead Arrangers to complete such syndication, including, but not limited to (x) information and evaluations prepared by you, the Acquired Business and your and its advisors, or on your or its behalf, relating to the Transaction (including the Projections (as hereinafter defined)) and (y) customary forecasts prepared by management of the Companies of balance sheets, income statements and cash flow statements for each fiscal quarter for the first twelve months following the Closing Date and for each year commencing with the first fiscal year following the Closing Date and for each of the succeeding seven fiscal years thereafter; (b) your assistance (including the use of commercially reasonable efforts to cause the Acquired Business to assist) in the preparation of a customary information memorandum with respect to each of the Facilities (each, an “Information Memorandum”) and other customary marketing materials to be used in connection with the syndication of each Facility (collectively with the Summary of Terms and any additional summary of terms prepared for distribution to Public Lenders (as hereinafter defined), the “Information Materials”); (c) using commercially reasonable efforts to ensure that the syndication efforts of the Lead Arrangers benefit from your existing lending relationships and, to the extent practical and appropriate, using commercially reasonable efforts to ensure that the syndication efforts of the Lead Arrangers benefit from the existing banking relationships of the Acquired Business and its subsidiaries; (d) using commercially reasonable efforts to obtain, upon our request, prior to the launch of primary syndication, monitored public corporate credit or family ratings (but no specific rating) for you after giving effect to the Transaction and ratings (but no specific rating) of the Facilities from Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) (collectively, the “Ratings”); (e) your ensuring, and with respect to the Acquired Business, using your commercially reasonable efforts to ensure, that none of the Companies shall syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of any debt of the Companies (other than the Facilities), including any renewals or refinancings of any existing debt, that, in the reasonable judgment of the Lead Arrangers, could reasonably be expected to materially and adversely affect the syndication of the Facilities without the prior written consent of the Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned) (it being understood and agreed that the following debt may be issued without the prior written consent of the Lead Arrangers: (i) capital leases and purchase money and equipment financing indebtedness incurred in the ordinary course of business, (ii) intercompany indebtedness and (iii) other indebtedness of the Acquired Business permitted to be incurred or remain outstanding under the Acquisition Agreement); and (f) your otherwise assisting the Lead Arrangers in their syndication efforts, including by making your officers and advisors, and, to the

 

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extent practical and appropriate, using your commercially reasonable efforts to make the officers and advisors of the Acquired Business, available from time to time upon reasonable advance notice to attend and make presentations regarding the business and prospects of the Companies and the Transaction at one or more meetings of prospective Lenders. Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letters or any other letter agreement or undertaking concerning the financing of the Transaction to the contrary, neither the obtaining of the Ratings referenced above nor the compliance with any of the other provisions set forth in clauses (a) through (f) above or any other provision of this paragraph shall constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date. For the avoidance of doubt, the Companies will not be required to provide any information to the extent that the provision thereof would violate any attorney-client privilege, law, rule or regulation or any obligation of confidentiality binding on the Companies; provided that in the event that the Companies do not provide information in reliance on this sentence, the Companies shall provide notice to the Lead Arrangers that such information is being withheld and shall use their commercially reasonable efforts to communicate, to the extent feasible, the applicable information in a way that would not violate the applicable obligation or risk waiver of such privilege.

 

It is understood and agreed that the Lead Arrangers will manage and control all aspects of the syndication of the Facilities in consultation with you and, as to the selection of Lenders, with your approval (such approval not to be unreasonably withheld or delayed), and, subject to the second paragraph in Section 1 above, any titles offered to prospective Lenders, when commitments will be accepted and the final allocations of the commitments among the Lenders. It is understood that no Lender participating in the Facilities will receive compensation from you in order to obtain its commitment, except on the terms contained herein and in the Summary of Terms. It is also understood and agreed that the amount and distribution of the fees among the Lenders will be at the sole and absolute discretion of the Lead Arrangers.

 

3.                                      Information Requirements. You hereby represent, warrant and covenant (with respect to information relating to the Acquired Business made available prior to the Closing Date, to your knowledge) that (a) all written information, other than Projections (as defined below) forward looking information and information of a general economic or industry specific nature, that has been or is hereafter made available to the Lead Arrangers or any of the Lenders by or on behalf of you or any of your representatives in connection with any aspect of the Transaction (including such information relating to the Acquired Business) (the “Information”) did not and will not when furnished, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not materially misleading (giving effect to all supplements and updates provided thereto) and (b) all financial projections concerning the Companies that have been or are hereafter made available to the Lead Arrangers or any of the Lenders by or on behalf of you or any of your representatives (the “Projections”) have been or will be prepared in good faith based upon reasonable assumptions (it being understood and agreed that the Projections are not to be viewed as a guarantee of financial performance or achievement, that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and that actual results may differ from the Projections and such differences may be material). You agree that if at any time prior to the later of (a) the earlier of (i) the date on which a Successful Syndication (as defined in the Facilities Fee Letter) is achieved and (ii) 60 days following the Closing Date (such earlier date, the “Syndication Date”) and (b) the Closing Date any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will (and with respect to Information and Projections with respect to the Acquired Business you will use commercially reasonable efforts to cause the Acquired Business to) promptly supplement, or cause to be supplemented, the Information and Projections so that such representations will be correct in all material respects (to your knowledge insofar as it applies to the Information and Projections furnished prior to the

 

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Closing Date concerning the Acquired Business) at such time. In issuing this commitment and in arranging and syndicating each of the Facilities, the Commitment Parties are and will be using and relying on the Information and the Projections without independent verification thereof. For the avoidance of doubt, nothing in this paragraph will constitute a condition to the availability of the Facilities on the Closing Date.

 

You acknowledge that (a) the Lead Arrangers 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 (the “Platform”) 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 Companies, their respective affiliates or any other entity, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such entities’ securities. If requested, you will assist the Lead Arrangers in preparing an additional version of the Information Materials not containing MNPI (the “Public Information Materials”) to be distributed to prospective Public Lenders.

 

Before distribution of any Information Materials (a) to prospective Private Lenders, you shall provide the Lead Arrangers with a customary letter authorizing the dissemination of the Information Materials; and (b) to prospective Public Lenders, you shall provide the Lead Arrangers with a customary letter authorizing the dissemination of the Public Information Materials and confirming the absence of MNPI therefrom. In addition, you hereby agree that (x) at the request of the Lead Arrangers (or their respective affiliates), you shall use commercially reasonable efforts to identify that portion of the Information Materials that may be distributed to the Public Lenders by clearly and conspicuously marking the same as “PUBLIC”; (y) all Information Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (z) the Lead Arrangers (and their respective affiliates) shall be entitled to treat any Information Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

You agree, subject to the confidentiality and other provisions of this Commitment Letter, that the Lead Arrangers (and their respective affiliates) on your behalf may distribute the following documents to all prospective Lenders, unless you advise the Lead Arrangers 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 prepared by the Lead Arrangers for prospective Lenders such as lender meeting invitations and funding and closing memoranda, (b) notifications of changes to the terms of the Facilities and (c) other materials intended for prospective Lenders after the initial distribution of the Information Materials, including drafts approved in writing by you and the Lead Arrangers (or their respective affiliates) and final versions of definitive documents with respect to the Facilities. If you advise the Lead Arrangers (or their respective affiliates) that any of the foregoing items should be distributed only to Private Lenders, then the Lead Arrangers (and their respective affiliates) will not distribute such materials to Public Lenders without further discussions with you. You agree (with respect to Information Materials relating to the Acquired Business made available prior to the Closing Date, to your knowledge) that Information Materials made available to prospective Public Lenders in accordance with this Commitment Letter shall not contain MNPI.

 

4.                                      Fees and Indemnities.

 

(a)                                 You agree to reimburse the Commitment Parties for all reasonable and documented out-of-pocket fees and expenses (including, but not limited to, the reasonable and documented fees, actual disbursements and other out-of-pocket expenses of one primary counsel to the

 

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Commitment Parties (it being understood and agreed that Weil, Gotshal & Manges LLP shall act as primary counsel to the Commitment Parties), and of (x) one local counsel in each relevant state and one local counsel in each Material Jurisdiction, in each case, retained by the Lead Arrangers (each such counsel shall be subject to your reasonable consent (such consent not to be unreasonably withheld, delayed or conditioned)) and (y) solely in the case of a conflict of interest, one additional counsel in each relevant jurisdiction to the affected Commitment Parties similarly situated and reasonable due diligence expenses) incurred in connection with the Facilities, the syndication thereof, the preparation of the Credit Documentation (as defined below) therefor and the other transactions contemplated hereby, whether or not the Closing Date occurs or any of the Credit Documentation is executed and delivered or any extensions of credit are made under either of the Facilities. Such amounts shall be paid on the earlier of (i) the Closing Date or (ii) three business days following the termination of this Commitment Letter as provided below. You agree to pay the fees set forth in (x) the separate fee letter addressed to you dated the date hereof from the Commitment Parties (the “Facilities Fee Letter”) and (y) the separate agency fee letter addressed to you dated the date hereof from the Administrative Agent (the “Agency Fee Letter” and, together with the Facilities Fee Letter, the “Fee Letters”).

 

(b)                                 You also agree to indemnify and hold harmless each of the Commitment Parties, each other Lender and each of their affiliates, successors and assigns and their respective partners, officers, directors, employees, trustees and agents (in each case, except to the extent acting in their capacity as a financial advisor in connection with the Acquisition) (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party for) any and all claims, damages, losses, liabilities and expenses (including, without limitation, the reasonable and documented fees, actual disbursements and other out-of-pocket expenses of counsel to any Indemnified Party) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) this Commitment Letter, (b) the Fee Letters, (c) any aspect of the Transaction or any of the other transactions contemplated thereby or (d) the Facilities, or any use made or proposed to be made with the proceeds thereof, except to the extent such claim, damage, loss, liability or expense (i) is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from (x) such Indemnified Party’s bad faith, gross negligence or willful misconduct or (y) a material breach of such Indemnified Party’s obligations hereunder or under the Fee Letters, (ii) arises from a dispute solely among the Indemnified Parties (other than a dispute involving claims against us in our capacity as a Lead Arranger, bookrunning manager, co-agent or similar capacity), and in any such event described in this clause (ii) solely to the extent that the underlying dispute does not arise as a result of any action, inaction or representation of, or information provided by or on behalf of, you or any of your subsidiaries or (iii) resulted from any agreement governing any settlement effected without your prior written consent (such consent not to be unreasonably withheld or delayed); provided, however, that the foregoing indemnity will apply to any such settlement in the event that you were offered the ability to assume the defense of the action that was the subject matter of such settlement and elected not to assume such defense. In the case of any claim, litigation, investigation or proceeding (any of the foregoing, a “Proceeding”) to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such Proceeding is brought by you, your equity holders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether or not any aspect of the Transaction is 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 arising out of, related to or in connection with any aspect of the Transaction, except to the extent of direct (as opposed to special, indirect, consequential or punitive) damages determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s bad faith, gross negligence, willful misconduct or material breach of this Commitment Letter or the Fee Letters. Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic

 

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telecommunications or other information transmission systems, other than for direct, actual damages resulting from the bad faith, gross negligence or willful misconduct of such Indemnified Party as determined by a final non-appealable judgment of a court of competent jurisdiction. You shall not, without the prior written consent of an Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened Proceeding against an Indemnified Party in respect of which indemnity could have been sought hereunder by such Indemnified Party unless (i) such settlement includes an unconditional release of such Indemnified Party from all liability or claims that are the subject matter of such Proceeding and (ii) does not include any statement as to any admission of liability.

 

You and each Indemnified Party (in consultation with you) shall take all reasonable steps to mitigate any losses, claims, damages, liabilities and expenses and each Indemnified Party shall give such information and assistance to you as you may reasonably request in connection with any Proceeding.

 

In addition, please note that Barclays Capital Inc. has been retained by you as financial advisor (in such capacity, together with any affiliates, the “Financial Advisor”) to you in connection with the Acquisition. You agree to such retention, and further agree not to assert any claim you might allege based on any actual or potential conflicts of interest that might be asserted to arise or result from our and our affiliates’ relationships with you as described and referred to herein.

 

5.                                      Conditions to Financing. The commitment of each Initial Lender with respect to the initial funding of the Facilities is subject solely to (a) the satisfaction or waiver by the Commitment Parties of each of the conditions set forth under Annex II hereto and (b) subject to the Funds Certain Provisions (as defined below), the execution and delivery of definitive credit documentation with respect to each Facility consistent with this Commitment Letter and the Fee Letters and, to the extent terms are not provided in this Commitment Letter or the Fee Letters, otherwise satisfactory to you and the Lead Arrangers (the “Credit Documentation”) prior to such initial funding.

 

Notwithstanding anything in this Commitment Letter, the Fee Letters, the Credit Documentation or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, (a) the Credit Documentation shall be in a form such that the terms thereof do not impair availability of the Facilities on the Closing Date if the conditions in Annex II and paragraph 5 hereof shall have been satisfied, (b) to the extent any security interest in the Collateral (as defined in Annex I) (other than the Collateral of the Borrowers and the Guarantors (as defined in Annex I) the security interest in which may be perfected by the filing of a UCC financing statement, the filing of short-form security agreements with the United States Patent and Trademark Office or the United States Copyright Office or the delivery of certificates evidencing equity interests (other than any certificates evidencing equity interests in the Acquired Business and its subsidiaries)) is not provided on the Closing Date after your use of commercially reasonable efforts to do so, the provision and/or perfection, as applicable, of any such Collateral shall not constitute a condition precedent to the availability of the Facilities on the Closing Date (it being understood, however, that the Credit Documentation shall provide that such provision and/or perfection occurs not later than 90 days, or in the case of any certificates evidencing equity interests in the Acquired Business and any of its subsidiaries organized in the United States, 10 days (or, in each case such later date as reasonably agreed to by the Administrative Agent) after the Closing Date pursuant to arrangements to be mutually agreed), and (c) subject to appropriate qualifications to reflect the foregoing clause (b), the only representations and warranties the accuracy of which shall be a condition to the availability of the Facilities on the Closing Date shall be those set forth in paragraph (ii) of Annex II hereto. The provisions of this paragraph are referred to herein as the “Funds Certain Provisions.”

 

Each of the parties hereto agrees that this Commitment Letter and the Fee Letters is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance,

 

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reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Credit Documentation by the parties hereto in a manner consistent with this Commitment Letter and, to the extent applicable, the Fee Letters, it being acknowledged and agreed that the funding of the Facilities is subject only to the conditions precedent as provided herein.

 

6.                                      Confidentiality and Other Obligations. This Commitment Letter and the Fee Letters and the contents hereof and thereof are confidential and, may not be disclosed in whole or in part to any person or entity without the prior written consent of the Lead Arrangers (not to be unreasonably withheld, conditioned or delayed) except (i) this Commitment Letter and the Fee Letters may be disclosed (A) on a confidential basis to your directors, officers, employees, accountants, attorneys and other representatives and professional advisors and those of your affiliates who need to know such information in connection with the Transaction and are informed of the confidential nature of such information, (B) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process based on the reasonable advice of your legal counsel (in which case you agree to inform the Lead Arrangers promptly thereof prior to such disclosure to the extent permitted by applicable law), (C) on a confidential basis to the directors, officers, employees, accountants, attorneys and other representatives and professional advisors of the Acquired Business in connection with their consideration of the Transaction, provided that the Fee Letters are redacted in a manner reasonably satisfactory to the Lead Arrangers, and (D) on a confidential basis to any prospective Additional Arranger and its respective directors, officers, employees, accountants, attorneys and other representatives and professional advisors in connection with their consideration of the Transaction, (ii) Annex I and Annex II and the existence of this Commitment Letter and the Fee Letters (but not the contents of the Commitment Letter and the Fee Letters) may be disclosed to Moody’s and S&P and any other rating agency on a confidential basis, (iii) the aggregate amount of the fees (including upfront fees and original issue discount) payable under the Fee Letters may be disclosed as part of generic disclosure regarding sources and uses for closing of the Facilities (but without disclosing any specific fees, market flex or other economic terms set forth therein or to whom such fees or other amounts are owed), (iv) the Commitment Letter and the Fee Letters may be disclosed on a confidential basis to your auditors after the Closing Date for customary accounting purposes, including accounting for deferred financing costs, (v) you may disclose the Commitment Letter (but not the Fee Letters) and its contents in any proxy or other public filing relating to the Acquisition, (vi) the Commitment Letter and the Fee Letters may be disclosed to a court, tribunal or any other applicable administrative agency or judicial authority in connection with the enforcement of your rights hereunder (in which case you agree to inform the Lead Arrangers promptly thereof prior to such disclosure to the extent permitted by applicable law), and (v) you many disclose the existence and contents of the Commitment Letter to potential Lenders and participants in connection with their consideration of the Transaction.  This paragraph shall terminate on the earlier of (a) execution and delivery of the Credit Documentation and (b) the first anniversary of the date hereof.

 

The Commitment Parties shall use all confidential information provided to them by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and otherwise in connection with the Transaction and shall treat confidentially all such information; provided, however, that nothing herein shall prevent the Commitment Parties from disclosing any such information (i) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case the Commitment Parties agree to inform you promptly thereof to the extent not prohibited by law, rule or regulation), (ii) upon the request or demand of any regulatory authority having jurisdiction over the Commitment Parties or any of their respective affiliates, (iii) to the extent that such information becomes publicly available other than by reason of disclosure in violation of this

 

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agreement by the Commitment Parties, (iv) to the Commitment Parties’ affiliates, employees, legal counsel, independent auditors and other experts, professionals or agents who need to know such information in connection with the Transaction and are informed of the confidential nature of such information, (v) for purposes of establishing a “due diligence” defense, (vi) to the extent that such information is received by a Commitment Party from a third party that is not to the applicable Commitment Party’s knowledge subject to confidentiality obligations to you, (vii) to the extent that such information is independently developed by the Commitment Parties, (viii) to potential Lenders, participants, assignees or any direct or indirect contractual counterparties to any swap or derivative transaction relating to you or your obligations under the Facilities (other than Disqualified Institutions), in each case, who agree to be bound by the terms of this paragraph (or language not less restrictive than this paragraph or as otherwise reasonably acceptable to you and each Commitment Party, including as may be agreed in any confidential information memorandum or other marketing material), (ix) to Moody’s and S&P, and to Bloomberg, LSTA and similar market data collectors with respect to the syndicated lending industry; provided that such information is supplied only on a confidential basis and does not include copies of the Fee Letters, or (x) with your prior written consent. This paragraph shall terminate on the earlier of (a) execution and delivery of the Credit Documentation and (b) the first anniversary of the date hereof.

 

You acknowledge that the Commitment Parties or their affiliates may be providing financing or other services to parties whose interests may conflict with yours. The Commitment Parties agree that they will not furnish confidential information obtained from you to any of their other customers and will treat confidential information relating to the Companies and their respective affiliates with the same degree of care as they treat their own confidential information. The Commitment Parties further advise you that they will not make available to you confidential information that they have obtained or may obtain from any other customer. In connection with the services and transactions contemplated hereby, you agree that the Commitment Parties are permitted to access, use and share with any of their bank or non-bank affiliates, agents, advisors (legal or otherwise) or representatives any information concerning the Companies or any of their respective affiliates that is or may come into the possession of the Commitment Parties or any of their respective affiliates.

 

In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’ understanding, that: (i) each of the Facilities and any related arranging or other services described in this Commitment Letter is an arm’s-length commercial transaction between you and your affiliates, on the one hand, and the Commitment Parties, on the other hand, (ii) the Commitment Parties have not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby, (iv) in connection with the financing transactions contemplated hereby and the process leading to such transactions, each of the Commitment Parties has been, is, and will be acting solely as a principal and has not been, is not, and will not be acting as an advisor, agent or fiduciary for you or any of your affiliates, stockholders, creditors or employees or any other party, (v) the Commitment Parties have not assumed and will not assume an advisory, agency or fiduciary responsibility in your or your affiliates’ favor with respect to any of the financing transactions contemplated hereby or the process leading thereto, and the Commitment Parties have no obligation to you or your affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth in this Commitment Letter, and (vi) the Commitment Parties and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and the Commitment Parties have no obligation to disclose any of such interests to you or your affiliates. To the fullest extent permitted by law and without limiting the provisions of paragraph 4(b), you hereby waive and release any claims that you may have against the Commitment Parties with respect to any

 

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breach or alleged breach of agency or fiduciary duty in connection with any aspect of any financing transaction contemplated by this Commitment Letter.

 

The Commitment Parties hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “U.S.A. Patriot Act”), each of them is required to obtain, verify and record information that identifies you, the Euro Borrower and the Guarantors, which information includes the name and address of such person and other information that will allow the Commitment Parties, as applicable, to identify such person in accordance with the U.S.A. Patriot Act. This notice is given in accordance with the requirements of the U.S.A. Patriot Act and is effective for the Commitment Parties and each prospective Lender.

 

7.                                      Survival of Obligations. The provisions of paragraphs 2, 3, 4, 6 and 8 shall remain in full force and effect regardless of whether any Credit Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of the Commitment Parties hereunder, provided that (i) the provisions of paragraphs 2 and 3 shall not survive if the commitments and undertakings of the Commitment Parties are terminated by any party hereto prior to the effectiveness of the Facilities, (ii) if the Facilities close and the Credit Documentation is executed and delivered (A) the provisions of paragraphs 2 and 3 shall survive only until the Syndication Date is achieved and (B) the provisions under paragraph 4 and the second paragraph of Section 6 shall be superseded and deemed replaced by the terms of the Credit Documentation governing such matters (solely to the extent such provisions are set forth therein).

 

8.                                      Miscellaneous. This Commitment Letter and the Fee Letters may be executed in multiple counterparts and by different parties hereto in separate counterparts, all of which, taken together, shall constitute an original. Delivery of an executed counterpart of a signature page to this Commitment Letter or the Fee Letters by telecopier, facsimile or other electronic transmission (e.g., a “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart thereof. Headings are for convenience of reference only and shall not affect the construction of, or be taken into consideration when interpreting, this Commitment Letter or the Fee Letters.

 

This Commitment Letter and the Fee Letters shall be governed by, and construed in accordance with, the laws of the State of New York; provided that (i) the interpretation of whether a Company Material Adverse Effect (as defined in Annex II hereto) has occurred, (ii) the accuracy of the Acquisition Agreement Representations and whether you or any of your affiliates have the right to terminate your (or its) obligations under the Acquisition Agreement or decline to consummate the Acquisition as a result of a breach of such Acquisition Agreement Representations and (iii) whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement shall, in each case, be construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Each party hereto hereby irrevocably waives any and all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter, the Fee Letters, the Transaction and the other transactions contemplated hereby and thereby or the actions of the Commitment Parties in the negotiation, performance or enforcement hereof. Each party hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter, the Fee Letters, the Transaction and the other transactions contemplated hereby and thereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court. The parties hereto agree that service of any process, summons, notice or document by registered mail addressed to you shall be effective service of process against you for any

 

10

 

suit, action or proceeding relating to any such dispute. Each party hereto waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction the applicable party is or may be subject by suit upon judgment.

 

This Commitment Letter, together with the Fee Letters, embodies the entire agreement and understanding among the parties hereto and your affiliates with respect to the Facilities and supersedes all prior agreements and understandings relating to the subject matter hereof. No party has been authorized by the Commitment Parties to make any oral or written statements that are inconsistent with this Commitment Letter. Neither this Commitment Letter (including the attachments hereto) nor the Fee Letters may be amended or any term or provision hereof or thereof waived or modified except by an instrument in writing signed by each of the parties hereto.

 

This Commitment Letter may not be assigned by you without our prior written consent (and any purported assignment without such consent will be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and the Indemnified Parties). Notwithstanding the foregoing sentence, each Commitment Party may assign its commitment hereunder, in whole or in part, to any of its affiliates or to any Lender (other than to a Disqualified Institution); provided that, other than with respect to an assignment to (x) an Additional Arranger or (y) which you otherwise agree in writing, such Commitment Party shall not be released from the portion of its commitment hereunder so assigned to the extent such assignee fails to fund the portion of the commitment assigned to it on the Closing Date notwithstanding the satisfaction of the conditions to funding set forth herein.

 

Please indicate your acceptance of the terms of the Facilities set forth in this Commitment Letter and the Fee Letters by returning to Barclays executed counterparts of this Commitment Letter and the Fee Letters not later than 9:00 a.m. (New York City time) on March 17, 2016, whereupon the undertakings of the parties with respect to the Facilities shall become effective to the extent and in the manner provided hereby. This offer shall terminate with respect to the Facilities if not so accepted by you at or prior to that time. Thereafter, all commitments and undertakings of the Commitment Parties hereunder will expire on the earliest of (a) 11:59 p.m. (New York City time) on March 16, 2017 (the “Commitment Termination Date”) (provided that to the extent the Termination Date (as defined in the Acquisition Agreement in effect on the date hereof) is extended to June 16, 2017 in accordance with the terms of Section 8.1(b) of the Acquisition Agreement (in accordance with the terms thereof as in effect on the date hereof), the Commitment Termination Date shall, upon notice of such extension to the Lead Arrangers from the US Borrower, be automatically extended to 11:59 p.m. (New York City time) on June 16, 2017), (b) the closing of the Acquisition without the use of the Facilities, (c) the termination of the Acquisition Agreement and (d) the public announcement of the abandonment of the Acquisition by you or any of your affiliates in a public statement or filing (such earliest time set forth in clause (a), (b), (c) or (d) above, the “Expiration Date”).

 

[The remainder of this page intentionally left blank.]

 

11

 

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

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
BARCLAYS BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy Broadbent
    
	
 
    	
Name:
    	
Timothy Broadbent
    
	
 
    	
Title:
    	
Managing Director
    

 

Signature Page to Commitment Letter

 

 

This Commitment Letter is accepted and agreed to as of the date first written above:

 

	
COHERENT, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Kevin Palatnik
    	
 
    
	
 
    	
Name:
    	
Kevin Palatnik
    	
 
    
	
 
    	
Title:
    	
Executive Vice President   and Chief Financial Officer
    	
 
    

 

Signature Page to Commitment Letter

 

 

ANNEX I

 

SUMMARY OF TERMS AND CONDITIONS
 FACILITIES

 

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

 

	
Borrowers:
    	
 
    	
With   respect to the US Term Facility and the Revolving Credit Facility,   Coherent, Inc. (the “US Borrower”).

 

With   respect to the Euro Term Facility and the Revolving Credit Facility,   Constellation Holding, GmbH, a German company with limited liability (the “Euro Borrower” and, together with   the US Borrower, the “Borrowers”).
    
	
 
    	
 
    	
 
    
	
Borrower Representative:
    	
 
    	
The   Credit Documentation (as defined below) will permit the US Borrower to act as   the borrower representative (in such capacity, the “Borrower   Representative”), and to act as agent on behalf of the   Borrowers for purposes of delivering notices, providing consents, receiving   notices and taking other actions permitted or required under the Credit   Documentation.
    
	
 
    	
 
    	
 
    
	
Guarantors:
    	
 
    	
Subject   in all respects to the Security Principles (as defined below), (a) the   obligations of the US Borrower under the US Term Facility, the Revolving   Credit Facility (as defined below) and, at the Borrower Representative’s   option, under any treasury management, interest protection or other hedging   arrangements entered into with a Lender (as defined below) or an affiliate   thereof (collectively, the “US Obligations”)   will be guaranteed on a senior basis by each of the US Borrower’s, direct or   indirect, wholly-owned restricted subsidiaries that are US Subsidiaries (as   defined below) (the entities described in this clause (a), collectively, the   “US Guarantors”; the US Guarantors   together with the US Borrower, the “US Loan Parties”)   and (b) all obligations of the Euro Borrower under the Euro Term   Facility and the Revolving Credit Facility (collectively, the “Euro Obligations”) will be   unconditionally guaranteed on a senior basis by each US Loan Party and each   of the US Borrower’s wholly-owned restricted subsidiaries that are Foreign   Subsidiaries (as defined below) (collectively, the “Euro   Guarantors”; and the Euro Guarantors, together with the US   Guarantors, collectively, the “Guarantors”;   and the Euro Guarantors, together with the Euro Borrower, collectively, the “Euro Loan Parties”; and the Euro   Loan Parties, together with the US Loan Parties, the “Loan   Parties”), subject to customary exceptions to be agreed   (including, without limitation, no guarantee from (i) with respect to   the US Obligations only, any CFC Holdco or Disregarded Domestic Person (each   as defined below) and any US Subsidiary that is a subsidiary of a Foreign   Subsidiary, (ii) any subsidiary whose provision of a guarantee would   (x) be prohibited by applicable law or regulation or any contractual   obligation existing on the Closing Date or at the time of acquisition thereof   after the Closing Date (so long as such prohibition is not created in   contemplation of such transaction) or that would require consent, approval,   license or authorization of a governmental authority (unless such consent,   approval, license or authorization has been received) or (y) otherwise   result in a material adverse tax consequence to either
    

 

Annex I-1

 

	
 
    	
 
    	
Borrower, in each case,   as reasonably determined by such Borrower, (iii) Immaterial Subsidiaries   (as defined below), (iv) unrestricted subsidiaries, (v) captive   insurance companies, (vi) not-for-profit subsidiaries, (vii) special   purpose entities, (viii) any subsidiary where the Borrower   Representative and the Administrative Agent reasonably determine that the   costs of obtaining a guarantee from such subsidiary are excessive in relation   to the value afforded thereby or (ix) other subsidiaries mutually agreed   between the Borrower Representative and the Administrative Agent.  For the avoidance of doubt and   notwithstanding anything to the contrary herein, subsidiaries which are not   “eligible contract participants” shall not guarantee swap obligations to the   extent not permitted by the Commodity Exchange Act, or any regulation   thereunder, by virtue of such subsidiary failing to constitute an “eligible   contract participant”.

 

For   purposes of the Credit Documentation, (a) “US   Subsidiary” means any direct or indirect subsidiary of the US   Borrower organized under the laws of the United States, any state thereof or   the District of Columbia, (b) “Foreign Subsidiary”   means any direct or indirect subsidiary of the US Borrower organized in a   jurisdiction outside of the United States, any state thereof or the District   of Columbia, (c) “Guarantor Coverage Test”   means, as of the last day of the fiscal quarter of the US Borrower most   recently ended for which financial statements have been (or were required to   be) delivered pursuant to the Credit Documentation, the Consolidated Total   Assets (to be defined in a manner consistent with the Documentation   Principles) and Consolidated EBITDA (as defined below) attributable to the   Guarantors only is no less than 80% of Consolidated Total Assets and   Consolidated EBITDA, respectively, of the US Borrower and its restricted   subsidiaries (other than any restricted subsidiaries located in an Excluded   Jurisdiction), in each case as of such date for the test period most recently   ended, (d) “Immaterial Subsidiary”   means (i) any Restricted Subsidiary organized under the law of a   Non-Material Jurisdiction and (ii) any Restricted Subsidiary organized   under the laws of a Material Jurisdiction, taken together with all such   Immaterial Subsidiaries organized under the laws of such Material   Jurisdiction as of the last day of the fiscal quarter of the US Borrower most   recently ended for which financial statements have been (or were required to   be) delivered pursuant to the Credit Documentation, did not have assets with   a value in excess of 1.0% of Consolidated Total Assets or contribute in   excess of 1.0% of Consolidated EBITDA, in each case as of such date for the   test period most recently ended; provided,   that the Borrower Representative may elect in its sole discretion to exclude   as an Immaterial Subsidiary any Restricted Subsidiary that would otherwise   meet the definition thereof; provided, further   that a Material Subsidiary organized in any Post-Closing Material   Jurisdiction shall not be required to be a Guarantor if the US Borrower has,   as of such date for the test period most recently ended, complied with the   Guarantor Coverage Test, (e) “Material Jurisdiction”   means (i) on the Closing Date, the United States, the United Kingdom,   Germany, Spain and the Netherlands (the “Closing Date Material   Jurisdictions”) and (ii) at any time after the Closing   Date, the Closing Date Material Jurisdictions and any other jurisdiction   where any Restricted Subsidiary organized under the laws of such   jurisdiction, taken together with all other Restricted Subsidiaries organized   under the laws of such jurisdiction 
    

 

Annex I-2

 

	
 
    	
 
    	
as   of the last day of the fiscal quarter of the US Borrower most recently ended   for which financial statements have been (or were required to be) delivered   pursuant to the Credit Documentation, have assets with a value in excess of   5.0% of Consolidated Total Assets or contribute in excess of 5.0% of   Consolidated EBITDA of the US Borrower and its restricted subsidiaries, in   each case as of such date for the test period most recently ended (the “Post-Closing Material Jurisdiction”);   provided that in no event shall The   People’s Republic of China, South Korea or Japan be deemed to be a “Material   Jurisdiction” (each such jurisdiction, an “Excluded   Jurisdiction”), (f) “Non-Material   Jurisdiction” means any jurisdiction that is not a Material   Jurisdiction and (g) “Material Subsidiary”   means any direct or indirect subsidiary of the US Borrower which is not an   Immaterial Subsidiary.
    
	
 
    	
 
    	
 
    
	
Administrative and Collateral Agent:
    	
 
    	
Barclays   Bank PLC (“Barclays”)   will act as sole and exclusive administrative and collateral agent for the   Lenders (the “Administrative   Agent”).
    
	
 
    	
 
    	
 
    
	
Joint Lead Arrangers and Joint Bookrunning Managers:
    	
 
    	
Barclays,   together with any Additional Arranger appointed pursuant to Section 1 of   the Commitment Letter, will act as joint lead arrangers and joint bookrunning   managers for the Facilities (each, in such capacity, a “Lead Arranger” and   collectively, the “Lead Arrangers”).
    
	
 
    	
 
    	
 
    
	
Lenders:
    	
 
    	
Banks,   financial institutions and institutional lenders selected by the Lead   Arrangers and reasonably acceptable to the Borrower Representative and, after   the initial funding of the Facilities, subject to the restrictions set forth   in the Assignments and Participations section below (the “Lenders”).
    
	
 
    	
 
    	
 
    
	
Facilities:
    	
 
    	
An   aggregate principal amount of up to $850,000,000 will be available through   the following facilities (such facilities, the “Facilities”):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Term Facility: (i) a $375,000,000 (plus, at the election of the Borrower Representative,   an amount sufficient to fund original issue discount (“OID”)   or upfront fees required to be funded in connection with the “market flex”   provisions of the Facilities Fee Letter and not funded under the Revolving   Credit Facility) term loan B facility made available to the US Borrower, all   of which will be drawn on the Closing Date (the “US Term Facility”)   and (ii) a term loan B facility in a principal amount equal to the Euro   equivalent of $375,000,000 made available to the Euro Borrower, all of which   will be drawn on the Closing Date (the “Euro Term Facility”   and together with the US Term Facility, collectively, the “Term Facility”). For the avoidance   of doubt, the Euro equivalent shall be determined by the Administrative Agent   on the earlier of (x) the allocation of the commitments under the Term   Facility in connection with the syndication thereof and (y) the date on   which the Borrower Representative submits the borrowing request to the   Administrative Agent in connection with the initial funding of the   Facilities.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Revolving Credit Facility: a $100,000,000 revolving credit facility   (the “Revolving Credit   Facility” and the loans thereunder, the “Revolving   Loans”), available from time to time on or after the Closing   Date until the fifth anniversary of the Closing Date, which will be available   to the US Borrower and the Euro Borrower in Euros, U.S. dollars and/or such   other 
    

 

Annex I-3

 

	
 
    	
 
    	
currencies   as the Administrative Agent and each lender with a commitment under the   Revolving Credit Facility agrees. The Revolving Credit Facility shall include   a sublimit of $30,000,000 for the issuance of standby letters of credit   (each, a “Letter of   Credit”) and a sublimit of $10,000,000 for swingline loans   (each, a “Swingline   Loan”). Letters of Credit will be initially issued by Barclays   and each Additional Arranger on a pro rata basis (in such capacity, the “Issuing Bank”), and   each of the Lenders under the Revolving Credit Facility will purchase an   irrevocable and unconditional participation in each Letter of Credit and each   Swingline Loan.
    
	
 
    	
 
    	
 
    
	
Swingline Option:
    	
 
    	
Barclays,   in its capacity as the swingline lender (in such capacity, the “Swingline Lender”),   will make Swingline Loans available to the US Borrower in U.S. dollars on a   same day basis. The US Borrower must repay each Swingline Loan upon demand of   the Swingline Lender (and in any event on the fifth anniversary of the   Closing Date).
    
	
 
    	
 
    	
 
    
	
Purpose:
    	
 
    	
The proceeds of the borrowings under the   Term Facility on the Closing Date and cash on of the balance sheet of the   Borrowers and the Guarantors, shall be used (i) to finance the   Acquisition and the Refinancing and (ii) to pay fees and expenses incurred   in connection with the Transaction. The proceeds of the Revolving Credit   Facility may be used on the Closing Date to fund any additional upfront fees   or OID payable due to an imposition of “market flex” under the Facilities Fee   Letter (to the extent no funded by an increase to the US Term Facility) and to   backstop, cash collateralize or replace letters of credit outstanding on the   Closing Date. The proceeds of the Revolving Credit Facility shall be used   after the Closing Date to provide ongoing working capital and for other   general corporate purposes of the Borrowers and their subsidiaries.
    
	
 
    	
 
    	
 
    
	
Interest Rates:
    	
 
    	
The   interest rates per annum applicable to the Facilities will be, at the option   of the Borrower Representative (i) LIBOR plus the Applicable Margin (as   hereinafter defined) or (ii) the Base Rate plus the Applicable Margin.   The Applicable Margin means (a) with respect to the Term Facility,   (x) 4.75% per annum, in the case of LIBOR advances, and (y) 3.75%   per annum, in the case of Base Rate advances, and (b) with respect to   the Revolving Credit Facility, (x) 4.25% per annum, in the case of LIBOR   advances, and (y) 3.25% per annum, in the case of Base Rate advances, in   each case with two 25 basis point step-downs if the Secured Net Leverage Ratios   (as defined below) are less than 0.75x and 1.25x inside the Secured Net   Leverage Ratio on the Closing Date, respectively.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Each   Swingline Loan shall bear interest at the Base Rate plus the Applicable   Margin for Base Rate Revolving Loans.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Borrower Representative may select interest periods of one, two, three or six   months (and, if agreed to by all relevant Lenders, twelve months) for LIBOR   advances. Interest shall be payable in cash at the end of the selected   interest period, but no less frequently than quarterly.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“LIBOR” and “Base Rate” will   have meanings customary and appropriate for financings of this type; provided that (x) LIBOR with   respect to (i) the 
    

 

Annex I-4

 

	
 
    	
 
    	
Term   Facility will be deemed to be not less than 1.00% per annum (the “LIBOR Floor”) and (ii) the   Revolving Credit Facility will be deemed to be not less than 0.00% per annum   and (y) the Base Rate will be deemed to be not less than 100 basis   points higher than one-month LIBOR.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
During   the continuance of an event of default for non-payment of principal, interest   or any other amount, interest will accrue on such overdue principal, interest   or other amount at the Default Rate (as defined below). During the   continuance of a bankruptcy event of default, the principal amount of all   outstanding obligations will bear interest at the Default Rate. As used   herein, “Default Rate”   means (i) on the principal of any loan at a rate of 2.00% in excess of   the rate otherwise applicable to such loan and (ii) on any other overdue   amount at a rate of 2.00% in excess of the non-default rate of interest then   applicable to Base Rate loans under the Term Facility.
    
	
 
    	
 
    	
 
    
	
Commitment Fee:
    	
 
    	
For   the period commencing on the Closing Date through the last day of the first   fiscal quarter ending thereafter, a commitment fee of 0.50% per annum, with a   step down to 0.375% per annum for any fiscal quarterly period thereafter for   which the Secured Net Leverage Ratio as of the last day of the most recently   completed fiscal quarter is equal to or less than a Secured Net Leverage   Ratio that is 1.00x inside the Secured Net Leverage Ratio on the Closing   Date, shall be payable on the actual daily unused portions of the Revolving   Credit Facility during each such applicable period, such fee to be payable   quarterly in arrears and on the date of termination or expiration of the   commitments under the Revolving Credit Facility. Swingline Loans will not be   considered utilization of the Revolving Credit Facility for purposes of this   calculation. No commitment fee shall be paid to any defaulting lender.
    
	
 
    	
 
    	
 
    
	
Calculation of Interest and Fees:
    	
 
    	
Other   than calculations in respect of interest at the Base Rate (which shall be   made on the basis of actual number of days elapsed in a 365/366 day year),   all calculations of interest and fees shall be made on the basis of actual   number of days elapsed in a 360-day year.
    
	
 
    	
 
    	
 
    
	
Cost and Yield Protection:
    	
 
    	
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, except as required by applicable   law (with appropriate gross-up for withholding taxes, subject to customary   exceptions); provided that for   all purposes of the Credit Documentation, (i) the Dodd-Frank Wall Street   Reform and Consumer Protection Act and all requests, rules, guidelines and   directives promulgated thereunder and (ii) all requests, rules,   guidelines or directives promulgated by the Bank for International   Settlements, the Basel Committee on Banking Supervision (or any successor or   similar authority) or the United States or foreign regulatory authorities, in   each case, pursuant to Basel III, shall be deemed introduced or adopted after   the Closing Date.

 
    
	
 
    	
 
    	
 
    
	
Letter of Credit Fees:
    	
 
    	
Letter   of Credit fees equal to the Applicable Margin from time to time on LIBOR   advances under the Revolving Credit Facility on a per annum basis will be   payable quarterly in arrears and shared proportionately by the 
    

 

Annex I-5

 

	
 
    	
 
    	
Lenders   under the Revolving Credit Facility. In addition, a fronting fee equal to   12.5 basis points per annum will be payable to the Issuing Bank for its own   account, as well as reasonable customary issuance and documentary fees. Both   the Letter of Credit fees and the fronting fees will be calculated on the   amount available to be drawn under each outstanding Letter of Credit.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
Term Facility: 7 years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Revolving Credit Facility: 5 years after the Closing Date.
    
	
 
    	
 
    	
 
    
	
Amendment and Extension:
    	
 
    	
The   Credit Documentation shall provide the right of individual Lenders to agree   in their sole discretion to extend the maturity of their loans and   commitments under the Facilities upon the request of the Borrower   Representative and without the consent of any other Lender (and as further   described under “Waivers and Amendments” below).
    
	
 
    	
 
    	
 
    
	
Incremental Facilities:
    	
 
    	
The   Credit Documentation will permit the Borrower Representative to add one or   more incremental term loan facilities to the Facilities (each, an “Incremental Term Facility”)   and/or increase commitments under the Revolving Credit Facility (any such   increase, an “Incremental   Revolving Facility”; the Incremental Term Facilities and the   Incremental Revolving Facilities are collectively referred to as “Incremental Facilities”)   in an aggregate amount of up to (a) $150,000,000 plus (b) an   additional amount such that, in the case of this clause (b) only, after   giving pro forma effect thereto (including use of proceeds), the Senior   Secured Net Leverage Ratio (as defined below) does not exceed 2.75:1.00 (and,   for purposes of the test in this clause (b) to include all such   Incremental Facilities, assuming they were fully drawn, and whether or not   secured and whether secured on a first-lien or junior basis (without netting   the proceeds thereof), but excluding any substantially simultaneous debt   incurrence pursuant to clause (a)) (it being understood that loans may be incurred   under both clauses (a) and (b) above, and proceeds from any such   incurrence under both clauses (a) and (b) above may be utilized in   a single transaction by first calculating the incurrence under clause   (b) above and then calculating the incurrence under clause   (a) above and, for the avoidance of doubt, any such incurrence under   clause (a) shall not be given pro forma effect for purposes of   determining Senior Secured Net Leverage Ratio for purposes of effectuating   the incurrence under clause (b) in such single transaction); provided that (i) no Lender will be   required to participate in any such Incremental Facility,   (ii) (x) no event of default (or, in the case of an Incremental   Facility the proceeds of which will be used to finance a Permitted Acquisition   (as defined below), no payment or bankruptcy event of default) exists or   would exist after giving effect thereto and (y) the representations and   warranties in the Credit Documentation shall be true and correct in all   material respects (except to the extent already qualified by materiality or   material adverse effect) (provided that   any bring-down of representations and warranties shall be limited in the case   of any Permitted Acquisition to customary “specified representations” and   “acquisition agreement representations”), (iii) the maturity date of any   such Incremental Term Facility shall be no earlier than the maturity date for   the Term Facility, (iv) the weighted average life to maturity of any   Incremental Term Facility shall be no shorter than the weighted average life 
    

 

Annex I-6

 

	
 
    	
 
    	
to   maturity of the Term Facility, (v) the interest margins for the   Incremental Term Facility shall be determined by the Borrower Representative   and the lenders of the Incremental Term Facility; provided that in the event that the interest margins for   any Incremental Term Facility incurred less than 18 months after the Closing   Date are greater than the Applicable Margin for the Term Facility by more   than 50 basis points, then the Applicable Margin for the Term Facility shall   be increased to the extent necessary so that the interest margins for the   Incremental Term Facility are not more than 50 basis points higher than the   Applicable Margin for the Term Facility; provided,   further, that in determining   the interest margins applicable to the Term Facility and the Applicable   Margins for the Incremental Term Facility, (x) OID or upfront fees   (which shall be deemed to constitute like amounts of OID) payable by the   applicable Borrower for the account of the Lenders of the Term Facility or   the Incremental Term Facility in the primary syndication thereof shall be   included (with OID being equated to interest based on the shorter of   (i) the weighted average life to maturity of such loans and (ii) an   assumed four-year life to maturity), (y) customary arrangement,   structuring, underwriting, amendment or commitment fees payable solely to the   Lead Arrangers (or their respective affiliates) in connection with the Term   Facility or to one or more arrangers (or their affiliates) of the Incremental   Term Facility shall be excluded, and (z) if the LIBOR or Base Rate floor   for the Incremental Term Facility is greater than the LIBOR or Base Rate   floor, respectively, for the existing Term Facility, the difference between   such floor for the Incremental Term Facility and the existing Term Facility   shall be equated to an increase in the Applicable Margin for purposes of this   clause (v), (vi) each Incremental Facility may be secured by either a   pari passu or junior lien on the Collateral (as hereinafter defined) securing   the Facilities in each case on terms and pursuant to documentation reasonably   satisfactory to the Administrative Agent, (vii) any Incremental   Revolving Facility shall be on terms and pursuant to documentation applicable   to the Revolving Credit Facility and any Incremental Term Facility shall be   on terms and pursuant to documentation to be determined by the Borrower   Representative and the lenders providing such Incremental Facility, provided that, to the extent such terms   and documentation are not consistent with the Term Facility (except to the   extent permitted by clause (iii), (iv) or (v) above), they shall be   reasonably satisfactory to the Administrative Agent and (viii) subject   to clause (vii) above, any Incremental Term Facility shall be on   terms and pursuant to documentation to be agreed between the Borrower   Representative and the applicable lenders providing the Incremental Term   Facility; provided that to the extent such terms   and documentation are not consistent with the Term Facility or the Revolving   Credit Facility, as the case may be (except to the extent permitted above),   such terms may, at the option of the Borrower Representative, be incorporated   into the Credit Documentation to the extent all such terms are beneficial to   all existing Lenders without further amendment requirements, including, for   the avoidance of doubt, any increase in the Applicable Margin relating to the   existing Term Facility to bring such Applicable Margin in line with the   Incremental Term Facility to achieve fungibility with such existing Term Facility. The Borrower Representative shall seek   commitments in respect of any Incremental Facility from existing Lenders or   from additional banks, financial institutions and other institutional lenders   reasonably 
    

 

Annex I-7

 

	
 
    	
 
    	
acceptable   to the Administrative Agent who will become Lenders in connection therewith.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Credit Documentation will permit the Borrower Representative to utilize   availability under the Incremental Term Facilities to issue first or junior   lien secured notes or junior lien loans (any such notes or loans (including   notes issued through a private placement), “Incremental   Equivalent Debt”), with the amount of such secured notes or   loans reducing the aggregate principal amount available for the Incremental   Term Facilities, subject to customary terms and conditions to be agreed; provided that, to the extent any Incremental Equivalent   Debt is junior lien indebtedness, such indebtedness shall be permitted to be   incurred as Incremental Equivalent Debt to the extent that after giving pro   forma effect thereto (include use of proceeds) the Total Gross Leverage Ratio   (as defined below) does not exceed 4.50:1.00 regardless of the Senior Secured   Net Leverage Ratio then in effect.
    
	
 
    	
 
    	
 
    
	
Refinancing Facilities:
    	
 
    	
The   Credit Documentation will permit the Borrower Representative to refinance   loans under the Term Facility or commitments under the Revolving Credit   Facility or loans or commitments under any Incremental Facility (each, “Refinanced Debt”)   from time to time, in whole or part, with (x) one or more new term   facilities (each, a “Refinancing   Term Facility”) or new revolving credit facilities (each, a “Refinancing Revolving Facility”;   the Refinancing Term Facilities and the Refinancing Revolving Facilities are   collectively referred to herein as “Refinancing Facilities”), respectively,   under the Credit Documentation with the consent of the Borrower   Representative and the institutions providing such Refinancing Facility or   (y) other than with respect to a refinancing of the Revolving Credit   Facility, one or more series of unsecured notes or loans, notes secured by   the Collateral on a pari passu basis   with the Facilities or notes or loans secured by the Collateral on a   subordinated basis to the Facilities, which will be subject to customary   intercreditor terms reasonably acceptable to the Administrative Agent and the   Borrower Representative (any such notes or loans, “Refinancing Notes”   and together with the Refinancing Facilities, the “Refinancing Indebtedness”);   provided that (i) any   Refinancing Term Facility or Refinancing Notes consisting of term loans do   not mature prior to the maturity date of, or have a shorter weighted average   life than, the applicable Refinanced Debt consisting of term loans,   (ii) any Refinancing Notes consisting of notes do not mature prior to   the maturity date of the applicable Refinanced Debt or have any scheduled   amortization, (iii) the commitments under any Refinancing Revolving   Facility do not terminate prior to the termination date of the revolving   commitments under the applicable Refinanced Debt, (iv) there shall be no   issuers, borrowers or guarantors in respect of any Refinancing Indebtedness   that are not a Borrower or a Guarantor, (v) any Refinancing Notes shall   not contain any mandatory prepayment provisions (other than related to   customary asset sale and change of control offers or events of default) that   could result in prepayments of such Refinancing Notes prior to the maturity   date of the applicable Refinanced Debt, (vi) the other terms and   conditions of such Refinancing Indebtedness (excluding pricing, interest rate   margins, rate floors, discounts, fees and prepayment or redemption   provisions) shall either, at the option of the Borrower Representative,   (x) with respect to Refinancing 
    

 

Annex I-8

 

	
 
    	
 
    	
Notes   only, reflect market terms and conditions (taken as a whole) at the time of   incurrence or issuance (as determined by the Borrower Representative) or   (y) not be materially more favorable (when taken as a whole) to the   lenders or investors providing such Refinancing Indebtedness than the terms   of the applicable Refinanced Debt unless (1) the holders of the Refinanced   Debt being replaced also receive the benefit of such terms or (2) any   such provisions apply only after the maturity date of the Refinanced Debt and   (vii) the proceeds of such Refinancing Facility or Refinancing Notes   (a) shall not be in an aggregate principal amount greater than the   aggregate principal amount of the applicable Refinanced Debt plus any fees,   premiums, OID and accrued interest associated therewith, and costs and   expenses related thereto and (b) shall be immediately applied to permanently   prepay (or, in the case of a Refinancing Revolving Facility, replace) in   whole or in part the applicable Refinanced Debt.
    
	
 
    	
 
    	
 
    
	
Documentation Principles:
    	
 
    	
The Credit Documentation:

 

(i)                                     will be   negotiated in good faith within a reasonable time period to be determined   based on the expected Closing Date and taking into account the timing of the   syndication of the Facilities;

 

(ii)                                  be in such form   that they do not impair the availability of the Term Facility by the Closing   Date if the Funds Certain Provisions are satisfied;

 

(iii)                               will contain   only those mandatory prepayments, representations, warranties, conditions to   borrowing, affirmative, negative and financial covenants and events of   defaults set forth herein, in each case applicable to the Borrowers and their   restricted subsidiaries; and

 

(iv)                              will contain other terms and provisions   substantially consistent with those contained in a documentation precedent   (the “Documentation Precedent”)   to be mutually agreed (as adjusted pursuant to terms of this section, the “Documentation Principles”),   with such changes and modifications thereto (A) that reflect the terms   and provisions set forth in the Commitment Letter, this Summary of Terms and   Conditions and the “market flex” provisions of the Facilities Fee Letter,   (B) that reflect changes in law or accounting standards and requirements   of local law or to cure mistakes or defects, (C) that are reasonably   agreed to by the Borrower Representative and the Lead Arrangers,   (D) that are reasonably necessary to take into account the operational   requirements and strategic requirements of the Borrowers and their restricted   subsidiaries (after giving effect to the Transaction) in light of their size,   industries, businesses and business practices, geographic location and   operations, proposed business plan and financial model, (E) the   jurisdiction of organization of the Borrowers and their restricted   subsidiaries and (F) that reflect the customary operational and agency 
    

 

Annex I-9

 

	
 
    	
 
    	
provisions of the Administrative Agent.

 

For the avoidance of doubt, the Credit   Documentation shall include customary EU bail-in provisions.
    
	
 
    	
 
    	
 
    
	
Scheduled Amortization:
    	
 
    	
Term Facility: Subject to quarterly amortization of principal equal to 0.25% per   quarter of the original aggregate principal amount of the Term Facility, with   the balance payable at final maturity of the Term Facility.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Revolving Credit Facility: None.
    
	
 
    	
 
    	
 
    
	
Mandatory Prepayments:
    	
 
    	
In   addition to the amortization set forth above and the next paragraph,   mandatory prepayments shall be required:

 

(i)             in   an amount equal to 100% of the net cash proceeds of non-ordinary course asset   sales or other dispositions (including insurance and condemnation proceeds)   by the Borrowers or any of their restricted subsidiaries (other than a   disposition among the Borrowers and any of their restricted subsidiaries), to   the extent (A) such proceeds are not reinvested or committed to be   reinvested in assets useful in the business of the Borrowers or any of their   restricted subsidiaries within 12 months of receipt (provided   that if so committed, such reinvestment shall in any case occur within   180 days following such twelve-month period) of the date of such disposition and (B) the aggregate amount of   such proceeds that are not reinvested in accordance with clause   (A) hereof exceeds $10,000,000 in any single transaction or related   series of transactions;

 

(ii)          in   an amount equal to 100% of net cash proceeds from the issuance or incurrence   after the Closing Date of additional debt of any of the Borrowers or any of   their restricted subsidiaries (other than (x) the Incremental Facilities   and (y) any other debt permitted under the Credit Documentation other   than Refinancing Indebtedness); and

 

(iii)       in an   amount equal to 50.0% of Excess Cash Flow (to be defined in a manner   consistent with the Documentation Principles) of the US Borrower and its   restricted subsidiaries, on a consolidated basis, with step downs to 25% and   0% if the Total Net Leverage Ratio is less than 0.50x and 1.00x inside the   Total Net Leverage Ratio on the Closing Date, respectively, in each case of   clauses (i) - (iii), subject to the limitations set forth in the   paragraph immediately following, such amounts shall be applied to scheduled   installments of principal in the direct order of maturity.

 

Except   as set forth in the following paragraph, prepayments of the Term Facility   shall be applied on a pro rata basis across the US Term Facility and the Euro   Term Facility.

 

All   prepayments referred to immediately above are subject to there being no   material adverse tax consequences and to permissibility (i) under local   law (e.g., financial assistance, corporate   benefit, restrictions on upstreaming of
    

 

Annex I-10

 

	
 
    	
 
    	
cash   intra-group and the fiduciary and statutory duties of directors or the   relevant subsidiaries) and (ii) material constituent document   restrictions and other material agreements (so long as any such prohibition   is not created in contemplation of such prepayment), it being understood and   agreed that if the payment of only one tranche of the Term Facility would   trigger a material adverse tax consequence or be subject to a local law restriction   then such payment shall be applied to the other tranche of the Term Facility   on a non-pro rata basis.  The   non-application of any prepayment amounts as a consequence of the foregoing   provisions will not, for the avoidance of doubt, constitute a default or   event of default, and such amounts shall be available to the Borrowers and   their restricted subsidiaries, subject to terms and conditions substantially   consistent with the Documentation Principles.

 

Any   Lender may elect not to accept its pro rata portion of any mandatory   prepayment as otherwise required by clauses (i), (ii) and   (iii) immediately above (except with respect to the proceeds of   Refinancing Facilities and Refinancing Notes) (each a “Declining   Lender”). Any prepayment amount declined by a Declining Lender   (“Declined Proceeds”) may be   retained by the Borrowers and may be used by the Borrowers in any manner not   prohibited by the Credit Documentation and any such retained amounts will not   thereafter be counted as excess cash flow or net cash proceeds in any   subsequent measurement period.
    
	
 
    	
 
    	
 
    
	
Optional Prepayments and Commitment Reductions:
    	
 
    	
The   Facilities may be prepaid at any time in whole or in part without premium or   penalty, upon written notice, at the option of the Borrower Representative,   together with accrued and unpaid interest thereon, to the date of prepayment,   except (x) that any prepayment of LIBOR advances other than at the end   of the applicable interest periods therefor shall be made with reimbursement   for any funding losses and redeployment costs of the Lenders resulting   therefrom and (y) as set forth in “Repayment Premium” below. Each   optional prepayment of the Term Facility shall be applied as directed by the   Borrower Representative. The unutilized portion of any commitment under the   Revolving Credit Facilities may be reduced permanently or terminated by the   Borrower Representative at any time without penalty.
    
	
 
    	
 
    	
 
    
	
Repayment Premium:
    	
 
    	
In   the event that all or any portion of the Term Facility is (i) repaid,   prepaid, refinanced or replaced or (ii) repriced or effectively   refinanced through any waiver, consent or amendment (in each case, in   connection with any waiver, consent or amendment to the Term Facility   directed at, or the result of which would be, the lowering of the effective   interest cost or the weighted average yield of the Term Facility or the   incurrence of any term facility having an effective interest cost or weighted   average yield that is less than the effective interest cost or weighted   average yield of the Term Facility (or portion thereof) so repaid, prepaid,   refinanced, replaced or repriced (other than a refinancing of the Term   Facility in connection with any transaction that would, if consummated,   constitute a change of control) (a “Repricing Transaction”)) occurring on or   prior to the date that is six months after the Closing Date, such repayment,   prepayment, refinancing, replacement or repricing will be made at 101.0% of   the principal amount so repaid, prepaid, refinanced, replaced or repriced (it   being understood and agreed that the US Borrower shall be responsible for the   repayment premium of 1.0%). If all or 
    

 

Annex I-11

 

	
 
    	
 
    	
any   portion of the Term Facility held by any Lender is repaid, prepaid,   refinanced or replaced pursuant to a “yank-a-bank” or similar provision in   the Credit Documentation as a result of, or in connection with, such Lender   not agreeing or otherwise consenting to any waiver, consent or amendment referred   to in clause (ii) above (or otherwise in connection with a Repricing   Transaction), such repayment, prepayment, refinancing or replacement will be   made at 101.0% of the principal amount so repaid, prepaid, refinanced or   replaced (it being understood and agreed that the US Borrower shall be   responsible for the repayment premium of 1.0%). Notwithstanding the   foregoing, no prepayment premium shall apply in the case of any repayment,   prepayment, refinancing, replacement or amendment if in connection with a change   of control or any acquisition or transaction not otherwise permitted under   the Credit Documentation.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
Subject   to the Funds Certain Provisions and the provisions of the immediately   following paragraphs (the provisions set forth in the immediately following   paragraphs, collectively, the “Security Principles”),   the obligations of each US Loan Party and each Euro Loan Party shall be   secured by valid and perfected first priority (subject to certain exceptions   to be set forth in the Credit Documentation) liens on and security interests   in all of the following (collectively, the “Collateral”):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 (i) with respect to the US   Obligations, a pledge of the capital stock of the Material Subsidiaries   directly held by each US Loan Party but limited in the case of   (A) capital stock of each Foreign Subsidiary that is a Material   Subsidiary, (B) any direct or indirect subsidiary substantially all the   assets of which consist of the capital stock and, if applicable, indebtedness   of one or more CFCs (as defined below) and/or one or more CFC Holdcos (such   entity, a “CFC Holdco”) and   (C) Disregarded Domestic Persons (as defined below), to 65% of the   voting capital stock and 100% of the non-voting capital stock of any such   first tier Foreign Subsidiary, CFC, CFC Holdco or Disregarded Domestic   Person, as applicable, and excluding the capital stock of Constellation Int’l   Trading C.V. and Constellation Int’l Investment C.V., provided,   however, that, as determined by the Administrative Agent, in lieu of a pledge   of the stock of a domestic CFC Holdco or Disregarded Domestic Person, the   Collateral shall include a pledge of the capital stock of each direct   Subsidiary of the CFC Holdco or Disregarded Domestic Person subject to the   limitations of (A), (B) and (C), and (ii) with respect to the Euro   Obligations, a pledge of the capital stock of each restricted subsidiary   (including, in the case of companies organized as a limited partnership (Kommanditgesellschaft), a pledge of the capital stock of   the respective general partner) organized in a Material Jurisdiction directly   held by each US Loan Party and each Euro Loan Party but limited in the case   of any Foreign Subsidiary, CFC, CFC Holdco or Disregarded Domestic Person   directly held by a US Loan Party, to 65% of the voting capital stock and 100%   of the non-voting capital stock of any such Foreign Subsidiary, CFC, CFC   Holdco or Disregarded Domestic Person, as applicable, it being understood and   agreed that the Collateral with respect to the Euro Obligations shall, 
    

 

Annex I-12

 

	
 
    	
 
    	
in   any event, include a pledge of 100% of the capital stock of the Euro Borrower   and each Euro Guarantor, excluding the U.S. Borrower; Constellation   Investments, Inc. (65%); Constellation Int’l Finance C.V. (65%);   Constellation Int’l Trading C.V. (66% held by Constellation Int’l Finance   C.V.); Constellation Int’l, LLC (65%); Constellation Canada, Inc. (65%);   Constellation (Thailand) Co., Ltd. (65%); Constellation Finland Oy   (65%); Constellation Asia, Inc. (65%); Constellation Int’l Investment   C.V. (99.9% held by Constellation Int’l Trading C.V.); Rembrandt Oy (65%);   Rembrandt Technologies Europe S.L. (65%); Rembrandt Canada Ltd. (65%);   Rembrandt Europe NV (65%); provided   that following implementation of a post-Acquisition restructuring, the   foregoing exclusions from a 100% pledge of capital stock shall not apply to   any Foreign Subsidiary that is 100% owned by one or more Foreign Subsidiaries   that are corporations for US federal income tax purposes (ignoring any   Domestic Subsidiaries that are disregarded for US federal income tax purposes   and owned by a Foreign Subsidiary);

 

(b)                                 all present and future debt owed to a   Borrower or any Guarantor (other than debt owed to a US Loan Party by a CFC   Holdco, a Disregarded Domestic Person, any Foreign Subsidiary and any US   Subsidiary that is a subsidiary of a Foreign Subsidiary);

 

(c)                                  all of the present and future property and   assets, real and personal, of each Borrower and each Guarantor, including,   but not limited to, machinery and equipment, inventory and other goods,   accounts receivable, material fee-owned real estate, fixtures, bank accounts   (subject to certain customary exceptions), general intangibles, financial   assets, investment property, license rights, patents, trademarks, trade   names, copyrights, other intellectual property and other general intangibles,   chattel paper, insurance proceeds, contract rights, hedge agreements,   documents, instruments, indemnification rights, tax refunds and cash; and

 

(d)                                 all proceeds and products of the property   and assets described in clauses (a), (b) and (c) above.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   the avoidance of doubt, the pledge of a portion of an entity’s capital stock   with respect to both the US Obligations and the Euro Obligations shall be   deemed to refer to the same capital stock. The parties will cooperate in good   faith in a manner consistent with the Security Principles (taking into   account any applicable tax laws) with respect to any pledges of capital stock.   The Collateral shall ratably secure the relevant party’s obligations in   respect of the Facilities, any interest protection or other hedging   arrangements with a Lender or an affiliate of a Lender and treasury   management agreements with a Lender or an affiliate of a Lender.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
All the above-described pledges, security   interests and mortgages shall be created on terms, and pursuant to   documentation reasonably satisfactory to the Borrower Representative and the   Administrative Agent, and none of the
    

 

Annex I-13

 

	
 
    	
 
    	
Collateral shall be subject to any other   pledges, security interests or mortgages, subject to exceptions to be agreed   upon. Assets will be excluded from the Collateral in circumstances to be   agreed and in circumstances where the Administrative Agent reasonably   determined in consultation with the Borrower Representative that the cost of   obtaining a security interest in such assets is excessive in relation to the   value afforded thereby. In addition, the Administrative Agent shall not have   any right to require any US Loan Party to take any steps to perfect by   control any security interest noted herein in deposit, securities or   commodities accounts.

 

Notwithstanding anything to the contrary in the Commitment Letter or   any Annex thereto, the Collateral shall exclude the following:

 

(i)                                     (x) motor vehicles and other   assets subject to certificates of title, (y) letter of credit rights and   (z) commercial tort claims with a value of less than an amount to be   agreed;

 

(ii)                                  pledges and security interests   (including in respect of interests in partnerships, joint ventures and other   non-wholly owned entities) to the extent prohibited by law, rule, regulation   or prohibited by agreements containing anti-assignment clauses not overridden   by the Uniform Commercial Code or other applicable law (such as the German   Commercial Code (Handelsgesetzbuch))   other than proceeds and receivables thereof;

 

(iii)                               all fee owned real property with a   fair market value of less than $5,000,000 and all leasehold interests;

 

(iv)                              intent to use trademark or service   mark applications;

 

(v)                                 equity interests in any person other   than wholly owned subsidiaries to the extent not permitted by the terms of   such subsidiary’s organizational or joint venture documents;

 

(vi)                              any lease, license or other agreement   or any property subject to a purchase money security interest, capital lease   obligation or similar arrangements, in each case, to the extent permitted   under the Credit Documentation to the extent that a grant of a security   interest therein would violate or invalidate such lease, license or   agreement, purchase money, capital lease or a similar arrangement or create a   right of termination in favor of any other party thereto (other than any Loan   Party) or otherwise give rise to any consent rights of any such other party   or result in a default, in each case, after giving effect to the applicable   anti-assignment provisions of the Uniform Commercial Code or other applicable   law, other than proceeds and receivables thereof, the assignment of which is   expressly deemed effective under applicable law notwithstanding such   prohibition;

 

(vii)                           those assets as to which the Borrower   Representative and the Administrative Agent reasonably determine results in a   material 
    

 

Annex I-14

 

	
 
    	
 
    	
adverse tax consequence to the Borrower as reasonably determined by   the Borrower;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(viii)                        with respect to the US Obligations,   any assets owned by a CFC Holdco, Disregarded Domestic Person, CFC, Foreign   Subsidiary or US Subsidiary that is owned by a Foreign Subsidiary;

 

(ix)                              any governmental licenses or state or   local franchises, charters and authorizations, to the extent security   interests in such licenses franchises, charters or authorizations are   prohibited or restricted thereby (in each case, except to the extent such   prohibition is unenforceable after giving effect to the applicable   anti-assignment provisions of the Uniform Commercial Code or other applicable   law)) other than proceeds and receivables thereof, the assignment of which is   expressly deemed effective under the Uniform Commercial Code or other   applicable law notwithstanding such prohibition;

 

(x)                                 zero balance accounts, payroll   accounts, withholding and trust accounts, tax accounts, escrow or other   fiduciary accounts located in the United States and other accounts customarily   excluded in the other Material Jurisdictions;

 

(xi)                              margin stock;

 

(xii)                           other customary exclusions under   applicable local law or in applicable local jurisdictions;

 

(xiii)                        any intellectual property possessed   by a US Loan Party which cannot be perfected by the filing of a UCC-1   financing statement and/or the filing of a short form intellectual property   security agreement in either the United States Copyright Office or the United   States Patent and Trademark Office;

 

(xiv)                       any assets located in Non-Material   Jurisdictions; and

 

(xv)                          other exceptions to be agreed.

 

For   purposes of the Credit Documentation, (a) “CFC”   means a “controlled foreign corporation” within the meaning of   Section 957 of the Internal Revenue Code, as amended and (b) “Disregarded Domestic Person” means   any direct or indirect domestic subsidiary of the US Borrower that   (i) is a disregarded entity or partnership for U.S. federal income tax   purposes and (ii) has one or more directly owned (or owned through   another Disregarded Domestic Person) Foreign Subsidiaries that are CFCs.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to Closing:
    	
 
    	
Limited   to those conditions specified in (a) paragraph 5 of the Commitment   Letter and (b) Annex II to the Commitment Letter.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to Each Borrowing Under 
    	
 
    	
Each   borrowing or issuance or renewal of a Letter of Credit under the Facilities   following the Closing Date will be subject to satisfaction of the 
    

 

Annex I-15

 

	
the Facilities following the Closing Date:
    	
 
    	
following   conditions precedent: (i) delivery of prior written notice of borrowing,   (ii) all of the representations and warranties in the Credit   Documentation shall be true and correct in all material respects as of the   date of such extension of credit (except to the extent already qualified by   materiality or material adverse effect and except to the extent such   representation and warranty specifically relates to an earlier date) and   (iii) no default or event of default under the Credit Documentation   shall have occurred and be continuing or would result from such extension of   credit.
    
	
 
    	
 
    	
 
    
	
Representations and Warranties:
    	
 
    	
Only   the following representations and warranties shall apply (to be applicable to   the Borrowers and their restricted subsidiaries), subject to customary and   other exceptions and qualifications to be agreed consistent with the   Documentation Principles: (i) existence, qualification and power;   (ii) authorization, and non-contravention; (iii) government   authorization and other consents; (iv) binding effect; (v) accuracy   of financial statements in all material respects; (vi) no material   adverse effect; (vii) litigation; (viii) no default; (ix) ownership   of properties and liens; (x) environmental compliance;   (xi) insurance; (xii) taxes; (xiii) ERISA compliance;   (xiv) subsidiaries; (xv) Federal Reserve margin regulations and   Investment Company Act; (xvi) disclosure; (xvii) compliance with   laws (including OFAC, FCPA, U.S.A. PATRIOT Act and other anti-terrorism   laws); (xviii) priority and perfection of security interests in   Collateral (subject to permitted liens and other exceptions to be agreed);   (xix) closing date solvency (defined in a manner consistent with (i) the   Solvency Certificate (as defined in Annex II hereto) and (ii) the German   insolvency law based on sections 17 through 19 of the German Insolvency Code,   respectively); (xx) equity interests and ownership;   (xxi) intellectual property (xxii) use of proceeds; (xxiii) business   locations, taxpayer identification number; and (xxiv) COMI.
    
	
 
    	
 
    	
 
    
	
Covenants:
    	
 
    	
Only   the following covenants shall apply (to be applicable to the Borrowers and   their restricted subsidiaries), subject to customary and other exceptions,   qualifications, thresholds and baskets to be agreed consistent with the   Documentation Principles:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                                 Affirmative Covenants: (i) delivery of annual consolidated   financial statements within the later of 90 days after the end of each fiscal   year and 5 days after the date on which such financial statements are   required to be filed under the rules and regulations of the SEC (after giving   effect to any permitted extensions), delivery of quarterly consolidated   financial statements within the later of 45 days after the end of each of the   first three fiscal quarters of each fiscal year and 5 days after the date on   which such financial statements are required to be filed under the   rules and regulations of the SEC (after giving effect to any permitted   extensions); (ii) at the time of delivery of the financial statements   referenced in clause (i) above, compliance certificates; other reasonably   requested information regarding the operations, business affairs and   financial condition of the Borrowers and their restricted subsidiaries or   compliance with the terms of the Credit Documentation; (iii) delivery of   notification of default and material litigation; (iv) payment of   obligations; (v) preservation of existence (subject to merger,   acquisition, consolidation, 
    

 

Annex I-16

 

	
 
    	
 
    	
amalgamation,   dissolution and disposition not prohibited by the Credit Documentation);   (vi) maintenance of properties (subject to casualty, condemnation and   normal wear and tear and dispositions not prohibited by the Credit   Documentation); (vii) maintenance of customary insurance (with ability   to self-insure for healthcare matters); (viii) compliance with laws and   material obligations; ERISA compliance; (ix) maintenance of books and   records; (x) right of the Administrative Agent to inspect property,   books and records (limited to once per year, unless an event of default has   occurred and is continuing); (xi) use of proceeds; (xii) joinder of   subsidiaries as guarantors (subject to the limitations set forth under the   caption “Guarantors”); (xiii) pledge of capital stock and other property   (subject to the limitations set forth under the caption “Security”);   (xiv) further assurances in respect of collateral matters;   (xv) commercially reasonable efforts to maintain ratings (but not a   specific rating); (xvi) environmental compliance; (xvii) COMI;   (xviii) use of proceeds; and (xiv) entering into and maintain   domination and/or profit and loss sharing agreement (Beherrschungs-   und/oder Gewinnabführungsvertrag) with the (i) Euro Borrower   by subsidiaries of the Euro Borrower that are German subsidiaries or   (ii) direct holding companies of such German subsidiaries.

 

(b)                                 Negative Covenants: Restrictions on:

 

(i)                                     liens (it being agreed that the negative   covenant on liens will permit (A) liens securing the Facilities and any   Incremental Facilities, (B) liens securing Refinancing   Debt, Incremental Equivalent Debt, in each case, subject to an   intercreditor agreement reasonably satisfactory to the Administrative Agent,   and debt incurred pursuant to clauses (iii)(B), (E) and (F) below,  (C) liens on assets of a restricted subsidiary   which is not a Loan Party, (D) a general lien basket in an amount equal   to the greater of (i) $50,000,000 and (ii) a Corresponding   Percentage of Consolidated Total Assets (as defined below), (E) liens on   assets existing at the time such assets were acquired to the extent, in the   case of this clause (E), such liens do not extend to assets other than the   assets so acquired and such liens were not effected in contemplation of such   acquisition, (F) liens existing on the Closing Date, (G) liens on   the US Borrower’s Santa Clara, California facility securing debt incurred   pursuant to clause (iii)(I) below; provided that   the US Borrower receives net proceeds of such financing in an amount equal to   at least 40% of the fair market value of such property and all such net   proceeds are used to prepay the Term Facility and (H) permitted   refinancing liens of any liens that were permitted when incurred;

 

(ii)                                  investments (it being agreed that the   negative covenant on investments will permit (A) investments under the   Available 
    

 

Annex I-17

 

	
 
    	
 
    	
Amount Basket (as defined below) (subject to the restrictions set   forth therein), (B) additional investments, so long as (x) no event   of default shall have occurred and be continuing or would result therefrom   and (y) on a pro forma basis, the Total Net Leverage Ratio shall be   equal to or less than 2.50:1.00, (C) Permitted Acquisitions (as defined   below), (D) intercompany investments; provided   that (x) in the case of such investments by US Loan Parties in foreign   Loan Parties, such investments do not exceed $200,000,000 at any time   (excluding any such investments in a “Foreign Loan Party”   (defined herein as a Euro Loan Party other than a US Loan Party) to the   extent the proceeds of such investment are invested by such Foreign Loan   Party in a non-Loan Party), and (y) in the case of such investments by   Loan Parties in non-Loan Parties, such investments do not exceed $100,000,000   at any time, (E) intercompany investments in unrestricted subsidiaries   and joint ventures in an amount equal to the greater of (i) $30,000,000   and (ii) a Corresponding Percentage of Consolidated Total Assets,   (F) re-organizations and other activities related to tax planning and   re-organization set forth in a schedule to the Credit Documentation to be   agreed, so long as, after giving effect thereto, the Borrower remains in   compliance with the Guarantor Coverage Test, (G) the Transaction,   (H) investments existing on the Closing Date, (I) a general   investment basket in an amount equal to the greater of (i) $50,000,000   and (ii) a Corresponding Percentage of Consolidated Total Assets,   (J) investments of a restricted subsidiary acquired after the Closing   Date or of an entity merged into a Borrower or a restricted subsidiary after   the Closing Date to the extent such investments were not made in contemplation   of or in connection with such acquisition, merger, consolidation or   amalgamation and were in existence on the date of such acquisition, merger,   consolidation or amalgamation, (K) investments by any US Loan Party in   any other US Loan Party, by any Euro Loan Party in any other Euro Loan Party   and by any Euro Loan Party in any US Loan Party and (L) investments by   any non-Loan Party in any other non-Loan Party or in any Loan Party;

 

(iii)                               indebtedness (including cash management   obligations and hedging transactions) (it being agreed that the negative   covenant on indebtedness will permit (A) the   Facilities, Incremental Facilities, Refinancing Debt and Incremental   Equivalent Debt, (B) additional unsecured debt of Loan Parties and   additional unsecured or secured debt of non-Loan Parties, in each case, in an   unlimited amount so long as the pro forma Total Gross Leverage Ratio does not   exceed 4.50:1.00 and no event of default shall have occurred and be   continuing or would result therefrom; provided that   such
    

 

Annex I-18

 

	
 
    	
 
    	
debt shall not mature prior to date that is 180 days after the   maturity date of, or have a shorter weighted average life than, the Term   Facility, in each case in effect at the time the indebtedness was incurred,   (C) indebtedness existing on the Closing Date and any permitted   refinancing thereof, subject to certain conditions to be agreed,   (D) intercompany indebtedness (subject to the limitations set forth in   the investments covenant), (E) indebtedness of restricted subsidiaries   which are not Loan Parties in an amount equal to the greater of   (i) $50,000,000 and (ii) a Corresponding Percentage of Consolidated   Total Assets, (F) a capital lease and purchase money debt basket in an   amount equal to the greater of (i) $50,000,000 and (ii) a   Corresponding Percentage of Consolidated Total Assets, (G) a general   unsecured debt basket in an amount equal to the greater of   (i) $75,000,000 and (ii) a Corresponding Percentage of Consolidated   Total Assets, (H) any interest rate hedges consistent with those permitted   by the Borrower’s foreign exchange risks policy delivered to the Lead   Arrangers prior to the date of the Commitment Letter and any amendments   thereto reasonably acceptable to the Administrative Agent), (I) the mortgage financing of the   Borrower’s Santa Clara, California facility, so long as the proceeds of such   indebtedness are used to prepay the Term Facility and (J) permitted   refinancing indebtedness; provided that   notwithstanding the forgoing exceptions the aggregate amount of all debt of   non-Loan Parties incurred pursuant to clauses (iii)(B), (E) and   (G) above shall not exceed the greater of (i) $75,000,000 and   (ii) a Corresponding Percentage of Consolidated Total Assets;

 

(iv)                              mergers and dissolutions (it being agreed that the negative covenant   on mergers and dissolutions will permit (A) Permitted Acquisitions and   other permitted investments (including any merger, consolidation or   amalgamation in order to effect such Permitted Acquisition or other permitted   investment), (B) intercompany mergers, consolidations and amalgamations   subject to certain limitations to be agreed, (C) dissolutions or changes   in form if the Borrower Representative determines in good faith that such   dissolution or change in form is in its best interests and is not materially   disadvantageous to the Lenders and (D) certain other transactions to be   mutually agreed);

 

(v)                                 dispositions of assets (it being agreed   that the negative covenant on dispositions of assets will permit   (A) sales of assets in the ordinary course of business and immaterial   assets, (B) asset swaps, (C) dispositions of non-Collateral assets,   subject to certain limitations to be agreed, (D) dispositions of   non-core assets acquired in connection with a Permitted Acquisition or other   permitted investment, 
    

 

Annex I-19

 

	
 
    	
 
    	
(E) dispositions of obsolete, worn out, uneconomical, negligible or   surplus assets or assets no longer useful in the business,   (F) intercompany transfers, (G) dispositions of receivables and   related assets in a factoring, receivables or securitization facility,   (H) dispositions of any other assets on an unlimited basis  for fair market value (as determined by the   Borrower Representative in good faith) so long as (x) with respect to   dispositions in excess of $10,000,000, at least 75% of the consideration   consists of cash or Cash Equivalents (as defined below) (subject to customary   and agreed upon exceptions to the cash consideration requirement, including a   basket in an amount to be mutually agreed for non-cash consideration that may   be designated as cash consideration) and, if in excess of $10,000,000, is   subject to the terms set forth in the mandatory prepayment requirements   (including the reinvestment provisions) in the Credit Documentation,   (I) sale and leaseback transactions, (J) dispositions of cash or   cash equivalents in the ordinary course of business, (K) dispositions of   defaulted receivables in the ordinary course of business and not as part of   an accounts receivables financing, (L) dispositions or abandonment of   intellectual property of the Borrowers and their restricted subsidiaries   determined in good faith by the management of the Borrower Representative to   be no longer useful or necessary in the operation of the business of the   Borrowers and their restricted subsidiaries and (M) leases, licenses, or   subleases or sublicenses of any real or personal property in the ordinary   course of business;

 

(vi)                              dividends, stock repurchases and redemptions of equity interests (“Restricted Payments”) (it being   agreed that the negative covenant on Restricted Payments will permit   (A) Restricted Payments under the Available Amount Basket (subject to   the restrictions set forth therein), (B) a basket for stock repurchases   and redemptions in a dollar amount to be agreed, (C) additional   Restricted Payments, so long as (x) no event of default shall have   occurred and be continuing or would result therefrom and (y) on a pro   forma basis, the Total Net Leverage Ratio shall be equal to or less than   2.25:1.00), (D) any Subsidiary of the Borrower Representative to pay   dividends and make distributions to the holders of its equity interests   (including any securities convertible into or exchangeable for equity   interests and all warrants, options or other rights to purchase, subscribe   for or otherwise acquire the foregoing or equity interests),   (E) Restricted Payments in connection with the Transaction and   (F) other Restricted Payments in a dollar amount to mutually be agreed;

 

(vii)                           change in nature of business;
    

 

Annex I-20

 

	
 
    	
 
    	
(viii)                        change in fiscal year;

 

(ix)                              transactions with affiliates;

 

(x)                                 use of proceeds;

 

(xi)                              prepaying, redeeming or repurchasing subordinated or junior lien debt   (“Restricted Debt Payments”) (it   being agreed that the Credit Documentation will allow (A) Restricted   Debt Payments under the Available Amount Basket (subject to the restrictions   set forth therein), (B) additional Restricted Debt Payments, so long as   (x) no event of default shall have occurred and be continuing or would   result therefrom and (y) on a pro forma basis, the Total Net Leverage   Ratio shall be equal to or less than 2.50:1.00), (C) refinancings with   permitted indebtedness, (D) payment of (x) regularly scheduled interest   and fees due and other non-principal payments and (y) any mandatory   prepayment of principal, interest and fees and principal on the scheduled   maturity date (subject, in each case, to an intercreditor agreement or other   applicable subordination agreement), (E) the conversion or exchange of   subordinated or junior lien debt to equity interests of the US Borrower,   (F) intercompany Restricted Debt Payments and (G) other Restricted   Debt Payments in an amount to be mutually agreed;

 

(xii)                           burdensome agreements (negative pledge clauses that limit or restrict   the Administrative Agent from taking or perfecting its lien in the intended   Collateral, subject to exceptions to be agreed, and restrictions on dividends   and distributions from subsidiaries of the Borrowers); and

 

(xiii)                        amending or waiving (A) organizational documents in a manner   that would be materially adverse to the Lenders or (B) subordinated,   second lien or junior debt instruments to the extent prohibited by applicable   subordination or intercreditor terms, to permit a payment not otherwise   permitted hereunder or as would otherwise be materially adverse to the Lenders.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Among   other things, the Credit Documentation will permit (a) acquisitions   (each, a “Permitted Acquisition”)   subject to (i) no event of default under the Facilities at the time of   consummation of the Permitted Acquisition or resulting therefrom or, if   consummated using the proceeds of an Incremental Facility, at the time of   execution of the definitive agreement governing such Permitted Acquisition if   agreed by the Lenders providing such Incremental Facility, (ii) the   acquired entity and its subsidiaries becoming Guarantors to the extent   required under “Security” above, subject to a basket to be agreed to permit   acquisitions of non-Guarantors, (iii) the acquisition being approved by   the board of directors, or other governing body, of the target and   (iv) the acquired entity or assets being in the same, related,   complimentary or 
    

 

Annex I-21

 

	
 
    	
 
    	
ancillary   line of business as the Borrowers and their subsidiaries, (b) an “Available Amount Basket”, which   may be used for certain investments, Restricted Payments and Restricted Debt   Payments subject to limitations to be agreed (including, without limitation,   with respect to (x) Restricted Payments, on a pro forma basis, the Total   Net Leverage Ratio being equal to or less than 2.50:1.00 and   (y) Restricted Debt Payments, on a pro forma basis, the Total Net   Leverage Ratio being equal to or less than 2.75:1.00) and be based on the   retained portion of Excess Cash Flow (which in no event shall be less than   zero) with an initial basket of $50,000,000 and (c) (x) reorganizations   and other activities related to tax planning and reorganization or otherwise   to achieve synergies, in each case, as set forth on a schedule to the Credit   Documentation (such schedule to be provided by Borrower and deemed acceptable   so long as of the date of the Credit Documentation, on a pro forma basis,   after giving effect to the actions contemplated thereby (and assuming all   required Guarantors have become Guarantors as of such date), the Guarantor   Coverage Test would be met and the security interests of the Lenders in the   Collateral, taken as a whole, would not be materially impaired), and   (y) such other actions to achieve synergies in connection with the   Acquisition, provided after giving effect to such actions the Guarantor   Coverage Test would be met and the security interests of the Lenders in the   Collateral, taken as a whole, would not be materially impaired.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Corresponding Percentage of Consolidated Total   Assets” means, with respect to any dollar basket, the amount   of such dollar basket divided by the initial consolidated total assets of the   Borrowers and their restricted subsidiaries giving effect to the Transaction,   expressed as a percentage.
    
	
 
    	
 
    	
 
    
	
Financial   Covenant:
    	
 
    	
Limited   to the following (applicable each Borrower and its restricted subsidiaries):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Term   Facility:  None.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Revolving Facility:  Senior Secured Net Leverage Ratio to be set   at a level to be agreed (the “Financial Covenant”),   commencing with the first full fiscal quarter after the Closing Date to be   tested on the last day of each fiscal quarter.  The Financial Covenant shall be set with a   cushion of 30% (rounded in a manner to be mutually agreed) off Consolidated   EBITDA set forth in the model projections delivered to the Lead Arrangers   prior to the date of the Commitment Letter.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Consolidated EBITDA” shall   be defined in a manner consistent with the Documentation Precedent; provided that the aggregate amount of all net cost   savings, operating expense reductions, other operating improvements and   acquisition synergies in good faith projected to be realized during such   period (collectively, the “Synergies”)   shall not exceed 20% of Consolidated EBITDA.

 

“Secured Net Leverage Ratio” means,   as of any date of determination, the ratio of (a)(i) Total Funded   Secured Indebtedness as of such date, less (ii) all unrestricted cash   and Cash Equivalents (with “Cash Equivalents”   being defined to include investments permitted by the Borrower’s cash   investment 
    

 

Annex I-22

 

	
 
    	
 
    	
policy delivered to the   Lead Arrangers prior to the date of the Commitment Letter and any amendments thereto   reasonably acceptable to the Administrative Agent) of the Borrowers and the Guarantors to   (b) Consolidated EBITDA for the most recently ended four-fiscal quarter   period for which financial statements are available.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Senior Secured Net Leverage   Ratio” means, as of any date of determination, the ratio of   (a)(i) Total Funded Senior Secured Indebtedness as of such date, less   (ii) all unrestricted cash and Cash Equivalents of the Borrowers and the   Guarantors to (b) Consolidated EBITDA for the most recently ended   four-fiscal quarter period for which financial statements are available.

 

“Total Funded   Indebtedness” means, if and to the extent the same would   constitute indebtedness or a liability in accordance with GAAP, the sum of   (without duplication) (i) the outstanding principal amount of funded   indebtedness for borrowed money, (ii) unreimbursed draws under letters   of credit, (iii) the outstanding principal amount of purchase money   indebtedness and (iv) the outstanding principal amount of capital leases   of the Borrowers and their restricted subsidiaries, subject to exceptions to   be agreed.

 

“Total Funded Secured   Indebtedness” means Total Funded Indebtedness as of such date   secured by a lien, subject to exceptions to be agreed.

 

“Total Funded Senior   Secured Indebtedness” means Total Funded Indebtedness as of   such date secured by a lien (excluding any lien ranking junior to the liens   securing the Facilities), subject to exceptions to be agreed.

 

“Total Gross Leverage   Ratio” means, as of any date of determination, the ratio of   (a) Total Funded Indebtedness as of such date to (b) Consolidated   EBITDA for the most recently ended four-fiscal quarter period for which   financial statements are available.

 

“Total Net Leverage Ratio”   means, as of any date of determination, the ratio of (a)(i) Total Funded   Indebtedness as of such date, less (ii) all unrestricted cash and Cash   Equivalents of the Borrowers and the Guarantors to (b) Consolidated   EBITDA for the most recently ended four-fiscal quarter period for which   financial statements are available.

 

In the event that any additional OID or upfront fees   are implemented pursuant to the “market flex” provisions of the Facilities   Fee Letter, any Secured Net Leverage Ratio, Senior Secured Net Leverage   Ratio, Total Gross Leverage Ratio or Total Net Leverage Ratio tests set forth   in the Term Sheet shall be adjusted as mutually agreed to account for the   additional interest expense or additional indebtedness and maintain the   agreed cushion taking into account such additional interest expense or   additional indebtedness.
    
	
 
    	
 
    	
 
    
	
Unrestricted Subsidiaries:
    	
 
    	
The Credit Documentation will contain provisions   pursuant to which, subject to customary limitations on investments, loans,   advances to, and other investments in, unrestricted subsidiaries, the   Borrower Representative will be 
    

 

Annex I-23

 

	
 
    	
 
    	
permitted to designate   any existing or subsequently acquired or organized subsidiary as an   “unrestricted subsidiary” and, in each case, subsequently re-designate any   such unrestricted subsidiary as a “restricted subsidiary” so long as, after   giving effect to any such designation or re-designation, (i) no event of   default shall have occurred and be continuing or would result from any such   designation and (ii) the Borrowers shall be in pro forma compliance with   the Financial Covenant. Unrestricted subsidiaries will not be subject to the   mandatory prepayment, representation and warranty, affirmative or negative   covenant or event of default provisions of the Credit Documentation, and the   cash held by, results of operations, indebtedness and interest expense of   unrestricted subsidiaries will not be taken into account for purposes of   determining any financial ratio or covenant contained in the Credit   Documentation. The designation of any subsidiary as an unrestricted   subsidiary after the Closing Date shall constitute an investment by the   relevant Borrower or its subsidiary (as applicable) at the date of   designation in an amount equal to the fair market value of the Borrower’s or   its subsidiaries’ (as applicable) investment therein.
    
	
 
    	
 
    	
 
    
	
Events of Default:
    	
 
    	
Only the following events of default shall apply (to   be applicable to the Borrowers and their restricted subsidiaries), with grace   periods, baskets and materiality to be agreed consistent with the Documentation   Principles: (i) nonpayment of principal; nonpayment of interest with a   grace period of three business days and nonpayment of fees or other amounts   with a grace period of five business days; (ii) any representation or   warranty proving to have been inaccurate in any material respect when made or   confirmed; (iii) failure to perform or observe covenants set forth in   the Credit Documentation (subject, in the case of certain affirmative   covenants, to a grace period of 30 days); (iv) cross-defaults to other   indebtedness in an amount to be agreed; (v) bankruptcy, insolvency   defaults (with a 60 day grace period for involuntary proceedings in case of   US Loan Parties and customary grace periods in other jurisdictions) and, in   case of the Euro Loan Parties, is illiquid (zahlungsunfähig)   pursuant to section 17 of the German Insolvency Code, imminent illiquid (drohend zahlungsunfähig) pursuant to Section 18 of   German Insolvency Code or over-indebted (überschuldet)   pursuant to Section 19 of German Insolvency Code; (vi) monetary   judgment defaults to the extent not covered by indemnities or insurance above   an amount to be agreed; (vii) invalidity of guarantees or other loan   documents; (viii) change of control; and (ix) ERISA defaults.

 

Notwithstanding the foregoing and the provisions   under “Waivers and Amendments” below, (i) only Lenders holding at least   a majority of the Revolving Loan commitments and Revolving Loans shall have   the ability to amend the Financial Covenant, waive a breach of the Financial   Covenant or accelerate the Revolving Credit Facility and (ii) a breach   of the Financial Covenant shall not constitute an event of default with   respect to the Term Facility or trigger a cross-default under the Term   Facility until the date on which the Revolving Loans (if any) have been   accelerated or the Revolving Loan commitments have been terminated, in each   case, by the Lenders in accordance with the terms of the Revolving Credit   Facility.
    
	
 
    	
 
    	
 
    
	
Assignments and 
    	
 
    	
Each Lender will be permitted to make assignments (except   to Disqualified 
    

 

Annex I-24

 

	
Participations:
    	
 
    	
Institutions) in minimum amounts to be agreed to   other entities approved by (x) the Administrative Agent (y), so long as   no payment or bankruptcy event of default has occurred and is continuing, the   Borrower Representative, and (z) with respect to commitments under the   Revolving Credit Facility, the Swingline Lender and the Issuing Bank, each   such approval not to be unreasonably withheld or delayed; provided, however, that (i) no approval of the   Borrower Representative shall be required in connection with assignments to   other Lenders or any of their affiliates, (ii) the Borrower   Representative shall be deemed to have given consent to an assignment if it   shall have failed to respond to a written notice thereof within ten business   days and (iii) no approval of the Administrative Agent shall be required   in connection with assignments (x) under the Term Facility to other   Lenders or any of their affiliates or approved funds or (y) under the   Revolving Credit Facility to other Lenders under the Revolving Credit Facility   or any of their affiliates or approved funds. Each Lender will also have the   right, without consent of the Borrower Representative or the Administrative   Agent, to assign as security all or part of its rights under the Credit   Documentation to any Federal Reserve Bank.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Lenders will be permitted to sell participations   (except to Disqualified Institutions, if the list of Disqualified   Institutions has been provided to all Lenders) with voting rights   (a) limited to matters in respect of (i) increases in commitment   amount of such participant, (ii) reductions of principal, interest or   fees payable to such participant, (iii) extension of scheduled   maturities or times for payment of amounts payable to such participant and   (iv) releases of all or substantially all of the Collateral or value of   the guarantees and (b) for clarification purposes, which shall not   include the right to vote on waivers of defaults or events of default and the   sale of such participations shall not require the approval of the Borrower   Representative or the Administrative Agent.

 

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.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding anything herein or in the Credit   Documentation to the contrary, (i) in the case that after the date of   the Commitment Letter the Borrower Representative supplements the list of   Disqualified Institutions, such supplement from the Borrower Representative   may not retroactively disqualify any person that previously acquired an   assignment or participation in the Facilities and (ii) the   Administrative Agent shall not be responsible or have any liability for, or   have any duty to ascertain, inquire into, monitor or enforce, compliance with   the provisions hereof relating to Disqualified Institutions.  Without   limiting the generality of the foregoing, the Administrative Agent shall not (x) be   obligated to ascertain, monitor or inquire as to whether any Lender or   participant or prospective Lender or participant is a Disqualified   Institution or (y) have any liability with respect to or arising out of   any assignment or participation of loans, or disclosure of confidential   information, to, or the restrictions on any exercise of rights or remedies   of, any Disqualified Institution.
    

 

Annex I-25

 

	
 
    	
 
    	
Subject to the Documentation Principles, assignments   of loans under the Term Facility to the Borrowers or any of their   subsidiaries shall be permitted subject to satisfaction of conditions to be   set forth in the Documentation Precedent.
    
	
 
    	
 
    	
 
    
	
Waivers and Amendments:
    	
 
    	
Amendments and waivers of the provisions of the   Credit Documentation will require the approval of Lenders holding loans and   commitments representing more than 50% of the aggregate advances and   commitments under the Facilities (the “Required Lenders”),   except that (a) the consent of each Lender directly and adversely   affected thereby will also be required with respect to, among other things,   (i) increases in commitment amount of such Lender (it being understood   that a waiver of any condition precedent or the waiver of any default or   mandatory prepayment shall not constitute an increase in any commitment of   any Lender), (ii) reductions of principal, interest, or fees payable to   such Lender (other than waivers of default interest, a default or an event of   default or mandatory prepayment); provided that   any change in the definitions of any ratio used in the calculation of any   rate of interest or fees (or the component definitions) shall not constitute   a reduction in any rate of interest or fees, (iii) extensions of   scheduled maturities or times for payment of amounts payable to such Lender   (it being understood and agreed that the waiver of any mandatory prepayment,   default interest, default or event of default shall only require the consent   of the Required Lenders), (iv) releases of all or substantially all of   the Collateral or value of the guarantees (other than in connection with   permitted asset sales, dispositions, mergers, liquidations or dissolutions or   as otherwise permitted), (v) changes that impose any restriction on the   ability of such Lender to assign any of its rights or obligations,   (vi) the definition of Required Lenders, (vii) pro rata/sharing   provisions and (viii) re-denominations of currency and (b) tranche   voting will be required for certain matters.

 

Notwithstanding the foregoing, (i) amendments   and waivers of the Financial Covenant shall only require the approval of   Lenders holding more than 50% of the aggregate amount of the commitments   under the Revolving Credit Facility and (ii) amendments to affect a   Repricing Transaction which reduced the interest rate shall only require the   approval of Lenders directly and adversely affected thereby.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subject to the Documentation Principles, the Credit   Documentation shall contain defaulting lender provisions and “yank-a-bank”   provisions substantially consistent with the Documentation Precedent.

 

If the Administrative Agent and the Borrower   Representative shall have jointly identified an obvious error or any error or   omission of a technical nature in the Credit Documentation, then the   Administrative Agent and the Borrower Representative shall be permitted to   amend such provision without further action or consent of any other party so   long as the Required Lenders do not object thereto within 10 business days   following receipt of notice thereof.

 

Notwithstanding anything to the contrary set forth   herein, the Credit Documentation shall provide that the Borrower   Representative may at any 
    

 

Annex I-26

 

	
 
    	
 
    	
time and from time to time request that all or a portion   of any loans under the Facilities be converted to extend (i) the   scheduled maturity date of any payment of principal with respect to all or a   portion of any principal amount of such loans and (ii) the scheduled   termination date of any commitments pursuant to the Revolving Credit Facility   (any such loans which have been so converted, “Extended   Loans”) and upon such request of the Borrower Representative   any individual Lender shall have the right to agree to extend the maturity   date of its outstanding loans or the termination date of its commitments   without the consent of any other Lender; provided that   all such requests shall be made pro rata to all Lenders within the applicable   Facility. The terms of Extended Loans shall be identical to the loans of the   existing class from such Extended Loans are converted except for interest   rates, fees, amortization, final maturity date or final termination date,   provisions requiring optional and mandatory prepayments to be directed first   to the non-extended loans prior to being applied to Extended Loans and   certain other customary provisions to be agreed.

 

Any applicable intercreditor agreement may be   amended solely with the consent of the Administrative Agent and, if a party   thereto, the Borrowers and the Guarantors, to give effect thereto or to carry   out the purposes thereof.
    
	
 
    	
 
    	
 
    
	
Indemnification:
    	
 
    	
The Borrowers will indemnify the Administrative   Agent, the Lead Arrangers, each Swingline Lender and Issuing Bank, and the   Lenders and their respective affiliates, and the officers, directors,   employees, affiliates, agents, advisors and controlling persons of the   foregoing (each an “Indemnified Person”),   and hold them harmless from and against all costs, expenses (including,   without limitation, reasonable fees, disbursements and other charges of   counsel) and liabilities of any such Indemnified Person arising out of or   relating to any claim or any litigation or other proceeding (regardless of   whether any such Indemnified Person is a party thereto or whether such claim,   litigation, or other proceeding is brought by a third party or by the   Borrowers or any of its affiliates, creditors or shareholders) that relate to   the Credit Documentation, provided that   no Indemnified Person will be indemnified for any cost, expense or liability   (x) to the extent determined by a court of competent jurisdiction in a   final non-appealable judgment to have resulted from the gross negligence, bad   faith, willful misconduct of such Indemnified Person or any of such   Indemnified Person’s controlled or controlling affiliates or any of its or   their respective officers, directors, employees, agents, advisors or   controlling persons, (y) arising from a material breach of such   Indemnified Person’s (or any of their respective affiliates, successors and   assigns and the officers, directors, employees, agents, advisors and   controlling persons) obligations under the definitive loan documentation (as   determined by a court of competent jurisdiction in a final non-appealable   judgment), or (z) arising from any claim, actions, suits, inquiries,   litigation, investigation or proceeding that does not involve an act or   omission of the Borrower or any of its affiliates and that is brought by an   Indemnified Person against any other Indemnified Person (other than any   claim, actions, suits, inquiries, litigation, investigation or proceeding   against the Administrative Agent, the Issuing Bank, any Lead Arranger or any   Commitment Party in its capacity as such).
    

 

Annex I-27

 

	
Governing Law:
    	
 
    	
New York.
    
	
 
    	
 
    	
 
    
	
Expenses:
    	
 
    	
The Borrowers shall pay (a) all reasonable and   documented out-of-pocket expenses of the Administrative Agent, the Lead   Arrangers, each Swingline Lender and Issuing Bank associated with the   syndication of the Facilities and the preparation, execution, delivery and   administration of the Credit Documentation and any amendment or waiver with   respect thereto (including, without limitation, the reasonable fees,   disbursements and other charges of one firm of counsel for all such persons,   taken as a whole, one local counsel for all such persons, taken as a whole,   in each relevant state and in each Material Jurisdiction, in each case   retained by the Lead Arrangers (each such counsel subject to the Borrower   Representative’s reasonable consent (such consent not to be unreasonably   withheld, delayed or conditioned)) and (b) all reasonable and documented   or invoiced out-of-pocket expenses of the Administrative Agent, the Lead   Arrangers, each Swingline Lender and Issuing Bank, and the Lenders   (including, without limitation, the fees, disbursements and other charges of   counsel) in connection with the enforcement of the Credit Documentation.
    
	
 
    	
 
    	
 
    
	
Counsel to the Commitment Parties:
    	
 
    	
Weil, Gotshal & Manges LLP.
    
	
 
    	
 
    	
 
    
	
Miscellaneous:
    	
 
    	
Each of the parties shall (i) waive its right   to a trial by jury and (ii) submit to exclusive New York jurisdiction. The   Credit Documentation shall contain customary “defaulting lender” provisions.
    

 

Annex I-28

 

ANNEX II

 

CONDITIONS PRECEDENT TO CLOSING

 

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

 

The initial extensions of credit under the Facilities on the Closing Date will be subject to satisfaction (or waiver by the Lead Arrangers with the consent of the Commitment Parties) of the following conditions precedent:

 

(i)                    The terms of the Acquisition Agreement will be reasonably satisfactory to the Lead Arrangers (it being understood that the execution version of the Acquisition Agreement, dated as of March 16, 2016 is reasonably satisfactory to the Lead Arrangers). The Acquisition shall have been or shall substantially concurrently be, consummated in accordance with the terms of the Acquisition Agreement without giving effect to any amendment, change or supplement or waiver of any provision thereof (including any change in the purchase price) in any manner that is materially adverse to the interests of the Lenders or the Lead Arrangers without the prior written consent of the Lead Arrangers (which consent shall not be unreasonably withheld or delayed); provided that (x) (i) any reduction in purchase price for the Acquisition shall not be deemed to be material and adverse to the interests of the Lenders or the Lead Arrangers so long as there is a concurrent reduction in the aggregate principal amount of the commitments in respect of the Term Facility and (ii) any increase in purchase price for the Acquisition shall not be deemed to be material and adverse to the interests of the Lenders or the Lead Arrangers so long as the purchase price is not funded with additional indebtedness (it being understood and agreed that no purchase price, working capital or similar adjustment provisions set forth in the Acquisition Agreement shall constitute a reduction or increase in purchase price) and (y) any amendment, change or supplement or waiver of the definition of “Company Material Adverse Effect” set forth in the Acquisition Agreement shall be deemed to be material and adverse to the interests of the Lenders.

 

(ii)                   Notwithstanding anything in this Commitment Letter (including, for the avoidance of doubt, Annexes I, II and III), the Fee Letters, the Credit Documentation or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, the only representations and warranties the accuracy of which shall be a condition to the initial availability of the Facilities shall be (A) the Acquisition Agreement Representations (as defined below) and (B) the Specified Representations (as defined below). “Acquisition Agreement Representations” shall mean the representations made by or with respect to the Acquired Business and its subsidiaries in the Acquisition Agreement as are material to the interests of the Lenders (in their capacities as such), but only to the extent that the breach of any such representations results in you or any of your affiliates having the right to terminate your or its obligations under the Acquisition Agreement (after giving effect to any applicable notice and cure period) or results in the failure of a condition precedent to your obligation to consummate the Acquisition pursuant to the Acquisition Agreement. “Specified Representations” shall mean the representations and warranties in the Credit Documentation relating to (in each case, subject to applicable materiality qualifiers and the Documentation Principles): (i) (A) corporate status of you and the Guarantors and (B) corporate power and authority to enter into the Credit Documentation by you and the Guarantors, (ii) due authorization, execution and delivery by you and the Guarantors and enforceability of the Credit Documentation against you and the Guarantors, (iii) no conflicts with charter documents by you and the Guarantors as it relates to the entry into and performance of the Credit Documentation, (iv) compliance by you and the other Guarantors with Federal Reserve margin regulations, U.S.A. Patriot Act, not using proceeds in violation of OFAC, FCPA, other anti-terrorism laws and the Investment Company Act, (v) solvency of you and your subsidiaries on a consolidated basis on the Closing Date immediately after giving effect to the consummation of the Transaction (such representations to be substantially

 

Annex II-1

 

identical to those set forth in the Solvency Certificate attached as Annex III to the Commitment Letter (the “Solvency Certificate”)), and (vi) the creation, validity and perfection of the security interests granted in the Collateral by you and the other Guarantors on the Closing Date substantially concurrently with the initial funding of the Facilities.

 

(iii)                  Since the date of the Acquisition Agreement, there shall not have occurred or arisen any Company Material Adverse Effect (as defined below) that is continuing. For purposes hereof, “Company Material Adverse Effect” means any fact, event, violation, inaccuracy, circumstance, change or effect (any such item, an “Effect”) that, individually or when taken together with all other Effects that exist or have occurred prior to or at the date of determination of the occurrence of the Company Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, operations, financial condition or results of operations of the Company and its Subsidiaries taken as a whole; provided, however, that in no event shall any Effect directly or indirectly resulting from any of the following, either alone or in combination, be taken into account when determining whether a Company Material Adverse Effect has occurred or may, would or could occur:

 

(i)                                     general economic, regulatory, business or political conditions in the United States or any other country or region in the world (or changes therein);

 

(ii)                                  conditions in the industries in which the Company or any of its Subsidiaries conduct business;

 

(iii)                               changes in Applicable Law or GAAP or the interpretations thereof;

 

(iv)                              acts of war, terrorism or sabotage or any escalation or worsening of acts of war or terrorism;

 

(v)                                 earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in the United States or any other country or region in the world;

 

(vi)                              the public announcement or pendency of the Acquisition Agreement, the Merger or any other transactions contemplated by the Acquisition Agreement, including by reason of the identity of Parent or any communication by Parent regarding the plans or intentions of Parent with respect to the conduct of the business of the Company or any of its Subsidiaries and including the impact of any of the foregoing on any relationships, contractual or otherwise, with customers, suppliers, distributors, collaboration partners, stockholders, lenders, employees or regulators (including without limitation, any cancellations of or delays in customer agreements, any reduction in sales, any disruption in supplier, distributor, partner or similar relationships or any loss of employees);

 

(vii)                           any failure by the Company to meet published analysts’ estimates, projections or forecasts of revenues, earnings or other financial or business metrics, in and of itself, and or any failure by the Company to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations or the issuance of revised projections that are not as optimistic as those in existence as of the date hereof (it being understood that the underlying cause(s) of any such failure may be taken into consideration unless otherwise prohibited by this definition of “Company Material Adverse Effect”);

 

Annex II-2

 

(viii)                        any decline in the market price or change in the trading volume of Company Common Stock, in and of itself (it being understood that the underlying cause(s) of any such failure may be taken into consideration unless otherwise prohibited by this definition of “Company Material Adverse Effect”);

 

(ix)                              any action taken that is required by the terms of the Acquisition Agreement or taken at the written request of Parent or with the prior written consent or approval of Parent;

 

(x)                                 any Legal Proceedings made or brought by any of the current or former Company Stockholders (on their own behalf or on behalf of the Company) against the Company, arising out of the Merger or in connection with any other transactions contemplated by the Acquisition Agreement; and

 

(xi)                              the availability or cost of equity, debt or other financing to Parent, Merger Sub or the Surviving Corporation, or any changes, events or occurrences in financial, credit, banking or securities markets (including any disruption thereof and any decline in the price of any security or market index) or any interest rate or exchange rate changes or general financial or capital market conditions, including interest rates, or changes therein;

 

(except, in the case of each of clauses (i) through (v) above, to the extent that such Effect has had a disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, relative to other companies operating in the industries in which the Company and its Subsidiaries operate). All capitalized terms used in this paragraph (iii) and the definition of “Company Material Adverse Effect” and not defined herein shall have the meaning assigned thereto in the Acquisition Agreement (as in effect on the date hereof) for purposes of the definition of “Company Material Adverse Effect”.

 

(iv)                  The Administrative Agent under each Facility shall have received the Solvency Certificate from the chief financial officer of the US Borrower (or, at the US Borrower’s option, a solvency opinion from an independent investment bank or valuation firm of nationally recognized standing that is addressed to the Administrative Agent and the Lenders and dated as of the Closing Date) with respect to solvency of you and your subsidiaries on a consolidated basis on the Closing Date immediately after giving effect to the consummation of the Transaction.

 

(v)                   The Administrative Agent under each Facility shall have received (A) customary opinions of counsel to the US Borrower and the Guarantors, (B) customary corporate resolutions, customary closing date officer’s certificates certifying as to the satisfactions of the conditions precedent to the Facilities, customary secretary’s and/or officer’s certificates appending such resolutions, commercial register excerpts (not older than 14 days), shareholders lists, charter documents, good standing certificates and incumbency certificate and information necessary for the Lead Arrangers to perform customary lien searches prior to closing, (C) subject in all respects to the Funds Certain Provisions, all documents and instruments (including schedules to security documentation) required to create and perfect the Administrative Agent’s senior priority security interest in the Collateral shall have been executed and delivered by the US Borrower, the Euro Borrower and the Guarantors (or, where applicable, the US Borrower and the Guarantors shall have authorized the filing of financing statements under the Uniform Commercial Code) and, if applicable, be in proper form for filing and (D) a customary borrowing notice.

 

(vi)                  The Lead Arrangers shall have received: (A) the audited consolidated balance sheets and related consolidated statements of operations, cash flows and shareholders’ equity of each of the US Borrower and the Acquired Business for the three most recently completed fiscal years of the US Borrower and the Acquired Business, respectively, ended at least 60 days before the Closing Date, accompanied by an unqualified report thereon by their respective independent registered public

 

Annex II-3

 

accountants; (B) the unaudited consolidated balance sheets and related statements of operations and cash flows of each of the US Borrower and the Acquired Business for each subsequent fiscal quarter of the US Borrower and the Acquired Business, respectively, ended at least 40 days before the Closing Date; and (C) pro forma consolidated balance sheet and related statement of operations of the US Borrower as of and for the periods for which audited and unaudited financial statements are required by clauses (A) and (B) above, and, other than a fiscal year end, as of and for the twelve-month period ended on the last day of the most recently completed four fiscal quarter period at least 40 days before the Closing Date, in each case after giving effect to the Transaction (the “Pro Forma Financial Statements”), all of which financial statements shall be prepared in accordance with Regulation S-X under the Securities Act (except that it is understood and agreed that the Pro Forma Financial Statements for any last twelve-month period that does not correspond with a fiscal year end may not comply with Regulation S-X only insofar as Regulation S-X contemplates fiscal year and interim period pro forma financial statements rather than “last twelve-month” pro forma financial statements).

 

(vii)                 The Lead Arrangers shall have been afforded a period of at least 21 consecutive calendar days (or such shorter period reasonably acceptable to the Lead Arrangers) following receipt of the Information Memorandum prior to the Closing Date; provided that such period shall (x) exclude the period from July 1, 2016 through and including July 4, 2016 and from November 23, 2016 through and including November 27, 2016, and (y) either conclude on or prior to August 19, 2016 or commence no earlier than September 6, 2016 and on or prior to December 23, 2016 or commence no earlier than January 3, 2017.

 

(viii)                All fees due to the Administrative Agent, the Lead Arrangers and the Lenders under the Fee Letters and the Commitment Letter to be paid on the Closing Date, and all expenses to be paid or reimbursed under the Commitment Letter to the Administrative Agent and the Lead Arrangers on the Closing Date that have been invoiced at least three business days prior to the Closing Date, shall have been paid, in each case, from the proceeds of the initial funding under the applicable Facilities.

 

(ix)                  The Refinancing shall have been, or shall concurrently with the initial funding of the Facilities be consummated and all guarantees of such indebtedness shall be released and, to the extent applicable, all liens and security interests securing such indebtedness shall be discharged.

 

(x)                   So long as requested at least ten business days prior to the Closing Date, the Administrative Agent shall have received, at least three business days prior to the Closing Date, all documentation and other information with respect to the Borrowers and the Guarantors that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the U.S.A. PATRIOT Act.

 

Annex II-4

 

ANNEX III

 

FORM OF SOLVENCY CERTIFICATE(1)
 [             ], 201[   ]

 

This SOLVENCY CERTIFICATE (this “Certificate”) is delivered in connection with that certain Credit Agreement dated as of [      ], 201[ ] (as amended, supplemented, amended and restated, replaced, or otherwise modified from time to time, the “Credit Agreement”), by and among COHERENT, INC., a Delaware corporation (the “US Borrower”), CONSTELLATION HOLDING, GMBH, a German company with limited liability (the “Euro Borrower”), BARCLAYS BANK PLC, as administrative agent and collateral agent (the “Administrative Agent”), and the financial institutions from time to time party thereto as lenders. Capitalized terms used herein without definition have the same meanings as in the Credit Agreement.

 

I, [·], the [Chief Financial Officer/equivalent officer] of the US Borrower, in such capacity and not in an individual capacity and without personal liability, hereby certify on behalf of the US Borrower that, to my knowledge, as of the date hereof, immediately after giving effect to the consummation of the Transaction, including the incurrence of the obligations under the Credit Agreement and the use of proceeds thereof:

 

1.             The fair value of the assets of the Company (as used herein “Company” means the Borrowers and their subsidiaries, on a consolidated basis) is more than its debts and liabilities, subordinated, contingent or otherwise.

 

2.             The present fair saleable value of assets of the Company is more than the amount that will be required to pay the probable liability, on a consolidated basis, of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured.

 

3.             The Company is able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured.

 

4.             The Company is not engaged in, and is not about to engage in, business for which it has “unreasonably small capital”.

 

For purposes of this Certificate, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.

 

[Signature page follows]

 

(1) NTD: Defined terms to be aligned with those in the definitive Credit Agreement.

 

Annex III-1

 

IN WITNESS WHEREOF, I represent the foregoing information is provided to the best of my knowledge and belief and execute this Certificate as of the date first above written.

 

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   [·]
    
	
 
    	
 
    	
Title:   [Chief Financial Officer/equivalent officer]
    

 

Annex III-2

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