Document:

Amended and Restated Credit Agreement

 Exhibit 10.1 
 Execution Copy 
  

 AMENDED AND RESTATED CREDIT AGREEMENT 
 dated as of 
 June 5, 2007 
 among 
 TESCO US HOLDING LP, 
 as US Borrower, 
 TESCO CORPORATION, 
 as Canadian Borrower,

 The Lenders Party Hereto 
 and

 JPMORGAN CHASE BANK, N.A., 
 as
Administrative Agent 
  

 J.P. MORGAN SECURITIES INC., 
 as Sole Bookrunner and Sole Lead Arranger 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
		  	ARTICLE I	  	
			
		  	Definitions	  	
			
	 SECTION 1.01.
	  	Defined Terms	  	1
	 SECTION 1.02.
	  	Classification of Loans and Borrowings	  	17
	 SECTION 1.03.
	  	Terms Generally	  	17
	 SECTION 1.04.
	  	Accounting Terms; GAAP	  	18
	 SECTION 1.05.
	  	Foreign Currency Calculations	  	18
			
		  	ARTICLE II	  	
			
		  	The Credits	  	
			
	 SECTION 2.01.
	  	Commitments	  	18
	 SECTION 2.02.
	  	Loans and Borrowings	  	19
	 SECTION 2.03.
	  	Requests for Borrowings	  	20
	 SECTION 2.04.
	  	Evidence of Debt	  	20
	 SECTION 2.05.
	  	Swingline Loans	  	21
	 SECTION 2.06.
	  	Letters of Credit	  	22
	 SECTION 2.07.
	  	Funding of Borrowings	  	25
	 SECTION 2.08.
	  	Interest Elections	  	26
	 SECTION 2.09.
	  	Termination and Reduction of Commitments; Increase in Revolving Commitments.	  	27
	 SECTION 2.10.
	  	Repayment of Loans	  	28
	 SECTION 2.11.
	  	Prepayment of Loans	  	30
	 SECTION 2.12.
	  	Fees	  	30
	 SECTION 2.13.
	  	Interest	  	31
	 SECTION 2.14.
	  	Alternate Rate of Interest	  	32
	 SECTION 2.15.
	  	Increased Costs	  	32
	 SECTION 2.16.
	  	Break Funding Payments	  	33
	 SECTION 2.17.
	  	Taxes	  	34
	 SECTION 2.18.
	  	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	  	35
	 SECTION 2.19.
	  	Mitigation Obligations; Replacement of Lenders	  	37
			
		  	ARTICLE III	  	
			
		  	Representations and Warranties	  	
			
	 SECTION 3.01.
	  	Organization; Powers	  	38
	 SECTION 3.02.
	  	Authorization; Enforceability	  	38
	 SECTION 3.03.
	  	Governmental Approvals; No Conflicts	  	38
	 SECTION 3.04.
	  	Financial Condition; No Material Adverse Change	  	38
	 SECTION 3.05.
	  	Properties	  	39
	 SECTION 3.06.
	  	Litigation and Environmental Matters	  	39
	 SECTION 3.07.
	  	Compliance with Laws and Agreements	  	39
	 SECTION 3.08.
	  	Investment Company Status	  	39
	 SECTION 3.09.
	  	Taxes	  	39

  

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	 SECTION 3.10.
	  	Pension Plans	  	40
	 SECTION 3.11.
	  	Disclosure	  	40
	 SECTION 3.12.
	  	Labor Matters	  	40
	 SECTION 3.13.
	  	Solvency	  	41
		  	Target Acquisitions	  	33
			
		  	ARTICLE IV	  	
			
		  	Conditions	  	
			
	 SECTION 4.01.
	  	Effective Date	  	41
	 SECTION 4.02.
	  	Each Credit Event	  	42
			
		  	ARTICLE V	  	
			
		  	Affirmative Covenants	  	
			
	 SECTION 5.01.
	  	Financial Statements and Other Information	  	43
	 SECTION 5.02.
	  	Notices of Material Events	  	44
	 SECTION 5.03.
	  	Existence; Conduct of Business	  	45
	 SECTION 5.04
	  	Payment of Obligations	  	45
	 SECTION 5.05.
	  	Maintenance of Properties; Insurance	  	45
	 SECTION 5.06.
	  	Books and Records; Inspection Rights	  	45
	 SECTION 5.07.
	  	Compliance with Laws	  	45
	 SECTION 5.08.
	  	Use of Proceeds and Letters of Credit	  	45
	 SECTION 5.09
	  	Collateral Security; Further Assurances	  	46
			
		  	ARTICLE VI	  	
			
		  	Negative Covenants	  	
			
	 SECTION 6.01.
	  	Indebtedness	  	47
	 SECTION 6.02.
	  	Liens	  	47
	 SECTION 6.03.
	  	Fundamental Changes; Sale of Assets	  	48
	 SECTION 6.04.
	  	Investments, Loans, Advances, Guarantees and Acquisitions	  	48
	 SECTION 6.05.
	  	Swap Agreements	  	50
	 SECTION 6.06.
	  	Restricted Payments	  	50
	 SECTION 6.07.
	  	Transactions with Affiliates	  	50
	 SECTION 6.08.
	  	Restrictive Agreements	  	50
	 SECTION 6.09
	  	Change of Name or Location; Change of Fiscal Year	  	51
	 SECTION 6.10
	  	Amendments to Agreements 41	  	51
	 SECTION 6.11
	  	Prepayment of Indebtedness; Subordinated Indebtedness	  	51
	 SECTION 6.12
	  	Leverage Ratio	  	51
	 SECTION 6.13
	  	Minimum Net Worth	  	51
	 SECTION 6.14
	  	Fixed Charge Coverage Ratio	  	52
	 SECTION 6.15
	  	Consolidated Capital Expenditures	  	52

  

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		  	ARTICLE VII	  	
			
		  	Events of Default	  	52
			
		  	ARTICLE VIII	  	
			
		  	The Administrative Agent	  	54
			
		  	ARTICLE IX	  	
			
		  	Miscellaneous	  	
			
	 SECTION 9.01.
	  	Notices	  	57
	 SECTION 9.02.
	  	Waivers; Amendments	  	57
	 SECTION 9.03.
	  	Expenses; Indemnity; Damage Waiver	  	59
	 SECTION 9.04.
	  	Successors and Assigns	  	60
	 SECTION 9.05.
	  	Survival	  	62
	 SECTION 9.06.
	  	Counterparts; Integration; Effectiveness	  	62
	 SECTION 9.07.
	  	Severability	  	63
	 SECTION 9.08.
	  	Right of Setoff	  	63
	 SECTION 9.09.
	  	Governing Law; Jurisdiction; Consent to Service of Process	  	63
	 SECTION 9.10.
	  	WAIVER OF JURY TRIAL	  	64
	 SECTION 9.11.
	  	Headings	  	64
	 SECTION 9.12.
	  	Confidentiality	  	64
	 SECTION 9.13.
	  	Interest Rate Limitation	  	65
	 SECTION 9.14.
	  	USA PATRIOT Act	  	65
	 SECTION 9.15.
	  	Conversion of Currencies.	  	65

  

			
	SCHEDULES:	 	
	
	 Schedule 2.01     —    Commitments

	 Schedule 3.06     —    Disclosed Matters

	 Schedule 6.01     —    Existing Indebtedness

	 Schedule 6.02     —    Existing Liens

	 Schedule 6.04     —    Existing Investments

	 Schedule 6.08     —    Existing Restrictions

			
		
	 EXHIBITS:
	 	
	
	 Exhibit A     —    Form of Assignment and Assumption

	 Exhibit B     —    Form of Notes

  

 iii 

 This AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 5, 2007, is among TESCO US HOLDING LP,
TESCO CORPORATION, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent. 
 RECITALS 
 A. The Borrowers, the lenders party thereto (the “Existing Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent for such Existing
Lenders, are each party to a Credit Agreement dated as of November 2, 2005, as amended (the “Existing Credit Agreement”). 
 B. The Borrowers have requested that the Lenders, including each lender becoming a Lender on the date hereof, and the Administrative Agent amend and restate the Existing Credit Agreement as herein provided, and the Lenders and the
Administrative Agent are willing to amend and restate the Existing Credit Agreement on the terms and conditions herein set forth. 
 AGREEMENT 
 In consideration of the premises and of the mutual agreements herein contained, the parties hereto agree
that the Existing Credit Agreement shall be amended and restated in its entirety as follows: 
 ARTICLE I 
 Definitions 
 SECTION 1.01. Defined
Terms. As used in this Agreement, the following terms have the meanings specified below: 
 “ABR”, when used in reference
to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. 
 “Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which
the Parent or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise
or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person. 
 “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. 
 “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder. 
 “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent. 
 “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person specified. 
  

 1 

 “Alternate Base Rate” means, for
any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus  1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 
 “Applicable Percentage” means,
with respect to any Lender, the percentage of the total Revolving Commitments represented by such Lender’s Revolving Commitments. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon
the Revolving Commitments most recently in effect, giving effect to any assignments. 
 “Applicable Rate” means, for any
day, with respect to any Eurodollar Loan or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Eurodollar Spread” or “Commitment Fee Rate”,
as the case may be, based upon the Leverage Ratio as of the most recent determination date: 
  

							
	Level	  	Leverage Ratio	  	Eurodollar Spread	 	Commitment Fee Rate
	I	  	£0.50	  	1.00%	 	0.20%
	II	  	>0.50 and £ 1.00	  	1.25%	 	0.25%
	III	  	>1.00 and £ 1.50	  	1.50%	 	0.30%
	IV	  	>1.50 and £ 2.00	  	1.75%	 	0.35%
	V	  	>2.00	  	2.00%	 	0.40%

 The Applicable Rate shall be determined in accordance with the foregoing table based on the Leverage Ratio as of
the end of each Fiscal Quarter, as calculated for the four most recently ended consecutive Fiscal Quarters of the Parent. Adjustments, if any, to the Applicable Rate shall be effective five Business Days after the Administrative Agent is scheduled
to receive the applicable financials under Section 5.01(a) or (b) and certificate under Section 5.01(c). If the Parent fails to deliver the financials to the Administrative Agent at the time required hereunder, then the Applicable
Rate shall be set at Level V until such financials are so delivered. 
 “Approved Fund” has the meaning assigned to such
term in Section 9.04. 
 “Asset Sale” means any sale, transfer, lease or other disposition (in one transaction or in a
series of transactions) of any asset (in each case, whether now owned or hereafter acquired) of the Parent of any Subsidiary, excluding (a) sales and leases of inventory in the ordinary course of business, (b) sales, transfers, leases or
other dispositions from the Parent or any Subsidiary to a Borrower or Guarantor and sales among Subsidiaries that are not a Borrower or Guarantor, and (c) sales of drilling equipment during or at the termination of short term (less than 36
months in duration) leases, lease purchase or rental agreements thereof to the lessor under such lease if the intent at the inception of such lease, lease purchase or rental agreement was for such lessor to purchase such drilling equipment, in each
case in the ordinary course of business and consistent with past practices. 
 “Assignment and Assumption” means an
assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent. 
  

 2 

 “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitments. 
 “Banking
Services” means each and any of the following bank services provided to any Borrower or Guarantor by any Lender or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services). 
 “Banking Services Obligations” means any and all obligations of any Borrower or Guarantor, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services. 
 “Board” means the Board of Governors of the Federal Reserve System of the United States of America. 
 “Borrowers” means the US Borrower and the Canadian Borrower. 
 “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, (b) Term Loans or portions thereof of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is
in effect or (c) a Swingline Loan. 
 “Borrowing Request” means a request by a Borrower for a Borrowing in accordance
with Section 2.03. 
 “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial
banks in Chicago are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings
in dollar deposits in the London interbank market, and when used in connection with a Swingline Canadian Loan, the term “Business Day” shall also exclude any day on which commercial banks in Toronto, Ontario are authorized or
required by law to remain closed. 
 “Canadian Borrower” means the Parent as the borrower of Swingline Canadian Loans
hereunder. 
 “Canadian Dollars” or “C$” means the lawful currency of Canada. 
 “Canadian Lender” means any Lender that (a) is incorporated under the laws of Canada or a province thereof, (b) is an
“authorized foreign bank” as defined under the Income Tax Act (Canada) that will receive all amounts paid or credited to it with respect to the Swingline Canadian Loans or Letters of Credit for the account of a Canadian LC Obligor in
respect of its “Canadian banking business” for the purposes of the Income Tax Act (Canada) or (c) the Minister of National Revenue is satisfied that payments made to it hereunder would not be subject to Canadian withholding taxes
pursuant to Regulation 805(2) of the Income Tax Act (Canada). 
 “Canadian Pension Plan” means any “pension plan”
or “plan” that is subject to the funding requirements of the Pension Benefits Act (Ontario) or applicable pension benefits legislation in any other Canadian jurisdiction and is applicable to employees resident in Canada of a Parent or any
of its Subsidiaries. 
  

 3 

 “Canadian Welfare Plan” means any medical, health, hospitalization, insurance or other
employee benefit or welfare plan or arrangement applicable to employees resident in Canada of a Parent or any of its Subsidiaries. 
 “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 “Change in Control” means the occurrence of any of the following events: (a) the Parent ceases to own directly or
indirectly 100% of the Equity Interests in the US Borrower; (b) the Parent ceases to own, either directly or indirectly, 100% of the Equity Interests in any of its material U.S. or Canadian Subsidiaries other than the US Borrower other than
(i) as a result of a sale of asset or merger permitted under Section 6.03, (ii) any directors’ qualifying shares mandated by applicable law, and (iii) with respect to any Subsidiary that is organized in a foreign
jurisdiction, to the extent that such Subsidiary is required by the applicable laws and regulations of such foreign jurisdiction to be partially owned by the government of such foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction; (c) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person
or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 35% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any option right); or (d) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent
cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body. 
 “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any
law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement. 
 “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are Revolving Loans, Term Loans or Swingline Loans. 
  

 4 

 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 “Collateral” means, collectively, the “Collateral” under and as defined in, and any other assets upon which a
Lien has been granted by, any of the Collateral Documents. 
 “Collateral Documents” means, collectively, the Security
Agreements, the Guaranties and all other agreements or documents granting or perfecting a Lien in favor of the Administrative Agent for the benefit of the Lenders or otherwise providing support for the Secured Obligations at any time (including
without limitation all such agreements executed pursuant to the Existing Credit Agreement), as any of the foregoing may be amended or modified from time to time. 
 “Commitments” means the Revolving Commitments and the Term Loan Commitments. 
 “Consolidated Capital Expenditures” means, with reference to any period, the Capital Expenditures of the Parent and its Subsidiaries calculated on a consolidated basis for such period. 
 “Consolidated EBITDA” means Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated
Net Income, (a) Consolidated Interest Expense, (b) expense for taxes paid or accrued net of tax refunds, (c) depreciation, (d) amortization, (e) non-cash charges relating to any compensation deduction as a result of the
grant of any stock or other Equity Interests to employees, officers or directors, (f) non-cash foreign currency exchange gains and losses, (g) extraordinary non-cash losses incurred other than in the ordinary course of business, and
(h) other non-cash losses and expenses determined in accordance with GAAP (including any non-cash losses and expenses attributable to the conversion from Canadian GAAP to U.S. GAAP), minus, to the extent included in Consolidated
Net Income, extraordinary gains realized other than in the ordinary course of business and all non-cash gains or other income determined in accordance with GAAP (including any non-cash gains or other income attributable to the conversion from
Canadian GAAP to U.S. GAAP), all calculated for the Parent and its Subsidiaries on a consolidated basis. 
 “Consolidated Fixed
Charges” means, with reference to any period, without duplication, Consolidated Interest Expense paid in cash, plus scheduled principal payments on Indebtedness paid or payable during such period, plus for each
Fiscal Quarter in 2006, $2,500,000, plus Restricted Payments with respect to any Equity Interests of the Parent paid in cash. 
 “Consolidated Funded Indebtedness” means at any time the (a) all obligations of the Parent and its Subsidiaries for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of the
Parent and its Subsidiaries evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of the Parent and its Subsidiaries upon which interest charges are customarily paid, (d) all obligations of the Parent and its
Subsidiaries under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of the Parent and its Subsidiaries in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien
on property owned or acquired by the Parent and its Subsidiaries, whether or not the Indebtedness secured thereby has been assumed, and (g) any other Indebtedness or other financial accommodation (excluding current accounts payable incurred in
the ordinary course of business) of the Parent and its Subsidiaries which in accordance with GAAP would be shown as a liability on a consolidated balance sheet, all as calculated on a consolidated basis for the Parent and its Subsidiaries.

 “Consolidated Interest Expense” means, with reference to any period, the interest expense of the Parent and its
Subsidiaries calculated on a consolidated basis for such period. 
  

 5 

 “Consolidated Net Income” means, with reference to any period, the net income (or loss)
of the Parent and its Subsidiaries calculated on a consolidated basis for such period. 
 “Consolidated Net Worth” means at
any time the consolidated stockholders’ equity of the Parent and its Subsidiaries calculated on a consolidated basis as of such time. 
 “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings correlative thereto. 
 “Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
 “Defaulting Lender” means any Lender with respect to which a Lender Default is in effect. 
 “Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06. 
 “Disqualified Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part. 
 “Dollar Equivalent” means, on any date of determination (a) with respect to any amount in Dollars, such amount, and (b) with respect to any amount in any other currency, the equivalent in
Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.05 using the Exchange Rate with respect to such currency at the time in effect under the provisions of such Section. 
 “Dollar”, “dollar” or “$” refers to lawful money of the United States of America. 
 “Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with
Section 9.02). 
 “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to public health and safety matters. 
 “Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Parent or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. 
 “Equity Interests “ means shares of capital stock, partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. 
  

 6 

 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time. 
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Borrower or
Guarantor, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Borrower or Guarantor or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or Guarantor or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or Guarantor or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or Guarantor or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any
Borrower or Guarantor or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA. 
 “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate. 
 “Event of
Default” has the meaning assigned to such term in Article VII. 
 “Event of Loss” means, with respect to any
assets, any of the following: (a) any loss, destruction or damage of such assets; (b) any pending or threatened institution of any proceedings for the condemnation or seizure of such assets or for the exercise of any right of eminent
domain; or (c) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such assets, or confiscation of such assets or the requisition of the use of such assets. 
 “Exchange Rate” means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at
which such currency may be exchanged into Dollars at the time of determination on such day on the Reuters Currency pages, if available, for such currency. In the event that such rate does not appear on any Reuters Currency pages, the Exchange Rate
shall be determined by reference to such other publicly available service for displaying exchange rates as may be reasonably determined by the Administrative Agent, or, in the absence of such service, such Exchange Rate shall instead be the
arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about such time as the Administrative Agent shall
elect after determining that such rates shall be the basis for determining the Exchange Rate, on such date for the purchase of Dollars for delivery two Business Days later; provided that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error. 
  

 7 

 “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the
jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or resident or deemed resident or in which its principal office is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the US Borrower is located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by a Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.17(a). 
 “Existing
Lenders” is defined in the recitals to this Agreement. 
 “Existing Credit Agreement” is defined in the recitals to
this Agreement. 
 “Exiting Lender” is defined in Section 2.01(c). 
 “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it. 
 “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Parent. 
 “Fiscal Quarter” means any of the quarterly accounting periods of the Parent
ending on March 31, June 30, September 30 and December 31 of each year. 
 “Fiscal Year” means
any of the annual accounting periods of the Parent ending on December 31 of each year. 
 “Fixed Charge Coverage Ratio”
means, the ratio, determined as of the end of each of Fiscal Quarter of the Parent for the most-recently ended four Fiscal Quarters, of (a) Consolidated EBITDA minus taxes to (b) Consolidated Fixed Charges, all calculated for
the Parent and its Subsidiaries on a consolidated basis. 
 “Foreign Lender” means any Lender that is organized under the
laws of a jurisdiction other than that in which the US Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

  

 8 

 “GAAP” means generally accepted accounting principles in the United States of America or
Canada, as applicable. 
 “Governmental Authority” means the government of the United States of America, any other nation or
any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government. 
 “Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business or customary and
reasonable indemnity obligations entered into in connection with any acquisition or disposition of assets permitted under this Agreement. 
 “Guarantor” means each Subsidiary and each other Person required to execute and deliver a Guaranty under Section 5.09(a)(i), and each Borrower shall also be a Guarantor with respect to the Secured Obligations of the
other Borrower. 
 “Guaranty” means each guaranty executed by a Guarantor, which shall be in form and substance satisfactory
to the Administrative Agent, including without limitation all such existing guaranties executed pursuant to the Existing Credit Agreement. 
 “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. 
 “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (h) all Off-Balance Sheet Liabilities of such Person, (i) all
obligations under any Disqualified Stock of such Person, (j) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (k) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. 
  

 9 

 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
 “Interest Election Request” means a request by the US Borrower to convert or continue a Borrowing in accordance with Section 2.08.

 “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each
March, June, September and December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, and (c) with respect to any Swingline Loan, the
day that such Loan is required to be repaid or as otherwise required by the Swingline Lender. 
 “Interest Period”
means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter or such other
periods agreed to by all Lenders, as the US Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing. 
 “Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate and, for purposes of issuing Letters of Credit to any Canadian LC Obligor, “Issuing Bank” shall mean
JPMorgan Chase Bank, N.A., Toronto Branch. 
 “LC Disbursement” means a payment made by the Issuing Bank pursuant to a
Letter of Credit. 
 “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the US Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage
of the total LC Exposure at such time. 
 “LC Obligor” means any Borrower, any Guarantor or, if acceptable to the Issuing
Bank, any other Subsidiary. 
 “Lender Default” means (i) the refusal (which has not been retracted) of a Lender to
make available its portion of any Borrowing, to acquire participations in a Swingline Loan pursuant to Section 2.05 or to fund its portion of any unreimbursed payment under Section 2.06(e), or (ii) a Lender having notified in writing
the applicable Borrower and/or the Administrative Agent that it does not intend to comply with its obligations under Section 2.05, 2.06 or 2.07. 
  

 10 

 “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes
the Swingline Lender. 
 “Letter of Credit” means any letter of credit issued pursuant to this Agreement. 
 “Leverage Ratio” means, as of the end of any Fiscal Quarter of the Parent, the ratio of (a) Consolidated Funded Indebtedness at
such time to (b) Consolidated EBITDA, as calculated for the four consecutive Fiscal Quarters of the Parent then ending. 
 “LIBO
Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for
such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. 
 “Lien” means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities to the extent that any
such right is intended to have an effect equivalent to that of a security interest in such securities. 
 “Loan Documents”
means this Agreement, any Note, the Collateral Documents, any subordination agreement and any other agreement, instrument or other document executed in connection therewith (including without limitation all other agreements, instruments and other
documents executed pursuant to the Existing Credit Agreement). 
 “Loan Party” means any Borrower or any Guarantor.

 “Loans” means the loans made by the Lenders to the Borrowers pursuant to this Agreement. 
 “Local Time” means (a) with respect to a Loan or Borrowing denominated in Dollars, Chicago time, and (b) with respect to any
Swingline Canadian Loan, Toronto time. 
 “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the Parent and the Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under any Loan Document or (c) the rights of or
benefits available to the Lenders under any Loan Document. 
  

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 “Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit),
or obligations in respect of one or more Swap Agreements, of any one or more of the Parent and its Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Parent or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Parent or such Subsidiary would be required to pay
if such Swap Agreement were terminated at such time. 
 “Moody’s” means Moody’s Investors Service, Inc.

 “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which any Borrower or
Guarantor or ERISA Affiliate is making or accruing any obligation to make contributions. 
 “Net Cash Proceeds” means,
without duplication (a) in connection with any sale or other disposition of any asset or any settlement by, or receipt of payment in respect of, any property insurance claim or condemnation award, the cash proceeds (including any cash payments
received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such sale, settlement or payment, net of reasonable and documented
attorneys’ fees, accountants’ fees, investment banking fees, consultants’ fees, real estate commissions, survey costs, title insurance premiums, transfer taxes, deed or mortgage recording taxes, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such sale, insurance claim or condemnation award (other than any Lien in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders) and other customary fees actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof and (b) in connection with any issuance or sale of any
Equity Interests or debt securities or instruments or the incurrence of loans, the cash proceeds received from such issuance or incurrence, net of investment banking fees, reasonable and documented attorneys’ fees, accountants’ fees,
underwriting discounts and commissions and other reasonable and customary fees and expenses actually incurred in connection therewith. 
 “Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, the LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Borrowers and
of the Guarantors to the Lenders or to any Lender, the Administrative Agent or any Related Party arising under the Loan Documents. 
 “Off-Balance Sheet Liability” of a Person means (i) any obligation under a sale and leaseback transaction which is not a Capital Lease Obligation, (ii) any so-called “synthetic lease” or “tax
ownership operating lease” transaction entered into by such Person, (iii) the amount of obligations outstanding under the legal documents entered into as part of any asset securitization or similar transaction on any date of determination
that would be characterized as principal if such asset securitization or similar transaction were structured as a secured lending transaction rather than as a purchase or (iv) any other transaction (excluding operating leases for purposes of
this clause (iv)) which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person; in all of the foregoing cases, calculated based on the aggregate outstanding
amount of obligations outstanding under the legal documents entered into as part of any such transaction on any date of determination that would be characterized as principal if such transaction were structured as a secured lending transaction,
whether or not shown as a liability on a consolidated balance sheet of such Person, in a manner reasonably satisfactory to the Administrative Agent. 
  

 12 

 “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. 
 “Parent” means Tesco Corporation, an Alberta, Canada corporation. 
 “Participant” has the meaning set forth in Section 9.04. 
 “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions. 
 “Permitted Encumbrances” means: 
 (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04; 
 (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are not overdue by more than 90 days or are being contested in compliance with Section 5.04; 
 (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment
insurance and other social security laws or regulations; 
 (d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; 
 (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; and

 (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising
in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Parent or any Subsidiary; 
 provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness. 
 “Permitted Investments” means: 
 (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; 
 (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

  

 13 

 (c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof or Canada which has a combined capital and surplus and undivided profits of not less than $500,000,000 or any foreign bank which has a combined capital and surplus and undivided profits of not less than
$500,000,000 that ate rated at least “A-1” by S&P or “P-1” by Moody’s or any comparable rating from any comparable foreign rating agency; 
 (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria described in clause (c) above; and 
 (e) money
market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets
of at least $5,000,000,000. 
 “Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity. 
 “Plan” means any employee pension
benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower, Guarantor or ERISA Affiliate is (or, if such plan
were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. 
 “Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as being effective. 
 “Register” has the meaning
set forth in Section 9.04. 
 “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates. 
 “Reports” is defined in Section 9.03. 
 “Required Lenders” means, at any time, Lenders
having Revolving Credit Exposures, unused Commitments and Term Loans representing more than 50% of the sum of the total Revolving Credit Exposures, unused Commitments and Term Loans at such time. The Revolving Credit Exposure, unused Commitments and
Term Loan of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. 
 “Restricted Payment”
means (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Parent or any Subsidiary, or (ii) any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Parent or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in the Parent or any Subsidiary. 
  

 14 

 “Revolving Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders’ Revolving Commitments
is $100,000,000. 
 “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding
principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time. 
 “Revolving Credit
Maturity Date” means June 5, 2012. 
 “Revolving Loan” means a Loan made pursuant to Section 2.01(a).

 “SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the
functions of the Securities and Exchange Commission. 
 “Secured Obligations” means, collectively, (i) the Obligations,
(ii) the Banking Services Obligations and (iii) the Swap Agreement Obligations owing to one or more Lenders or their Affiliates. 
 “Security Agreement” means each security agreement, general security agreement, pledge agreement, pledge and security agreement and similar agreement and any other agreement from any Loan Party granting a Lien on any of its
personal property (including without limitation any Equity Interests owned by such Loan Party), each in form and substance acceptable to the Administrative Agent entered into by any Loan Party at any time for the benefit of the Administrative Agent
and the Lenders pursuant to this Agreement, as amended or modified from time to time, and including without limitation all such existing agreements executed pursuant to the Existing Credit Agreement. 
 “S&P” means Standard & Poor’s. 
 “Solvent” means, on any date with respect to any Loan Party, that the representations in Section 3.13 are correct with respect to such Loan Party. 
 “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
 “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations and is subject to such other terms to the written reasonable
satisfaction of the Administrative Agent and the Required Lenders. 
  

 15 

 “subsidiary” means, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. 
 “Subsidiary” means any subsidiary of the Parent. 
 “Swap Agreement” means any agreement with
respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of the Parent or the Subsidiaries shall be a Swap Agreement. 
 “Swap Agreement Obligations” means any and all obligations of the Parent or any of its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor) owing to any Lender or any of its Affiliates under any and all Swap Agreements. 
 “Swingline Canadian Loans” means Swingline Loans made to the Canadian Borrower. 
 “Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time. 
 “Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder and, for purposes of making Swingline Canadian Loans, shall mean JPMorgan Chase Bank, N.A., Toronto Branch. 
 “Swingline Loan” means a Loan made pursuant to Section 2.05. 
 “Taxes” means any and all
present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. 
 “Term
Loan Commitment” means, with respect to each Lender, the commitment of such Lender with respect to the Term Loans, as such commitment may be reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender’s Term Loan Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable. The initial
aggregate amount of the Lenders’ Term Loan Commitments is $25,004,480.28. 
 “Term Loans” means the term loans extended
by the Lenders to the US Borrower pursuant to Section 2.01(b) hereof in an aggregate amount not to exceed $25,004,480.28. 
  

 16 

 “Term Loan Maturity Date” means October 31, 2009. 
 “Transactions” means the execution, delivery and performance by the Borrowers of this Agreement, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder. 
 “Turnkey Warrants” means the warrants held by the
Parent as of the Effective Date (and without giving effect to any modification thereof) to purchase 1,000,000 shares of stock of Turnkey E & P, Inc. for a purchase price of C$6.00 and exercisable until December 13, 2007. 
 “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate. 
 “UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York. 
 “US Borrower” means Tesco US Holding LP, a
Nevada limited partnership. 
 “Wholly-Owned Subsidiary” of a Person means, any Subsidiary all of the outstanding Equity
Interests of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person. 
 “Withdrawal Liability” means liability of any Borrower, Guarantor or ERISA Affiliate to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 
 SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar
Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”). 
 SECTION 1.03. Terms Generally.
The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors
and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 
  

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 SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of
an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Parent notifies the Administrative Agent that the Parent requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision or to eliminate the effect of any change occurring after the date hereof in whether generally accepted
accounting principles in the United States of America or in Canada are used by the Parent and its Subsidiaries (or if the Administrative Agent notifies the Parent that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. For purposes of calculating the financial covenants, any Acquisition or any sale or other disposition outside the ordinary course of
business by the Parent or any of the Subsidiaries of any asset or group of related assets in one or a series of related transactions, including the incurrence of any Indebtedness and any related financing or other transactions in connection with any
of the foregoing, occurring during the period for which such ratios are calculated shall be deemed to have occurred on the first day of the relevant period for which such ratios were calculated on a pro forma basis reasonably acceptable to the
Administrative Agent. 
 SECTION 1.05. Foreign Currency Calculations. (a) For purposes of determining the Dollar Equivalent of
any Advance denominated in Canadian Dollars or any related amount, the Administrative Agent shall determine the Exchange Rate as of the applicable date with respect to each requested or outstanding Advance denominated in Canadian Dollars and shall
apply such Exchange Rates to determine such amount (in each case after giving effect to any Advance to be made or repaid on or prior to the applicable date for such calculation). 
 (b) For purposes of any determination hereunder, all amounts incurred, outstanding or proposed to be incurred or outstanding in currencies other than
Dollars shall be translated into Dollars at the currency exchange rates in effect on the date of such determination; provided that no Default shall arise as a result of any limitation set forth in Dollars in Section 6.01 or 6.02 being
exceeded solely as a result of changes in currency exchange rates from those rates applicable at the time or times Indebtedness or Liens were initially consummated in reliance on the exceptions under such Sections. For purposes of any determination
under Section 6.03, 6.04 or 6.05, the amount of each asset disposition, investment or other applicable transaction denominated in a currency other than Dollars shall be translated into Dollars at the currency exchange rate in effect on the date
such investment, disposition or other transaction is consummated. Such currency exchange rates shall be determined in good faith by the Borrowers. 
 ARTICLE II 
 The Credits 
 SECTION 2.01. Commitments. (a) Revolving Credit Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the US Borrower from time to time
during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (ii) the total Revolving Credit Exposures exceeding the
total Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the US Borrower may borrow, prepay and reborrow Revolving Loans. 
  

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 (b) Term Loan Commitments. Subject to the terms and conditions set forth herein, each Lender and
the U.S. Borrower agree that the Term Loans under the Existing Credit Agreement shall be combined and deemed the Term Loans hereunder as of the Effective Date, and as of the Effective Date each Lender shall hold an aggregate principal amount of the
Term Loan to the US Borrower equal to such Lender’s Term Loan Commitment. 
 (c) Amendment and Restatement. This Agreement amends
and restates the Existing Credit Agreement as of the Effective Date. All Obligations (as defined in the Existing Credit Agreement) outstanding under the Existing Credit Agreement shall constitute Obligations under this Agreement and, without
limiting the foregoing, the Revolving Loans, Swingline Loans, Letters of Credit and Term Loans (each under and as defined in the Existing Agreement) shall be Revolving Loans, Swingline Loans, Letters of Credit and Term Loans, respectively, under
this Agreement, and each Lender shall have the Commitments with respect thereto as stated in this Agreement. The Lenders acknowledge and agree that such transfer of rights and interests under the Loan Documents shall take place among the Lenders as
of the Effective Date to give effect to the Commitments set forth herein such that each Lender holds each Loan and has a participation in the LC Exposure and Swingline Exposure in accordance with its Commitments hereunder. The Lenders and any
Existing Lender which will not continue as a Lender hereunder (an “Exiting Lender”) will make such payments among themselves as directed by the Administrative Agent to give effect to the Commitments hereunder and the Borrowers shall be
liable for any breakage costs under Section 2.16. Nothing herein shall be interpreted to constitute a novation or satisfaction of the Obligations (as defined in the Existing Credit Agreement), and the Obligations hereunder shall be deemed a
continuation thereof and shall be entitled to the same collateral with the same priority as the Obligations under and as defined in the Existing Credit Agreement. 
 SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan and Term Loan shall be made as part of a Borrowing consisting of Revolving Loans or Term Loans, as the case may be, made by the Lenders ratably
in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans as required. 
 (b) Subject to Section 2.14,
each Revolving Borrowing and Term Loan Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the US Borrower may request in accordance herewith. Each Swingline Loan to the US Borrower shall be an ABR Loan and Swingline Canadian
Loan shall bear interest and be subject to such other terms as may be agreed upon from time to time by the Canadian Borrower and the Swingline Lender in any separate letter agreement or otherwise agreed upon between the Canadian Borrower and the
Swingline Lender. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the
US Borrower to repay such Loan in accordance with the terms of this Agreement. 
 (c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000; provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an
LC Disbursement as contemplated by Section 2.06(e). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of six Eurodollar Borrowings outstanding.

 (d) Notwithstanding any other provision of this Agreement, the US Borrower shall not 

  

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be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Term Loan
Maturity Date in the case of the Term Loan or the Revolving Credit Maturity Date in the case of any Revolving Loan. 
 SECTION 2.03.
Requests for Borrowings. To request a Revolving Borrowing or a Term Loan Borrowing, the US Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
Chicago time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., Chicago time, one Business Day before the date of the proposed Borrowing; provided that any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 12:00 noon, Chicago time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the US Borrower. Each such
telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02: 
 (i)
the aggregate amount of the requested Borrowing; 
 (ii) the date of such Borrowing, which shall be a Business Day;

 (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; 
 (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”; and 
 (v) the location and number of the US Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07. 
 If no election as to the Type of Revolving Borrowing or Term Loan Borrowing is
specified, then the requested Revolving Borrowing or Term Loan Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the US Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to
be made as part of the requested Borrowing. 
 SECTION 2.04. Evidence of Debt. (a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the US Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time
hereunder. 
 (b) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof. 
 (c) The
entries made in the accounts maintained pursuant to paragraph (a) or (b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; 

  

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provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement. 
 (d) Any Lender may request that Loans made
by it be evidenced by a promissory note. In such event, the Borrowers shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form attached hereto as Exhibit B. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). 
 SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender may, in its reasonable
discretion, make Swingline Loans to a Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the Dollar Equivalent of the aggregate principal amount of
outstanding Swingline Loans exceeding $15,000,000 or (ii) the sum of the total Revolving Credit Exposures exceeding the total Revolving Commitments; provided that the Swingline Lender shall not make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, each Borrower may borrow, prepay and reborrow Swingline Loans, provided that all Swingline Loans to the Canadian Borrower shall be made
by JPMorgan Chase Bank, N.A., Toronto Branch. 
 (b) To request a Swingline Loan, a Borrower shall notify the Administrative Agent of such
request by telephone (confirmed by telecopy), not later than 12:00 noon, Local Time, on the day of a proposed Swingline Loan or pursuant to such other procedures and requirements agreed upon between such Borrower and the Swingline Lender. Each such
notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from a
Borrower. If the Swingline Lender determines in its discretion to make such Swingline Loan, and such Borrower and the Swingline Lender have agreed upon the interest rate and other applicable terms, such Swingline Loan shall be made available to a
Borrower by means of a credit to the general deposit account of the applicable Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the Issuing Bank) by 3:00 p.m., Local Time, on the requested date of such Swingline Loan. 
 (c) The Swingline Lender may
by written notice given to the Administrative Agent not later than 10:00 a.m., Local Time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Any Swingline Loan outstanding in Canadian Dollars shall, upon the giving of such notice by the Swingline Lender, immediately and automatically be converted to
and redenominated in Dollars equal to the Dollar Equivalent thereof and shall bear interest at the greater of the Alternate Base Rate or the rate otherwise applicable to such Swingline Loan. Promptly upon receipt of such notice, the Administrative
Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to
pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each 

  

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such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations
of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the applicable Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from a Borrower (or other party on
behalf of a Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall
be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to a Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve any Borrower of any default in the payment thereof. 
 SECTION 2.06. Letters of Credit. (a) General.
Subject to the terms and conditions set forth herein, the US Borrower may request the issuance of Letters of Credit for its own account or the account of any LC Obligor, in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, at any time and from time to time during the Availability Period. In the event any Letter of Credit is to be issued to any LC Obligor other than the US Borrower, such LC Obligor shall execute and deliver such letter of credit application or
other agreement requested by the Issuing Bank and the US Borrower and such LC Obligor shall be jointly and severally liable for all LC Exposure with respect to such Letter of Credit. Letters of Credit may be denominated in Dollars, Canadian Dollars
or any other currency acceptable to the Administrative Agent that is freely available, freely transferable and freely convertible into Dollars. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement submitted by the any LC Obligor to, or entered into by the any LC Obligor with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. 
 (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the US Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the
Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the US Borrower and any other LC Obligor
requesting such Letter of Credit also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit or such other agreement reasonably requested by the Issuing Bank. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the US Borrower shall be deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the Dollar Equivalent of the LC Exposure shall not exceed $20,000,000 and (ii) the sum of the Dollar Equivalent of the total Revolving Credit Exposures shall not exceed the total Revolving Commitments.

  

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 (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on
the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior
to the Revolving Credit Maturity Date. 
 (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter
of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the US Borrower and other applicable LC Obligors on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the US Borrower or any other applicable LC Obligor for any reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. 
 (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the US Borrower and each other applicable
LC Obligor shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Chicago time, on the date that such LC Disbursement is made, if the US Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., Chicago time, on such date, or, if such notice has not been received by the US Borrower prior to such time on such date, then not later than 12:00 noon, Chicago time, on (i) the
Business Day that the US Borrower receives such notice, if such notice is received prior to 10:00 a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day that the US Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt; provided that the US Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be
financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the US Borrower’s and any other applicable LC Obligor’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Revolving Borrowing or Swingline Loan. If any LC Obligor fails to make such payment when due, (x) such payment obligation outstanding in any currency other than Dollars shall be immediately and automatically converted to and
redenominated in Dollars equal to the Dollar Equivalent thereof and shall bear interest at the Alternate Base Rate and (y) the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from any LC
Obligor in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from any LC Obligor, in
the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from any LC Obligor pursuant to this paragraph, the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve any LC Obligor of its obligation to reimburse
such LC Disbursement. 
  

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 (f) Obligations Absolute. Each LC Obligor’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of
Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
any LC Obligor’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer
of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control
of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to any LC Obligor to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are
hereby waived by each LC Obligor to the extent permitted by applicable law) suffered by any LC Obligor that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter
of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction or mutually agreed
upon by the Issuing Bank and all other parties), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. 
 (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the US Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve any LC Obligor of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. 

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless such LC Disbursement has been paid in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date such LC Disbursement is reimbursed in full, at the rate per annum then
applicable to ABR Revolving Loans; provided that, if any LC Obligor fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender
to the extent of such payment. 
  

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 (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written
agreement among the US Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement
shall become effective, the US Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit. 
 (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the US Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the US Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of
any Event of Default with respect to the US Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the LC
Obligors under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and at the US Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the LC Obligors for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrowers under this Agreement. If the US Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the US Borrower within three Business Days after all Events of Default have been cured or waived. 
 SECTION
2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, Chicago time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the US Borrower by
promptly crediting the amounts so received, in like funds, to an account of the US Borrower maintained with the Administrative Agent and designated by the US Borrower in the applicable Borrowing Request or in such other manner as agreed upon between
the Administrative Agent and the US Borrower; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

  

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 (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date
of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make available to the US Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the US Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made
available to the US Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the US Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing. 
 SECTION 2.08. Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the US Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The US Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not
apply to Swingline Borrowings, which may not be converted or continued. 
 (b) To make an election pursuant to this Section, the US Borrower
shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the US Borrower were requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the US Borrower. 
 (c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02: 
 (i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing); 
 (ii) the effective date of the election
made pursuant to such Interest Election Request, which shall be a Business Day; 
 (iii) whether the resulting Borrowing is to
be an ABR Borrowing or a Eurodollar Borrowing; and 
 (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”. 
  

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 If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the
US Borrower shall be deemed to have selected an Interest Period of one month’s duration. 
 (d) Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing. 
 (e) If the US Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the US Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. 
 SECTION 2.09.
Termination and Reduction of Commitments; Increase in Revolving Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Revolving Credit Maturity Date. 
 (b) The US Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the US Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans
in accordance with Section 2.11, the Revolving Credit Exposures would exceed the total Revolving Commitments. 
 (c) The US Borrower
shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the US Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitments delivered by the US Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the US Borrower (by
notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments. 
 (d) With the prior consent of the Administrative Agent (not to be unreasonably
withheld), from time to time the Borrowers may request to increase the Revolving Commitments in a minimum amount of $10,000,000, provided that the aggregate increase in the Revolving Commitments from the Effective Date shall not exceed $50,000,000
and the Borrowers shall not be permitted to increase the aggregate Revolving Commitments more than twice. Any such request to increase the Revolving Commitments shall be deemed to be a certification by the Borrowers that at the time of such request,
there exists no Event of Default or Default and the representations and warranties contained in Article III are true and correct in all material respects as of such date except to the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier date. Any request from the Borrowers to increase the Revolving Commitments shall be
implemented by one or more existing 

  

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Lenders agreeing to increase their Revolving Commitments (provided that no Lender shall have any obligation to increase any of its Revolving Commitments) or
by one or more new lenders agreeing to become a Lender hereunder or by any combination of the foregoing, as determined by the Administrative Agent in consultation with the Borrowers. Prior to any such increase in the Revolving Commitments becoming
effective, the Administrative Agent shall have received: 
 (i) copies, certified by the secretary of each Borrower of its Board of
Directors’ resolutions and of resolutions or actions of any other body authorizing the increase in the Revolving Commitments; 
 (ii) a
certificate, signed by a Financial Officer of the Parent, showing that after giving effect to the increase in the Aggregate Revolving Commitments, no Event of Default or Default shall occur and the Borrowers shall be in compliance with all covenants
in this Agreement; 
 (iii) copies of all governmental and nongovernmental consents, approvals, authorizations, declarations, registrations or
filings required on the part of either Borrowers or any Guarantor in connection with the increase in the Revolving Commitments, certified as true and correct and in full force and effect as of the date of the increase by a duly authorized officer of
the Parent, or if none are required, a certificate of such officer to that effect; 
 (iv) evidence satisfactory to the Administrative Agent
that no Material Adverse Effect shall have occurred with respect to the Parent and its Subsidiaries since the most recent financial statements provided to the Lenders hereunder; 
 (v) if requested by the Administrative Agent, a confirmation and consent from each Borrower and Guarantor to the increase in the Revolving Commitments;
and 
 (vi) such other documents and conditions as the Administrative Agent or its counsel may have reasonably requested. 
 On the effective date of any such increase, (x) each Lender’s pro rata share Revolving Credit Exposure shall be adjusted to equal its pro rata share determined
after giving effect to such increase and (y) all Revolving Loans will be replaced with new Revolving Loans hereunder from the Lenders based on such adjusted pro rata share. 
 SECTION 2.10. Repayment of Loans. (a) The US Borrower hereby unconditionally promises to pay to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan on the Revolving Credit Maturity Date. The Borrowers hereby unconditionally promise to pay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the
earlier of the Revolving Credit Maturity Date or the demand by the Swingline Lender in its discretion. 
 (b) If at any time the Dollar
Equivalent of the aggregate Revolving Credit Exposure of all Lenders exceeds the total Revolving Commitments, the Borrowers shall promptly repay such excess. If any such excess remains after repayment in full of all outstanding Revolving Loans and
Swingline Loans, the US Borrower shall provide cash collateral for the LC Exposure in the manner set forth herein to the extent required to eliminate such excess. 
  

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 (c) The US Borrower shall pay the Term Loans in nine (9) consecutive equal quarterly principal
installments, each in the amount of $2,497,759.86 and each payable on the last Business Day of each January, April, July and October, commencing on the last Business Day of July, 2007, plus a final principal installment in the amount of
$2,524,641.54 due on the Term Loan Maturity Date. 
 (d) In addition to all other payments of the Term Loans required hereunder, unless the
Leverage Ratio was less than 1.0 to 1.0 as of the most recently ended Fiscal Quarter prior to such sale, the US Borrower shall prepay the Term Loans by an amount equal to 50% of all of the Net Cash Proceeds from any Asset Sale or Event of Loss,
provided that: 
 (i) With respect to Net Cash Proceeds from the sale of any rental fleet assets, such Net Cash Proceeds
shall not be required to prepay the Term Loans if, both before and after giving effect to such sale: (x) no Default exists or would be caused thereby, and (y) the Borrowers and Guarantors own at least seventy-five (75) top-drive
rental fleet units with an average value for such units comparable to the average value of top-drive rental fleet units in the rental fleet of the Borrowers and Guarantors as of the Effective Date. 
 (ii) With respect to Net Cash Proceeds from the sale of any other plant, property, and equipment assets, such Net Cash Proceeds may be
used to purchase other similar plant, property, and equipment assets of comparable value, subject to the following conditions: (x) no Default exists on the date of such sale or of the proposed expenditure to purchase similar rental fleet assets
and other plant, property, and equipment assets of comparable value, and (y) such Net Cash Proceeds shall be used to purchase other similar plant, property, and equipment assets of comparable value within 270 days following the date of such
sale; provided that, if any of the foregoing conditions are not satisfied at any time then all such Net Cash Proceeds shall then used to prepay the Term Loans by the amount thereof. 
 (iii) With respect to Net Cash Proceeds from insurance paid with respect to any Event of Loss, such Net Cash Proceeds may used to
replace, rebuild or repair the assets for which such Net Cash Proceeds were paid, subject to the following conditions: (x) no Default exists on the date of such Event of Loss or of the proposed expenditure to replace, rebuild or repair, and
(y) the Parent delivers a certificate to Administrative Agent within 10 Business Days of such Event of Loss stating that such Net Cash Proceeds shall be used to replace, rebuild or repair such assets or other capital assets used or useful in
the Borrowers’ business within 270 days following the date of such Event of Loss (which certificate shall set forth the estimates of the proceeds to be so expended and when they will be expended) and such replacement, rebuilding or repair is
completed within 365 days following the date of such Event of Loss; provided that, if any of the foregoing conditions are not satisfied at any time then all such Net Cash Proceeds shall then used to prepay the Term Loans by the amount thereof.

 (iv) The first $3,000,000 of Net Cash Proceeds from the sale of any stock of Turnkey E & P, Inc. acquired by the
exercise of the Turnkey Warrants shall be excluded from the prepayment requirement under this Section 2.10(d) if no Default shall have occurred and be continuing at the time such Net Cash Proceeds are received. 
 (e) In addition to all other payments of the Term Loans required hereunder, the US Borrower shall prepay the Term Loans by an amount equal to 50% of the
Net Cash Proceeds from the issuance or other sale of any Equity Interests of the Parent or any of its Subsidiaries in excess of $10,000,000 after the Effective Date, other than (i) such Net Cash Proceeds used exclusively for Acquisitions
permitted hereunder and (ii) Net Cash Proceeds as a result of the purchase of any Equity Interests of the Parent by employees, officers or directors of the Parent or its Subsidiaries that are not material. 
  

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 (f) In addition to all other payments of the Term Loans required hereunder, the US Borrower shall prepay
the Term Loans by an amount equal to 50% of the Net Cash Proceeds of any Subordinated Indebtedness incurred by the Parent or any of its Subsidiaries. 
 (g) All prepayments of the Term Loans (whether mandatory under this Section 2.10 or optional under Section 2.11) shall be applied pro rata to all principal installments on the Term Loans. 
 SECTION 2.11. Prepayment of Loans. (a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing in whole
or in part, subject to prior notice in accordance with paragraph (b) of this Section. 
 (b) The Borrowers shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than noon,
Chicago time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than noon, Chicago time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 12:00 noon, Toronto time, on the date of prepayment or such other time agreed to between the applicable Borrower and the Swingline Lender. Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then
such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13. 
 SECTION 2.12. Fees. (a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender an unused commitment fee at a per annum rate equal to the Applicable Rate on the average daily
amount by which each such Lender’s Revolving Commitment exceeds the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure, during the period from and including the Effective Date to but excluding the date on
which such Revolving Commitment terminate. Swingline Loans shall not count as usage of the Revolving Commitment of any Lender’s Revolving Commitment for purposes of determining such commitment fees. Accrued commitment fees shall be payable in
arrears on third Business Day after the last day of March, June, September and December of each year and on the date on which the applicable Commitment terminates, commencing on the first such date to occur after the date hereof. All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). 
 (b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which 

  

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such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the
average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments
and the date on which there ceases to be any LC Exposure, provided that such fee shall not be less than $200, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on
the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last day). 
 (c) The Borrowers agree to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between any Borrower and the Administrative Agent. 
 (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders. Once paid, fees shall not be refundable under any circumstances. 
 SECTION 2.13.
Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate. 
 (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate. 
 (c) Notwithstanding the foregoing, during the continuance of an Event of Default the Required Lenders may, at their option, by notice to the Borrowers
(which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring unanimous consent of the Lenders to changes in interest rates), declare that (i) each Eurodollar Loan shall bear
interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum, (ii) the rate of each participation fee payable under Section 2.12(b)(i) with respect to Letters
of Credit shall be increased by 2% per annum and (iii) each ABR Loan shall bear interest at a rate per annum equal to the Alternate Base Rate in effect from time to time plus 2% per annum, provided that, during the continuance
of an Event of Default under clause (h) or (i) of Article VII, the rates set forth in clauses (i), (ii) and (iii) above shall be applicable to all Loans and Letters of Credit without any election or action on the part of the
Administrative Agent or any Lender. 
 (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such
Loan and, in the case of Revolving Loans, upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. 
  

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 (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent
manifest error. 
 (f) For the purposes of the Interest Act (Canada) hereunder (i) whenever interest payable pursuant to this
Agreement is calculated with respect to any monetary obligation relating to Loans to the Canadian Borrower on the basis of a period other than a calendar year (the “Calculation Period”), each rate of interest determined pursuant to
such calculation expressed as an annual rate is equivalent to such rate as so determined, multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the number of days in the Calculation
Period; (ii) the principle of deemed reinvestment of interest with respect to any monetary obligation relating to Loans in Canadian Dollars shall not apply to any interest calculation under this agreement, and (iii) the rates of interest
with respect to any monetary obligation relating to Loans to the Canadian Borrower stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. 
 SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing: 
 (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or 
 (b) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period; 
 then the Administrative Agent shall give notice thereof to the US Borrower and
the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the US Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an
ABR Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted. 
 SECTION 2.15. Increased Costs. (a) If any Change in Law shall: 
 (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or 
 (ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

  

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 and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the US Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered. 
 (b) If any Lender or the
Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender
or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such
Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered. 
 (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after
receipt thereof. 
 (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof. 
 SECTION 2.16. Break Funding Payments. In the event of
(a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under
Section 2.11(b) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the US Borrower pursuant to
Section 2.19, then, in any such event, the US Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include
an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the 

  

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period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth
the amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the US Borrower and shall be conclusive absent manifest error. The US Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof. 
 SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as
the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law. 
 (b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. 
 (c) The Borrowers shall indemnify the Administrative Agent, each Lender and
the Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth the amount of such payment or liability
delivered to the Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error. 
 (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to
the Administrative Agent. 
 (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law
of the jurisdiction in which the US Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the US Borrower (with a copy to the Administrative Agent), at the time or
times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the US Borrower as will permit such payments to be made without withholding or at a reduced rate. In
addition, any Foreign Lender, if requested by the US Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the
Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. 
 (f) If the Administrative Agent or a Lender determines that it has received a refund or credit of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect 

  

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to which the Borrowers has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrowers (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender
and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any
other Person. 
 (g) If JPMorgan Chase Bank, N.A., Toronto Branch shall not be a Canadian Lender at any time after the Effective Date, then
JPMorgan Chase Bank, N.A., Toronto Branch shall use reasonable efforts to designate a different lending office for funding or booking the Swingline Canadian Loans hereunder or issuing Letters of Credit for the account of any Canadian LC Obligor or
to assign its rights and obligations hereunder to another of its offices, branches or Affiliates that is a Canadian Lender or, if no such office, branch or Affiliate exists and no Default exists, use reasonable efforts to assign its functions as the
Issuing Bank for Letters of Credit to any Canadian LC Obligor and as the Swingline Lender to the Canadian Borrower to a lender that is either a Canadian Lender or would, upon taking such an assignment, be a Canadian Lender. The Borrowers hereby
agree to pay all costs and expenses incurred by the Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, any of its Affiliates or any Lender in connection with any such designation or assignment. All parties hereto agree to execute such
agreements as reasonably requested by the Administrative Agent to effect such designation or assignment. 
 SECTION 2.18. Payments
Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The Borrowers shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursement) by noon Local Time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices designated to the Borrowers from time to time, except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of
any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. 
 (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment
of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties. 
 (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, 

  

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obtain payment in respect of any principal of or interest on any of its Revolving Loans, Term Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans, Term Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans, Term Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored
to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Parent or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrowers consent to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrowers rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrowers in the amount of such participation. 
 (d) Unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if a Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally
agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
 (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid. 
 (f) All proceeds of any realization on the Collateral pursuant to the
Collateral Documents and any payments received by the Administrative Agent or any Lender subsequent to and during the continuance of any Event of Default, subject to the obligations secured thereby, shall be allocated and distributed by the
Administrative Agent as follows: 
 (i) First, to the payment of all fees, costs, expenses and other amounts owing to the
Administrative Agent, including without limitation all reasonable attorneys’ fees, in connection with the enforcement of the Collateral Documents and otherwise administering the Loan Documents; 
  

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 (ii) Second, to payment of any Secured Obligations pro rata among those parties to whom
such Secured Obligations are due in accordance with the amounts owing to each of them, provided that the proceeds of any realization on the Collateral may be altered by the Administrative Agent, with the consent of the Lenders, in a manner to
maximize the recovery by all Lenders and their Affiliates and which would not decrease the recovery of any Lender; and 
 (iii) Third, to the Borrowers, their Subsidiaries or such other Person as may be legally entitled thereto 
 The order and priority set forth in
this Section 2.18(f) and the related provisions are set forth solely to determine the rights and priorities of the Administrative Agent and the Lenders as among themselves, and the order and priority may at any time be changed by the Lenders
without the consent of the Borrowers, provided that the order or priority of any payment to the Administrative Agent may only be changed with the consent of the Administrative Agent. 
 SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.15, or if a
Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to
pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 
 (b) If any Lender
requests compensation under Section 2.15, if a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender is a Defaulting Lender,
then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such
Borrower shall have received the prior written consent of the Administrative Agent (and if a Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or such Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be
made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling such Borrower to require such assignment and delegation cease to apply. 
  

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 ARTICLE III 
 Representations and Warranties 
 In order to induce the Lenders and the Administrative Agent to enter
into this Agreement, each Borrower represents and warrants to each Lender and the Administrative Agent, that the following statements are true, correct and complete (it being understood and agreed that the representations and warranties made on the
Effective Date are deemed to be made concurrently with, and giving effect to, the consummation of the Transactions): 
 SECTION 3.01.
Organization; Powers. Each of the Parent and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where
such qualification is required. 
 SECTION 3.02. Authorization; Enforceability. The Transactions are within each Borrower’s
corporate, limited partnership or similar powers and have been duly authorized by all necessary corporate, limited partnership or similar action and, if required, stockholder, partnership or similar action. This Agreement has been duly executed and
delivered by each Borrower and constitutes a legal, valid and binding obligation of each Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. 
 SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except
such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Parent or any of its material Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Parent or any of its material Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Parent or any of its material Subsidiaries, and (d) except as required under the Loan Documents, will not result in the creation or imposition of any Lien on any asset of the Parent or any of its material
Subsidiaries, other than Liens permitted under Section 6.02. 
 SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Parent has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the 2006 Fiscal Year, reported on by PricewaterhouseCoopers LLP,
independent public accountants, and (ii) as of and for the first Fiscal Quarter of the 2007 Fiscal Year, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Parent and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above. 
 (b) Since the end of the 2006 Fiscal Year, there has been no material adverse change in the
business, assets, operations or condition, financial or otherwise, of the Parent and its Subsidiaries, taken as a whole. 
  

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 SECTION 3.05. Properties. (a) Each of the Parent and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for
their intended purposes, and all such real and personal property is free and clear of any Lien except for Liens permitted under Section 6.02. Each Collateral Document is effective to create in favor of the Administrative Agent a legal, valid,
perfected and enforceable security interest in the Collateral. 
 (b) Each of the Parent and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Parent and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION 3.06.
Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Parent, threatened against or affecting the Parent or
any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or
(ii) that involve this Agreement or the Transactions. The Disclosed Matters could not reasonably be expected to result in a Material Adverse Effect. 
 (b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the
Parent nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability. 
 (c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or reasonably be expected to materially increased the likelihood of, a Material Adverse Effect. 
 SECTION 3.07. Compliance
with Laws and Agreements. Each of the Parent and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing. 
 SECTION 3.08. Investment Company Status. Neither the Parent nor any of its Subsidiaries is an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940. 
 SECTION 3.09. Taxes. Each of the Parent and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Parent or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

  

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 SECTION 3.10. Pension Plans. No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of
the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of all such underfunded Plans. No Borrower or Subsidiary has a material contingent liability with respect to any
post-retirement benefit under a Canadian Welfare Plan. With respect to Canadian Pension Plans: (a) no steps have been taken to terminate any Canadian Pension Plan (wholly or in part) which could result in any Borrower or Subsidiary being
required to make an additional contribution to the Canadian Pension Plan; (b) no contribution failure has occurred with respect to any Canadian Pension Plan sufficient to give rise to a lien or charge under any applicable pension benefits laws
of any other jurisdiction; and (c) no condition exists and no event or transaction has occurred with respect to any Canadian Pension Plan which is reasonably likely to result in any Borrower or Subsidiary incurring any material liability, fine
or penalty. Each Canadian Pension Plan is in compliance in all material respects with all applicable pension benefits and tax laws; (i) all contributions (including employee contributions made by authorized payroll deductions or other
withholdings) required to be made to the appropriate funding agency in accordance with all applicable laws and the terms of each pension plan have been made in accordance with all applicable laws and the terms of each Canadian Pension Plan;
(ii) all liabilities under each Canadian Pension Plan are funded, on a going concern and solvency basis, in accordance with the terms of the respective Canadian Pension Plans, the requirements of applicable pension benefits laws and of
applicable regulatory authorities and the most recent actuarial report filed with respect to the Canadian Pension Plan and there is no accumulated funding deficit with respect to any Canadian Pension Plan; and (iii) no event has occurred and no
conditions exist with respect to any Canadian Pension Plan that has resulted or could reasonably be expected to result in any Canadian Pension Plan having its registration revoked or refused by any administration of any relevant pension benefits
regulatory authority or being required to pay any taxes or penalties under any applicable pension benefits or tax laws. 
 SECTION 3.11.
Disclosure. The Parent has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of the Parent to the Administrative Agent or any Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Parent represents only that such financial information was prepared in good faith based upon
assumptions believed to be reasonable at the time such projections were made. 
 SECTION 3.12. Labor Matters. Except as would not
reasonably be expected to have a Material Adverse Effect , (a) there are no strikes, lockouts or slowdowns against the Parent or any Subsidiary pending or, to the knowledge of the Borrowers, threatened, (b) the hours worked by and payments
made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, and (c) all payments due from the Parent
or any Subsidiary, or for which any claim may be made against the Parent or any Subsidiary, on account of wages and employee health and welfare insurance and other 

  

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benefits, have been paid or accrued as a liability on the books of the Parent or such Subsidiary. The consummation of the Transactions will not give rise to
any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Parent or any Subsidiary is bound. 
 SECTION 3.13. Solvency. (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Effective Date; (e) no Loan Party is “insolvent” within the meaning
of Section 101(32) of the United States Bankruptcy Code (11 U.S.C. § 101, et seq.), as amended, and any successor statute); and (f) no Loan Party has incurred (by way of assumption or otherwise) any obligations or
liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Loan Party or any of its Affiliates.

 ARTICLE IV 
 Conditions

 SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02): 
 (a) The Administrative Agent (or its counsel) shall have received from each party thereto either (i) a counterpart of each Loan
Document signed on behalf of each party thereto or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that each party thereto has signed a
counterpart of this Agreement. 
 (b) The Administrative Agent shall have received such written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of counsels for the Borrowers and the Guarantors, in form and substance satisfactory to the Lenders, and covering such other matters relating to the Borrowers, the Guarantors, this
Agreement or the Transactions as the Required Lenders shall reasonably request. The Borrowers hereby request such counsels to deliver such opinion. 
 (c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each
Borrower and Guarantor, the authorization of the Transactions and any other legal matters relating to the Borrowers, Guarantors, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

  

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 (d) The Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the Parent, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.04. 
 (e) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder. 
 (f) The Administrative Agent shall have received all Lien and other searches that the Administrative Agent deems necessary, the Loan Parties shall have delivered UCC termination statements or amendments to existing
UCC financing statements with respect to any filings against the Collateral as may be requested by the Administrative Agent and shall have authorized the filing of such termination statements or amendments, the Administrative Agent shall have been
authorized to file any UCC and PPSA financing statements that the Administrative Agent deems necessary to perfect its Liens in the Collateral and Liens creating a first priority security interest in the Collateral in favor of the Administrative
Agent shall have been perfected. 
 (g) All legal (including tax implications) and regulatory matters, including, but not
limited to compliance with applicable requirements of Regulations U, T and X of the Board shall be satisfactory to the Administrative Agent and the Lenders. 
 (h) The Parent shall have delivered evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent. 
 (i) The Administrative Agent shall have received satisfactory projected financial statements for the
Parent and its Subsidiaries. 
 (j) The Administrative Agent shall have received a certificate from a Financial Officer
concerning the solvency and other appropriate factual information with respect to the Parent and its Subsidiaries in form and substance satisfactory to the Administrative Agent with respect to solvency. 
 (k) All legal (including tax implications) and regulatory matters, including all due diligence reviews of all litigation of the Parent and
its Subsidiaries, shall be reasonably satisfactory to the Administrative Agent. 
 (l) The Loan Parties shall have delivered
such other documents and taken such other actions as the Administrative Agent, the LC Issuer, any Lender or their respective counsel may have reasonably requested, including without limitation all such documents and other actions with respect to the
Collateral. 
 The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m., Chicago time, on June 5, 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). 
 SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions: 
 (a) The
representations and warranties of each Loan Party set forth in this Agreement or in any other Loan Document shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent such representations and warranties are expressly limited to any earlier date (in which case such representations and warranties shall be true and correct in all material
respects on and as of such earlier date). 
  

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 (b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing. 
 (c) In the case of any Letter of Credit to be issued for the account of an LC Obligor other than the Borrower, such LC Obligor shall execute and deliver all agreements, resolutions, certificates and other documents requested by the
Issuing Bank. 
 Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and
warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section. 
 ARTICLE V 
 Affirmative Covenants 
 Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrowers covenant and agree with the Lenders that: 
 SECTION 5.01.
Financial Statements; Ratings Change and Other Information. The Parent will furnish to the Administrative Agent and each Lender: 
 (a) within 90 days (or such earlier date as the Parent may be required to file, after giving effect to any applicable extensions that have been granted, its applicable annual report by the rules and regulations of the
SEC or any applicable stock exchange) after the end of each Fiscal Year of the Parent, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated and consolidating financial statements present fairly in all material respects the financial condition and
results of operations of the Parent and its consolidated subsidiaries on a consolidated and consolidating basis in accordance with GAAP consistently applied; 
 (b) within 45 days (or such earlier date as the Parent may be required to file, after giving effect to any applicable extensions that have
been granted, its applicable quarterly report by the rules and regulations of the SEC or any applicable stock exchange) after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Parent, the consolidated balance sheet

  

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and related statements of operations and cash flows for the Parent and the Subsidiaries as of the end of and for such Fiscal Quarter, all certified by one of
its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Parent and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes; 
 (c) within 15 days after the delivery of financial
statements under clause (a) above and within 5 days after the delivery of financial statements under clause (b) above, a certificate on behalf of the Parent from a Financial Officer of the Parent (i) certifying as to whether a Default
has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.12,
6.13, 6.14 and 6.15, (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate and (iv) describing in reasonable detail any identified significant deficiencies or material weaknesses, if any, in the design or operation of the internal controls
over the financial reporting of the Parent and its Subsidiaries and any progress made since the last such certificate in addressing and curing any such existing significant deficiencies or material weaknesses; 
 (d) concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported
on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

 (e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other
materials filed by the Parent or any Subsidiary with the SEC or any successor agency, the Toronto Stock Exchange, NASDAQ or with any other securities exchange, or distributed by the Parent to its shareholders generally, as the case may be;

 (f) promptly following any request therefor, such other information regarding the operations, business affairs and
financial condition of the Parent or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request. 
 SECTION 5.02. Notices of Material Events. The Parent will furnish to the Administrative Agent and each Lender prompt written notice of the following: 
 (a) the occurrence of any Default; 
 (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Parent or any Subsidiary thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect; 
 (c) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Parent and its Subsidiaries in an aggregate amount exceeding $250,000; and 
 (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. 
  

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 Each notice delivered under this Section shall be accompanied by a statement on behalf of the Parent from a Financial
Officer of the Parent setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. 
 SECTION 5.03. Existence; Conduct of Business. The Parent will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03. 
 SECTION 5.04. Payment of Obligations. The Parent will, and will cause each the US Borrower, each Guarantor and,
except to the extent it would not reasonably be expected to result in a Material Adverse Effect, its other Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Parent or such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION 5.05. Maintenance of Properties; Insurance. The Parent will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations. 
 SECTION 5.06. Books and Records; Inspection Rights. The
Parent will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Parent will, and will
cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent accountants and permit any representatives designated by the Administrative Agent to conduct field examinations of the Collateral, all at such reasonable times and as
often as reasonably requested. The Parent shall take all action to ensure that the Administrative Agent and the Lenders shall be entitled to rely on annual audited financial statements of the Parent and its Subsidiaries. The Parent shall take all
action to correct in all material respects any significant deficiencies or material weaknesses in the design or operation of the internal controls over the financial reporting of the Parent and its Subsidiaries within nine months from the date any
such significant deficiency or material weakness is reported or required to be reported by the rules and regulations of the SEC or any applicable stock exchange. 
 SECTION 5.07. Compliance with Laws. The Parent will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
 SECTION 5.08. Use of Proceeds and Letters of Credit. The proceeds of the Loans and Letters of Credit will be used working capital needs, capital expenditures and general corporate purposes (including
Acquisitions permitted hereunder). No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. 
  

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 SECTION 5.09. Collateral Security; Further Assurances. (a) To guarantee or secure the payment when
due of the Secured Obligations, the Borrowers shall execute and deliver, or cause to be executed and delivered, to the Lenders and the Administrative Agent Collateral Documents granting or providing for the following: 
 (i) Guaranties of all present and future U.S. and Canadian Subsidiaries of the Parent and each Borrower. 
 (ii) Security Agreements granting a first priority, enforceable Lien and security interest, subject only to Liens permitted by Section 6.02, on all
present and future accounts, chattel paper, commercial tort claims, deposit accounts, documents, farm products, fixtures, chattel paper, equipment, general intangibles, goods, instruments, inventory, investment property, letter-of-credit rights (as
those terms are defined in the UCC) and all other personal property of the Borrowers and each Guarantor. 
 (iii) All other security and
collateral described in the Collateral Documents. 
 (b) The Parent agrees that it will promptly notify the Administrative Agent of the
formation or acquisition of any Subsidiary or the acquisition of any assets on which a Lien is required to be granted under 5.09(a)(ii) or (iii) and that is not covered by existing Collateral Documents. The Parent agrees that it will promptly
execute and deliver, and cause each Subsidiary to execute and deliver, promptly upon the request of the Administrative Agent, such additional Collateral Documents and other agreements, documents and instruments, each in form and substance
satisfactory to the Administrative Agent, sufficient to grant to the Administrative Agent, for the benefit of the Lenders and the Administrative Agent, the Guaranties and Liens contemplated by this Agreement and the Collateral Documents. The Parent
shall deliver, and cause each Guarantor to deliver, to the Administrative Agent all original instruments payable to it and all securities and other certificates for any Equity Interests held by it with any endorsements thereto and transfer powers
with respect thereto reasonably required by the Administrative Agent. Additionally, the Parent shall execute and deliver, and cause each Subsidiary to execute and deliver, promptly upon the request of the Administrative Agent, such certificates,
legal opinions, insurance, lien searches, environmental reports, organizational and other charter documents, resolutions and other documents and agreements as the Administrative Agent may request in connection therewith. Without limiting the
foregoing, the Parent agrees that it will deliver, and cause each Guarantor to deliver, within 45 days after the Effective Date, all additional Collateral Documents and opinions of counsel requested by the Administrative Agent with respect to
(x) the pledge of the Equity Interests of all material Subsidiaries, including the material Subsidiaries that are not organized in the U.S. and Canada, and (y) the perfection of the security interests in the deposit accounts of the
Borrowers and Guarantors. The Parent shall use commercially reasonable efforts to cause each lessor of real property to any Borrower or Guarantor where any Collateral valued in excess of $2,500,000 is located in the U.S. or Canada to execute and
deliver to the Administrative Agent an agreement in form and substance reasonably acceptable to the Administrative Agent duly executed on behalf of such lessor waiving any distraint, lien and similar rights with respect to any property subject to
the Collateral Documents and agreeing to permit the Administrative Agent to enter such premises in connection therewith. The Borrowers shall execute and deliver, and cause each Guarantor to execute and deliver, promptly upon the request of the
Administrative Agent, such agreements and instruments evidencing any intercompany loans or other advances among the Parent and the Subsidiaries, or any of them, and all such intercompany loans or other advances shall be, and are hereby made,
subordinate and junior to the Secured Obligations and no payments may be made on such intercompany loans or other advances upon and during the continuance of a Default unless otherwise agreed to by the Administrative Agent. 
  

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 ARTICLE VI 
 Negative Covenants 
 Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrowers covenant and agree with the Lenders that: 

SECTION 6.01. Indebtedness. The Parent will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except: 
 (a) Indebtedness created hereunder; 
 (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof; 
 (c) Indebtedness of a Borrower to any Guarantor
and of any Guarantor to a Borrower or any other Guarantor; 
 (d) Guarantees by the Parent of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Parent or any other Subsidiary; 
 (e) Indebtedness of the Parent or any
Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien
on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $10,000,000 at any time outstanding;

 (f) Subordinated Indebtedness; 
 (g) Indebtedness under any Swap Agreement Obligation owing to any Lender or any Affiliate of a Lender; and 
 (h) Other unsecured Indebtedness in aggregate outstanding amount not to exceed $15,000,000 minus the amount of outstanding Indebtedness
permitted by Section 6.01(e). 
 SECTION 6.02. Liens. The Parent will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except: 
 (a) Permitted Encumbrances and Liens created under this Agreement or any Collateral Document; 
  

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 (b) any Lien on any property or asset of the Parent or any Subsidiary existing on the
date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Parent or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on
the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; and 
 (c) Liens on fixed or capital assets acquired, constructed or improved by the Parent or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 6.01(e), (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Parent or any Subsidiary. 
 SECTION 6.03. Fundamental Changes; Sale of Assets. (a) The Parent will not, and will not permit any Subsidiary to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into a Borrower in a transaction in which a Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary, and
(iii) any Subsidiary that is not material may liquidate or dissolve if the Parent determines in good faith that such liquidation or dissolution is in the best interests of the Parent and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Person that is not a Wholly-Owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04. 
 (b) The Parent will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the
type conducted by the Parent and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto. 
 (c) The Parent will not, and will not permit any Subsidiary to sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets (in each case, whether now owned or hereafter acquired,
but excluding the sale of inventory in the ordinary course of its business), except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, the following sales and other dispositions
may be made: (i) sales of obsolete assets not exceeding $10,000,000 in any fiscal year, without carry-over of unused amounts from previous fiscal years; (ii) sales of rental fleet assets if, both before and after giving effect to such
sale, the Borrowers and Guarantors own at least seventy-five (75) top-drive rental fleet units with an average value for such units comparable to the average value of top-drive rental fleet units in the rental fleet of the Borrowers and
Guarantors as of the Effective Date; (iii) sales of other plant, property, and equipment assets (other than rental fleet assets) held for lease or sale provided that 100% of the Net Cash Proceeds of such sales are used within 270 days after the
receipt of such proceeds to purchase other similar plant, property, and equipment assets of comparable value; (iv) dispositions of assets outside of the ordinary course of business up to an aggregate net book value equal to $5,000,000 during
any Fiscal Year; and (v) sales from the Parent of any Subsidiary to a Borrower or Guarantor and sales among Subsidiaries that are not a Borrower or Guarantor. In the case of any such sale or other disposition made in accordance with the
provisions of the preceding sentence, (x) the Borrowers or such Subsidiary must comply with the provisions of Section 2.10, and (y) such assets may not be sold for an amount which is less than fair market value. 
 SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The 

  

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Parent will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a
Wholly-Owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or make any Acquisition, except: 
 (a) Permitted Investments; 
 (b) investments and loans existing on the date hereof and set
forth in Schedule 6.04, without any increase of the outstanding amount thereof as reduced from time to time; 
 (c)
investments by the Borrowers in the Equity Interests of Guarantors; 
 (d) loans or advances made by the Borrowers to any
Guarantor, made by any Subsidiary to any Borrower or Guarantor, provided that any such loan or advance by any Subsidiary shall be on terms reasonably satisfactory to the Administrative Agent and shall be subordinated to the Secured Obligations
hereunder in a manner satisfactory to Administrative Agent; 
 (e) Guarantees constituting Indebtedness permitted by
Section 6.01; 
 (f) Guarantees, investments, loans or advances not otherwise permitted by this Section 6.04 not in
excess of $10,000,000 in the aggregate; 
 (g) Acquisitions, provided that: (i) before and after giving pro forma effect
thereto (as of the end of the most recently ended Fiscal Quarter of the Parent), no Default exists or would be caused thereby and the representations and warranties contained in the Loan Documents shall be true and correct on and as of the date
thereof (both before and after such Acquisition is consummated, except to the extent such representations and warranties are expressly limited to any earlier date (in which case such representations and warranties shall be true and correct in all
material respects on and as of such earlier date)) as if made on the date such Acquisition is consummated, (ii) if such Acquisition involves the acquisition of Equity Interests, the consummation of such Acquisition has been recommended by the
Board of Directors and management of the target of such Acquisition, (iii) at least 5 Business Days’ prior to the consummation of such Acquisition, the Parent shall have provided to the Lenders a certificate of a Financial Officer
attaching pro forma computations acceptable to the Administrative Agent to demonstrate compliance with all financial covenants hereunder, (iv) at least 5 Business Days’ prior to the consummation of such Acquisition, the Parent shall have
delivered drafts all acquisition documents and other agreements and documents relating to such Acquisition which shall not materially differ from the final documentation for such Acquisition, and the Administrative Agent shall have completed a
satisfactory review thereof and completed such other due diligence satisfactory to the Administrative Agent, (v) both before and after giving effect to such Acquisition, the US Borrower is and will be able to borrow at least $10,000,000 of
additional Revolving Loans, (vi) the target of such Acquisition is in the oil field services business, and (vii) the aggregate consideration paid or payable in connection with any such Acquisition and permitted by this proviso, including
without limitation any Indebtedness assumed in connection therewith, all guarantees or other liabilities incurred in connection therewith, and all deferred payments and other direct or indirect consideration in connection therewith, shall not exceed
(x) when aggregated with all other Acquisitions since the Effective Date, $150,000,000 (y) when aggregated with all other Acquisitions in such fiscal year, $75,000,000 or (y) $40,000,000 for any single Acquisition; and 
  

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 (h) Investments solely as a result of the exercise of the Turnkey Warrants. 

SECTION 6.05. Swap Agreements. The Parent will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except
(a) Swap Agreements entered into to hedge or mitigate risks to which the Parent or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Parent or any of its Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent or
any Subsidiary. 
 SECTION 6.06. Restricted Payments. The Parent will not, and will not permit any of its Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Parent may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock,
(b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests; (c) the Parent and each Subsidiary thereof may purchase, redeem or otherwise acquire shares of its common stock or other common Equity Interests
or warrants or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests; and (d) the Parent may make Restricted Payments in an
aggregate amount in any Fiscal Year not to exceed $5,000,000 plus 50% of Consolidated Net Income from the previous Fiscal Year (with no carry-over), provided that, before and after giving pro forma effect to such Restricted Payments, no Default
exists or would be caused thereby, the representations and warranties contained in the Loan Documents shall be true and correct on and as of the date thereof (both before and after giving pro forma effect thereto) as if made on such date and the US
Borrower is and will be able to borrow at least $10,000,000 of additional Revolving Loans. 
 SECTION 6.07. Transactions with
Affiliates. The Parent will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Parent or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Borrowers and the Guarantors not involving any other Affiliate, and (c) any Restricted Payment permitted by Section 6.06. 
 SECTION 6.08. Restrictive Agreements. The Parent will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Parent or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Parent or any other Subsidiary or to Guarantee Indebtedness of the Parent
or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.08 (or any amendment or modification thereof not expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of the
foregoing shall not apply to customary provisions in leases restricting the assignment thereof. 
  

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 SECTION 6.09. Change of Name or Location; Change of Fiscal Year. No Loan Party shall
(a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or locations at
which Collateral is held or stored, or the location of its records concerning the Collateral as set forth in the Security Agreements, (c) change the type of entity that it is, (d) change its organization identification number, if any,
issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless the Administrative Agent shall have received at least thirty days prior written notice of such change and
the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral, or (2) any
reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of Lenders, in any Collateral),
provided that, any new location shall be in the U.S. or Canada. No Loan Party shall change its Fiscal Year. 
 SECTION 6.10.
Amendments to Agreements. No Loan Party will, nor will any Loan Party permit its Subsidiary to, amend, supplement or otherwise modify (a) its articles of incorporation, charter, certificate of formation, by-laws or other organizational
document, (b) any instrument or agreement evidencing or relating to any Subordinated Indebtedness or (c) any material term of any agreement with respect to any Acquisition, except to the extent, in each instance, such amendment, supplement
or other modification would not increase in any material respect any obligation of the Parent or any Subsidiary or adversely affect the rights and interests of the Parent, any Subsidiary or any Lender in any material respect. 
 SECTION 6.11. Prepayment of Indebtedness; Subordinated Indebtedness. 
 (a) No Loan Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (i) the Obligations and the Indebtedness described on Schedule 6.01 hereto; (ii) Indebtedness secured by Liens permitted by
Section 6.02 if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance herewith; and (iii) Indebtedness permitted hereunder upon any permitted refinancing thereof in accordance therewith. 
 (b) No Loan Party shall make any amendment or modification to the indenture, note or other agreement evidencing or governing any
Subordinated Indebtedness, or directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness. 
 SECTION 6.12. Leverage Ratio. The Parent will not permit the Leverage Ratio, determined as of the end of each of its Fiscal Quarters for the then
most-recently ended four Fiscal Quarters, to be greater than 2.25 to 1.0 at any time. 
 SECTION 6.13. Minimum Net Worth. The Parent
will at all times maintain Consolidated Net Worth of not less than the sum of (a) $208,471,000, plus (b) 50% of positive Consolidated Net Income for the last three fiscal quarters of 2007 and for each Fiscal Year thereafter,
plus (c) 75% of the amount by which Consolidated Net Worth is increased pursuant to any issuance of any Equity Interests of the Parent after the Effective Date. 
  

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 SECTION 6.14. Fixed Charge Coverage Ratio. The Parent will not permit the Fixed Charge Coverage
Ratio, determined as of the end of each of its Fiscal Quarters for the then most-recently ended four Fiscal Quarters, to be less 2.25 to 1.0 as of the end of any Fiscal Quarter. 
 SECTION 6.15. Consolidated Capital Expenditures. The Parent will not permit Consolidated Capital Expenditures, determined as of the end of each of
its Fiscal Quarters, to be greater than the sum of (a) (i) for any Fiscal Quarter ending on or before June 30, 2010, 70% of Consolidated EBITDA for the then most-recently ended four Fiscal Quarters, or (ii) thereafter, 60% of
Consolidated EBITDA for the then most-recently ended four Fiscal Quarters, plus (b) the Net Cash Proceeds from Asset Sales for the then most-recently ended four Fiscal Quarters. 
 ARTICLE VII 
 Events of Default 
 If any of the following events (“Events of Default”) shall occur: 
 (a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 
 (b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three Business Days; 
 (c) any representation or warranty
made or deemed made by or on behalf of the Parent or any Subsidiary in or in connection with this Agreement, any other Loan Document or any amendment or modification hereof or waiver thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect in all material respects when made; 
 (d) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect
to any Borrower’s existence) or 5.08 or in Article VI; 
 (e) any Borrower or any Guarantor shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of
15 days after notice thereof from the Administrative Agent to the Parent (which notice will be given at the request of any Lender); 
 (f) the Parent or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and
payable, and such failure shall continue after expiration of any applicable grace or cure period; 
 (g) any event or
condition occurs that results in any Material Indebtedness becoming due 

  

 52 

 
prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that
this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; 
 (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Parent or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect (including without
limitation the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada)) or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; 
 (i) the Parent or any Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect (including without limitation the Bankruptcy Code of the United States,
the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada)), (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent or any Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 (j) the Parent or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as
they become due; 
 (k) one or more judgments for the payment of money in an aggregate amount in excess of $2,500,000 shall be
rendered against the Parent, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Parent or any Subsidiary to enforce any such judgment; 
 (l) an ERISA Event or the institution of any steps by any Borrower or Guarantor or any of their respective Subsidiaries or any applicable regulatory authority to terminate a Canadian Pension Plan (wholly or in part) shall have occurred
that, when taken together with all other such other events that have occurred, could reasonably be expected, in the opinion of the Required Lenders, to result in liability of the Parent and its Subsidiaries in an aggregate amount exceeding
$2,500,000 in any year; 
 (m) Any Collateral Document shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the terms or provisions of any Collateral Document if the failure continues beyond any period of
grace provided for in the applicable Collateral Document, or any Collateral Document granting a Lien shall for any reason 

  

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fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby or subordination to be created
thereunder, except as permitted by the terms of this Agreement or any Collateral Document; 
 (n) a Change in Control shall
occur; 
 then, and in every such event (other than an event with respect to a Borrower described in clause (h) or (i) of this Article), and at any
time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrowers, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to a Borrower described in clause
(h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. 
 ARTICLE VIII 
 The Administrative Agent 
 Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. 
 The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Parent or any Subsidiary or other Affiliate thereof as
if it were not the Administrative Agent hereunder. 
 The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Parent or any of its Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in 

  

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the absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrowers or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms
or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. 
 The
Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed
or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts. 
 The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities
provided for herein as well as activities as Administrative Agent. 
 Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrowers. Upon any such resignation, the Required Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect
for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. 
 Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender
and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished
hereunder or thereunder. 
  

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 The Administrative Agent shall have no obligation whatsoever to any of the Lenders to assure that the
Collateral exists or is owned by the Loan Parties or is cared for, protected, or insured or has been encumbered, or that the Liens granted to the Administrative Agent therein have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or
available to the Administrative Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Administrative Agent may act in any manner it may deem
appropriate, in its sole discretion given the Administrative Agent’s own interest in the Collateral in its capacity as one of the Lenders and that the Administrative Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing. 
 Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Administrative Agent) obtain possession of any such
Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance
with the Administrative Agent’s instructions. 
 Each Lender hereby agrees as follows: (a) such Lender is deemed to have requested
that the Administrative Agent furnish such Lender, promptly after it becomes available, a copy of each Report prepared by or on behalf of the Administrative Agent; (b) such Lender expressly agrees and acknowledges that neither the
Administrative Agent nor any Related Party (i) makes any representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein, or (ii) shall be liable for any
information contained in any Report; (c) such Lender expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent, any of its Related Parties or any other party performing any
audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the
Administrative Agent and its Related Parties undertake no obligation to update, correct or supplement the Reports; (d) such Lender agrees to keep all Reports confidential and strictly for its internal use, not share the Report with any Loan
Party and not to distribute any Report to any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, such Lender agrees
(i) that neither the Administrative Agent nor any of its Related Parties shall be liable to such Lender or any other Person receiving a copy of the Report for any inaccuracy or omission contained in or relating to a Report, (ii) to conduct
its own due diligence investigation and make credit decisions with respect to the Loan Parties based on such documents as such Lender deems appropriate without any reliance on the Reports or on the Administrative Agent or any of its Related Parties,
(iii) to hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Credit
Extensions that the indemnifying Lender has made or may make to the Loan Parties, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, any Obligations and (iv) to pay and protect, and indemnify,
defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by the
Administrative Agent and any such other Person preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. 
  

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 The Lenders hereby empower and authorize the Administrative Agent to execute and deliver to the Loan
Parties on their behalf the Collateral Documents and all related agreements, documents or instruments as shall be necessary or appropriate to effect the purposes of the Collateral Documents. 
 The Lenders hereby empower and authorize the Administrative Agent to execute and deliver to the Loan Parties on their behalf any agreements, documents or
instruments as shall be necessary or appropriate to effect any releases or subordinations of Collateral which shall be permitted by the terms hereof or of any other Loan Document (whether pursuant to a permitted sale or otherwise) or which shall
otherwise have been approved by the Required Lenders in writing. 
 ARTICLE IX 
 Miscellaneous 
 SECTION 9.01. Notices. (a) Except in the case of
notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows: 
 (i) if to the Borrowers, to it at 3993 Sam
Houston Parkway North, Suite 100, Houston, Texas 77043-1221, Attention Anthony Tripodo, CFO (at such telecopy numbers to be determined and supplied by the Borrowers); 
 (ii) if to the Administrative Agent, Issuing Bank or Swingline Lender, to JPMorgan Chase Bank, N.A. at such address and other contact
information as from time to time supplied to the parties hereto by the Administrative Agent; and 
 (iii) if to any other
Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire. 
 (b) Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by
the Administrative Agent and the applicable Lender. The Administrative Agent or a Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices or communications. 
 (c) Any party hereto may change its
address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt. 
 SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they 

  

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would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrowers therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

 (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders or by the Borrowers and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender or, other than pursuant to Section 2.09, increase the aggregate amount of all Commitments, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) release all or substantially all of the Collateral without the written consent of each Lender, (vi) release any
material Guarantor without the written consent of each Lender, or (vii) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be. 
 (c) If, in connection with any proposed amendment, waiver or consent requiring the consent of all Lenders, the consent of the Required Lenders is
obtained, but the consent of other Lenders is not obtained (any such Lender whose consent is not obtained being referred to herein as a “Non-Consenting Lender”), then, so long as the Administrative Agent is not a Non-Consenting
Lender, the Borrowers may elect to replace such Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the
Borrowers and the Administrative Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Non-Consenting Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 9.04 applicable to assignments, and (ii) the Borrowers shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, and (2) an amount,
if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

 (d) Notwithstanding anything herein to the contrary, any Person may be added as a Lender hereunder pursuant to Section 2.09(d) with
the written consent of such Person, the Agent (not to be unreasonably withheld) and the Borrowers and subject to the execution of such supplemental assumption agreement and other documents required by the Agent. 
  

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 SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of this Agreement and any of the other Loan Documents (including without limitation the Collateral and any additional filings, documents, examinations or other actions with respect thereto) or
any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with
the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. 
 (b) The Borrowers shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for
any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the
parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Parent or any of its Subsidiaries, or any Environmental Liability related in any way to the Parent or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee. 
 (c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative
Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such. 
 (d) To the extent permitted by applicable law, the Borrowers shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

  

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 (e) All amounts due under this Section shall be payable promptly after written demand therefor.

 SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
 (b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of: 
 (A) the
Borrowers, provided that no consent of the Borrowers shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; 
 (B) the Administrative Agent; and 
 (C) the Issuing Bank, provided that no consent of the Issuing Bank shall be required for an assignment of all or any portion of a Term Loan. 
 (ii) Assignments shall be subject to the following additional conditions: 
 (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 or, in the case of a Term Loan, $1,000,000 unless each of the Borrowers and the Administrative Agent otherwise consent, provided that no such consent of the Borrowers
shall be required if an Event of Default has occurred and is continuing; 
 (B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning
Lender’s rights and obligations in respect of one Class of Commitments or Loans; 
 (C) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and 
 (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative 

  

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Agent an Administrative Questionnaire in which the assignee designates one or more Credit Contacts to whom all syndicate-level information (which may contain
material non-public information about the Loan Parties and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable
laws, including Federal and state securities laws. 
 For the purposes of this Section 9.04(b), the term “Approved
Fund” has the following meaning: 
 “Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender. 
 (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case
of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17
and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section. 
 (iv) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be deemed conclusive absent manifest error, and the Borrowers, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
 (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment
and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c),
2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. 
 (c)(i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, 

  

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the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. 
 (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.17(e) as though it were a Lender. 
 (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 
 SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance
of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. 

SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This 

  

 62 

 
Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent and the other Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement. 
 SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
 SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrowers against any
of and all the obligations of the Borrowers now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. 
 SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. 
 (b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or
for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against each Borrower or its
properties in the courts of any jurisdiction. 
 (c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 
 (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 
  

 63 

 SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
 SECTION 9.12.
Confidentiality. (a) Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its
Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information
and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any
other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing
provisions substantially the same as those of this Section, to (1) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (2) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and its obligations, (vii) with the consent of the Borrowers or (viii) to the extent such Information (1) becomes publicly available other
than as a result of a breach of this Section or (2) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrowers. For the purposes of this Section,
“Information” means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrowers; provided that, in the case of information received from the Borrowers after the date hereof, such information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information. 
 (b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED
IN SECTION 9.12(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS. 
  

 64 

 (c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE
ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWERS, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW. 
 SECTION 9.13. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender. 
 SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies
each Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow
such Lender to identify each Borrower in accordance with the Act. 
 SECTION 9.15. Conversion of Currencies. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given. 

(b) The obligations of each Borrower and LC Obligor in respect of any sum due to any party hereto or any holder of the obligations owing hereunder
(the “Applicable Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than the currency in which such sum is stated to be due hereunder (the “Agreement Currency”), be discharged
only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant
jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of the Borrowers and LC Obligors contained in this Section 9.15 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder. 
  

 65 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written. 
  

			
	TESCO CORPORATION
		
	By	 	 /s/ Anthony Tripodo

	Name:	 	Anthony Tripodo
	Title:	 	 Executive Vice President and
 Chief Financial
Officer

	
	TESCO US HOLDING LP
	
	 By: TESCO CANADA INTERNATIONAL INC.,
 its
general partner

		
	By	 	 /s/ James A. Lank

	Name:	 	James A. Lank
	Title:	 	President

  

 66 

			
	 JPMORGAN CHASE BANK, N.A., individually and
 as Administrative Agent

		
	By	 	 /s/ Cynthia C. Goodwin

	Name:	 	Cynthia C. Goodwin
	Title:	 	Senior Vice President
	
	 JPMORGAN CHASE BANK, N.A., TORONTO
 BRANCH,
as the Canadian Swingline Lender and
 Issuing Bank to Canadian LC Obligors

		
	By	 	 /s/ Michael N. Tam

	Name:	 	Michael N. Tam
	Title:	 	Senior Vice President

  

 67 

			
	NATIXIS
		
	By	 	 /s/ Donovan C. Broussard

	Name:	 	Donovan C. Broussard
	Title:	 	Managing Director
		
	By	 	 /s/ Louis P. Laville, III

	Name:	 	Louis P. Laville, III
	Title:	 	Managing Director

  

 68 

			
	COMERICA BANK
		
	By	 	 /s/ Cyd Dillahunty

	Name:	 	Cyd Dillahunty
	Title:	 	Vice President – Texas Division

  

 69 

			
	TRUSTMARK NATIONAL BANK
		
	By	 	 /s/ Jeffrey A. Deitsch

	Name:	 	Jeffrey A. Deitsch
	Title:	 	Senior Vice President

  

 70 

			
	THE BANK OF NOVA SCOTIA
		
	By	 	 /s/ J. F. Todd

	Name:	 	J. F. Todd
	Title:	 	Managing Director

  

 71 

			
	BANK OF TEXAS, N.A.
		
	By	 	 /s/ Marian Livingston

	Name:	 	Marian Livingston
	Title:	 	Vice President

  

 72 

			
	AMEGY BANK N.A.
		
	By	 	 /s/ Scott Collins

	Name:	 	Scott Collins
	Title:	 	Vice President

  

 73Agreement and Plan of Merger dated December 19, 2006

 Exhibit 4.2 
 EXECUTION VERSION 
 AGREEMENT AND PLAN OF MERGER 
 between 
 TELEFONAKTIEBOLAGET LM ERICSSON
(publ) 
 (“Parent”) 
 MAXWELL ACQUISITION CORPORATION 
 (“Purchaser”) 
 and 
 REDBACK NETWORKS INC. 
 (the “Company”) 
 dated 

Dated as of December 19, 2006 

 Table of Contents 
 TABLE OF CONTENTS 
  

							
	 	  	 	    	 	  	Page
	ARTICLE I THE OFFER AND MERGER	  	2
				
		  	 Section 1.1
	    	The Offer	  	2
		  	 Section 1.2
	    	Company Actions	  	5
		  	 Section 1.3
	    	Directors	  	6
		  	 Section 1.4
	    	The Merger	  	8
		  	 Section 1.5
	    	Effective Time	  	8
		  	 Section 1.6
	    	Closing	  	9
		  	 Section 1.7
	    	Directors and Officers of the Surviving Corporation	  	9
		  	 Section 1.8
	    	Subsequent Actions	  	9
		  	 Section 1.9
	    	Stockholders’ Meeting	  	9
		  	 Section 1.10
	    	Merger Without Meeting of Stockholders	  	11
		
	ARTICLE II CONVERSION OF SECURITIES	  	11
				
		  	 Section 2.1
	    	Conversion of Capital Stock	  	11
		  	 Section 2.2
	    	Exchange of Certificates	  	12
		  	 Section 2.3
	    	Dissenting Shares	  	13
		  	 Section 2.4
	    	Top-Up Options	  	14
		  	 Section 2.5
	    	Treatment of Options, Restricted Stock and other Equity Awards	  	16
		  	 Section 2.6
	    	Treatment of Employee Stock Purchase Plan	  	18
		  	 Section 2.7
	    	Treatment of Warrants	  	18
		
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY	  	19
				
		  	 Section 3.1
	    	Organization	  	19
		  	 Section 3.2
	    	Capitalization	  	20
		  	 Section 3.3
	    	Authorization; Validity of Agreement; Company Action	  	21
		  	 Section 3.4
	    	Board Approvals	  	22
		  	 Section 3.5
	    	Consents and Approvals; No Violations	  	22
		  	 Section 3.6
	    	Company SEC Documents and Financial Statements	  	23
		  	 Section 3.7
	    	Internal Controls; Sarbanes-Oxley Act.	  	24
		  	 Section 3.8
	    	Absence of Certain Changes	  	25
		  	 Section 3.9
	    	No Undisclosed Liabilities	  	25
		  	 Section 3.10
	    	Litigation	  	26
		  	 Section 3.11
	    	Employee Benefit Plans; ERISA	  	26
		  	 Section 3.12
	    	Taxes	  	30
		  	 Section 3.13
	    	Contracts	  	32
		  	 Section 3.14
	    	Title to Properties; Encumbrances	  	33
		  	 Section 3.15
	    	Intellectual Property	  	33

  

 i 

							
		  	 Section 3.16
	    	Labor Matters	  	36
		  	 Section 3.17
	    	Compliance with Laws; Permits	  	37
		  	 Section 3.18
	    	Information in the Proxy Statement	  	38
		  	 Section 3.19
	    	Information in the Offer Documents and the Schedule 14D-9	  	39
		  	 Section 3.20
	    	Opinion of Financial Advisor	  	39
		  	 Section 3.21
	    	Insurance	  	39
		  	 Section 3.22
	    	Environmental Laws and Regulations	  	39
		  	 Section 3.23
	    	Brokers; Expenses	  	40
		  	 Section 3.24
	    	Takeover Statutes	  	40
		  	 Section 3.25
	    	Bankruptcy	  	40
		
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER	  	41
				
		  	 Section 4.1
	    	Organization	  	41
		  	 Section 4.2
	    	Authorization; Validity of Agreement; Necessary Action	  	41
		  	 Section 4.3
	    	Consents and Approvals; No Violations	  	42
		  	 Section 4.4
	    	Litigation	  	42
		  	 Section 4.5
	    	Information in the Proxy Statement	  	42
		  	 Section 4.6
	    	Information in the Offer Documents	  	43
		  	 Section 4.7
	    	Ownership of Company Capital Stock	  	43
		  	 Section 4.8
	    	Sufficient Funds	  	43
		
	ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER	  	43
				
		  	 Section 5.1
	    	Interim Operations of the Company	  	43
		  	 Section 5.2
	    	No Solicitation; Unsolicited Proposals	  	47
		  	 Section 5.3
	    	Board Recommendation	  	49
		  	 Section 5.4
	    	Bankruptcy Claims	  	51
		
	ARTICLE VI ADDITIONAL AGREEMENTS	  	51
				
		  	 Section 6.1
	    	Notification of Certain Matters	  	51
		  	 Section 6.2
	    	Access; Confidentiality	  	52
		  	 Section 6.3
	    	Consents and Approvals	  	52
		  	 Section 6.4
	    	Publicity	  	55
		  	 Section 6.5
	    	Directors’ and Officers’ Insurance and Indemnification	  	55
		  	 Section 6.6
	    	State Takeover Laws	  	57
		  	 Section 6.7
	    	Certain Tax Matters	  	57
		  	 Section 6.8
	    	Rights Agreement; Consequences if Rights Triggered	  	57
		  	 Section 6.9
	    	Section 16	  	57
		  	 Section 6.10
	    	Obligations of Purchaser	  	58
		  	 Section 6.11
	    	Employee Benefits Matters	  	58
		  	 Section 6.12
	    	Termination of 401(k) Plan	  	58
		  	 Section 6.13
	    	Rule 14d-10(d)	  	59

  

 ii 

							
	ARTICLE VII CONDITIONS	  	59
				
		  	 Section 7.1
	    	Conditions to Each Party’s Obligations to Effect the Merger	  	59
		
	ARTICLE VIII TERMINATION	  	59
				
		  	 Section 8.1
	    	Termination	  	59
		  	 Section 8.2
	    	Effect of Termination	  	61
		
	ARTICLE IX MISCELLANEOUS	  	63
				
		  	 Section 9.1
	    	Amendment and Modification; Waiver	  	63
		  	 Section 9.2
	    	Non-survival of Representations and Warranties	  	63
		  	 Section 9.3
	    	Expenses	  	64
		  	 Section 9.4
	    	Notices	  	64
		  	 Section 9.5
	    	Certain Definitions	  	65
		  	 Section 9.6
	    	Terms Defined Elsewhere	  	71
		  	 Section 9.7
	    	Interpretation	  	73
		  	 Section 9.8
	    	Counterparts	  	74
		  	 Section 9.9
	    	Entire Agreement; No Third-Party Beneficiaries	  	74
		  	 Section 9.10
	    	Severability	  	74
		  	 Section 9.11
	    	Governing Law; Jurisdiction	  	74
		  	 Section 9.12
	    	Waiver of Jury Trial	  	75
		  	 Section 9.13
	    	Assignment	  	75
		  	 Section 9.14
	    	Enforcement; Remedies	  	76

  

 iii 

 ANNEXES AND SCHEDULE 
  

			
	Annex I	  	Conditions to the Offer
	Annex II	  	Key Employees
	Schedule 5.4	  	Bankruptcy Claims
	
	EXHIBITS
		
	Exhibit A	  	Form of Certificate of Incorporation of the Surviving Corporation
	Exhibit B	  	Form of Bylaws of the Surviving Corporation

  

 iv 

 AGREEMENT AND PLAN OF MERGER 
 AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this “Agreement”), dated December 19, 2006, between Telefonaktiebolaget LM
Ericsson (publ), a limited liability company under the Swedish Companies Act (“Parent”), Maxwell Acquisition Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of Parent (“Purchaser”), and
Redback Networks Inc., a Delaware corporation (the “Company”). 
 WHEREAS, the Board of Directors of, or authorized
committee thereof, each of Parent, Purchaser and the Company has approved, and deems it advisable and in the best interests of their respective stockholders to consummate the acquisition of the Company by Parent upon the terms and subject to the
conditions set forth herein; 
 WHEREAS, in furtherance thereof and pursuant to this Agreement, Purchaser has agreed to commence a tender
offer (the “Offer”) to purchase all of the outstanding shares of the Common Stock of the Company, including the associated Company Rights (such shares of Common Stock with the associated Company Rights are referred to collectively
as the “Shares”), at a price per Share of US$25.00 (such amount or any different amount per Share that may be paid pursuant to the Offer being hereinafter referred to as the “Offer Price”), subject to any
withholding of Taxes required by law, net to the seller in cash; 
 WHEREAS, following the consummation of the Offer, upon the terms and
subject to the conditions set forth in this Agreement, Purchaser will be merged with and into the Company with the Company as the Surviving Corporation (the “Merger,” and together with the Offer and the other transactions
contemplated by this Agreement, the “Transactions”), in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), whereby each issued and outstanding Share not owned directly or indirectly
by Parent, Purchaser or the Company will be converted into the right to receive the Offer Price in cash; 
 WHEREAS, the Board of Directors
of the Company (the “Company Board of Directors”) has unanimously, on the terms and subject to the conditions set forth herein, (i) determined that the Transactions contemplated by this Agreement are in the best interests of
its stockholders, (ii) approved and declared advisable this Agreement and the Transactions contemplated hereby, including the Offer and the Merger, and (iii) determined to recommend that the Company’s stockholders accept the Offer,
tender their Shares to Purchaser and, to the extent applicable, adopt this Agreement; 
 WHEREAS, the Board of Directors of, or authorized
committee thereof, Parent and Purchaser have, on the terms and subject to the conditions set forth herein, unanimously declared advisable this Agreement and the Transactions contemplated hereby, including the Offer and the Merger; 
 WHEREAS, as a condition to and inducement to Parent’s and Purchaser’s willingness to enter into this Agreement, simultaneously with the
execution of this Agreement, certain stockholders of the Company are entering into tender and stockholder support agreements with Parent and Purchaser (the “Support Agreements”); 
  

 1 

 WHEREAS, Parent, Purchaser and the Company desire to (i) make certain representations and warranties
in connection with the Offer and the Merger, (ii) make certain covenants and agreements in connection with the Offer and the Merger, and (iii) prescribe various conditions to the Offer and the Merger. 
 NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows: 
 ARTICLE I 
 THE OFFER AND MERGER 
 Section 1.1
The Offer. 
 (a) Provided that this Agreement shall not have been terminated in accordance with Section 8.1, as promptly as
practicable (and in any event within ten (10) business days) after the date hereof, Purchaser shall (and Parent shall cause Purchaser to) commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the “Exchange Act”)) the Offer to purchase for cash all Shares at the Offer Price, subject to: 
 (i) there being validly tendered in the Offer and not withdrawn prior to any then scheduled Expiration Date (as defined below) that number
of Shares which, together with the Shares then beneficially owned by Parent or Purchaser (if any), represents at least a majority of: 
 (x) all Shares then outstanding, plus  
 (y) all Shares issuable upon the exercise,
conversion or exchange of any Company Options, SARs, RSUs, Warrants, Equity Interests or other rights to acquire Shares then outstanding that are vested and exercisable, convertible or exchangeable as of any then scheduled Expiration Date or that
would be vested and exercisable, convertible or exchangeable (including after giving effect to the acceleration of any vesting or exercisability, convertibility or exchangeability that may occur as a result of the Offer) at any time within sixty
(60) days following the then scheduled Expiration Date assuming that the holder of such Company Options, SARs, RSUs, Warrants, Equity Interests or other rights satisfies the vesting or exercisability, convertibility or exchangeability
conditions applicable thereto during such time period, less 
 (z) the number of Shares issuable upon the exercise of
Company Options then outstanding held by Kevin A. DeNuccio which are vested and exercisable as of the then scheduled Expiration Date or that would be vested 

  

 2 

 
and exercisable (including after giving effect to the acceleration of any vesting or exercisability that may occur as a result of the Offer) at any time
within sixty (60) days following the then scheduled Expiration Date assuming that Mr. DeNuccio satisfies the vesting or exercisability conditions applicable thereto during such time period (the “Minimum Condition”); and

 (ii) the satisfaction, or waiver by Parent or Purchaser, of the other conditions and requirements set forth in Annex I.

 (b) The obligation of the Purchaser to accept for payment and pay for any Shares validly tendered and not withdrawn pursuant to the Offer
shall be subject to the satisfaction of the Minimum Condition and the satisfaction, or waiver by Parent or Purchaser, of the other conditions and requirements set forth in Annex I. Subject to the prior satisfaction of the Minimum Condition and the
satisfaction or waiver by Parent or Purchaser of the other conditions and requirements set forth in Annex I, Purchaser shall (and Parent shall cause Purchaser to) consummate the Offer in accordance with its terms and accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer as promptly as practicable after Purchaser is legally permitted to do so under applicable law. The Offer Price payable in respect of each Share validly tendered and not withdrawn
pursuant to the Offer shall be paid net to the Seller in cash subject to withholding as provide in Section 2.2(e). 
 (c) The Offer
shall be made by means of an offer to purchase (the “Offer to Purchase”) that contains the terms set forth in this Agreement, the Minimum Condition and the other conditions and requirements set forth in Annex I. Parent and Purchaser
expressly reserve the right to increase the Offer Price or to make any other changes in the terms and conditions of the offer; provided, however, that unless otherwise provided by this Agreement or as previously approved by the Company
in writing, Purchaser shall not (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer, (iii) reduce the maximum number of Shares to be purchased in the Offer, (iv) impose conditions to the Offer
that are different than or in addition to the conditions set forth in Annex I, (v) amend or waive the Minimum Condition, (vi) amend any of the conditions to the Offer set forth in Annex I, or (vii) extend the expiration of the Offer
in a manner other than as required by this Agreement. 
 (d) Unless extended pursuant to and in accordance with the terms of this Agreement,
the Offer shall expire at midnight (New York City time) on the date that is twenty (20) business days (for this purpose calculated in accordance with Rule 14d-1(g)(3) under the Exchange Act) following the commencement (within the meaning of
Rule 14d-2 under the Exchange Act) of the Offer (the “Initial Expiration Date”) or, in the event the Initial Expiration Date has been extended pursuant to and in accordance with this Agreement, the date to which the Offer has been
so extended (the Initial Expiration Date, or such later date to which the Initial Expiration Date has been extended pursuant to and in accordance with this Agreement, is referred to as the “Expiration Date”). 
  

 3 

 (e) The Offer shall be extended from time to time as follows: 
 (i) Offer Conditions Not Satisfied. If on or prior to any then scheduled Expiration Date, all of the conditions to the Offer
(including the Minimum Condition and all other conditions and requirements set forth in Annex I) shall not have been satisfied, or waived by Parent or Purchaser if permitted hereunder, Purchaser shall (and Parent shall cause Purchaser to) extend the
Offer for successive periods of ten (10) business days each in order to permit the satisfaction of such conditions, or any lesser period ending on April 19, 2007 (the “Initial Outside Date”), or on December 19, 2007
in the event that the HSR Condition and/or the Governmental Approval Condition shall not have been satisfied, or waived by Parent and Purchaser if permitted hereunder, by the Initial Outside Date (the “Extended Outside Date”), if
any such ten-day extension would otherwise end after the Initial Outside Date or the Extended Outside Date, as applicable. 
 (ii) Required by Applicable Law or Nasdaq. Purchaser shall extend the Offer for any period or periods required by applicable law, rule, regulation, interpretation or position of the SEC (or its staff) or Nasdaq. 
 (f) If necessary to obtain sufficient Shares (without regard to the exercise of the 90% Top-Up Option) to reach the Short Form Threshold, Purchaser may,
in its sole discretion, provide for a “subsequent offering period” in accordance with Rule 14d-11 under the Exchange Act. In the event that more than eighty percent (80%) of the then outstanding Shares have been validly tendered and
not withdrawn pursuant to the Offer following the Expiration Date, Purchaser shall (and Parent shall cause Purchaser to) provide for a “subsequent offering period” in accordance with Rule 14d-11 under the Exchange Act of at least ten
(10) business days immediately following the Expiration Date unless Parent and Purchaser exercise the 90% Top-Up Option. Subject to the terms and conditions of this Agreement and the Offer, Purchaser shall (and Parent shall cause Purchaser to)
accept for payment, and pay for, all Shares that are validly tendered and not withdrawn pursuant to the Offer during such “subsequent offering period” promptly after any such Shares are tendered during such “subsequent offering
period.” The Offer Documents will provide for the possibility of a “subsequent offering period” in a manner consistent with the terms of this Section 1.1(f). 
 (g) Purchaser shall not terminate the Offer prior to any scheduled Expiration Date without the prior written consent of the Company except in the event
that this Agreement is terminated pursuant to Section 8.1. In the event that this Agreement is terminated pursuant to Section 8.1, Purchaser shall (and Parent shall cause Purchaser to) promptly (and in any event within twenty four
(24) hours of such termination), irrevocably and unconditionally terminate the Offer. 
 (h) As soon as practicable after the
commencement of the Offer (within the meaning of Rule 14d-2 under the Exchange Act), Parent and Purchaser shall file with the Securities and Exchange Commission (the “SEC”), pursuant to Regulation M-A under the Exchange Act
(“Regulation M-A”), a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments, supplements and exhibits thereto, the “Schedule TO”). The Schedule TO shall include, as exhibits,
the 

  

 4 

 
Offer to Purchase and a form of letter of transmittal and summary advertisement (collectively, together with any amendments and supplements thereto, the
“Offer Documents”). Parent and Purchaser agree to take all steps necessary to cause the Offer Documents to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by the Exchange Act.
Parent and Purchaser, on the one hand, and the Company, on the other hand, agree to promptly correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material
respect or as otherwise required by applicable law. Parent and Purchaser further agree to take all steps necessary to cause the Offer Documents, as so corrected (if applicable), to be filed with the SEC and disseminated to holders of Shares, in each
case as and to the extent required by the Exchange Act. The Company and its counsel shall be given a reasonable opportunity to review the Schedule TO and the Offer Documents before they are filed with the SEC, and Parent and Purchaser shall give due
consideration to all the reasonable additions, deletions or changes suggested thereto by the Company and its counsel. In addition, Parent and Purchaser shall provide the Company and its counsel with copies of any written comments, and shall inform
them of any oral comments, that Parent, Purchaser or their counsel may receive from time to time from the SEC or its staff with respect to the Schedule TO or the Offer Documents promptly after receipt of such comments, and any written or oral
responses thereto. The Company and its counsel shall be given a reasonable opportunity to review any such written responses and Parent and Purchaser shall give due consideration to all reasonable additions, deletions or changes suggested thereto by
the Company and its counsel. If the Offer is terminated or withdrawn by Purchaser, or this Agreement is terminated prior to the purchase of Shares in the Offer, Purchaser shall promptly return, and shall cause any depository, acting on behalf of
Purchaser to return, all tendered Shares to the registered holders thereof. 
 (i) The Offer Price shall be adjusted appropriately to reflect
the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination, exchange of
shares or other like change with respect to Common Stock occurring on or after the date hereof and prior to the Effective Time. 
 Section 1.2 Company Actions. 
 (a) Contemporaneous with the filing of the Schedule TO, the Company shall, in a manner
that complies with Rule 14d-9 under the Exchange Act, file with the SEC a Tender Offer Solicitation/ Recommendation Statement on Schedule 14D-9 with respect to the Offer (together with all amendments, supplements and exhibits thereto, the
“Schedule 14D-9”) that shall, subject to the provisions of Section 5.3(c), contain the Company Recommendation. The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent required by the Exchange Act. The Company, on the one hand, and Parent and Purchaser, on the other hand, agree to promptly correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect or as 

  

 5 

 
otherwise required by applicable law. The Company further agrees to take all steps necessary to cause the Schedule 14D-9, as so corrected (if applicable), to
be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by the Exchange Act. Parent, Purchaser and their counsel shall be given a reasonable opportunity to review the Schedule 14D-9 before it is filed
with the SEC and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Purchaser and their counsel. In addition, the Company shall provide Parent, Purchaser and their counsel with
copies of any written comments, and shall inform them of any oral comments, that the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after the Company’s receipt of such
comments, and any written or oral responses thereto. Parent, Purchaser and their counsel shall be given a reasonable opportunity to review any such written responses and the Company shall give due consideration to all reasonable additions, deletions
or changes suggested thereto by Parent, Purchaser and their counsel. 
 (b) In connection with the Offer, the Company shall promptly furnish
or cause to be furnished to Purchaser mailing labels, security position listings and any available listing or computer files containing the names and addresses of the record holders of the Shares as of the most recent practicable date, and shall
promptly furnish Purchaser with such information and assistance (including, but not limited to, lists of holders of the Shares, updated promptly from time to time upon Purchaser’s request, and their addresses, mailing labels and lists of
security positions) as Purchaser or its agent may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of the Shares. Except for such steps as are necessary to disseminate the Offer Documents and any
other documents necessary to consummate the Offer, the Merger and the other Transactions contemplated by this Agreement, Purchaser shall hold in confidence the information contained in any such labels, listings and files, shall use such information
only in connection with the Offer and the Merger and, if this Agreement shall be terminated, shall promptly deliver to the Company all copies of such information. 
 Section 1.3 Directors. 
 (a) Promptly after Purchaser accepts for payment and pays for any Shares
tendered and not withdrawn pursuant to the Offer (the “Appointment Time”), and at all times thereafter, Purchaser shall be entitled to elect or designate such number of directors, rounded up to the next whole number, on the Company
Board of Directors as is equal to the product of the total number of directors on the Company Board of Directors (giving effect to the directors elected or designated by Purchaser pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned by Parent, Purchaser and any of its affiliates bears to the total number of Shares then outstanding. The Company shall, upon Purchaser’s request at any time following the purchase of and payment for
Shares pursuant to the Offer, take such actions, including but not limited to promptly filling vacancies or newly created directorships on the Company Board of Directors, promptly increasing the size of the Company Board of Directors (including by
amending the Bylaws of the Company if necessary so as to increase the size of the Company Board of Directors) and/or promptly securing the resignations of such number of its incumbent directors as are necessary or desirable to 

  

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enable Purchaser’s designees to be so elected or designated to the Company Board of Directors, and shall use its best efforts to cause Purchaser’s
designees to be so elected or designated at such time. The Company shall, upon Purchaser’s request following the Appointment Time, also cause Persons elected or designated by Purchaser to constitute the same percentage (rounded up to the next
whole number) as is on the Company Board of Directors of (i) each committee of the Company Board of Directors, (ii) each board of directors (or similar body) of each Company Subsidiary and (iii) each committee (or similar body) of
each such board, in each case to the extent permitted by applicable law and the Marketplace Rules of the Nasdaq Global Market (the “Nasdaq”). Promptly after the Appointment Time, the Company shall take all action necessary to elect
to be treated as a “controlled company” as defined by Nasdaq Marketplace Rule 4350(c) and make all necessary filings and disclosures associated with such status. The Company’s obligations under this Section 1.3(a) shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly upon execution of this Agreement take all actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.3(a), including mailing to stockholders (together with the Schedule 14D-9) the information required by Section 14(f) and Rule 14f-1 as is necessary to enable Purchaser’s designees to be elected or
designated to the Company Board of Directors. Purchaser shall supply the Company with information with respect to Purchaser’s designees and Parent’s and Purchaser’s respective officers, directors and affiliates to the extent required
by Section 14(f) and Rule 14f-1. The provisions of this Section 1.3(a) are in addition to and shall not limit any rights that any of Purchaser, Parent or any of their respective affiliates may have as a record holder or beneficial owner of
Shares as a matter of applicable law with respect to the election of directors or otherwise. 
 (b) In the event that Purchaser’s
designees are elected or designated to the Company Board of Directors pursuant to Section 1.3(a), then, until the Effective Time, the Company shall cause the Company Board of Directors to maintain three (3) directors who are members of the
Company Board of Directors on the date hereof, each of whom shall be an “independent director” as defined by Rule 4200(a)(15) of the Nasdaq Marketplace Rules and eligible to serve on the Company’s audit committee under the Exchange
Act and Nasdaq rules and, at least one of whom shall be an “audit committee financial expert” as defined in Item 401(h) of Regulation S-K and the instructions thereto (the “Continuing Directors”); provided,
however, that if any Continuing Director is unable to serve due to death, disability or resignation, the Company shall take all necessary action (including creating a committee of the Company Board of Directors) so that the Continuing
Director(s) shall be entitled to elect or designate another Person (or Persons) to fill such vacancy, and such Person (or Persons) shall be deemed to be a Continuing Director for purposes of this Agreement. If no Continuing Director then remains,
the other directors shall designate three (3) Persons to fill such vacancies and such Persons shall be deemed Continuing Directors for all purposes of this Agreement. Notwithstanding anything in this Agreement to the contrary, if
Purchaser’s designees constitute a majority of the Company Board of Directors after the Appointment Time and prior to the Effective Time, then the affirmative vote of a majority of the Continuing Directors shall (in addition to the approval
rights of the Company Board of Directors or the stockholders of the Company as may be required by the Amended and Restated 

  

 7 

 
Certificate of Incorporation of the Company (as amended, the “Company Certificate”), the Amended and Restated Bylaws of the Company (as
amended, the “Company Bylaws”, and together with the Company Certificate, the “Company Governing Documents”) or applicable law) be required (i) for the Company to amend or terminate this Agreement, (ii) to
exercise or waive any of the Company’s rights, benefits or remedies hereunder, if such action would materially and adversely affect the holders of Shares (other than Parent or Purchaser), (iii) to amend the Company Governing Documents if
such action would materially and adversely affect the holders of Shares (other than Parent or Purchaser) or (iv) to take any other action of the Company Board of Directors under or in connection with this Agreement if such action would
materially and adversely affect the holders of Shares (other than Parent or Purchaser); provided, however, that if there shall be no Continuing Directors as a result of such Persons’ deaths, disabilities or refusal to serve, then
such actions may be effected by majority vote of the entire Company Board of Directors. 
 Section 1.4 The Merger. 

(a) Subject to the terms and conditions of this Agreement, and in accordance with the DGCL, at the Effective Time, the Company and Purchaser shall
consummate the Merger pursuant to which (i) Purchaser shall be merged with and into the Company and the separate corporate existence of Purchaser shall thereupon cease, (ii) the Company shall be the surviving corporation in the Merger and
shall continue to be governed by the DGCL and (iii) the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. The corporation surviving the Merger
is sometimes hereinafter referred to as the “Surviving Corporation.” The Merger shall have the effects set forth in Section 259 of the DGCL. 
 (b) Purchaser and the Surviving Corporation shall take all necessary action such that (i) the certificate of incorporation of the Surviving Corporation shall be amended so as to read in its entirety in the form
set forth as Exhibit A hereto until thereafter changed or amended as provided therein or by applicable law and (ii) the bylaws of the Surviving Corporation shall be amended so as to read in its entirety in the form set forth as
Exhibit B until thereafter changed or amended as provided therein or by applicable law. 
 Section 1.5 Effective Time.
Parent, Purchaser and the Company shall cause an appropriate certificate of merger or other appropriate documents (the “Certificate of Merger”) to be executed and filed on the Closing Date (or on such other date as Parent and the
Company may agree) with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL and shall make all other filings or recordings required under the DGCL. The Merger shall become effective at the time such
Certificate of Merger have been duly filed with the Secretary of State of the State of Delaware or such date and time as is agreed upon by the parties and specified in the Certificate of Merger, such date and time hereinafter referred to as the
“Effective Time.” 
  

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 Section 1.6 Closing. The closing of the Merger (the “Closing”) will take
place at 10:00 a.m., California time, on a date to be specified by the parties, such date to be no later than the second business day after satisfaction or waiver of all of the conditions set forth in Article VII (the “Closing
Date”), at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California unless another date or place is agreed to in writing by the parties hereto. 
 Section 1.7 Directors and Officers of the Surviving Corporation. The directors of Purchaser immediately prior to the Effective Time shall,
from and after the Effective Time, be appointed as the directors of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time, from and after the Effective Time, shall continue as the officers of the
Surviving Corporation, in each case until their respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s certificate of
incorporation and bylaws. 
 Section 1.8 Subsequent Actions. If at any time after the Effective Time the Surviving Corporation
shall determine, in its sole discretion, or shall be advised, that any deeds, bills of sale, instruments of conveyance, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of either of the Company or Purchaser acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, then the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of either the Company or Purchaser, all such
deeds, bills of sale, instruments of conveyance, assignments and assurances and to take and do, in the name and on behalf of each of such corporations or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all right, title or interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement. 
 Section 1.9 Stockholders’ Meeting. If approval of the stockholders of the Company is required under DGCL in order to consummate the Merger: 
 (a) As promptly as practicable following the Appointment Time and the expiration of any “subsequent offering period” provided by Purchaser
pursuant to and in accordance with this Agreement, if applicable, the Company shall prepare and file as promptly as practicable with the SEC a proxy or information statement for the Special Meeting (together with any amendments thereof or
supplements thereto and any other required proxy materials, the “Proxy Statement”) relating to the Merger and this Agreement; provided, that Parent, Purchaser and their counsel shall be given a reasonable opportunity to
review the Proxy Statement before it is filed with the SEC and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Purchaser and their counsel with the intention that the Proxy
Statement be in a form ready to print and mail to the stockholders of the Company as 

  

 9 

 
promptly as practicable following the Appointment Time and the expiration of any “subsequent offering period” provided by Purchaser pursuant to and
in accordance with this Agreement, if applicable. The Company shall include in the Proxy Statement the recommendation of the Company Board of Directors that stockholders of the Company vote in favor of the adoption of this Agreement in accordance
with the DGCL. The Company shall use its reasonable best efforts to obtain and furnish the information required to be included by the SEC in the Proxy Statement and, after consultation with Purchaser, respond promptly to any comments made by the SEC
with respect to the Proxy Statement. The Company shall provide Parent, Purchaser and their counsel with copies of any written comments, and shall inform them of any oral comments, that the Company or its counsel may receive from time to time from
the SEC or its staff with respect to the Proxy Statement promptly after the Company’s receipt of such comments, and any written or oral responses thereto. Parent, Purchaser and their counsel shall be given a reasonable opportunity to review any
such written responses and the Company shall give due consideration to all reasonable additions, deletions or changes suggested thereto by Parent, Purchaser and their counsel. The Company, on the one hand, and Parent and Purchaser, on the other
hand, agree to promptly correct any information provided by it for use in the Proxy Statement if and to the extent that it shall have become false or misleading in any material respect or as otherwise required by applicable law and, the Company
further agrees to cause the Proxy Statement, as so corrected (if applicable), to be filed with the SEC and, if any such correction is made following the mailing of the Proxy Statement as provided in Section 1.9(b)(ii), mailed to holders of
Shares, in each case as and to the extent required by the Exchange Act or the SEC (or its staff). 
 (b) The Company, acting through the
Company Board of Directors, shall, in accordance with and subject to the requirements of applicable law: 
 (i)(A) as promptly
as practicable following the Appointment Time and the expiration of any “subsequent offering period” provided by Purchaser pursuant to and in accordance with this Agreement, if applicable, duly set a record date for, call and give notice
of a special meeting of its stockholders (the “Special Meeting”) for the purpose of considering and taking action upon this Agreement (with the record date and meeting date set in consultation with Purchaser), and (B) as
promptly as practicable following the Appointment Time and the expiration of any “subsequent offering period” provided by Purchaser pursuant to and in accordance with this Agreement, if applicable, convene and hold the Special Meeting;

 (ii) cause the definitive Proxy Statement to be mailed to its stockholders; and 
 (iii) use its reasonable best efforts to (A) solicit from its stockholders proxies in favor of the adoption of this Agreement and
(B) secure any approval of stockholders of the Company that is required by the DGCL and any other applicable law to effect the Merger. 
  

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 (c) At the Special Meeting or any postponement or adjournment thereof, Parent shall vote, or cause to be
voted, all of the Shares then owned by it, Purchaser or any of their other subsidiaries and affiliates in favor of the adoption of this Agreement and to deliver or provide, in its capacity as a stockholder of the Company, any other approvals that
are required by the DGCL and any other applicable law to effect the Merger. 
 Section 1.10 Merger Without Meeting of
Stockholders. Notwithstanding the terms of Section 1.9, in the event that Parent, Purchaser and their respective subsidiaries and affiliates shall hold, in the aggregate, at least ninety percent (90%) of the outstanding shares of each
class of capital stock of the Company entitled to vote on the adoption of this Agreement under the DGCL (the “Short Form Threshold”), following the Appointment Time and the expiration of any “subsequent offering period”
provided by Purchaser pursuant to and in accordance with this Agreement, if applicable, and the exercise of the 90% Top-Up Option, if applicable, Parent shall cause the Merger to become effective as promptly as practicable, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL. 
 ARTICLE II 
 CONVERSION OF SECURITIES 
 Section 2.1
Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any securities of the Company or common stock, par value $0.0001 per share, of Purchaser (the “Purchaser
Common Stock”): 
 (a) Purchaser Common Stock. Each issued and outstanding share of Purchaser Common Stock shall be converted
into and become one fully paid and nonassessable share of common stock, par value $0.0001 per share, of the Surviving Corporation. 
 (b)
Cancellation of Treasury Stock and Parent-Owned Stock. All Shares that are owned by the Company and any Shares owned by Parent, Purchaser or any of their respective subsidiaries or affiliates shall be cancelled and shall cease to exist, and
no consideration shall be delivered in exchange therefor. 
 (c) Conversion of Common Stock. Each issued and outstanding Share (other
than Shares to be cancelled in accordance with Section 2.1(b) and other than Dissenting Shares) shall be converted into the right to receive the Offer Price, payable to the holder thereof in cash, without interest (the “Merger
Consideration”). From and after the Effective Time, all such Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to
have any rights with respect thereto, except the right to receive the Merger Consideration therefor upon the surrender of such certificate in accordance with Section 2.2, without interest thereon. 
  

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 (d) Adjustment to Merger Consideration. The Merger Consideration shall be adjusted appropriately
to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to Common Stock occurring on or after the date hereof and prior to the Effective Time. 
 Section 2.2 Exchange of Certificates. 
 (a) Paying Agent. Purchaser shall designate a bank or trust company to
act as the payment agent in connection with the Merger (the “Paying Agent”). Prior to the Effective Time, Parent or Purchaser shall deposit, or cause to be deposited, with the Paying Agent the aggregate Merger Consideration. Such
funds shall be invested by the Paying Agent as directed by Parent, in its sole discretion, pending payment thereof by the Paying Agent to the holders of the Shares. Earnings from such investments shall be the sole and exclusive property of Parent,
and no part of such earnings shall accrue to the benefit of holders of Shares. 
 (b) Exchange Procedures. Promptly after the
Effective Time, the Paying Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding Shares (the “Certificates”) and whose Shares were converted
pursuant to Section 2.1 into the right to receive the Merger Consideration (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for effecting the surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration for each Share formerly represented by such Certificate and the Certificate so surrendered shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a
Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent of payment that (x) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and (y) the Person requesting such payment shall have paid any transfer and other similar taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered
or shall have established to the satisfaction of the Surviving Corporation that such tax either has been paid or is not required to be paid. Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive the Merger Consideration in cash as contemplated by this Section 2.2, without interest thereon. 
 (c) Transfer Books; No Further Ownership Rights in Shares. At the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of
Shares on the records of the Company. 

  

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From and after the Effective Time, the holders of Certificates outstanding immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided for herein or by applicable law. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this
Article II. 
 (d) Termination of Fund; No Liability. At any time following six months after the Effective Time, the Surviving
Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) made available to the Paying Agent and not disbursed (or for which disbursement is pending subject only to
the Paying Agent’s routine administrative procedures) to holders of Certificates, and thereafter such holders shall be entitled to look only to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as
general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates, without any interest thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable
to any holder of a Certificate for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. 
 (e) Withholding Rights. Parent, Purchaser, the Surviving Corporation and the Paying Agent, as the case may be, shall be entitled to deduct and withhold from the relevant Merger Consideration or Offer Price
otherwise payable pursuant to this Agreement to any holder of Shares such amounts that Parent, Purchaser, the Surviving Corporation or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the “Code”), the rules and regulations promulgated thereunder or any provision of applicable state, local or foreign law. To the extent that amounts are so withheld by Parent, Purchaser, the
Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Shares in respect of which such deduction and withholding was made by Parent, Purchaser, the Surviving
Corporation or the Paying Agent. 
 (f) Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been
lost, stolen or destroyed, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration payable in respect thereof pursuant to
Section 2.1 hereof; provided, however, that Parent may, in its discretion and as a condition precedent to the payment of such Merger Consideration, require the owners of such lost, stolen or destroyed Certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Paying Agent with respect to the Certificates alleged to have been lost, stolen or destroyed. 

Section 2.3 Dissenting Shares. 
 (a) Notwithstanding anything in this Agreement to the contrary, Shares outstanding immediately prior to the Effective Time and held by a holder who is 

  

 13 

 
entitled to demand and properly demands appraisal of such Shares (“Dissenting Shares”) pursuant to, and who complies in all respects with,
Section 262 of the DGCL (the “Appraisal Rights”) shall be entitled to payment of the fair value of such Dissenting Shares in accordance with the Appraisal Rights; provided, however, that if any such holder shall
fail to perfect or otherwise shall waive, withdraw or lose the right to dissent under the Appraisal Rights, then the right of such holder to be paid the fair value of such holder’s Dissenting Shares shall cease and such Dissenting Shares shall
be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive the Merger Consideration. 
 (b) The Company shall serve prompt notice to Purchaser of any demands received by the Company for dissenter’s rights of any Shares, and Purchaser shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Purchaser, make any payment with respect to, or settle or compromise or offer to settle or compromise, any such
demand, or agree to do any of the foregoing. 
 Section 2.4 Top-Up Options. 
 (a) 90% Top-Up Option. 
 (i) The Company hereby grants to Purchaser an irrevocable option (the “90% Top-Up Option”), exercisable only upon the terms and subject to the conditions set forth herein, to purchase with a promissory note, bearing simple
interest at 6% per annum, and due 30 days after the purchase (a “Promissory Note”), at a price per share equal to the Offer Price, that number of shares of Common Stock (the “90% Top-Up Option Shares”) equal to
the lesser of (x) the lowest number of shares of Common Stock that, when added to the number of shares of Common Stock owned by Parent, Purchaser and their respective subsidiaries and affiliates at the time of such exercise, shall constitute
ten thousand (10,000) shares more than 90% of the shares of Common Stock then outstanding (after giving effect to the issuance of the 90% Top-Up Option Shares) and (y) an aggregate number of shares of Common Stock that is equal to 19.9% of
the shares of Common Stock issued and outstanding as of the date hereof; provided, however, that the 90% Top-Up Option shall not be exercisable unless, immediately after such exercise and the issuance of shares of Common Stock pursuant
thereto, the Short Form Threshold would be reached (assuming the issuance of the 90% Top-Up Option Shares); and provided, further, that in no event shall the 90% Top-Up Option be exercisable for a number of shares of Common
stock in excess of the Company’s total authorized and unissued shares of Common Stock. 
 (ii) Provided that no
applicable law, rule, regulation, order, injunction or other legal impediment shall prohibit the exercise of the 90% Top-Up Option or the issuance of the 90% Top-Up Option Shares pursuant thereto, or otherwise make such exercise or issuance illegal,
Purchaser may exercise the 90% Top-Up Option, in whole but not in part, at any one time after the Appointment Time and prior to the earlier to occur of (i) the Effective Time and (ii) the termination of this Agreement pursuant to
Section 8.1. 
  

 14 

 (iii) In the event Purchaser wishes to exercise the 90% Top-Up Option, Purchaser shall
send to the Company a written notice (a “90% Top-Up Exercise Notice,” the date of which notice is referred to herein as the “90% Top-Up Notice Date”) specifying the denominations of the certificate or certificates
evidencing the 90% Top-Up Option Shares which the Purchaser wishes to receive, and the place, time and date for the closing of the purchase and sale pursuant to the 90% Top-Up Option (the “90% Top-Up Closing”). The Company shall,
promptly after receipt of the 90% Top-Up Exercise Notice, deliver a written notice to the Purchaser confirming the number of 90% Top-Up Option Shares and the aggregate purchase price therefore (the “90% Top-Up Notice Receipt”). At
the 90% Top-Up Closing, Purchaser shall pay the Company the aggregate price required to be paid for the 90% Top-Up Option Shares, by delivery of a Promissory Note in an aggregate principal amount equal to the amount specified in the 90% Top-Up
Notice Receipt, and the Company shall cause to be issued to Purchaser a certificate or certificates representing the 90% Top-Up Option Shares. Such certificates may include any legends that are required by federal or state securities laws.

 (b) 50% Top-Up Option. 
 (i) In order to offset the dilutive impact of the issuance of Shares pursuant to the exercise, conversion or exchange of any Company Options, SARs, RSUs, Warrants, Equity Interests or other rights to acquire Shares
following the Appointment Time, the Company hereby grants to Purchaser an irrevocable option (the “50% Top-Up Option”), exercisable only upon the terms and subject to the conditions set forth herein, to purchase with a Promissory
Note, at a price per share equal to the Offer Price, that number of shares of Common Stock (the “50% Top-Up Option Shares”) equal to the lesser of (x) the lowest number of shares of Common Stock that, when added to the number
of shares of Common Stock owned by Parent, Purchaser and their respective subsidiaries and affiliates at the time of such exercise, shall constitute ten thousand (10,000) shares more than 50% of the shares of Common Stock then outstanding
(after giving effect to the issuance of the 50% Top-Up Option Shares) and (y) an aggregate number of shares of Common Stock that is equal to 19.9% of the shares of Common Stock issued and outstanding as of the date hereof; provided,
however, that the 50% Top-Up Option shall not be exercisable unless, immediately after such exercise and the issuance of shares of Common Stock pursuant thereto, Purchaser would own more than 50% of the Shares then outstanding (assuming the
issuance of the 50% Top-Up Option Shares); and provided, further, that in no event shall the 50% Top-Up Option be exercisable for a number of shares of Common stock in excess of the Company’s total authorized and unissued
shares of Common Stock. 
  

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 (ii) Provided that no applicable law, rule, regulation, order, injunction or other legal
impediment shall prohibit the exercise of the 50% Top-Up Option or the issuance of the 50% Top-Up Option Shares pursuant thereto, or otherwise make such exercise or issuance illegal, Purchaser may exercise the 50% Top-Up Option, in whole but not in
part, at any one time after the Appointment Time and prior to the earlier to occur of (i) the record date for the Special Meeting, and (ii) the termination of this Agreement pursuant to Section 8.1. 
 (iii) In the event Purchaser wishes to exercise the 50% Top-Up Option, Purchaser shall send to the Company a written notice (a
“50% Top-Up Exercise Notice,” the date of which notice is referred to herein as the “50% Top-Up Notice Date”) specifying the denominations of the certificate or certificates evidencing the 50% Top-Up Option Shares
which the Purchaser wishes to receive, and the place, time and date for the closing of the purchase and sale pursuant to the 50% Top-Up Option (the “50% Top-Up Closing”). The Company shall, promptly after receipt of the 50% Top-Up
Exercise Notice, deliver a written notice to the Purchaser confirming the number of 50% Top-Up Option Shares and the aggregate purchase price therefore (the “50% Top-Up Notice Receipt”). At the 50% Top-Up Closing, Purchaser shall
pay the Company the aggregate price required to be paid for the 50% Top-Up Option Shares by delivery of a Promissory Note in an aggregate principal amount equal to the aggregate purchase price specified in the 50% Top-Up Notice Receipt, and the
Company shall cause to be issued to Purchaser a certificate or certificates representing the 50% Top-Up Option Shares. Such certificates may include any legends that are required by federal or state securities laws. 
 Section 2.5 Treatment of Options, Restricted Stock and other Equity Awards. 
 (a) At the Effective Time, each option, or portion thereof, to purchase Shares granted pursuant to the Company Stock Plans (“Company
Options”) or stock appreciation right, or portion thereof, whether settled in cash or Shares (“SAR”), in each case granted pursuant to the Company Stock Plans, that is outstanding and vested immediately prior to the
Effective Time, shall be deemed exercised and automatically converted into the right to receive an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Shares for which such Company Option or SAR was vested
and exercisable immediately prior to the Effective Time and (y) the excess, if any, of the Merger Consideration less the per Share exercise price of such Company Option or SAR (the “Option Consideration”) after which it shall
be cancelled and extinguished. 
 (b) At the Effective Time, each Company Option and SAR that was outstanding and unvested immediately prior
to the Effective Time shall be assumed by the Parent and converted into the right to receive the Option Consideration, provided that the Company Option or SAR shall be subject to the same vesting arrangements that were applicable to such Company
Option or SAR immediately prior to the Effective Time and Parent’s obligation to pay the Option Consideration will only become payable to the 

  

 16 

 
extent that such vesting requirements are satisfied. For each Share subject to a Company Option or SAR which would have vested after the Effective Time under
the vesting schedule applicable to such Company Option or SAR immediately prior to the Effective Time, the holder thereof shall be entitled to a cash payment equal to the Option Consideration, and Parent shall pay the holder thereof the Option
Consideration as soon as administratively practicable after the day on which such Share would have vested. 
 (c) At the Effective Time, the
Merger Consideration payable with respect to each unvested Share subject to restrictions and forfeiture granted pursuant to the Company Stock Plans (“Restricted Stock”) shall be subject to the same restrictions and vesting
arrangements that were applicable to such unvested Restricted Stock immediately prior to the Effective Time. Therefore, cash otherwise payable pursuant to Section 2.1 in exchange for the Restricted Stock issued and outstanding immediately prior
to the Effective Time (“Unvested Cash”) shall not automatically be payable by Parent at the Effective Time, and shall instead become payable by Parent on the date that such Shares of Restricted Stock would have become vested under
the vesting schedule in place for such shares immediately prior to or at the Effective Time (subject to the restrictions and other terms of such vesting schedule). Parent shall make all such required payments to holders of Unvested Cash as soon as
administratively practicable after the day on which such Unvested Cash would have become vested under the original vesting schedule. All outstanding rights to repurchase Restricted Stock that the Company may hold or similar restrictions in the
Company’s favor immediately prior to the Effective Time (all such rights, the “Repurchase Rights”) shall be assigned to Parent in the Merger and shall thereafter be exercisable by Parent upon the same terms and subject to the
same conditions that were in effect immediately prior to the Effective Time, except that Repurchase Rights may be exercised by Parent retaining the Unvested Cash into which such Restricted Stock has been converted, and paying to the former holder
thereof the repurchase price in effect for each such Share subject to that Repurchase Right immediately prior to the Effective Time. 
 (d)
At the Effective Time, each Share subject to a Restricted Stock Unit granted pursuant to the Company Stock Plans (“RSU”) that is outstanding immediately prior to the Effective Time will be assumed by the Parent and converted into
the potential right to receive a cash payment equal to the Merger Consideration (the “RSU Consideration”); provided, however, that the RSU shall be subject to the same vesting arrangements that were applicable immediately prior to
the Effective Time and payment of the RSU Consideration with respect to a Share subject to an RSU will only become payable by the Parent to the extent that such vesting requirements are satisfied. For each Share subject to an RSU which would have
vested after the Effective Time, the holder thereof shall be entitled to a cash payment equal to the RSU Consideration, and Parent shall pay the holder thereof the RSU Consideration as soon as administratively practicable after the day on which such
Share subject to the RSU would have vested. 
 (e) The Company shall take all necessary actions, including obtaining any required consents
from holders of outstanding Company Options, SARs, Restricted Stock and RSUs necessary to effect the transactions described in Sections 2.5(a)-(d) above pursuant to the terms of the applicable Company Stock Plans and agreements 

  

 17 

 
evidencing the Company Options, SARs Restricted Stock and RSUs. All amounts payable pursuant to Sections 2.5(a)-(d) shall be paid without interest, and
no Unvested Cash or RSU Consideration or rights to receive any payments pursuant to Section 2.5(c) and (d) may be pledged, encumbered, sold, assigned or transferred (including any transfer by operation of law), by any Person, other than
Parent, or be taken or reached by any legal or equitable process in satisfaction of any liability of such Person, prior to the distribution to such Person of such Unvested Cash or RSU Consideration or payment pursuant to Section 2.5(c) and (d),
in accordance with this Agreement. Any payments made pursuant to this Section 2.5 shall be net of all applicable withholding taxes that Parent, Purchaser, the Surviving Corporation and the Paying Agent, as the case may be, shall be required to
deduct and withhold from the relevant Option Consideration, Unvested Cash, RSU Consideration, or Merger Consideration under the Code, the rules and regulations promulgated thereunder or any provision of applicable state, local or foreign law. To the
extent that amounts are so withheld by Parent, Purchaser, the Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Shares in respect of which such deduction
and withholding was made by Parent, Purchaser, the Surviving Corporation or the Paying Agent. 
 Section 2.6 Treatment of Employee
Stock Purchase Plan. Each outstanding purchase right (each, a “Purchase Right”) under the Company’s 1999 Employee Stock Purchase Plan (the “ESPP”) shall be cancelled immediately prior to the Effective Time
and converted into the right to receive at the Effective Time from Parent, an amount (subject to any withholding tax required by applicable law) in cash equal to the product obtained by multiplying (x) the number of Shares issuable to the
holder of such Purchase Right had such Purchase Right been exercised immediately prior to the Effective Time and (y) the amount by which the Merger Consideration exceeds the purchase price under such Purchase Right. Within five (5) days
following the Effective Time, Parent shall cause the Company to return to participants their respective accumulated payroll contributions not applied to the purchase of Shares under the ESPP, if any. 
 Section 2.7 Treatment of Warrants. At the Effective Time, each warrant to purchase Shares (the “Warrants”) that is issued
and outstanding immediately prior to the Effective Time and not terminated pursuant to its terms shall be assumed by Parent and converted into the right to receive cash equal to the product obtained by multiplying (x) the aggregate number of
Shares for which such Warrant was exercisable immediately prior to the Effective Time and (y) the excess, if any, of the Merger Consideration less the per Share exercise price of such Warrant (the “Warrant Consideration”). The
Company shall take all necessary actions, including obtaining any required consents from holders of outstanding Warrants necessary to effect such assumption pursuant to the terms of the applicable Warrant. Any payments made pursuant to this
Section 2.7 shall be net of all applicable withholding taxes that Parent, Purchaser, the Surviving Corporation and the Paying Agent, as the case may be, shall be required to deduct and withhold from the Warrant Consideration under the Code, the
rules and regulations promulgated thereunder or any provision of applicable state, local or foreign law. To the extent that amounts are so withheld by Parent, Purchaser, the 
  

 18 

 
Surviving Corporation or the Paying Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Warrants in
respect of which such deduction and withholding was made by Parent, Purchaser, the Surviving Corporation or the Paying Agent. 
 ARTICLE III

 REPRESENTATIONS AND 
 WARRANTIES
OF THE COMPANY 
 Except as set forth in the Company’s disclosure schedule delivered to Parent immediately prior to the execution of
this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to Parent and Purchaser as set forth below. Each disclosure set forth in the Company Disclosure Schedule is identified by reference to, or has
been grouped under a heading referring to, a specific section of this Agreement and disclosure made pursuant to any section thereof shall be deemed to be disclosed on each of the other sections of the Company Disclosure Schedule to the extent the
applicability of the disclosure to such other section is reasonably apparent from the disclosure made. 
 Section 3.1
Organization. (a) The Company and each of the Company Subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing (with respect to jurisdictions which recognize such concept) under the laws
of the jurisdiction in which it is organized and has the requisite corporate or other power, as the case may be, and authority to conduct its business as now being conducted, except, as to Company Subsidiaries, for those jurisdictions where the
failure to be so organized, existing or in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company and each of the Company Subsidiaries is duly qualified or licensed to
do business and is in good standing (with respect to jurisdictions which recognize such concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing
necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has
delivered to or made available to Parent and Purchaser prior to the execution of this Agreement true and complete copies of any amendments to the Company Governing Documents not filed as of the date hereof with the SEC. The Company is in compliance
with the terms of the Company Governing Documents. 
 (b) Subsidiaries. Exhibit 21 to the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2005, includes all the Company Subsidiaries that, as of the date of this Agreement, are “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X of the SEC). All outstanding
shares of capital stock of, or other Equity Interests in, each such Significant Subsidiary have been validly issued and are fully paid and nonassessable and are owned directly or indirectly by the Company, free and clear of any Liens, other than
Permitted Liens. Other than the 

  

 19 

 
Company Subsidiaries, the Company does not directly or indirectly beneficially own any Equity Interests in any other Person except for non-controlling
investments made in the ordinary course of business in entities which are not individually or in the aggregate material to the Company and the Company Subsidiaries as a whole. 
 Section 3.2 Capitalization. (a) The authorized capital stock of the Company consists of (i) 750,001,200 shares of common stock,
par value $0.0001 per share (the “Common Stock”), (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), of which 250,000 shares has been designated Series A Junior
Participating Preferred Stock, par value $0.0001 per share (the “Junior Preferred Stock”) and reserved for issuance in connection with the rights (the “Company Rights”) issued pursuant to the Rights Agreement dated
as of June 12, 2001 (as amended from time to time, the “Company Rights Agreement”) between the Company and U.S. Stock Transfer Corporation, as Rights Agent. As of December 15, 2006, (A) 69,908,406 shares of Common Stock
were issued and outstanding, (B) no shares of Preferred Stock were issued and outstanding, (C) no shares of Junior Preferred Stock were issued and outstanding, (D) no shares of Common Stock were issued and held in the treasury of the
Company or otherwise owned by the Company, (E) 7,592,036 shares of Common Stock were issuable (and such number was reserved for issuance) upon exercise of Warrants, and (F) 20,477,738 shares of Common Stock were reserved for issuance
pursuant to the Company Stock Plans of which 13,551,160 shares of Common Stock were subject to outstanding Company Options, SARs and RSUs (collectively, the “Company Stock Rights”) and Restricted Stock. All of the outstanding shares
of the Company’s capital stock are, and all Shares which may be issued pursuant to the exercise of outstanding Company Stock Rights and Warrants will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully
paid and non-assessable. Except for issuances of Shares pursuant to Company Stock Rights described in the first sentence of Section 3.2(b) and Warrants described in Section 3.2(c), since December 15, 2006, the Company has not issued
any Shares or designated or issued any shares of Preferred Stock or Junior Preferred Stock. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) (“Voting
Debt”) of the Company or any Company Subsidiary issued and outstanding. Except for the Company Rights issuable pursuant to the Company Rights Agreement, the Company Stock Rights described in the first sentence of Section 3.2(b) and the
Warrants described in Section 3.2(c), there are no (x) options, warrants, calls, pre-emptive rights, subscriptions or other rights, agreements, arrangements or commitments of any kind, including any stockholder rights plan, relating to the
issued or unissued capital stock of the Company or any Company Subsidiary, obligating the Company or any Company Subsidiary to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any Company Subsidiary or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any Company Subsidiary to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or commitment (collectively, “Equity Interests”) or (y) outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any Shares or any capital stock of, or other Equity Interests in, the Company or any Company Subsidiary or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in the Company or any
Company Subsidiary. No Company Subsidiary owns any Shares. 
  

 20 

 (b) As of December 15, 2006, the Company had outstanding Company Options to purchase 13,539,699
shares of Common Stock and no SARs for a maximum of 13,539,699 shares of Common Stock, no RSUs for a maximum of 0 shares of Common Stock and 11,461 shares of Restricted Stock granted under Company Stock Plans. All of such Company Stock Rights and
Restricted Stock have been granted to service providers of the Company and the Company Subsidiaries in the ordinary course of business pursuant to the Company Stock Plans. Section 3.2(b) of the Company Disclosure Schedule sets forth a listing
of all outstanding Company Stock Rights and shares of Restricted Stock as of December 15, 2006 and (i) the date of their grant and the portion of which that is vested as of December 15, 2006 and if applicable, the exercise price
therefor, (ii) the date upon which each Company Stock Right would normally be expected to expire absent termination of employment or other acceleration, and (iii) whether or not such Company Option is intended to qualify as an
“incentive stock option” within the meaning of Section 422 of the Code. 
 (c) As of December 15, 2006, the Company had
outstanding Warrants to purchase 4,159,586 shares of Common Stock at an exercise price of $5.00 per share and Warrants to purchase 3,432,450 shares of Common Stock at an exercise price of $9.50 per share. Section 3.2(c) of the Company
Disclosure Schedule sets forth a listing of all outstanding Warrants as of December 15, 2006, their date of grant, their expiration date and the exercise price therefore. 
 (d) There are no voting trusts or other agreements to which the Company or any Company Subsidiary is a party with respect to the voting of the
Company’s Common Stock or any capital stock of, or other equity interest of the Company or any of the Company Subsidiaries. Neither the Company nor any Company Subsidiary has granted any preemptive rights, anti-dilutive rights or rights of
first refusal or similar rights. 
 Section 3.3 Authorization; Validity of Agreement; Company Action. The Company has all
necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement, and the consummation by
it of the Transactions, have been duly and validly authorized by the Company Board of Directors and, no other corporate action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement and the
consummation by it of the Transactions, subject, in the case of the Merger, to the approval of this Agreement by the holders of a majority of all of the Shares entitled to be cast, if required by applicable law. This Agreement has been duly executed
and delivered by the Company and, assuming due and valid authorization, execution and delivery hereof by Parent and Purchaser, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that
(i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors’ rights 
  

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generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought. 
 Section 3.4 Board Approvals. The Company Board
of Directors, at a meeting duly called and held, has unanimously (i) determined that this Agreement, the Offer, the Merger and other Transactions are advisable, fair to, and in the best interests of the stockholders of the Company,
(ii) duly and validly approved and taken all corporate action required to be taken by the Company Board of Directors to authorize the consummation of the Transactions, (iii) approved this Agreement and the transactions contemplated hereby
(including the Offer and the Merger) and the Support Agreements, which approval, to the extent applicable, constituted approval under the provisions of Section 203 of the DGCL as a result of which this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, as well as the Support Agreements and the transactions contemplated thereby, are not and will not be subject to the restrictions on “business combinations” under, the provision of
Section 203 of the DGCL; and (iv) recommended that the stockholders of the Company accept the Offer, tender their Shares to Purchaser pursuant to the Offer, and adopt this Agreement. No further corporate action is required by the Company
Board of Directors, pursuant to the DGCL or otherwise, in order for the Company to approve this Agreement, the Support Agreements or the Transactions, including the Offer and the Merger, subject, in the case of the Merger, to the approval of this
Agreement by the holders of a majority of the outstanding Shares, if required by applicable law, as contemplated by Section 1.9, which is the only stockholder vote that is required for adoption of this Agreement and the consummation of the
Merger by the Company. 
 Section 3.5 Consents and Approvals; No Violations. (a) None of the execution, delivery or
performance of this Agreement by the Company, the acceptance for payment or acquisition of Shares pursuant to the Offer, the consummation by the Company of the Merger or any other Transaction or compliance by the Company with any of the provisions
of this Agreement will (i) conflict with or result in any breach of any provision of the Company Governing Documents or the organizational documents of any Company Subsidiary, (ii) require any filing by the Company or any Company
Subsidiary, or the permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, foreign, federal, state, local or supernational entity
(a “Governmental Entity”) (except for (A) compliance with any applicable requirements of the Exchange Act, (B) any filings as may be required under the DGCL in connection with the Merger, (C) filings, permits,
authorizations, consents and approvals as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and the Required Governmental Approvals, or (D) the filing with the SEC and
the Nasdaq of (1) the Schedule 14D-9, (2) a Proxy Statement if stockholder approval of the Merger is required by applicable law, (3) the information required by Rule 14f-1 under the Exchange Act and (4) such reports under
Section 13(a) of the Exchange Act as may be required in connection with this Agreement and the Offer and the Merger), (iii) automatically result in a modification, violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any right, including, but 
  

 22 

 
not limited to, any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond,
mortgage, lien, indenture, lease, license, contract or agreement, or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which any of them or any of their respective properties or assets is bound (the
“Company Agreements”) and which are set forth on the Company Disclosure Schedule or should be so set forth (such Company Agreements, the “Company Scheduled Agreements”) or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any Company Subsidiary or any of their respective properties or assets; except in the case of clauses (ii), (iii) or (iv) where (x) any failure to obtain such
permits, authorizations, consents or approvals, (y) any failure to make such filings or (z) any such modifications, violations, rights, breaches or defaults have not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect or have a material adverse effect on the ability of the Company to consummate the Offer, the Merger and the other Transactions. 
 (b) The Company and the Company Board of Directors have taken all action reasonably necessary to (i) render the Company Rights inapplicable to this
Agreement, the Support Agreements, the Offer, the Merger and the other Transactions and (ii) ensure that (A) neither Parent nor any of its stockholders, affiliates or associates is or will become an “Acquiring Person” (as defined
in the Company Rights Agreement) solely by reason of this Agreement, the Support Agreements, the Offer, the Merger or any other Transaction, (B) a “Distribution Date” (as defined in the Company Rights Agreement) shall not occur solely
by reason of this Agreement, the Support Agreements, the Offer, the Merger or any other Transaction and (C) the Company Rights shall expire at the Effective Time. 
 Section 3.6 Company SEC Documents and Financial Statements. (a) The Company and each of the Company Subsidiaries has filed or furnished (as applicable) with the SEC all forms, reports, schedules,
statements and other documents required by it to be filed or furnished (as applicable) since and including September 30, 2002, under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”) (together
with all certifications required pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)) (such documents and any other documents filed by the Company and each Company Subsidiary with the SEC, as have been amended
since the time of their filing, collectively, the “Company SEC Documents”). As of their respective filing dates the Company SEC Documents (i) did not (or with respect to Company SEC Documents filed after the date hereof, will
not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading
and (ii) complied in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, the Sarbanes-Oxley Act and the applicable rules and regulations of the SEC thereunder. None of the
Company Subsidiaries is currently required to file any forms, reports or other documents with the SEC. All of the audited consolidated financial statements and unaudited consolidated interim financial statements of the Company and its consolidated
Subsidiaries included in the Company SEC Documents 
  

 23 

 
(collectively, the “Financial Statements”), (A) have been or will be, as the case may be, prepared from, are in accordance with, and
accurately reflect the books and records of the Company and its consolidated Subsidiaries in all material respects, (B) have been or will be, as the case may be, prepared in accordance with United States generally accepted accounting principles
(“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments and as may be
permitted by the SEC on Form 10-Q, 8-K or any successor or like form under the Exchange Act) and (C) fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the
Company and its consolidated Subsidiaries as of the times and for the periods referred to therein. 
 (b) Without limiting the generality of
Section 3.6(a), (i) PricewaterhouseCoopers LLP has not resigned or been dismissed as independent public accountant of the Company as a result of or in connection with any disagreement with the Company on a matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure, (ii) no executive officer of the Company has failed in any respect to make, without qualification, the certifications required of him or her under Section 302 or
906 of the Sarbanes-Oxley Act with respect to any form, report or schedule filed by the Company with the SEC since the enactment of the Sarbanes-Oxley Act and (iii) no enforcement action has been initiated or, to the knowledge of the Company,
threatened against the Company by the SEC relating to disclosures contained in any Company SEC Document. 
 Section 3.7 Internal
Controls; Sarbanes-Oxley Act. (a) The Company and the Company Subsidiaries have designed and maintained a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to
provide reasonable assurances regarding the reliability of financial reporting. The Company (i) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that
material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is
accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and (ii) has disclosed to the Company’s auditors and the audit committee of the Company Board of Directors
(and made summaries of such disclosures available to Parent) (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any
material respect the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal controls over financial reporting. The Company is in compliance in all material respects with all effective provisions of the Sarbanes-Oxley Act. 
 (b) Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any director, officer, auditor, accountant or representative of the Company or any of its Subsidiaries has received or
otherwise had or obtained knowledge 

  

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of any substantive complaint, allegation, assertion or claim, whether written or oral, that the Company or any of its Subsidiaries has engaged in
questionable accounting or auditing practices. No current or former attorney representing the Company or any of its Subsidiaries has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the
Company or any of its officers, directors, employees or agents to the current Company Board or any committee thereof or to any current director or executive officer of the Company. 
 (c) To the Company’s knowledge, no employee of the Company or any of its Subsidiaries has provided or is providing information to any law
enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable legal requirements of the type described in Section 806 of the Sarbanes-Oxley Act by the Company or any of
its Subsidiaries. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, contractor, subcontractor or agent of the Company or any such Subsidiary has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of the Company or any of its Subsidiaries in the terms and conditions of employment because of any lawful act of such employee described in Section 806 of the
Sarbanes-Oxley Act. 
 Section 3.8 Absence of Certain Changes. (a) Except as contemplated by this Agreement or in the
Company SEC Documents filed prior to the date hereof, since December 31, 2005 (the “Balance Sheet Date”), each of the Company and each Company Subsidiary has conducted its respective business in the ordinary course of business
consistent with past practice. 
 (b) From the Balance Sheet Date through the date of this Agreement, no fact(s), change(s), event(s),
development(s) or circumstances have occurred, arisen, come into existence or become known, which have had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (ii) no action has been
taken by the Company or any Company Subsidiary that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of the following subsections of Section 5.1: (a) (b), (c), (d), (i), (m),
(p), (q), (s), (t) and (u). 
 Section 3.9 No Undisclosed Liabilities. Except (a) as reflected or otherwise reserved
against on the Financial Statements, (b) for liabilities and obligations incurred since September 30, 2006 in the ordinary course of business, (c) for liabilities and obligations incurred under this Agreement or in connection with the
Transactions and (d) for liabilities and obligations incurred under any Company Agreement other than liabilities or obligations due to breaches thereunder, neither the Company nor any Company Subsidiary has incurred any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise required by GAAP to be recognized or disclosed on a consolidated balance sheet of the Company or any Company Subsidiary or in the notes thereto. 
  

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 Section 3.10 Litigation. As of the date hereof, there is no claim, action, suit,
arbitration, investigation, alternative dispute resolution action or any other judicial or administrative proceeding, in law or equity (collectively, a “Legal Proceeding”), pending against (or, to the Company’s knowledge,
threatened against or naming as a party thereto), the Company or any Company Subsidiary or to the Company’s knowledge, any executive officer or director of the Company or any Company Subsidiary (in their capacity as such). None of the Company
or any Company Subsidiary is subject to any outstanding order, writ, injunction, decree or arbitration ruling or judgment of a Governmental Entity which has had or would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect or prevent or materially delay the consummation of the Offer, the Merger or any of the other Transactions. 
 Section 3.11 Employee Benefit Plans; ERISA. 
 (a) Section 3.11(a) of the Company Disclosure Schedule sets forth a
correct and complete list of all material employee benefit plans, programs, agreements or arrangements, including pension, retirement, profit sharing, deferred compensation, stock option, change in control, retention, equity or equity-based
compensation, stock purchase, employee stock ownership, severance pay, vacation, bonus or other incentive plans, all medical, vision, dental or other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including “employee benefit plans” as that term is defined in Section 3(3) of ERISA, in each case, whether oral or written, funded or unfunded, or insured or self-insured, maintained by the Company or any Company Subsidiary, or
to which the Company or any Company Subsidiary contributes or is obligated to contribute thereunder, or with respect to which the Company or any Company Subsidiary has or may have any liability (contingent or otherwise), in each case, for or to
(i) any current or former employees, directors or officers of the Company or any Company Subsidiary located primarily in the United States and/or their dependents (collectively, the “Benefit Plans”), or (ii) any current or former
employees, directors or officers of the Company or any Company Subsidiary not located primarily in the United States and/or their dependents (collectively, the “Foreign Plans”). For purposes of this Agreement, the term “plan,”
when used with respect to Foreign Plans, shall mean a “scheme” or other employee benefit program or arrangement in accordance with specific country usage. 
 (b) All Benefit Plans that are intended to be subject to Code Section 401(a) and any trust agreement that is intended to be tax exempt under Code Section 501(a) have been determined by the Internal Revenue
Service to be qualified under Code Section 401(a) and exempt from taxation under Code Section 501(a), and, to the knowledge of the Company, nothing has occurred that would adversely affect the qualification of any such plan. Except as has
not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (i) each Benefit Plan and any related trust subject to ERISA complies in all material respects with and has been
administered in substantial compliance with, (A) the provisions of ERISA, (B) all provisions of the Code, (C) all other applicable laws, and (D) its terms and the terms of any collective bargaining or collective labor agreements;
(ii)

  

 26 

 
neither the Company nor any Company Subsidiary has received any written notice from any Governmental Entity questioning or challenging such compliance;
(iii) there are no unresolved claims or disputes under the terms of, or in connection with, the Benefit Plans other than claims for benefits which are payable in the ordinary course; (iv) there has not been any non-exempt “prohibited
transaction” (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Benefit Plan; (v) no litigation has been commenced with respect to any Benefit Plan and, to the knowledge of the Company,
no such litigation is threatened (other than routine claims for benefits in the normal course); (vi) there are no governmental audits or investigations pending or, to the knowledge of the Company, threatened in connection with any Benefit Plan;
and (vii) to the knowledge of the Company, there are not any facts that could give rise to any liability in the event of any governmental audit or investigation. 
 (c) Neither the Company nor any ERISA Affiliate of the Company (as defined below) (i) has an “obligation to contribute” (as defined in ERISA Section 4212) to a Benefit Plan that is a
“multiemployer plan” (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)); (ii) sponsors, maintains or contributes to any plan, program or arrangement that provides for post-retirement or other post-employment welfare benefits
(other than health care continuation coverage as required by applicable law); and (iii ) sponsors a Foreign Plan that is a defined benefit pension plan intended to be registered or approved by any Governmental Entity. 
 (d) Neither the Company nor any ERISA Affiliate has ever maintained, established, sponsored, participated in, or contributed to, any defined benefit plan
(as defined in ERISA Section 3(35)) subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code. 
 (e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each Foreign Plan complies in all material respects with and has been administered in
substantial compliance with the laws of the applicable foreign country, (ii) each Foreign Plan which, under the laws of the applicable foreign country, is required to be registered or approved by any Governmental Entity, has been so registered
or approved, (iii) all contributions to each Foreign Plan required to be made by the Company or the Company Subsidiaries through the Closing Date have been or shall be made or, if applicable, shall be accrued in accordance with country-specific
accounting practices, (iv) no litigation has been commenced with respect to any Foreign Plan and, to the knowledge of the Company, no such litigation is threatened (other than routine claims for benefits in the normal course), (v) there
are no governmental audits or investigations pending or, to the knowledge of the Company, threatened in connection with any Foreign Plan and (vi) no condition exists that would prevent the Company or a Company Subsidiary from terminating or
amending any Foreign Plan at any time for any reason. 
 (f) Except as has not had and would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, all reports, returns and similar documents with respect to all Benefit Plans or Foreign Plans required to be filed by the Company or any Company Subsidiary with any Governmental Entity or
distributed to any Benefit Plan or Foreign Plan participant have been duly and timely filed or distributed. 
  

 27 

 (g) Section 3.11(g) of the Company Disclosure Schedule discloses each Benefit Plan that is an
employee welfare benefit plan which is (i) unfunded or self-insured or (ii) funded through a “welfare benefit fund”, as such term is defined in Code Section 419(e) or other funding mechanism. Except as has not had and would
not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each such employee welfare benefit plan may be amended or terminated (including with respect to benefits provided to retirees and other former
employees) without liability (other than benefits then payable under such plan without regard to such amendment or termination) to the Company or any Company Subsidiary at any time. Each of the Company and the Company Subsidiaries complies in all
material respects with the applicable requirements of Section 4980B(f) of the Code or any similar state statute with respect to each Benefit Plan that is a group health plan within the meaning of Section 5000(b)(1) of the Code or such
state statute. Neither the Company nor any Company Subsidiary has any material obligations for retiree health or life insurance benefits under any Benefit Plan (other than for continuation coverage under Section 4980B(f) of the Code).

 (h) Except as may be required by applicable law, or as contemplated under this Agreement, neither the Company nor any Company Subsidiary
has any plan or commitment to create any additional Benefit Plans or Foreign Plans, or to amend or modify any existing Benefit Plan or Foreign Plan in such a manner as to materially increase the cost of such Benefit Plan or Foreign Plan to the
Company or any Company Subsidiary. 
 (i) Section 3.11(i) of the Company Disclosure Schedule discloses: (i) each material payment
(including any bonus, severance, unemployment compensation, deferred compensation, forgiveness of indebtedness or golden parachute payment) becoming due to any current or former employee under any Benefit Plan or Foreign Plan because of this
Agreement (or the consummation of the Transactions); (ii) any increase in any material respect of any benefit otherwise payable under any Benefit Plan or Foreign Plan; (iii) any acceleration in any material respect of the time of payment
or vesting of any such benefits under any Benefit Plan or Foreign Plan; or (iv) any material obligation to fund any trust or other arrangement with respect to compensation or benefits under a Benefit Plan or Foreign Plan in each case caused or
triggered by the execution and delivery of this Agreement or the consummation of the Offer or the Merger or the other Transactions contemplated hereby. No payment or benefit which has been, will or may be made by the Company or any Company
Subsidiary with respect to any current or former employee located in the United States in connection with the execution and delivery of this Agreement or the consummation of the Transactions contemplated hereby would fail to be deductible under
Section 162(m) of the Code. Neither this Agreement (or the consummation of the Transactions contemplated hereby) nor any other agreement, plan, arrangement or other contract between the Company or any Company Subsidiary and an employee or other
service provider that, considered individually or considered collectively with any other such agreements, plans, arrangements or other contracts, 

  

 28 

 
could reasonably be expected to, give rise directly or indirectly to the payment of any amount that would be characterized as an “excess parachute
payment” within the meaning of Section 280G(b)(1) of the Code. 
 (j) Correct and complete copies have been delivered or made
available to Parent by the Company of all material Benefit Plans and Foreign Plans (including all amendments and attachments thereto); written summaries of any material Benefit Plan not in writing, all related trust documents; all insurance
contracts or other funding arrangements to the degree applicable; the most recent annual information filings (Form 5500) and annual financial reports for those Benefit Plans (where required); the most recent determination letter from the Internal
Revenue Service (where required); all material written agreements and contracts relating to each Benefit Plan and Foreign Plan, including administrative service agreements and group insurance contracts; and the most recent summary plan descriptions
for the Benefit Plans (where required) and in respect of Benefit Plans and Foreign Plans, the most recent actuarial valuation and any subsequent valuation or funding advice (where required, including draft valuations). 
 (k) Neither the Company nor any Subsidiary has entered into any contract, agreement, arrangement or understanding with any officer or director of the
Company or any Company Subsidiary in connection with or in contemplation of the Transactions, except as contemplated by this Agreement or the Transactions. 
 (l) To the knowledge of the Company, no payment pursuant to any Benefit Plans or other arrangement between the Company or a Company Subsidiary and any “service provider” (as such term is defined in
Section 409A of the Code and the United States Treasury Regulations and IRS guidance thereunder), including, without limitation, the grant, vesting or exercise of any stock option or the grant or vesting of an RSU, would subject any Person to a
tax pursuant to Section 409A of the Code, whether pursuant to the consummation of the Offer or the Merger, any other transactions contemplated by this Agreement or otherwise. 
 (m) All Company Options have been appropriately authorized by the Company’s Board of Directors or an appropriate committee thereof, including
approval of the option exercise price or the methodology for determining the option exercise price and the substantive option terms. All Company Options granted to employees in the United States that are potentially subject to Code Section 409A
have a per share exercise price which reflects the fair market value of the Company’s common stock as determined in good faith compliance with Section 409A of the Code on the date that the option was granted (within the meaning of United
States Treasury Regulation §1.421-1(c)). To the knowledge of the Company, no Company Options have been retroactively granted, or the exercise price of any Company Option determined retroactively. The Company Board of Directors, at a meeting
duly called and held, has determined that each of the members of the Compensation Committee of the Company Board of Directors (the “Compensation Committee”) are, and the Company represents and warrants that each of the members of
the Compensation Committee are and at the Expiration Date will be, “independent directors” as defined in Rule 4200(a)(15) of the Nasdaq Marketplace Rules and eligible to serve on the Compensation Committee under the Exchange Act and all
applicable 

  

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Nasdaq Marketplace Rules. On or prior to the date hereof, the Compensation Committee, at a meeting duly called and held, approved each Company Compensation
Arrangement as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”), and has taken all
other action necessary to satisfy the requirements of the non-exclusive safe-harbor with respect to such Company Compensation Arrangements in accordance to Rule 14d-10(d)(2) under the Exchange Act. 
 Section 3.12 Taxes. 
 (a) The
Company and each Company Subsidiary has timely filed with the appropriate Governmental Entity all material Tax Returns required to be filed by them. All such Tax Returns are complete and accurate in all material respects. All material Taxes due and
owing by any of the Company and each Company Subsidiary on or before the date hereof (whether or not shown on any Tax Returns) have been paid, or both are being contested in good faith and have been reserved for in accordance with GAAP on the
Financial Statements. None of the Company or any Company Subsidiary currently is the beneficiary of any extension of time within which to file any material Tax Return. No claim has ever been made by a Tax authority in a jurisdiction where any of the
Company or any Company Subsidiary does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. 
 (b) The unpaid
Taxes of the Company and each Company Subsidiary did not, as of the dates of the Financial Statements, exceed the reserve for Tax liability set forth on the face of the balance sheets contained in such Financial Statements. Since the date of the
most recent Financial Statements, neither the Company nor any of the Company Subsidiaries have incurred any liability for Taxes outside the ordinary course of business or otherwise inconsistent with past practice. 
 (c) No deficiencies for material Taxes with respect to any of the Company and the Company Subsidiaries have been claimed or proposed in writing or
assessed by any Tax authority. There are no pending or, to the Company’s knowledge, threatened audits, assessments or other actions for or relating to any material liability in respect of Taxes of any of the Company or any of the Company
Subsidiaries, and there are no matters under discussion with any Tax authority, or known to the Company or any of the Company Subsidiaries, with respect to Taxes that are likely to result in an additional material liability for Taxes with respect to
any of the Company or any Company Subsidiaries. The Company has delivered or made available to Parent complete and accurate copies of federal, state and local income Tax Returns and other material Tax Returns of each of the Company and the Company
Subsidiaries and their predecessors for the years ended December 31, 2003 through 2005, and complete and accurate copies of all examination reports and statements of deficiencies assessed against or agreed to by any of the Company and the
Company Subsidiaries or any predecessors since January 1, 2003, with respect to Taxes of any type. Neither the Company nor any of the Company Subsidiaries nor any predecessor has waived any statute of limitations in respect of material Taxes or
agreed to any extension of time with respect to a material Tax assessment or deficiency, nor has any request been made in writing for any such extension or waiver. 
  

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 (d) There are no Liens for Taxes upon the assets of any of the Company and the Company Subsidiaries
(other than with respect to Liens for Taxes (i) not yet due and payable or (ii) being contested in good faith and for which adequate reserves have been established in accordance with GAAP on the Financial Statements). 
 (e) None of the Company nor any of the Company Subsidiaries has been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. 
 (f) The Company
and each Company Subsidiary has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party. 

(g) Neither the Company nor any of the Company Subsidiaries has any liability for the Taxes of any other Person (other than the Company and any of the
Company Subsidiaries) under Treasury Regulation Section 1.1502–6 (or any similar provision of state, local, or foreign law), as a transferee, by contract, or otherwise. None of the Company or any of the Company Subsidiaries has been a
member of an affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which is the Company). 
 (h) There are no Tax sharing agreements or similar arrangements (including indemnity arrangements) with respect to or involving any of the Company and the Company Subsidiaries (except for the allocation of Taxes set forth in leases,
contracts and commercial agreements entered into in the ordinary course of business), and, after the Closing Date, none of the Company nor any of the Company Subsidiaries shall be bound by any such Tax sharing agreements or similar arrangements or
have any liability thereunder for amounts due in respect of periods prior to the Closing Date. 
 (i) Neither the Company nor any of the
Company Subsidiaries has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock to which Section 355 of the Code (or so
much of Section 356 of the Code as relates to Section 355 of the Code) applies. 
 (j) Neither the Company nor any of the Company
Subsidiaries (i) has agreed, or is required, to make any adjustment under Section 481(a) of the Code for any period after the Closing Date by reason of a change in accounting method or otherwise; or (ii) is a shareholder of a
“passive foreign investment company” within the meaning of Section 1297 of the Code. 
 (k) None of the Company nor any of the
Company Subsidiaries has entered into any transaction identified as a “reportable transaction” for purposes of Section 6111 of the Code or Treasury Regulation § 1.6011-4(b)(1), or analogous provisions of any state or local Tax
law. 
  

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 Section 3.13 Contracts. 
 (a) Except as filed as exhibits to the Company SEC Documents filed prior to the date hereof, there is no Company Agreement (a) any of the benefits to
any party of which will be increased, or the vesting of the benefits to any party of which will be accelerated, by the occurrence of any of the Transactions or (b) which, as of the date hereof, (i) is a “material contract” (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) involves aggregate expenditures in excess of $20 million, (iii) involves annual expenditures in excess of $5 million and was not entered into in the ordinary
course of business, (iv) that contains “take or pay” provisions applicable to the Company or any Company Subsidiary, (v) that contains any non-compete or exclusivity provisions with respect to any line of business or geographic
area with respect to the Company or any Company Subsidiary, or upon consummation of the Transactions, Parent or its Subsidiaries, or which restricts the conduct of any line of business by the Company or any Company Subsidiary, or upon consummation
of the Transactions, Parent or its Subsidiaries, or any geographic area in which the Company or any Company Subsidiary, or upon consummation of the Transactions, Parent or its Subsidiaries conducts business, or (v) which would prohibit or
materially delay the consummation of the Offer, the Merger or any of the other Transactions. Each contract of the type described above in Section 3.13, whether or not set forth in Section 3.13 of the Company Disclosure Schedule, is
referred to herein as a “Company Material Contract.” Each Company Scheduled Agreement is valid and binding on the Company and each Company Subsidiary party thereto and, to the Company’s knowledge, each other party thereto, as
applicable, and in full force and effect (except that (x) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors’ rights generally and (y) the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought), and the Company and each Company Subsidiary has
performed in all material respects all obligations required to be performed by it under each Company Scheduled Agreement and, to the Company’s knowledge, each other party to each Company Scheduled Agreement has performed in all material
respects all obligations required to be performed by it under such Company Scheduled Agreement, except as would not be reasonably expected to, (1) prevent or materially delay the consummation of the Offer, the Merger or any of the other
Transactions, or (2) result in, individually or in the aggregate, a Company Material Adverse Effect. None of the Company or any Company Subsidiary knows of, or has received notice of, any violation or default under (or any condition which with
the passage of time or the giving of notice would cause such a violation of or default under) any Company Scheduled Agreement except for violations or defaults that would not be reasonably expected to, (1) prevent or materially delay
consummation of the Offer or the Merger, or (2) result in, individually or in the aggregate, a Company Material Adverse Effect. 
  

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 (b) The Company has delivered or made available to Parent or provided to Parent for review, prior to the
execution of this Agreement, true and complete copies of all of the Company Material Contracts or other Company Scheduled Agreements required to be disclosed in Section 3.13 of the Company Disclosure Schedule, which are not filed as exhibits to
the Company SEC Documents and the Company Material Contracts required to be disclosed in Section 3.13 of the Company Disclosure Schedule filed as exhibits to the Company SEC Documents are true and complete copies of such contracts. 

Section 3.14 Title to Properties; Encumbrances. The Company and each of the Company Subsidiaries has good, valid and marketable title to,
or, in the case of leased properties and assets, valid leasehold interests in, all of its tangible properties and assets except where the failure to have such good, valid and marketable title has not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; in each case subject to no Liens, except for (a) Liens reflected in a consolidated balance sheet as of the Balance Sheet Date, (b) Liens consisting of zoning or planning
restrictions, easements, permits and other restrictions or limitations on the use of real property or irregularities in title thereto, which do not materially impair the value of such properties or the use of such property by the Company or any of
the Company Subsidiaries in the operation of its respective business, (c) Liens for current Taxes, assessments or governmental charges or levies on property not yet due and payable and Liens for Taxes that are being contested in good faith by
appropriate proceedings and for which an adequate reserve has been provided on the appropriate financial statements and (d) Liens which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect (the foregoing Liens (a)-(d), “Permitted Liens”). The Company and each of the Company Subsidiaries is in compliance with the terms of all material leases of tangible properties to which they are a party, except for
non-compliance that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. All such material leases are in full force and effect, and the Company and each of the Company Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases. 
 Section 3.15 Intellectual Property. 
 (a) Section 3.15(a) of the Company Disclosure Schedule contains a complete and accurate list, as of the date hereof, of the following Owned Company
IP: (i) all Registered IP; and (ii) all unregistered Trademarks used in connection with Company Products; in each case listing, as applicable, (A) the name of the applicant or registrant and current owner, (B) the jurisdiction
where the application or registration is located, (C) the Governmental Entity with which the application or registration is filed, (D) the application or registration number, and (E) all proceedings or actions before any court or
tribunal (including the United States Patent and Trademark Office or any equivalent authority anywhere else in the world) related to Company Registered IP. The Company and each of the Company Subsidiaries has in a timely manner made all filings,
payments, and recordations and taken all other actions required to obtain and maintain ownership of all Intellectual Property Rights in each item of Company Registered IP. 
  

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 (b) Section 3.15(b) of the Company Disclosure Schedule contains a complete and accurate list of all
Company Agreements that are material to the Company, in effect as of the date hereof, in each case specifying the date of and parties to the agreement and whether such agreement is exclusive or non-exclusive, (i) under which the Company or any
of its Subsidiaries uses or has the right to use any Licensed Company IP, other than non-exclusive licenses and related services agreements for generally commercially available software that is not incorporated into any Company Products or
(ii) under which the Company or any of its Subsidiaries has licensed or otherwise permitted others the right to use any Company IP or Company Products (such agreements described in clauses (i) and (ii) above, the “Company IP
Agreements”). Neither the Company nor any of its Subsidiaries has granted any exclusive license under any Owned Company IP. To the knowledge of the Company, there are no pending disputes regarding the scope of any Company IP Agreements,
performance under any Company IP Agreements, or with respect to payments made or received under any Company IP Agreements, except where such disputes have not had and would not have, individually or in the aggregate, a Company Material Adverse
Effect. To the knowledge of the Company (A) no parties to the Company IP Agreements are in material breach thereof, and (B) all Company IP Agreements are binding and are in full force and effect except for those Company IP Agreements that
by their terms have expired or been terminated since the date hereof. 
 (c) To the knowledge of the Company, the Company and its
Subsidiaries own or otherwise have all Intellectual Property Rights needed to conduct the business of the Company and its Subsidiaries as conducted prior to the Closing Date. 
 (d) The Company and its Subsidiaries exclusively own all right, title and interest in the Owned Company IP, free and clear of all Liens, other than Liens
which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and which for the purposes of this Section do not include licenses under Intellectual Property Rights. Without limiting the
foregoing, each Person who is or was an employee or contractor of Company or any of its Subsidiaries and who is or was involved in the creation or development of any Owned Company IP has executed a valid agreement containing an assignment of all
Intellectual Property Rights in such employee’s or contractor’s contribution to the Owned Company IP. 
 (e) Neither the Company
nor any of its Subsidiaries is or has been a member of, or a contributor to, any domestic or foreign industry standards body or similar organization which membership or contribution may require the Company or any of its Subsidiaries to grant or
offer to any other third party any license or right to any Company IP. No Governmental Entity has any ownership interest in any Owned Company IP, and neither Company nor its Subsidiaries use or have used any funding, facilities, or personnel of any
Governmental Entity in connection with the creation of the Owned Company IP in a manner that could give rise to an ownership interest in the Owned Company IP in favor of such Governmental Entity. 
 (f) The Company and each of its Subsidiaries has taken reasonable and appropriate steps to protect and preserve the confidentiality of the Trade Secrets
of 

  

 34 

 
Company and its Subsidiaries, and to the knowledge of the Company, there are no unauthorized uses, disclosures or infringements of any such Trade Secrets by
any Person that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the Company’s knowledge, all use and disclosure by the Company or any of its Subsidiaries of Trade Secrets
owned by another Person has been pursuant to the terms of a written agreement with such Person permitting such use or was otherwise lawful, except to the extent that any such use or disclosure that was not done in accordance with such a written
agreement does not and will not, individually or in the aggregate, give rise to a Company Material Adverse Effect. The Company and its Subsidiaries have executed confidentiality agreements with all employees and contractors to whom the Company or
its Subsidiaries have granted access to Trade Secrets, which agreements prohibit such employees and contractors from disclosing such Trade Secrets to third parties or using such Trade Secrets for any purpose other than for the benefit of the Company
or its Subsidiaries. 
 (g) To the knowledge of the Company, none of the Company or any of its Subsidiaries or any of its or their current
products or services or other operation of the Company’s or its Subsidiaries’ business has infringed upon or otherwise violated, or is infringing upon or otherwise violating, in any respect the Intellectual Property Rights of any third
party. To the knowledge of the Company as of the date hereof, no Person or any of such Person’s products or services or other operation of such Person’s business is infringing upon or otherwise violating any Owned Company IP in any
material respect. 
 (h) No action, claim or proceeding alleging infringement, misappropriation, or other violation of any Intellectual
Property Right of another Person is pending or, to the knowledge of the Company, has been threatened against Company or its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any notice or other communication relating to any
actual, alleged, or suspected infringement, misappropriation, or violation of any Intellectual Property Right of another Person by Company or any Subsidiary. The Company and its Subsidiaries are not subject to any Order of any Governmental Entity
that restricts or impairs the use of any Company IP. 
 (i) The execution and delivery of this Agreement and the consummation of the
Transactions will not (with or without notice or the lapse of time, or both) automatically result in (i) the Company or its Subsidiaries granting to any third party any rights or licenses to any Intellectual Property or Intellectual Property
Rights, (ii) any right, including any right of termination, amendment, modification, cancellation or acceleration under any Company IP Agreement, (iii) the loss of or the imposition of any Lien on any Owned Company IP, (iv) the
release, disclosure, or delivery of any Owned Company IP by or to any escrow agent or other Person; or (v) after the Merger, Parent or any of its Subsidiaries being required, under the terms of any agreement to which the Company or any of its
Subsidiaries is a party, to grant any Person any rights or licenses to any of Parent’s or any of its Subsidiaries’ Intellectual Property or Intellectual Property Rights. 
 (j) No software incorporated in any Company Product is subject to any “copyleft” or other obligation or condition (including any obligation or
condition 

  

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under any “open source” license such as the GNU Public License, Lesser GNU Public License, or Mozilla Public License) that (i) could require,
or could condition the use or distribution of any software contained in any Company Product on, the disclosure, licensing, or distribution of any source code for any portion of Owned Company IP in a Company Product, or (ii) could otherwise
impose any limitation, restriction, or condition on the right or ability of the Company or its Subsidiaries to use or distribute any software contained in any Company Product. 
 (k) None of the source code used by Company or any of its Subsidiaries and material to the conduct of the business of the Company, including software
contained any of the Company Products, (collectively, “Company Source Code”) has been disclosed by the Company or any of its Subsidiaries, except to its employees or advisers or pursuant to non-disclosure agreements, or, to the
knowledge of the Company, by any other person except as authorized by the Company under a non-disclosure agreement. Neither the Company nor any of its Subsidiaries has provided or licensed, or has any duty or obligation (whether present, contingent,
or otherwise) to provide or license, Company Source Code to any escrow agent or other third party. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected
to, result in the provision, license, or disclosure of any Company Source Code to any third party. 
 (l) The Company’s and its
Subsidiaries’ collection and dissemination of personal information in connection with their business has been conducted in accordance with applicable privacy policies published or otherwise adopted by the Company and its Subsidiary and any
applicable laws and regulations, except where the failure to abide by any such policy or law would not, individually or in the aggregate, reasonably be expected to give rise to a Company Material Adverse Effect. 
 Section 3.16 Labor Matters. 
 (a) Except as would not have a Company Material Adverse Effect: (i) there is no collective bargaining or other labor union or foreign work council contract applicable to Persons employed by the Company or any of the Company
Subsidiaries to which the Company or any of the Company Subsidiaries is a party (each a “Company Collective Bargaining Agreement”), (ii) no Company Collective Bargaining Agreement is being negotiated by the Company or any of
the Company Subsidiaries, (iii) as of the date of this Agreement, there is no strike or work stoppage against the Company or any of the Company Subsidiaries pending or, to the knowledge of the Company, threatened that may interfere with the
respective business activities of the Company or any Company Subsidiary and (iv) as of the date of this Agreement, to the knowledge of the Company, none of the Company or any Company Subsidiary has committed any material unfair labor practice
in connection with the operation of the respective businesses of the Company and the Company Subsidiaries. 
 (b) The Company and its
Subsidiaries have complied in all material respects with applicable laws, rules and regulations with respect to employment, employment practices, and terms, conditions and classification of employment (including 

  

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applicable laws, rules and regulations regarding wage and hour requirements, immigration status, discrimination in employment, employee health and safety,
and the Workers’ Adjustment and Retraining Notification Act), except for such noncompliance as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. 
 Section 3.17 Compliance with Laws; Permits. 
 (a) As of the date hereof, the Company and each Company Subsidiary have complied and are in compliance with all laws, rules and regulations, ordinances, judgments, decrees, orders, writs and injunctions of all
federal, state, local and foreign governments and agencies thereof, which affect the business, properties or assets of the Company and each Company Subsidiary, except for instances of possible noncompliance that have not had and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and no notice, charge or assertion has been received by the Company or any Company Subsidiary or, to the Company’s knowledge, threatened against the
Company or any Company Subsidiary alleging any violation of any of the foregoing, except for instances of possible noncompliance that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. All licenses, authorizations, consents, permits and approvals required under such laws, rules and regulations are in full force and effect except where the failure to be in full force and effect have not had and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. 
 (b) The Company and each Company Subsidiary is
in possession of all authorizations, licenses, permits, certificates, approvals and clearances of any Governmental Entity necessary for the Company and each Company Subsidiary to own, lease and operate its properties or to carry on their respective
businesses substantially in the manner described in the Company SEC Documents filed prior to the date hereof and substantially as it is being conducted as of the date hereof (the “Company Permits”), and all such Company Permits are
valid, and in full force and effect, except where the failure to have, or the suspension or cancellation of, or failure to be valid or in full force and effect of, any of the Company Permits would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. 
 (c) None of the Company or any of the Company Subsidiaries, nor to the knowledge of
the Company, any of their respective directors, officers, agents, employees or representatives (in each case acting in their capacities as such) has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, (ii) directly or indirectly paid or delivered any fee, commission or other sum of money or item of property, however characterized, to any finder, agent or other party acting on behalf of or under the auspices of
a governmental official or Governmental Entity, in the United States or any other country, that was illegal under any applicable law, (iii) made any payment to any customer or supplier, or to any officer, director, partner, employee or agent of
any such customer or supplier, for the unlawful sharing of fees to any such customer or supplier or any such officer, director, partner, employee or agent for the unlawful rebating of charges, (iv) engaged in any other unlawful reciprocal
practice, or made any other unlawful payment or given any other unlawful consideration to any such customer or supplier or any such officer, director, 

  

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partner, employee or agent, (v) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended or
(vi) violated Section 8 of the Export Administration Act of 1977, as amended, except, in the case of clauses (i) through (vi) above, for such payments, violations, conduct or other practices that would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect. 
 (d) Without limiting the other provisions of this
Section 3.17, to the knowledge of the Company, none of (A) the Company, or any of the Company Subsidiaries or (B) any of the directors, officers, agents, employees or representatives of the Company or any Company Subsidiary (in each
case acting in their capacities as such), has, in the past five (5) years, taken any action or made any omission in violation of, or that would reasonably be expected to cause the Company or Company Subsidiary to be in violation of, any
applicable law governing imports into or exports from the United States or any foreign country, transactions with designated individuals and organizations, or relating to economic sanctions or embargoes, corrupt practices, money laundering, or
compliance with unsanctioned foreign boycotts, including without limitation: the Arms Export Control Act, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Export Administration Act, the 1930 Tariff Act and other
U.S. customs laws, the Foreign Corrupt Practices Act, the Export Administration Regulations, the International Traffic in Arms Regulations, the Office of Foreign Assets Control Regulations, the U.S. Customs Regulations, or any regulation, ruling,
rule, order, decision, writ, judgment, injunction, or decree of any Governmental Authority issued pursuant thereto (collectively, the “International Trade Laws”), except in each case for actions, omissions or violations that would
not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. 
 (e) Without limiting the other
provisions of this Section 3.17, to the knowledge of the Company, none of (A) the Company or any Company Subsidiary or (B) any of the directors, officers, agents, employees or representatives of the Company or any Company Subsidiary
(in each case acting in their capacities as such), has any reasonable basis for believing that, in the past five (5) years, the Company or any Company Subsidiary is or has been the subject of any investigation, complaint or claim of any
violation of the International Trade Laws by any Governmental Entity, except in each case for violations that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. 

Section 3.18 Information in the Proxy Statement. The Proxy Statement, if any (and any amendment thereof or supplement thereto), at the
date mailed to the Company’s stockholders and at the time of any meeting of Company stockholders to be held in connection with the Merger, will not contain any untrue statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company 
  

 38 

 
with respect to statements made therein based on information supplied by Parent or Purchaser expressly for inclusion in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder. 
 Section 3.19 Information in the Offer Documents and the Schedule 14D-9. The information supplied by the Company expressly for inclusion in the Offer Documents will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Schedule 14D-9 will comply as to form in all material
respects with the provisions of Rule 14d-9 of the Exchange Act and any other applicable federal securities laws and will not when filed with the SEC or distributed or disseminated to the Company’s stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no
representation or warranty with respect to statements made in the Schedule 14D-9 based on information furnished by Parent or Purchaser expressly for inclusion therein. 
 Section 3.20 Opinion of Financial Advisor. The Company has received the opinion of UBS Securities LLC (the “Company Financial Advisor”), to the effect that, as of the date hereof,
the consideration to be received in the Offer and the Merger by the holders of the Shares is fair to such stockholders from a financial point of view, and such opinion has not been modified or withdrawn. 
 Section 3.21 Insurance. The Company maintains insurance coverage with insurers, or maintains self-insurance practices, in such amounts and
covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of the Company and the Company Subsidiaries (taking into account the cost and availability of such insurance). All such
policies are in full force and effect, all premiums due and payable have been paid, and no written notice of cancellation or termination has been received with respect to any such policy. Neither the Company nor any Company Subsidiary is in material
breach or default, and neither the Company nor any Company Subsidiary has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or material
modification of any such insurance policies. The consummation of the Transactions will not, in and of itself, cause the revocation, cancellation or termination of any such insurance policy. 
 Section 3.22 Environmental Laws and Regulations. Except as has not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (i) Hazardous Materials have not been generated, used, treated or stored on, transported to or from or Released or disposed of on, any Company Property, (ii) the Company and each of the Company
Subsidiaries are in compliance with all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws with respect to any Company Property, (iii) there 
  

 39 

 
are no past, pending or, to the Company’s knowledge, threatened Environmental Claims against the Company or any of the Company Subsidiaries or any
Company Property and (iv) there are no facts or circumstances, conditions or occurrences regarding the business, assets or operations of the Company or any Company Property that could reasonably be anticipated to form the basis of an
Environmental Claim against the Company or any of the Company Subsidiaries or any Company Property. 
 Section 3.23 Brokers;
Expenses. 
 (a) No broker, investment banker, financial advisor or other Person, other than the Company Financial Advisor, is entitled to
any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Offer or the Merger based upon arrangements made by or on behalf of Company. 
 (b) True and correct copies of all agreements between the Company and the Company Financial Advisor concerning this Agreement and the Transactions,
including, without limitation, any fee arrangements, have been previously made available to Parent, except to the extent such agreements have been redacted with respect to pricing incentives thresholds. 
 Section 3.24 Takeover Statutes. The Company Board of Directors and the Company have taken all action necessary to render inapplicable to the
Transactions each and every state takeover statute or similar statute or regulation that applies to the Company with respect to this Agreement, the Support Agreements, the Offer, the Merger or any other Transaction, including the restrictions on
“business combinations” set forth in Section 203 of the DGCL. 
 Section 3.25 Bankruptcy. 
 (a) The Company as prepetition debtor and debtor-in possession, has complied in all material respects with all of the provisions of the Order Confirming
Prepackaged Plan of Reorganization Of Redback Networks Inc. Under Chapter 11 of the Bankruptcy Code dated December 19, 2003 (the “Bankruptcy Confirmation Order”) and all of the provisions of the related Prepackaged Plan of
Reorganization of Redback Networks Inc., as amended (the “Reorganization Plan”). The provisions of the Reorganization Plan and the Bankruptcy Confirmation Order remain in full force and effect in accordance with the terms thereof,
and the Company remains entitled to all of the rights, remedies, privileges, immunities, releases, exculpatory terms, and other benefits and protections afforded thereunder. Without limiting the foregoing, the transfers of property (including,
without limitation, the Passed Through Rights (as defined in the Reorganization Plan) by the Company, as debtor or debtor-in-possession, to the Company pursuant to the Reorganization Plan and the Bankruptcy Confirmation Order (i) were and
continue to be legal, valid, and effective transfers of property, (ii) vested and continue to vest the Company with good title to such property free and clear of all liens, charges, claims, encumbrances, or interests, except as expressly
provided in the Reorganization Plan or Bankruptcy Confirmation Order, (iii) did not constitute and continues not to constitute avoidable transfers under the Bankruptcy Code or under 

  

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applicable bankruptcy or nonbankruptcy law, and (iv) do not and continue not to subject the Company to any liability by reason of such transfer under
the Bankruptcy Code or under applicable nonbankruptcy law, including, without limitation, any laws affecting successor, transferee or stamp or recording tax liability. 
 (b) Except as set forth in the Reorganization Plan or the Bankruptcy Confirmation Order, as of the date hereof, all Claims (as defined in the Reorganization Plan) against and Interests (as defined in the
Reorganization Plan) in the Company, as debtor and debtor-in-possession, that were in existence or outstanding as of the Effective Date of (and as defined in) the Reorganization Plan (collectively, the “Bankruptcy Claims/Interests”)
have been satisfied or discharged in full, and all distributions or other amounts to which any holder of any such Bankruptcy Claims/Interests were or are entitled pursuant to the Reorganization Plan or Bankruptcy Confirmation Order have been made in
full. As of the date hereof, the Company is not subject to any such Bankruptcy Claims/Interests (other than Claims arising after the Effective Date under executory contracts or unexpired leases assumed by the Company or Passed Through Rights (as
defined in the Bankruptcy Plan)) and is not obligated to make any payments or distributions, whether in cash, equity or debt securities or any other property, on account of any such Bankruptcy Claims/Interests, and has no obligations or liabilities
under the Reorganization Plan or the Bankruptcy Confirmation Order. 
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES 
 OF PARENT AND PURCHASER 
 Parent and Purchaser represent and warrant to the Company as follows: 
 Section 4.1 Organization. Each of Parent and Purchaser is a corporation or other legal entity duly organized, validly existing and in good standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is organized and has the requisite corporate or other power, as the case may be, and authority to conduct its business as now being conducted, except, for those jurisdictions where the failure
to be so organized, existing or in good standing, individually or in the aggregate, would not impair in any material respect the ability of each of Parent and Purchaser, as the case may be, to perform its obligations under this Agreement or prevent
or materially delay the consummation of the Transactions. 
 Section 4.2 Authorization; Validity of Agreement; Necessary Action.
Each of Parent and Purchaser has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution, delivery and performance by Parent and Purchaser of this Agreement and the
consummation of the Transactions have been duly authorized by all necessary corporate action on the part of Parent and Purchaser and will be adopted by the sole stockholder of Purchaser. This Agreement has been duly executed and delivered by Parent
and Purchaser and, assuming due and valid authorization, execution and delivery hereof by the Company, is the valid and binding obligation of each of Parent and 
  

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Purchaser enforceable against each of them in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought. 
 Section 4.3 Consents and Approvals; No
Violations. None of the execution, delivery or performance of this Agreement by the Parent and Purchaser, the consummation by the Parent and Purchaser of the Transactions or compliance by the Parent or Purchaser with any of the provisions of
this Agreement will (i) violate or conflict with or result in any breach of any provision of the organizational documents of Parent or Purchaser,(ii) require any filing by the Parent or Purchaser with, or the permit, authorization, consent or
approval of, any Governmental Entity (except for (A) compliance with any applicable requirements of the Exchange Act, (B) any filings as may be required under the DGCL in connection with the Merger, (C) filings, permits,
authorizations, consents and approvals as may be required under the HSR Act and Required Governmental Approvals, or (D) the filing with the SEC of (x) the Schedule TO and (y) the Proxy Statement, if stockholder approval is required by
applicable law, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent or Purchaser, any of their Subsidiaries, or any of their properties or assets, except in the case of clause (i) or
(ii) such violations, breaches or defaults which would not, individually or in the aggregate, impair in any material respect the ability of each Parent or Purchaser to perform its obligations under this Agreement, as the case may be, or prevent
the consummation of the Transactions. 
 Section 4.4 Litigation. As of the date hereof, there is no claim, action, suit,
arbitration, alternative dispute resolution action or any other judicial or administrative proceeding pending against (or, to the knowledge of Parent, threatened against or naming as a party thereto) Parent or any of its Subsidiaries, nor, to the
knowledge of Parent, is there any investigation pending or threatened against Parent or any of its Subsidiaries, and none of Parent or any of its Subsidiaries is subject to any outstanding order, writ, injunction or decree, in each case, which
would, individually or in the aggregate, impair in any material respect the ability of each of Parent and Purchaser to perform its obligations under this Agreement, as the case may be, or prevent the consummation of any of the Transactions.

 Section 4.5 Information in the Proxy Statement. None of the information supplied by Parent or Purchaser in writing expressly
for inclusion or incorporation by reference in the Proxy Statement (or any amendment thereof or supplement thereto) will, at the date mailed to stockholders or at the time of the meeting of stockholders to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading.

  

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 Section 4.6 Information in the Offer Documents. The Offer Documents (and any amendment
thereof or supplement thereto) will not when filed with the SEC or at the time of distribution or dissemination thereof to the stockholders of the Company, contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by Parent or Purchaser with respect to statements
made therein based on information supplied by the Company for inclusion in the Offer Documents. The Offer Documents will comply as to form in all material respects with applicable federal securities laws and the rules and regulations thereunder.

 Section 4.7 Ownership of Company Capital Stock. Neither Parent nor Purchaser is, nor at any time during the last three
(3) years has it been, an “interested stockholder” of the Company as defined in Section 203 of the DGCL (other than as contemplated by this Agreement). 
 Section 4.8 Sufficient Funds. Parent and Purchaser will have all of the funds available as and when needed that are necessary to consummate
the Transactions and to perform their respective obligations under this Agreement. 
 ARTICLE V 
 CONDUCT OF BUSINESS PENDING THE MERGER 
 Section 5.1 Interim Operations of the Company. Except as set forth in Section 5.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as agreed in writing by Parent (which agreement shall not be
unreasonably withheld or delayed), from the date hereof until the earlier of (A) the valid termination of this Agreement in accordance with Article VIII hereto and (B) the time the designees of Parent have been elected to, and shall
constitute a majority of, the Company Board of Directors pursuant to Section 1.3 (the “Appointment Date”), the Company shall, and shall cause the Company Subsidiaries to, (i) conduct their businesses in all material
respects in the ordinary course consistent with past practice, (ii) use commercially reasonable efforts to preserve intact their present business organizations, (iii) use commercially reasonable efforts to maintain satisfactory relations
with and keep available the services of their current officers and other key employees, (iv) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including all material licenses and permits
that are required for the Company or any Company Subsidiary to carry on its business and (v) use commercially reasonable efforts to preserve existing relationships with material customers, lenders, suppliers, distributors and others having
material business relationships with the Company and the Company Subsidiaries. Without limiting the generality of the foregoing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required pursuant to this Agreement or as
agreed in writing by Parent (which agreement shall not be unreasonably withheld or delayed), from the date hereof until the earlier of (x) the valid termination of this Agreement in accordance with Article VIII hereto and (y) the
Appointment Date, the Company shall not, nor shall it permit any Company Subsidiary to: 
  

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 (a) amend the Company Governing Documents or equivalent documents of any Company Subsidiary or amend the
terms of any outstanding security of the Company or any Company Subsidiary; 
 (b) split, combine, subdivide or reclassify any shares of
capital stock of the Company or any Company Subsidiary, other than any such transaction by a Company Subsidiary that remains a Company Subsidiary after consummation of such transaction, in the ordinary course of business consistent with past
practice; 
 (c) declare, set aside or pay any dividend or other distribution payable in cash, stock or property (or any combination thereof)
with respect to the Company’s capital stock; 
 (d) redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any Equity Interests, except (i) repurchases of unvested shares at cost in connection with the termination of the services relationship with any service provider pursuant to stock option or purchase agreements in effect on the date
hereof, and (ii) repurchases of unvested shares in connection with the withholding of shares upon vesting of restricted stock; 
 (e)
issue, sell, pledge, deliver, transfer, dispose of or encumber any shares of, or securities convertible into or exchangeable for, or grant any Company Stock Rights, Restricted Stock or warrants, calls, commitments or rights of any kind to acquire,
any shares of capital stock of any class, or grant to any Person any right the value of which is based on the value of Shares or other capital stock, other than (i) the issuance of Shares (and associated Company Rights) reserved for issuance on
the date hereof pursuant to the exercise of the Company Stock Rights disclosed in Section 3.2(b) of the Company Disclosure Schedule and outstanding on the date hereof in the ordinary course of business consistent with past practice of the
Company Stock Plans or (ii) the issuance of shares of capital stock of the Company upon the exercise of Company Rights; 
 (f) acquire
(whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions (i) except in the ordinary course of business consistent with past practice, any assets having a fair market value in
excess of $25 million or (ii) any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or business or division thereof); 
 (g) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets, other than (i) sales in the ordinary
course of business consistent with past practice, and (ii) dispositions of equipment and property no longer used in the operation of the business; 
 (h)(i) incur or assume any long-term or short-term indebtedness except (A) short-term indebtedness made in the ordinary course of business consistent 

  

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with past practice or (B) additional indebtedness under existing debt facilities or like replacement debt facilities in excess of indebtedness of the
Company outstanding as of the date hereof; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, other than with respect to Company
Subsidiaries in the ordinary course of business consistent with past practice; or (iii) make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advance or capital contributions to, or
investments in, wholly owned Company Subsidiaries made in the ordinary course of business consistent with past practice; provided, however, that after the Appointment Time, the Company shall not accelerate the vesting of, or make changes in,
equity based compensation, Restricted Stock or Company Stock Rights, other than (i) by permitting the acceleration of any Company Options or other equity based compensation pursuant to the terms of agreements in existence on the date hereof
which provide for such acceleration or (ii) as otherwise provided in Section 5.1 of the Company Disclosure Schedule; 
 (i) other
than in the ordinary course of business consistent with past practice or as required by applicable law or the terms of any agreement existing on the date hereof, and in the case of any officer or director of the Company only to the extent that the
Compensation Committee has duly approved such action as an Employment Compensation Arrangement, make any change in, or accelerate the vesting of, the compensation or benefits payable or to become payable to, or grant any severance or termination pay
to, any of its officers, directors, employees, agents or consultants or enter into or amend any employment, consulting, severance, retention, change in control, termination pay, collective bargaining or other agreement or any equity based
compensation, pension, deferred compensation, welfare benefits or other employee benefit plan or arrangement, or make any loans to any of its officers, directors, employees, affiliates or agents or consultants or make any change in its existing
borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Benefit Plan or otherwise; provided, however, that after the Appointment Time, the Company shall not accelerate the vesting of, or make changes in, equity
based compensation, Restricted Stock or Company Stock Rights, other than (i) by permitting the acceleration of any Company Options or other equity based compensation pursuant to the terms of agreements in existence on the date hereof which
provide for such acceleration or (ii) as otherwise provided in Section 5.1 of the Company Disclosure Schedule; 
 (j) other than in
the ordinary course of business consistent with past practice or as required by applicable law or the terms of any agreement or plan existing on the date hereof and in the case of any officer or director of the Company only to the extent that the
Compensation Committee has duly approved such action as an Employment Compensation Arrangement: (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan,
agreement or arrangement to any officer, director, employee or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any Company Subsidiary of any amount relating to
unused vacation days; or (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra 

  

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compensation, incentive, deferred compensation, Company Stock Plan, stock purchase, group insurance, severance pay, retirement or other employee benefit
plan, agreement or arrangement, or any employment agreement with or for the benefit of any Company or any Company Subsidiary director, officer, employee or agent, whether past or present, or amend in any material respect any such existing plan,
agreement or arrangement in a manner inconsistent with the foregoing; 
 (k) except as publicly announced prior to the date hereof, announce,
implement or effect any material reduction in labor force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary other than
routine employee terminations; 
 (l) incur any capital expenditures or any obligations or liabilities in respect thereof in excess of $25
million, in the aggregate, except those contemplated in the capital expenditures budgets for the Company and the Company Subsidiaries previously made available to Parent; 
 (m) enter into any agreement or arrangement that limits or otherwise restricts the Company, any Company Subsidiary, or upon completion of the Transactions, Parent or its Subsidiaries or any successor thereto from
engaging or competing in any line of business or in any location; 
 (n) amend or modify in a material respect or terminate any Company
Material Contract or otherwise waive, release or assign any material rights, claims or benefits thereunder, or enter into any contract that would be a Company Material Contract; 
 (o) settle, pay or discharge any litigation, investigation, arbitration, other than the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice, of such claims, liabilities or obligations (i) disclosed or reserved against in the Financial Statements included in the Company SEC Documents filed prior to the date hereof in amounts no greater than the
amount reserved with respect to the relevant liability therein or (ii) incurred in the ordinary course of business consistent with past practice since the date of such financial statements; 
 (p) permit any material insurance policy naming it as a beneficiary or a loss payee to be cancelled or terminated without reasonable prior notice to
Purchaser; 
 (q) change any of the accounting methods used by it materially affecting its assets, liabilities or business, except for such
changes required by GAAP or Regulation S-X promulgated under the Exchange Act, as concurred in by its independent registered public accountants; 
 (r) revalue in any material respect any of its material assets, including writing down the value of inventory or writing down notes or accounts receivable, other than in the ordinary course of business consistent with past practice;

  

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 (s) make or change any material Tax election, change an annual accounting period, adopt or change any
accounting method, file any amended Tax Returns, enter into any closing agreement with respect to material Taxes, settle or consent to any material Tax Claim, take any affirmative action to surrender any right to claim a refund of Taxes, or consent
to any extension or waiver of the limitation period applicable to any Tax Claim; 
 (t) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger); 
 (u)
take any action which would, directly or indirectly, restrict or impair the ability of Purchaser to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company acquired or controlled
or to be acquired or controlled by Parent or Purchaser; 
 (v) except as required by applicable law, convene any regular or special meeting
(or any adjournment or postponement thereof) of the stockholders of the Company other than the Special Meeting; and 
 (w) enter into any
written agreement, contract, commitment or arrangement to do any of the foregoing, or authorize in writing any of the foregoing. 
 Section 5.2 No Solicitation; Unsolicited Proposals. 
 (a) From the date of this Agreement until the Effective Time or,
if earlier, the valid termination of this Agreement in accordance with its terms, the Company shall not, shall cause all of the Company Subsidiaries and the Company’s and such Company Subsidiaries’ respective officers and directors not to,
and shall not authorize or permit its non-officer employees, investment bankers, attorneys, accountants or other agents or representatives (collectively, “Representatives”) to, directly or indirectly, (i) solicit, initiate,
knowingly encourage or facilitate (including by way of furnishing non-public information), any inquiries or the making or submission of, or any inquiry, offer, proposal or indication of interest that constitutes, or would reasonably be expected to
lead to, an Acquisition Proposal, (ii) participate or engage in any discussions or negotiations with, or disclose or provide any non-public information or data relating to the Company or any Company Subsidiary or afford access to the
properties, assets, books or records or employees of the Company or any Company Subsidiary to, any Person, or “group” (as defined under Section 13(d) of the Exchange Act ) other than Parent and its Subsidiaries and Representatives
(any such Person or “group” and its Representatives (excluding the Company’s and Parent’s Representatives in their capacity as such), a “Third Party”) relating to an Acquisition Proposal, (iii) facilitate
any effort or attempt to make or implement an Acquisition Proposal, (iv) accept, approve, endorse or recommend an Acquisition Proposal, or (v) enter into any agreement, arrangement, undertaking, contract, commitment or understanding
(including any agreement in principle or letter of intent or understanding) with respect to or contemplating an Acquisition Proposal or enter into any agreement, arrangement, undertaking, contract, commitment or understanding 

  

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requiring the Company to abandon, terminate or fail to consummate the Transactions contemplated by this Agreement. The Company shall, and shall cause the
Company Subsidiaries and the Company’s and such Company Subsidiaries’ respective Representatives to, immediately cease and terminate any existing solicitation, encouragement, activity, discussion or negotiation with any Third Party
heretofore conducted by the Company, the Company Subsidiaries or their respective Representatives with respect to an Acquisition Proposal or Acquisition Transaction. 
 (b) Notwithstanding the restrictions set forth in Section 5.2(a), if, at any time prior to the Effective Time, (i) the Company receives an unsolicited bona fide written Acquisition Proposal from a Third
Party and under circumstances in which the Company, its Subsidiaries and their Representatives have complied with the Company’s obligations under Section 5.2(a) and (ii) the Company Board of Directors determines in good faith (after
consultation with its financial advisor and outside legal counsel) (such consultation with a financial advisor and outside legal counsel, “After Consultation”) that (A) such Acquisition Proposal is, or is reasonably likely to
lead to, a Superior Proposal and (B) the failure to take any such action would be a breach of its fiduciary duties to the Company’s stockholders under applicable law, the Company may, subject to its giving Parent at least 48 hours prior
written notice (which notice shall contain the identity of such Third Party, a copy of the written Acquisition Proposal, a description of any other material terms pertinent thereto and a statement to the effect that the Company Board of Directors
has made the determination required by this Section 5.2(b) and the Company intends to furnish non-public information to, or enter into discussions or negotiations with, such Third Party), (x) furnish information with respect to the Company
and Company Subsidiaries to such Third Party pursuant to a confidentiality agreement containing terms no less favorable to the Company, including the “standstill” provisions, than the terms of the Confidentiality Agreement, dated
December 11, 2006 between Parent and the Company (the “Confidentiality Agreement“), provided, that a copy of all such information is delivered simultaneously to Parent to the extent it has not previously been so
furnished to Parent and (y) participate in discussions or negotiations with such Third Party regarding such Acquisition Proposal (including by requesting that such Third Party amend the terms of such Acquisition Proposal so that it may be a
Superior Proposal). 
 (c) In addition to any prior notice obligations contained in Section 5.2(b), the Company shall as promptly as
practicable (and in any event within twenty-four (24) hours) notify Parent of any Acquisition Proposal that the Company receives or of any request for information or inquiry that the Company receives which relates to or would reasonably be
expected to lead to an Acquisition Proposal, which notification shall include, (i) the applicable written Acquisition Proposal, request or inquiry (or, if oral, the material terms and conditions of such Acquisition Proposal, request or
inquiry), and (ii) the identity of the Person making such Acquisition Proposal, request or inquiry. The Company shall keep Parent informed on a reasonably current basis (but in any event within 48 hours) of the status and material terms and
conditions (including all amendments or proposed amendments) of any such Acquisition Proposal, request or inquiry. The Company shall provide Parent with at least forty eight (48) hours prior notice of a meeting of the Company Board of Directors
(or such lesser notice as is provided to the members of the Company Board of Directors) at which the Company Board of Directors is reasonably expected to consider an Acquisition Proposal. 
  

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 (d) Nothing contained in this Agreement shall prohibit the Company from (i) issuing a
“stop-look-and listen communication” pursuant to Rule 14d-9(f) or taking and disclosing to its stockholders a position as required by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act or (ii) otherwise disclosing any
information to its stockholders that the Company Board of Directors determines in good faith (after consultation with its outside legal counsel) it is required to disclose in order to not breach its fiduciary duties to the Company’s
stockholders under applicable law, subject to compliance with the requirements of Sections 5.2(a), (b), and (c) and Section 5.3. 
 (e) The Company shall not release or waive any provision of any confidentiality, “standstill” or similar agreement to which the Company or any Company Subsidiary is a party. The Company will use its reasonable best efforts to
enforce or cause to be enforced each such agreement at the request of Parent. 
 (f) The Company shall promptly after the date of this
Agreement instruct that each Person which has heretofore executed a confidentiality agreement relating to an Acquisition Proposal with or for the benefit of the Company to promptly return or destroy (which destruction shall be certified in writing
by such Person to the Company) all information, documents and materials relating to an Acquisition Proposal or to the Company or its businesses, operations or affairs heretofore furnished by the Company or any of its Representatives to such Person
or any of its Representatives in accordance with the terms of any confidentiality agreement with such Person and to destroy all summaries, analyses or extracts of or based upon such information in the possession of such Person or any of its
Representatives. 
 Section 5.3 Board Recommendation. 
 (a) Subject to the terms of Section 5.3(c) hereof, the Company Board of Directors shall (i) recommend that the holders of the Shares accept the
Offer, tender their Shares to the Purchaser pursuant to the Offer and, if necessary under applicable law, adopt this Agreement in accordance with the applicable provisions of DGCL (the “Company Recommendation”), and
(ii) include the Company Recommendation in the Schedule 14D-9 and permit Parent to include the Company Recommendation in the Offer Documents. 
 (b) Subject to Section 5.3(c), neither the Company Board of Directors nor any committee thereof shall withdraw, qualify, modify, change or amend in any manner adverse to Parent or Purchaser (including pursuant to the Schedule 14D-9 or
any amendment thereto), the Company Recommendation, the approval by the Company Board of Directors of this Agreement and the transactions contemplated hereby, including the Offer and the Merger, or the approval by the Compensation Committee of the
Company Compensation Arrangements as Employment Compensation Arrangements for purposes of satisfying the requirements of the non-exclusive safe-harbor in accordance to Rule 14d-10(d)(2) under the Exchange Act (a “Company Change in
Recommendation”). 
  

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 (c) Notwithstanding anything to the contrary set forth in this Agreement, the Company Board of Directors
may effect a Company Change in Recommendation at any time prior to the Effective Time, if either: 
 (i)(A) the Company Board
of Directors has received an Acquisition Proposal (that has not been withdrawn) that constitutes a Superior Proposal and such Acquisition Proposal shall not have resulted from a breach or violation of the terms of Section 5.2(a), (B) the
Company Board of Directors determines in good faith (After Consultation and after considering in good faith any counter-offer or proposal made by Parent during the three-day period contemplated by clause (D) below), that the failure to effect a
Company Change in Recommendation in light of such Superior Proposal would be a breach of its fiduciary duties to the Company’s stockholders under applicable law, (C) at least three (3) days prior to such Company Change in
Recommendation, the Company shall have provided to Parent a written notice (a “Notice of Recommendation Change”) of its intention to make such Company Change in Recommendation (which notice shall not be deemed to be, in and of
itself, a Company Change in Recommendation), specifying the material terms and conditions of such Superior Proposal, including a copy of such Superior Proposal and identifying the Person making such Superior Proposal (it being understood and agreed
that any amendment to the financial terms or any other material terms of such Superior Proposal shall require the delivery of a new Notice of Recommendation Change and a new three-day period), (D) during the three-day period following
Parent’s receipt of a Notice of Recommendation Change, the Company shall have given Parent the opportunity to meet with the Company and its Representatives, and at Parent’s request, shall have negotiated in good faith regarding the terms
of possible revisions to the terms of this Agreement, and (E) Parent shall not, within three (3) business days of Parent’s receipt of a Notice of Recommendation Change have made an offer that the Board of Directors of the Company
determines in good faith, After Consultation to be at least as favorable to the Company’s stockholders as such Superior Proposal; or 
 (ii) other than in connection with a Superior Proposal (it being understood and hereby agreed that the Company Board of Directors shall not effect a Company Change of Recommendation in connection with a Superior
Proposal other than pursuant to the immediately preceding clause (i) of this Section 5.3(c)), (A) the Company Board of Directors determines in good faith (After Consultation) that the failure to effect a Company Change in
Recommendation would be a breach of its fiduciary duties to the Company’s stockholders under applicable law and (B) at least three (3) days prior to such Company Change in Recommendation, the Company shall have provided to Parent a
Notice of Recommendation Change of its intention to make such Company Change in Recommendation (which notice shall not be deemed to be, in and of itself a Company Change in Recommendation), specifying in sufficient 

  

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detail reasonably satisfactory to Parent the circumstances for such proposed Company Change in Recommendation (it being understood and agreed that any change
to such circumstances or any additional circumstances shall require the delivery of a new Notice of Recommendation Change and a new three-day period), and (C) during the three-day period following Parent’s receipt of a Notice of
Recommendation Change, the Company shall have given Parent the opportunity to meet with the Company and its Representatives, and at Parent’s request, shall have negotiated in good faith regarding the terms of possible revisions to the terms of
this Agreement. 
 (d) Notwithstanding anything to the contrary in this Section 5.3, the Company shall not be entitled to enter into any
agreement (other than a confidentiality agreement as contemplated by Section 5.2(b)), including a letter of intent, with respect to a Superior Proposal unless this Agreement has been or concurrently is validly terminated by its terms pursuant
to Section 8.1 and Parent has received, by wire transfer of immediately available funds, any amounts due to Parent pursuant to Section 8.2(b). 
 Section 5.4 Bankruptcy Claims. From the date of this Agreement and prior to the Effective Time, the Company will use its reasonable best efforts to resolve all Bankruptcy Claims /Interests outstanding as
of the date hereof (the “Unresolved Bankruptcy Claims/Interests”), and promptly after the resolution of any such Unresolved Bankruptcy Claims/Interests, the Company shall make any distributions of Shares or other consideration required to
be made on account of such Unresolved Bankruptcy Claims/Interests in accordance with the terms of the Reorganization Plan and the Bankruptcy Confirmation Order, and shall take such other actions as are set forth on Schedule 5.4. 
 ARTICLE VI 
 ADDITIONAL AGREEMENTS 

Section 6.1 Notification of Certain Matters. The Company shall give prompt notice to Parent and Purchaser and Parent and Purchaser shall
give prompt notice to the Company, of (a) the occurrence or non-occurrence of any event whose occurrence or non-occurrence, as the case may be, would be likely to cause either (i) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect at any time from the date hereof to the Effective Time or (ii) any condition or requirement set forth in Annex I to be unsatisfied at any time from the date hereof to the Appointment Time
(except to the extent it refers to a specific date) and (b) any material failure of the Company, Purchaser or Parent, as the case may be, or any officer, director, employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.1 shall not limit or otherwise affect the remedies available hereunder to the party
receiving such notice or the representations or warranties of the parties, or the conditions to the obligations of the parties hereto. 
  

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 Section 6.2 Access; Confidentiality. (a) From the date of this Agreement until the
Effective Time, the Company shall, and shall cause the Company Subsidiaries to, (i) upon reasonable prior notice, give Parent and Purchaser, their officers and a reasonable number of their employees and their authorized representatives,
reasonable access during normal business hours to the Company Agreements, contracts, books, records, analysis, projections, plans, systems, personnel, commitments, offices and other facilities and properties of the Company and the Company
Subsidiaries and their accountants and accountants’ work papers and (ii) furnish Parent and Purchaser on a timely basis with such financial and operating data and other information with respect to the business, properties and Company
Agreements of the Company and the Company Subsidiaries as Parent and Purchaser may from time to time reasonably request and use its reasonable best efforts to make available at all reasonable times during normal business hours to the officers,
employees, accountants, counsel, financing sources and other representatives of Parent and Purchaser the appropriate individuals (including management personnel, attorneys, accountants and other professionals) for discussion of the Company’s
business, properties, prospects and personnel as Parent or Purchaser may reasonably request. 
 (b) The terms of the Confidentiality
Agreement shall apply to any information provided to Parent or Purchaser pursuant to Section 6.2(a). 
 (c) No investigation heretofore
conducted or conducted pursuant to this Section 6.2 shall affect any representation or warranty made by the parties hereunder. 
 (d)
Notwithstanding anything to the contrary set forth herein, the Company shall not be required to provide access to, or to disclose information, where such access or disclosure would jeopardize the attorney-client privilege of the Company or its
Subsidiaries or contravene any law or contract entered into prior to the date of this Agreement. 
 Section 6.3 Consents and
Approvals. 
 (a) Each of the Company, Parent and Purchaser shall use its reasonable best efforts to (i) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under any applicable law or otherwise to consummate and make effective the Transactions as promptly as practicable, (ii) obtain from any Governmental
Entities any consents, licenses, permits, waivers, clearances approvals, authorizations or orders required to be obtained or made by Parent, Purchaser or the Company or any of their respective Subsidiaries, or avoid any action or proceeding by any
Governmental Entity (including, without limitation, those in connection with the HSR Act and any Required Governmental Approvals), in connection with the authorization, execution and delivery of this Agreement and the consummation of the
Transactions, (iii) make or cause to be made the applications or filings required to be made by Parent, Purchaser or the Company or any of their respective Subsidiaries under or with respect to the HSR Act, any Required Governmental Approvals
or any other applicable laws in connection with the authorization, execution and delivery of this Agreement and the consummation of the Transactions, and pay any fees due in 

  

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connection with such applications or filings, as promptly as is reasonably practicable, and in any event within ten (10) business days after the date
hereof, (iv) comply at the earliest practicable date with any request under or with respect to the HSR Act, any Required Governmental Approvals and any such other applicable laws for additional information, documents or other materials received
by Parent or the Company or any of their respective Subsidiaries from the Federal Trade Commission or the Department of Justice or any other Governmental Entity in connection with such applications or filings or the Transactions and
(v) coordinate and cooperate with, and give due consideration to all reasonable additions, deletions or changes suggested by the other party in connection with, making (A) any filing under or with respect to the HSR Act, any other Required
Governmental Approvals or any such other applicable laws and (B) any filings, conferences or other submissions related to resolving any investigation or other inquiry by any such Governmental Entity. Each of the Company and Parent shall, and
shall cause their respective affiliates to, furnish to the other party all information necessary for any such application or other filing to be made in connection with the Transactions. Each of the Company and Parent shall promptly inform the other
of any material communication with, and any proposed understanding, undertaking or agreement with, any Governmental Entity regarding any such application or filing. If a party hereto intends to independently participate in any meeting with any
Governmental Entity in respect of any such filings, investigation or other inquiry, then such party shall give the other party reasonable prior notice of such meeting and invite Representatives of the other party to participate in the meeting with
the Governmental Entity unless prohibited by such Governmental Entity. The parties shall coordinate and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made
or submitted by or on behalf of any party in connection with all meetings, actions and proceedings under or relating to any such application or filing. 
 (b) The Company and Parent shall give (or shall cause their respective Subsidiaries to give) any notices to third parties, and use, and cause their respective Subsidiaries to use, reasonable best efforts to obtain any
third party consents (i) necessary, proper or advisable to consummate the Transactions, (ii) required to be disclosed in the Company Disclosure Schedule or (iii) required to prevent a Company Material Adverse Effect from occurring
prior to or after the consummation of the Offer; provided, however, that the Company and Parent shall coordinate and cooperate in determining whether any actions, notices, consents, approvals or waivers are required to be given or
obtained, or should be given or obtained, from parties to any Company Scheduled Agreements in connection with consummation of the Transactions and seeking any such actions, notices, consents, approvals or waivers. In the event that either party
shall fail to obtain any third party consent described in the first sentence of this Section 6.3(b), such party shall use its reasonable best efforts, and shall take any such actions reasonably requested by the other party hereto, to mitigate
any adverse effect upon the Company and Parent, their respective Subsidiaries, and their respective businesses resulting, or which could reasonably be expected to result after the consummation of the Offer, from the failure to obtain such consent.
Notwithstanding the foregoing, neither Parent nor Purchaser shall be required to, and neither the Company nor any Company Subsidiary will without the written consent of Parent, make any material payment to any third party or agree to any limitation
on the conduct of its business, in order to obtain any such consent. 
  

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 (c) From the date of this Agreement until the consummation of the Offer, each of Purchaser and the
Company shall promptly notify the other in writing of any pending or, to the knowledge of Purchaser or the Company (as the case may be), threatened action, suit, arbitration or other proceeding or investigation by any Governmental Entity or any
other Person (i) challenging or seeking material damages in connection with the Transactions or (ii) seeking to restrain or prohibit the consummation of the Transactions or otherwise limit in any material respect the right of Purchaser or
any affiliate of Purchaser to own or operate all or any portion of the businesses or assets of the Company or any Company Subsidiary. The Company shall give Parent the opportunity to consult with the Company regarding the defense or settlement of
any such stockholder litigation and shall consider Parent’s views with respect to such stockholder litigation and shall not settle any such stockholder litigation without the prior written consent of Parent. Notwithstanding the foregoing, the
Company shall not be required to provide any notice or information to Parent the provision of which the Company in good faith determines may adversely affect the Company’s or any other person’s attorney client or other privilege with
respect to such information. 
 (d) If any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by
a Governmental Entity challenging the Transactions as violative of any applicable law, each of the Company and Purchaser shall, and shall cause their respective affiliates to, cooperate and use their reasonable best efforts to contest and resist,
except insofar as the Company and Purchaser may otherwise agree, any such action or proceeding, including any action or proceeding that seeks a temporary restraining order or preliminary injunction that would prohibit, prevent or restrict
consummation of the Transactions. 
 (e) Notwithstanding anything set forth in this Agreement, nothing contained in this Agreement shall give
Parent or Purchaser, directly or indirectly, the right to control or direct the operations of the Company prior to the consummation of the Offer. Prior to the consummation of the Offer, the Company shall exercise, consistent with the terms and
conditions of this Agreement, control and supervision over its business operations. 
 (f) Notwithstanding anything set forth in
Section 6.3 and any other provision hereof, in connection with the receipt of any necessary governmental approvals or clearances (including under the HSR Act), neither Parent nor the Company shall be required to sell, hold separate or otherwise
dispose of or conduct their business in a specified manner, or agree to sell, hold separate or otherwise dispose of or conduct their business in a specified manner, or permit the sale, holding separate or other disposition of, any assets of Parent,
the Company or their respective Subsidiaries or the conduct of their business in a specified manner. 
 (g) Parent shall vote all of the
shares of capital stock of Purchaser beneficially owned by it, or sign a written consent in lieu of a meeting of the stockholders of Purchaser, in favor of the adoption of this Agreement in accordance with applicable law. 
  

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 Section 6.4 Publicity. So long as this Agreement is in effect, neither the Company nor
Parent, nor any of their respective controlled affiliates, shall issue or cause the publication of any press release or other announcement with respect to the Offer, the Merger or this Agreement without the prior consent of the other party, unless
such party determines, after consultation with outside counsel, that it is required by applicable law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of any
press release or other announcement with respect to the Offer, the Merger or this Agreement, in which event such party shall endeavor, on a basis reasonable under the circumstances, to provide a meaningful opportunity to the other parties to review
and comment upon such press release or other announcement and shall give due consideration to all reasonable additions, deletions or changes suggested thereto; provided, however, that the party seeking to issue or cause the publication
of any press release or other announcement with respect to the Offer, the Merger or this Agreement shall not be required to provide any such review or comment to the other party in connection with any disclosure contemplated by Section 5.2 or
Section 5.3. 
 Section 6.5 Directors’ and Officers’ Insurance and Indemnification. 
 (a) For a period of six (6) years after the Effective Time, Parent and the Surviving Corporation shall honor and fulfill in all respects the
obligations of the Company and its Subsidiaries to the fullest extent permissible under applicable provisions of the DGCL (i) under the Company Certificate and Company Bylaws (and the equivalent organizational documents of all such Company
Subsidiaries) in effect on the date hereof (true and correct copies of which previously have been made available to Parent) and (ii) under any indemnification or other similar agreements (the “Indemnification Agreements”) in
effect on the date hereof between the Company or any of its Subsidiaries and the current and former directors, officers and other employees of the Company or any Company Subsidiary (the “Covered Persons”) arising out of or relating
to actions or omissions in their capacity as directors, officers or employees occurring at or prior to the Effective Time, including in connection with the approval of this Agreement and the Transactions; provided, however, that in the
event any claim or claims are asserted or made within such six-year period, all rights to indemnification in respect of any such claim or claims shall continue until disposition of any and all such claims. 
 (b) The Surviving Corporation shall advance expenses (including reasonable legal fees and expenses) incurred in the defense of any claim, action, suit,
proceeding or investigation with respect to any matters subject to indemnification pursuant to Section 6.5(a) pursuant to the procedures set forth, and to the extent provided in the Company Certificate, the Company Bylaws or the Indemnification
Agreements as in effect on the date hereof; provided, however, that any Person to whom expenses are advanced undertakes, to the extent required by the Company Certificate, the Company Bylaws or the DGCL, to repay such advanced expenses if it is
ultimately determined that such Person is not entitled to indemnification. 
  

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 (c) For a period of six (6) years after the Effective Time, the certificate of incorporation and
bylaws of the Surviving Corporation shall contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of Covered Persons for periods prior to and including the Effective Time than are currently set
forth in the Company Certificate and Company Bylaws. The Indemnification Agreements with Covered Persons in existence on the date of this Agreement that survive the Merger shall continue in full force and effect in accordance with their terms.

 (d) The Surviving Corporation shall maintain and extend all existing officers’ and directors’ liability insurance
(“D&O Insurance”) for a period of not less than six (6) years after the Effective Time with respect to claims arising in whole or in part from facts or events that actually or allegedly occurred on or before the Effective
Date, including in connection with the approval of this Agreement and the Transactions; provided, however, that Parent may substitute therefor policies of substantially equivalent coverage and amounts containing terms no less favorable
to the Covered Persons than the existing D&O Insurance; provided, further, that if the existing D&O Insurance expires or is terminated or cancelled during such period through no fault of Parent or the Surviving Corporation, the
Surviving Corporation shall obtain substantially similar D&O Insurance; provided further, however, that in no event shall Parent be required to pay aggregate premiums for insurance under this Section 6.5(d) in excess of
200% of the aggregate premiums paid by the Company in 2006 for such purpose (the “Base Premium”), the true and correct amount of which is set forth in Section 6.5(d) of the Company Disclosure Schedule; and provided,
further, that if Parent or the Surviving Corporation is unable to obtain the amount of insurance required by this Section 6.5(d) for such aggregate premium, Parent or the Surviving Corporation shall obtain as much insurance as can be
obtained for aggregate premiums not in excess of 200% of the Base Premium. In lieu of the foregoing, the Company may obtain prepaid policies prior to the Effective Time, which policies may provide the Covered Persons with D&O Insurance coverage
of equivalent amount and on no more favorable terms than that provided by the Company’s current D&O Insurance for an aggregate period of at least six (6) years with respect to claims arising from facts or events that occurred on or
before the Effective Time, including in connection with the approval of this Agreement and the Transactions contemplated hereby. If such prepaid policies have been obtained prior to the Effective Time, Parent and the Surviving Corporation shall be
relieved of all further obligations under this Section 6.5(d); provided, that Parent and the Surviving Corporation shall maintain such policies in full force and effect, and continue to honor its obligations thereunder. 
 (e) In the event the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then and in each such case, proper provision shall be made so that such
continuing or surviving corporation or entity or transferee of such assets, as the case may be, shall assume all of the applicable obligations set forth in this Section 6.5. 
  

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 (f) The Covered Persons (and their successors and heirs) are intended third party beneficiaries of this
Section 6.5, and this Section 6.5 shall not be amended in a manner that is adverse to the Covered Persons (including their successors and heirs) or terminated without the consent of the Covered Persons (including their successors and
heirs) affected thereby. 
 Section 6.6 State Takeover Laws. If any “control share acquisition”, “fair
price” or other anti-takeover laws or regulations enacted under state or federal laws becomes or is deemed to become applicable to the Company, the Offer, the acquisition of Shares pursuant to the Offer, the Merger, the Support Agreements or
any other Transaction, then the Company Board of Directors shall take all action necessary to render such statute inapplicable to the foregoing. 
 Section 6.7 Certain Tax Matters. During the period from the date hereof to the Effective Time, the Company shall and shall cause each of the Company Subsidiaries to: (i) timely file all material Tax Returns required to be
filed by the Company or such Company Subsidiary, as the case may be, and prepare such Tax Returns in all material respects in a manner consistent with past practice, (ii) timely pay all material Taxes due and payable by the Company and such
Company Subsidiary, respectively, except for such Taxes contested in good faith and for which an adequate reserve has been established in accordance with GAAP on the appropriate financial statements and (iii) promptly notify Parent of any
federal or state income or franchise, or other material Tax, suit claim, action, investigation, proceeding or audit pending against or with respect to the Company or any Company Subsidiary in respect of any Tax matters (or any significant
developments with respect to ongoing Tax matters), including without limitation material Tax liabilities and material refund claims. 
 Section 6.8 Rights Agreement; Consequences if Rights Triggered. The Company Board of Directors shall take all action requested in writing by Parent or Purchaser in order to render the Company Rights inapplicable to the Offer,
the Merger, the Support Agreements and the other Transactions. Except as approved in writing by Parent, the Company Board shall not (i) amend the Company Rights Agreement, (ii) redeem the Company Rights or (iii) take any action with
respect to, or make any determination under, the Company Rights Agreement, in each case in a manner adverse to Parent or Purchaser. If any Distribution Date, Stock Acquisition Date or Flip-In Event occurs under the Company Rights Agreement at any
time during the period from the date of this Agreement to the Effective Time, the Company and Parent shall make such adjustment to the Offer Price as the Company and Parent shall mutually agree so as to preserve the economic benefits that the
Company and Parent each reasonably expected on the date of this Agreement to receive as a result of the consummation of the Offer, the Merger and the other Transactions. 
 Section 6.9 Section 16. The Company Board of Directors shall, to the extent necessary, take appropriate action, prior to or as of the Effective Time, 
  

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to approve, for purposes of Section 16(b) of the Exchange Act, the deemed disposition and cancellation of the vested Company Options in the Merger.
Provided that Company shall first provide to Parent the names of its stockholders and the number of shares of Common Stock or Company Options which may be subject to Section 16(b) of the Exchange Act and any other information reasonably
requested by Parent and relating to the same, the Board of Directors of Parent, or an authorized committee thereof, shall, prior to the Effective Time, take appropriate action to approve, for purposes of Section 16(b) of the Exchange Act, the
issuance of the Merger Consideration to holders of Company Options in accordance with Section 2.5. 
 Section 6.10 Obligations
of Purchaser. Parent shall take all action necessary to cause Purchaser and the Surviving Corporation to perform their respective obligations under this Agreement and to consummate the transactions contemplated by this Agreement, including the
Offer and the Merger, upon the terms and subject to the conditions set forth in this Agreement. 
 Section 6.11 Employee Benefits
Matters. Except as provided in the last sentence of this Section 6.11, Parent and the Surviving Corporation shall have no obligation to continue after the Effective Time any plan or arrangement in effect immediately before the Effective
Time (except as otherwise required by applicable law, including without limitation ERISA and the Code) for current or former employees, officers or directors of the Company or any Subsidiary, and shall have the discretion to continue or terminate
any of such programs, or to merge any of them into plans or arrangements in effect for other employees of Parent or the Surviving Corporation. To the extent legally permitted, employees of the Company or any Subsidiary shall receive credit for
purposes of eligibility to participate and vesting under any employee pension benefit plan, program or arrangement established or maintained by the Surviving Corporation or any of its Subsidiaries and for the purpose of eligibility and determining
the amount of any benefit with respect to any employee welfare benefit plan, program or arrangement established or maintained by the Surviving Corporation for service accrued or deemed accrued prior to the Effective Time with the Company or any
Subsidiary; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit. Parent shall also cause the Surviving Corporation to perform the Company’s obligations
under the change in control and other agreements set forth in the Company Disclosure Schedule between the Company and certain of its officers and employees unless any such officer or employee agrees otherwise. 
 Section 6.12 Termination of 401(k) Plan. Unless Parent directs the Company otherwise in writing no later than five (5) business days
prior to the Effective Time, the Company Board of Directors shall adopt resolutions terminating, effective at least two (2) days prior to the Effective Time, any Benefit Plan which is intended to meet the requirements of section 401(k) of the
Code (each such Benefit Plan, a “401(k) Plan”). At the Closing, the Company shall provide Parent with (i) executed resolutions of the Company Board of Directors authorizing such termination and (ii) an executed copy of any
necessary amendment to each such 401(k) Plan in a form reasonably satisfactory to Parent that is intended to assure compliance with all applicable requirements of the Code and the regulations thereunder. 
  

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 Section 6.13 Rule 14d-10(d). Prior to the Expiration Date, the Company (acting through its
Compensation Committee) will take all such steps as may be required to cause each agreement, arrangement or understanding entered into by the Company or its Subsidiaries on or after the date hereof with any of its officers, directors or employees
pursuant to which consideration is paid to such officer, director or employee to be approved as an Employment Compensation Arrangement and to satisfy the requirements of the non-exclusive safe-harbor set forth in Rule 14d-10(d) of the Exchange Act.

 ARTICLE VII 
 CONDITIONS

 Section 7.1 Conditions to Each Party’s Obligations to Effect the Merger. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent, Purchaser and the Company, as the case may be, to the
extent permitted by applicable law: 
 (a) Stockholder Approval. This Agreement shall have been adopted by the holders of a majority of
the then outstanding Shares, if required by applicable law. 
 (b) Statutes; Court Orders. No statute, rule or regulation shall have
been enacted or promulgated by any Governmental Entity which prohibits the consummation of the Merger, and there shall be no order or injunction of a court of competent jurisdiction in effect preventing the consummation of the Merger. 
 (c) Purchase of Shares in Offer. The Purchaser shall have accepted for payment and paid for, or caused to be accepted for payment and paid for,
all Shares validly tendered and not withdrawn pursuant to the Offer (including pursuant to any “subsequent offer period” provided by Purchaser pursuant to this Agreement). 
 ARTICLE VIII 
 TERMINATION 
 Section 8.1 Termination. 
 (a)
This Agreement may be terminated and the Transactions may be abandoned at any time before the Appointment Time: 
  

 59 

 (i) by either Parent (by action duly authorized by the Parent Board of Directors, or an
authorized committee thereof) or the Company (by action of the Company Board of Directors): 
 (1) if there has been a breach
by the other party of any representation, warranty, covenant or agreement set forth in this Agreement, which breach (A) in the case of the Company shall result in any condition or requirement set forth in Annex I not being satisfied, and
(B) in the case of a breach by Parent or Purchaser, shall have had or is reasonably like to have, individually or in the aggregate, a material adverse effect upon Parent or Purchaser’s ability to consummate the Offer or Merger (and in each
case such breach is not reasonably capable of being cured or such condition is not reasonably capable of being satisfied within thirty (30) days after the receipt of notice thereof by the defaulting party from the non-defaulting party, it being
understood and agreed that this Agreement may not be terminated pursuant to this Section 8.1(a)(i)(1) during such 30-day period or following such 30-day period if such breach is cured during such 30-day period);  
 (2) if Purchaser shall not have accepted for payment and paid for all Shares tendered pursuant to the Offer in accordance with the terms
thereof on or before the Initial Outside Date or the Extended Outside Date, as applicable; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(a)(i)(2) shall not be available to any party
whose breach of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, Purchaser’s failure to accept for payment and pay for all Shares tendered pursuant to the Offer prior to the
Initial Outside Date or Extended Outside Date; or 
 (ii) by Parent, if (1) the Company Board of Directors or any
committee thereof shall have effected a Company Change in Recommendation (whether or not in compliance with Section 5.3), (2) the Company shall have violated or breached (or be deemed pursuant to the terms thereof, to have violated or
breached) in any material respect the provisions of Sections 5.2 and as a result thereof, the Company shall have received an Acquisition Proposal, (3) the Company Board of Directors or any committee thereof shall have approved or recommended
(or proposed publicly to approve or recommend) any Acquisition Proposal (whether or not a Superior Proposal), (4) if, after a tender offer or exchange offer that, if successful, would result in any Person or “group” (as defined in our
under Section 13(d) of the Exchange Act ) becoming a beneficial owner of twenty percent (20%) or more of the outstanding Shares is commenced (other than by Parent or Purchaser), the Company Board of Directors shall have failed to recommend
that the Company’s stockholders not tender their Shares in such tender or exchange offer, (5) the Company or any Company Subsidiary shall have entered into any agreement (other than a confidentiality agreement as contemplated by
Section 5.2(b)), including any letter of intent, with respect to any 

  

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Acquisition Proposal, (6) the Company shall have failed to include the Company Recommendation in the Schedule 14D-9 or to permit Parent and Purchaser to
include the Company Recommendation in the Offer Documents, (7) the Company Board of Directors shall have failed to reconfirm the Company Recommendations or its approval of this Agreement, the Offer, the Merger or any other Transaction promptly,
and in any event within five (5) business days following Parent’s request to do so or (8) the Company Board of Directors or any committee thereof shall have resolved to take any action described in the preceding clauses
(1) through (7); or 
 (iii) by the Company, immediately prior to entering into a definitive agreement with respect to a
Superior Proposal, provided that (1) the Company received such Superior Proposal other than as a result of a breach of or violation of the terms of Section 5.2 hereof, (2) the Company has not breached or violated the terms of
Section 5.2 or 5.3 hereof in connection with such Superior Proposal (or any Acquisition Proposal that was a precursor thereto), (3) subject to the terms of this Agreement, the Company Board of Directors has effected a Company Change in
Recommendation in response to such Superior Proposal pursuant to and in compliance with Section 5.3(c)(i) and authorized the Company to enter into such definitive agreement for such Superior Proposal (which authorization may be subject to
termination of this Agreement), (4) immediately prior to the termination of this Agreement, the Company pays to Parent the Termination Fee payable pursuant to Section 8.2(b) hereof, and (5) immediately following the termination of
this Agreement, the Company enters into such definitive agreement to effect such Superior Proposal. 
 (b) This Agreement may be terminated
and the Transactions may be abandoned at any time before the Effective Time, whether before or after stockholder approval thereof: 
 (i) if a court of competent jurisdiction or other Governmental Entity shall have issued a final, non-appealable order, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the Transactions; or

 (ii) by mutual written consent of Parent and the Company duly authorized by the Company Board of Directors and the Parent
Board of Directors, or authorized committee thereof. 
 Section 8.2 Effect of Termination. 
 (a) In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof shall forthwith be given to the other party
or parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void and there shall be no liability on the part of Parent, the Purchaser or the Company, except (i) as
set forth in Section 6.4, Section 8.2 and Sections 9.3 through 9.14 and (ii) nothing herein shall relieve any party from liability for any willful or intentional material breach of this Agreement. 
  

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 (b) Termination Fee. 
 (i) If Parent terminates this Agreement pursuant to Section 8.1(a)(ii), then the Company shall pay to Parent promptly, but in no
event later than two (2) business days after the date of such termination, a termination fee of US $61.0 million in cash (the “Termination Fee”). 
 (ii) If the Company terminates this Agreement pursuant to Section 8.1(a)(iii), prior to and as a condition to the effectiveness of
such termination, the Company shall pay to Parent the Termination Fee. 
 (iii) If (A) Parent or the Company shall have
terminated this Agreement pursuant to Section 8.1(a)(i)(2) as a result of the failure to satisfy the Minimum Condition, and (B) following the execution and delivery of this Agreement and prior to the termination of this Agreement an
Acquisition Proposal (whether or not a continuation or renewal of, or otherwise relating to, an Acquisition Proposal that was publicly announced or became publicly known prior to the execution and delivery of this Agreement) shall have been publicly
announced or shall have become publicly known and not publicly withdrawn, and (C) concurrently with, or within twelve (12) months following such termination, a Third Party Acquisition Event occurs, then, the Company shall pay to Parent
promptly, but in no event later than the date of consummation of such Third Party Acquisition Event, the Termination Fee. 
 (iv) If (A) Parent shall have terminated this Agreement pursuant to Section 8.1(a)(i)(1) as a result of a breach of a covenant or agreement of the Company under this Agreement or an intentional breach of a representation or
warranty of the Company under this Agreement, and (B) following the execution and delivery of this Agreement and prior to the breach forming the basis for such termination, an Acquisition Proposal (whether or not a continuation or renewal of,
or otherwise relating to, an Acquisition Proposal that was known to the Company prior to the execution and delivery of this Agreement) is known to the Company, and (C) concurrently with, or within twelve (12) months following such
termination, a Third Party Acquisition Event occurs, then, the Company shall pay to Parent promptly, but in no event later than the date of consummation of such Third Party Acquisition Event, the Termination Fee. 
 (c) The Termination Fee shall be paid by wire transfer of immediately available funds to an account designated in writing by Parent. For the avoidance of
doubt, in no event shall the Company be obligated to pay the Termination Fee on more than one occasion. Except to the extent required by applicable law, the Company shall not withhold any withholding taxes on any payment under this Section 8.2.

  

 62 

 (d) The Company acknowledges that the agreements contained in this Section 8.2 are an integral part
of the Transactions contemplated by this Agreement and that without such provisions, Parent would not have entered into this Agreement. If the Company fails to pay the Termination Fee and Parent or Purchaser commences a suit which results in a
judgment against the Company for the Termination Fee, the Company shall pay Parent and Purchaser their costs and expenses (including reasonable attorney’s fees and disbursements) in connection with such suit, together with interest on the
amounts set forth in Section 8.2(b) hereof at the prime rate of Citibank N.A. in effect on the date such payment was required to be made. Likewise, if the Company fails to pay the Termination Fee and Parent or Purchaser commences a suit which
results in a judgment against Parent and Purchaser, Parent shall pay the Company its costs and expenses (including reasonable attorney’s fees and disbursements) in connection with such suit. 
 ARTICLE IX 
 MISCELLANEOUS 
 Section 9.1 Amendment and Modification; Waiver. 
 (a) Subject to applicable law and except as otherwise provided in this Agreement, this Agreement may be amended, modified and supplemented in any and all respects, whether before or after any vote of stockholders of
the Company contemplated hereby, by written agreement of the parties hereto (by action taken by their respective Boards of Directors); provided, however, that after the adoption of this Agreement by the stockholders of the Company, no
amendment shall be made which by law requires further approval by such stockholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

 (b) At any time and from time to time prior to the Effective Time, any party or parties hereto may, to the extent legally allowed and
except as otherwise set forth herein, (i) extend the time for the performance of any of the obligations or other acts of the other party or parties hereto, as applicable, (ii) waive any inaccuracies in the representations and warranties
made to such party or parties hereto contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party or parties hereto contained herein. Any
agreement on the part of a party or parties hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party or parties, as applicable. Any delay in exercising any right under this
Agreement shall not constitute a waiver of such right. 
 Section 9.2 Non-survival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Effective Time. This Section 9.2 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time. 
  

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 Section 9.3 Expenses. Except as expressly set forth in Section 8.2(b), all fees, costs
and expenses incurred in connection with this Agreement, the Offer and the Merger shall be paid by the party incurring such fees, costs and expenses; provided, however, that Parent and the Company shall share equally the (i) filing fees paid by
Parent or the Company in connection with filing, permits, authorizations, consents and approvals as may be required under the HSR Act and the Required Governmental Approvals, and (ii) the out of pocket fees and expenses of Parent and the
Company incurred in connection with the preparation, printing and mailing of the Offer Documents and Schedule 14D-9. 
 Section 9.4
Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), telecopied (notice deemed given upon confirmation of receipt) or sent by a
nationally recognized overnight courier service, such as Federal Express (notice deemed given upon receipt of proof of delivery), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

  

	 	(a)	if to Parent or Purchaser, to: 

  

	 	  	TELEFONAKTIEBOLAGET LM ERICSSON (publ) 

	 	  	SE-164 83 

	 	  	Stockholm, Sweden 

	 	  	Telephone:      +46 8 719 00 00 

	 	  	Facsimile:         +46 8 719 9527 

	 	  	Attention: Carl Olof Blomqvist 

  

	 	  	with a copy to: 

  

	 	  	Latham & Watkins LLP 

	 	  	505 Montgomery Street, Suite 2000 

	 	  	San Francisco, California 94111 

	 	  	Attention: John M. Newell, Esq. 

	 	  	Facsimile: 1 (415) 395-8095 

  

	 	  	and 

  

	 	  	Latham & Watkins LLP 

	 	  	140 Scott Drive 

	 	  	Menlo Park, California 94025 

	 	  	Attention: Peter F. Kerman, Esq. 

	 	  	Facsimile: 1 (650) 463-2600 

  

	 	  	and 

  

	 	(b)	if to the Company, to: 

  

	 	  	Redback Networks Inc. 

  

 64 

	 	  	100 Headquarters Way 

	 	  	San Jose, California 95314 

	 	    	Telephone: (408) 750-5000 

	 	  	Facsimile: (408) 750-5599 

	 	  	Attention: General Counsel 

  

	 	  	with copies to: 

  

	 	  	Wilson Sonsini Goodrich & Rosati 

	 	  	Professional Corporation 

	 	  	650 Page Mill Road 

	 	  	Palo Alto, California 94304 

	 	  	Attention: John Sheridan, Esq. 

	 	  	Facsimile: (650) 493-6811 

  

	 	  	and 

  

	 	  	Wilson Sonsini Goodrich & Rosati 

	 	  	Professional Corporation 

	 	  	One Market Street 

	 	  	Spear Tower, Suite 3300 

	 	  	San Francisco, California 94105 

	 	  	Attention: Michael S. Ringler, Esq. 

	 	  	Facsimile: (415) 947-2099 

 Section 9.5
Certain Definitions. For the purposes of this Agreement, the term: 
 “Acquisition Proposal“ means any inquiry, offer,
proposal or indication of interest, whether or not in writing, as the case may be, by any Person that relates to an Acquisition Transaction. 
 “Acquisition Transaction“ means any transaction or series of transactions (other than the transactions contemplated by this Agreement) involving (i) any merger, consolidation, recapitalization, liquidation or other
direct or indirect business combination involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction would hold less than eighty-five percent (85%) of the equity or voting securities of the
surviving or resulting entity of such transaction, (ii) the issuance by the Company or any Company Subsidiaries, directly or indirectly, or the acquisition by any Person or “group” (as defined under Section 13(d) of the Exchange
Act), directly or indirectly, of shares of any class of capital stock or other equity securities of (A) the Company representing more than fifteen percent (15%) or more (by ownership or voting power) of the outstanding shares of any class
of capital stock of the Company or (B) any Company Subsidiary or Subsidiaries whose assets constitute fifteen percent (15%) or more of the assets of the Company and its Subsidiaries, taken as a whole, (iii) any tender or exchange
offer that if consummated would result in any Person or “group” (as defined in our under Section 13(d) of the Exchange Act) beneficially owning shares of any class of capital stock or other equity securities of the Company
representing more than fifteen percent (15%) or more (by ownership or voting power) of 

  

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the outstanding shares of any class capital stock of the Company, (iv) any the acquisition, license, lease, purchase or other disposition of assets that
constitute more than twenty percent (20%) of the assets of the Company and its Subsidiaries, taken as a whole, other than the sale of inventory in the ordinary course of business or consistent with past practice, or (v) any combination of
the foregoing. 
 “business days” means any day, other than Saturday, Sunday or a United States federal holiday, and shall
consist of the time period from 12:01 a.m. through 12:00 midnight New York City time. 
 “Company Compensation Arrangement”
means (i) any employment agreement, severance agreement or change of control agreement between the Company or a Company Subsidiary and a Key Employee and any amendments thereto entered into during the 12 months immediately prior to the date
hereof, (ii) any Company Stock Rights or Restricted Stock awarded to, or any acceleration of vesting of any Common Stock Rights or Restricted Stock held by, a Key Employee during the 12 months immediately prior to the date hereof, and
(iii) any Company Stock Rights or Restricted Stock awarded to, or any acceleration of vesting of any Common Stock Rights or Restricted Stock held by, a member of the Company Board of Directors during the 12 months immediately prior to the date
hereof. 
 “Company IP” means Owned Company IP and Licensed Company IP. 
 “Company Material Adverse Effect” means any change, effect, development, circumstance, condition or worsening thereof (an
“Effect”) that, individually or when taken together will all other Effects that exist at the date of determination, has or is reasonably likely to have a material adverse effect on the properties, assets, liabilities, condition
(financial or otherwise), business or results of operations of the Company and the Company Subsidiaries, taken as a whole; provided, however, that no Effects resulting from, relating to or arising out of the following shall be deemed
to be or constitute a Company Material Adverse Effect, and no Effects resulting from, relating to or arising out of the following shall be taken into account when determining whether a Company Material Adverse Effect has occurred or is reasonably
likely to exist (i) conditions (or changes therein) in any industry or industries in which the Company operates to the extent that such conditions do not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a
whole, relative to other companies of comparable size to the Company operating in such industry or industries, (ii) general economic conditions (or changes therein) in the United States, in any country in which the Company or any of
Subsidiaries conducts business or in the global economy as a whole, (iii) any generally applicable change in law, rule or regulation or GAAP or interpretation of any of the foregoing to the extent that such conditions do not have a materially
disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other companies of comparable size to the Company operating in such industry or industries, (iv) conditions arising out of acts of terrorism, war,
weather conditions or other force majeure events to the extent that such conditions do not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other companies of comparable size to the Company
operating in such industry or industries, (v) Effects primarily related to the 

  

 66 

 
announcement of the execution of this Agreement or the pendency of the Offer or the Merger, including the loss or departure of officers or other employees of
the Company or any of its subsidiaries, or the termination, reduction (or potential reduction) or any other negative development (or potential negative development) in the Company’s relationships with any of its customers, suppliers,
distributors or other business partners, (vi) compliance with the terms of, or the taking of any action required by, this Agreement, or the failure to take any action prohibited by this Agreement, (vii) any actions taken, or failure to
take action, to which Parent or Purchaser has expressly consented or requested, (viii) changes in the Company’s stock price or the trading volume of the Company’s stock, in and of itself (it being understood that the facts or
occurrences giving rise or contributing to such changes that are not otherwise excluded from the definition of a “Company Material Adverse Effect” may be taken into account), (ix) any failure by the Company to meet any published
analyst estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet its internal budgets, plans or forecasts of its
revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a
“Company Material Adverse Effect” may be taken into account) and (x) any legal proceedings made or brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company) arising out of or
related to this Agreement or any of the transactions contemplated hereby. 
 “Company Products” means products distributed
and services performed by Company or its Subsidiaries. 
 “Company Property” means any real property and improvements, now
or heretofore, owned, leased or operated by the Company or any of the Company Subsidiaries or their respective predecessors. 
 “Company Stock Plans” mean collectively the Company’s 1999 Stock Incentive Plan and 2004 Employment Inducement Award Plan and each other stock option, stock appreciation rights or other equity incentive plan maintained
or assumed by the Company and the Company Subsidiaries. 
 “Company Subsidiary” means each Person which is a Subsidiary of
the Company. 
 “Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, Liens, notices of noncompliance or violation, investigations or proceedings under any Environmental Law or any permit issued under any such Environmental Law, including, without limitation, (A) any and all Environmental
Claims by Governmental Entities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (B) any and all Environmental Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury to the environment or as a result of exposure to Hazardous Materials. 
  

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 “Environmental Law” means any federal, state, foreign or local statute, law, rule,
regulation, ordinance, code or rule of common law and any judicial or administrative interpretation thereof binding on the Company or its operations or property as of the date hereof and Closing Date, including any judicial or administrative order,
consent decree or judgment, relating to the environment, Hazardous Materials, worker safety or exposure of any Person to Hazardous Materials including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. sec. 9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. sec. 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. sec. 1251 et seq.; the Toxic Substances Control Act,
15 U.S.C. sec. 2601 et seq.; the Clean Air Act, 42 U.S.C. sec. 7401 et seq.; Oil Pollution Act of 1990, 33 U.S.C. sec. 2701 et seq.; the Safe Drinking Water Act, 42 U.S.C. sec. 300f et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. sec.
1801 et seq.; the Occupational Safety and Health Act of 1970, 29 U.S.C. sec. 651 et seq., and all similar or analogous foreign, state, regional or local statutes, secondary and subordinate legislation, and directives, and the rules and regulations
promulgated thereunder. 
 “ERISA Affiliate” means any trade or business, whether or not incorporated, that together with
the Company would be deemed a single employer for purposes of Section 4001 of ERISA or Sections 414(b), (c), (m), (n) or (o) of the Code. 
 “Hazardous Materials” means (A) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; and (B) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “extremely hazardous wastes,” “extremely hazardous substances,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” or words of similar import,
under any applicable Environmental Law. 
 “Intellectual Property” shall mean any or all of the following:
(i) inventions (whether patentable or not), invention disclosures, industrial designs, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the
foregoing; (ii) business, technical and know-how information, non-public information, and confidential information, including databases and data collections; (iii) works of authorship (including computer programs, source code, object code,
whether embodied in software, firmware or otherwise), architecture, documentation, files, records, schematics, verilog files, netlists, emulation and simulation reports, test vectors and hardware development tools; (iv) URLs and domain names;
and (v) any similar or equivalent property of any of the foregoing (as applicable). 
 “Intellectual Property Rights”
shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof (“Patents”); (ii) copyrights, copyrights registrations and applications therefor, and all other rights corresponding 

  

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thereto throughout the world including moral and economic rights of authors and inventors, however denominated (“Copyrights”);
(iii) industrial designs and any registrations and applications therefor; (iv) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor (“Trademarks”);
(v) trade secrets (including, those trade secrets defined in the Uniform Trade Secrets Act and under corresponding foreign statutory and common law), business, technical and know-how information, non-public information, and confidential
information and rights to limit the use or disclosure thereof by any Person; including databases and data collections and all rights therein (“Trade Secrets”); and (vi) any similar or equivalent rights to any of the foregoing
(as applicable). 
 “Key Employee” means an employee of the Company or a Company Subsidiary identified on Annex II.

 “knowledge” will be deemed to be the actual knowledge of any executive officer or director of Parent, Purchaser or the
Company, as the case may be. 
 “Licensed Company IP” means all Intellectual Property and Intellectual Property Rights that
are licensed to the Company or any of its Subsidiaries by third parties and material to the conduct of the business of the Company. 
 “Lien” means any lien, pledge, hypothecation, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction of any
nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset). 

“Owned Company IP” means shall mean all Intellectual Property and Intellectual Property Rights that are owned or purported to be
owned by the Company or any of its Subsidiaries and material to the conduct of the business of the Company. 
 “Person”
means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity or organization. 
 “Registered IP” means all Intellectual Property that is registered, filed, or issued under the authority of any Governmental Entity,
including all Patents, registered Copyrights, registered Trademarks, domain names and URLs, and all applications for any of the foregoing. 
 “Release” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying or seeping into or upon any land or water or air, or otherwise entering into the environment. 

“Subsidiary” means with respect to any Person, any corporation, limited liability company, partnership or other organization, whether
incorporated or unincorporated, of which (i) at least a majority of the outstanding shares of capital stock of, or other equity interests, having by their terms ordinary voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more 

  

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of its Subsidiaries or (ii) such Person or any other Subsidiary of such Person is a general partner (excluding any such partnership where such Person or
any Subsidiary of such Person does not have a majority of the voting interest in such partnership). 
 “Superior Proposal”
means any bona fide written Acquisition Proposal received by the Company after the date hereof and not in breach of this Agreement, that is not subject to any financing condition or contingency (provided, that for the purposes of this definition,
(A) the applicable percentages in clause (i) of the definition of Acquisition Transaction shall be twenty percent (20%) as opposed to eighty-five percent (85%), and (B) the applicable percentages in clauses (ii), (iii) and
(iv) of the definition of Acquisition Transaction shall be eighty percent (80%) as opposed to fifteen percent (15%)), which the Company Board of Directors determines in good faith, After Consultation, taking into account, among other
things, all legal, financial, regulatory, timing and other aspects of the Acquisition Proposal and the Third Party making the Acquisition Proposal and any adjustment to the terms and conditions of this Agreement proposed by Parent in response to
such Acquisition Proposal would, if consummated in accordance with its terms, be more favorable to the holders of Shares (in their capacity as such) than the transactions contemplated by this Agreement, including the Offer and the Merger (after
taking into account any adjustment to the terms and conditions of this Agreement proposed by Parent in response to such Acquisition Proposal). 
 “Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 
 “Tax Claim” means any audit,
investigation, litigation or other proceeding conducted by or with any Governmental Entity with respect to Taxes. 
 “Tax
Return” means any return, report, certificate, form or similar statement or document or other communication required or permitted to be supplied to, or filed with, a Governmental Entity in connection with the determination, assessment or
collection of any Tax or the administration of any laws relating to any Tax. 
 “Third Party Acquisition Event” means
the consummation of an Acquisition Transaction or series of related Acquisition Transactions; provided, that the consummation of such Acquisition Proposal or Acquisition Proposals results in the acquisition by any Third Party of (i) a
majority of the outstanding Shares or (ii) a majority (by number of shares or voting power) of the outstanding capital stock of the Company or (iii) a majority of the assets (including the capital stock or assets of any Subsidiary) of the
Company and the Company Subsidiaries, taken as a whole. 
  

 70 

 Section 9.6 Terms Defined Elsewhere. The following terms are defined elsewhere in this
Agreement, as indicated below: 
  

			
	“401(k) Plan”	  	Section 6.12
	“After Consultation”	  	Section 5.2(b)
	“Agreement”	  	Introduction
	“Appointment Date”	  	Section 5.1
	“Appointment Time”	  	Section 1.3
	“Appraisal Rights”	  	Section 2.3(a)
	“Assignee”	  	Section 9.13
	“Balance Sheet Date”	  	Section 3.8(a)
	“Bankruptcy Claims/Interest	  	Section 3.25(b)
	“Bankruptcy Confirmation Order”	  	Section 3.25
	“Base Premium”	  	Section 6.6(d)
	“Benefit Plans”	  	Section 3.11(a)
	“Certificate of Merger”	  	Section 1.5
	“Certificates”	  	Section 2.2(b)
	“Closing”	  	Section 1.6
	“Closing Date”	  	Section 1.6
	“Code”	  	Section 2.2(e)
	“Common Stock”	  	Section 3.2(a)
	“Company”	  	Introduction
	“Company Agreements”	  	Section 3.5(a)
	“Company Board of Directors”	  	Recitals
	“Company Bylaws”	  	Section 1.3(b)
	“Company Certificate”	  	Section 1.3(b)
	“Company Change in Recommendation”	  	Section 5.3(b)
	“Company Collective Bargaining Agreement”	  	Section 3.16(a)
	“Company Disclosure Schedule”	  	Article III
	“Company Financial Advisor”	  	Section 3.20
	“Company Governing Documents”	  	Section 1.3(b)
	“Company IP Agreements”	  	Section 3.15(d)
	“Company Material Contract”	  	Section 3.13
	“Company Options”	  	Section 2.5(a)
	“Company Permits”	  	Section 3.17(b)
	“Company Recommendation”	  	Section 5.3(a)
	“Company Rights”	  	Section 3.2(a)
	“Company Rights Agreement”	  	Section 3.2(a)
	“Company Scheduled Agreements”	  	Section 3.5(a)
	“Company SEC Documents”	  	Section 3.6(a)
	“Company Stock Rights”	  	Section 3.2(a)
	“Compensation Committee”	  	Section 3.25
	“Confidentiality Agreement”	  	Section 5.2(b)
	“Continuing Directors”	  	Section 1.3(b)
	“Covered Persons”	  	Section 6.6(a)
	“D&O Insurance”	  	Section 6.6(d)
	“Dissenting Shares”	  	Section 2.3(a)
	“Effective Time”	  	Section 1.5
	“Employment Compensation Arrangement”	  	Section 5.1(i)
	“Equity Interests”	  	Section 3.2(a)

  

 71 

			
	“ESPP”	  	Section 2.6
	“Exchange Act”	  	Section 1.1(a)
	“Expiration Date”	  	Section 1.1(d)
	“Financial Statements”	  	Section 3.6(a)
	“Foreign Plans”	  	Section 3.11(a)
	“GAAP”	  	Section 3.6(a)
	“DGCL”	  	Recitals
	“Governmental Approval Condition”	  	Annex I
	“Governmental Entity”	  	Section 3.5(a)
	“HSR Act”	  	Section 3.5(a)
	“HSR Condition”	  	Annex I
	“Indemnification Agreements”	  	Section 6.6(a)
	“Initial Expiration Date”	  	Section 1.1(d)
	“International Trade Laws”	  	Section 3.17(d)
	“Junior Preferred Stock”	  	Section 3.2(a)
	“Legal Proceedings”	  	Section 3.10
	“Merger”	  	Recitals
	“Merger Agreement”	  	Annex I
	“Merger Consideration”	  	Section 2.1(c)
	“Minimum Condition”	  	Section 1.1(a)
	“Nasdaq”	  	Section 1.3(a)
	“Notice of Recommendation Change”	  	Section 5.3(b)
	“Offer”	  	Recitals
	“Offer Documents”	  	Section 1.1(h)
	“Offer Price”	  	Recitals
	“Offer to Purchase”	  	Section 1.1(c)
	“Option Consideration”	  	Section 2.5(a)
	“Initial Outside Date”	  	Section 1.1(e)
	“Extended Outside Date”	  	Section 1.1(e)
	“Parent”	  	Introduction
	“Paying Agent”	  	Section 2.2(a)
	“Permitted Liens”	  	Section 3.14
	“Post Signing Returns”	  	Section 6.8
	“Preferred Stock”	  	Section 3.2(a)
	“Promissory Note”	  	Section 2.4(a)
	“Proxy Statement”	  	Section 1.9(a)
	“Public Disclosure”	  	Section 5.3(b)
	“Purchase Right”	  	Section 2.6
	“Purchaser”	  	Introduction
	“Purchaser Common Stock”	  	Section 2.1
	“Regulation M-A”	  	Section 1.1(h)
	“Reorganization Plan”	  	Section 3.25
	“Representatives”	  	Section 5.2(a)
	“Repurchase Rights”	  	Section 2.5(c)
	“Required Governmental Approvals”	  	Annex I
	“Restricted Stock”	  	Section 2.5(c)

  

 72 

			
	“RSU”	  	Section 2.5(d)
	“RSU Consideration”	  	Section 2.5(d)
	“SAR”	  	Section 2.5(a)
	“Sarbanes-Oxley Act”	  	Section 3.6(a)
	“Schedule 14D-9”	  	Section 1.2(a)
	“Schedule TO”	  	Section 1.1(h)
	“SEC”	  	Section 1.1(h)
	“Securities Act”	  	Section 3.6(a)
	“Shares”	  	Recitals
	“Short Form Threshold”	  	Section 1.10
	“Significant Subsidiary”	  	Section 3.1(b)
	“Special Meeting”	  	Section 1.9(b)
	“Support Agreements”	  	Recitals
	“Surviving Corporation”	  	Section 1.4(a)
	“Termination Fee”	  	Section 8.2(b)
	“Third Party”	  	Section 5.2(a)
	“50% Top-Up Closing”	  	Section 2.4(b)(iii)
	“50% Top-Up Exercise Notice”	  	Section 2.4(b)(iii)
	“50% Top-Up Notice Date”	  	Section 2.4(b)(iii)
	“50% Top-Up Notice Receipt”	  	Section 2.4(b)(iii)
	“50% Top-Up Option”	  	Section 2.4(b)(i)
	“50% Top-Up Option Shares”	  	Section 2.4(b)(i)
	“90% Top-Up Closing”	  	Section 2.4(a)(iii)
	“90% Top-Up Exercise Notice”	  	Section 2.4(a)(iii)
	“90% Top-Up Notice Date”	  	Section 2.4(a)(iii)
	“90% Top-Up Notice Receipt”	  	Section 2.4(a)(iii)
	“90% Top-Up Option”	  	Section 2.4(a)(i)
	“90% Top-Up Option Shares”	  	Section 2.4(a)(i)
	“Transactions”	  	Recitals
	“Unvested Cash”	  	Section 2.5(c)
	“Voting Debt”	  	Section 3.2(a)
	“Warrant”	  	Section 2.7
	“Warrant Consideration”	  	Section 2.7

 Section 9.7 Interpretation. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include”, “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words
“without limitation.” As used in this Agreement, the term “affiliates” shall have the meaning set forth in Rule 12b-2 of the Exchange Act. All references to this Agreement shall be deemed to include references to the “plan
of merger” contained herein (as such term is used in the DGCL). The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or
interpretation of this Agreement or any term or provision hereof. When reference is made herein to a Person, such reference shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context

  

 73 

 
otherwise requires. Unless otherwise indicated, all references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect
Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. 
 Section 9.8 Counterparts. This Agreement may be executed manually or by facsimile by the parties hereto, in any number of counterparts, each
of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the parties and delivered to the other parties. 
 Section 9.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the Company Disclosure Schedule) and the
Confidentiality Agreement: 
 (a) constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and
supersede all other prior agreements (except that the Confidentiality Agreement shall be amended so that until the termination of this Agreement in accordance with Section 8.1 hereof, Parent and Purchaser shall be permitted to take the action
contemplated by this Agreement, including the making of any proposals as contemplated by Section 5.3) and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof and thereof, and

 (b) except as provided in Section 6.5, are not intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder. 
 Section 9.10 Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Offer or the Merger is not
affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to the end that the Offer and the Merger are fulfilled to the extent possible. 
 Section 9.11 Governing Law; Jurisdiction. (a) This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to conflicts of laws
principles that would result in the application of the law of any other state. 
 (b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Delaware Court of 

  

 74 

 
Chancery, or, if no such state court has proper jurisdiction, the Federal court of the United States of America, sitting in Delaware, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment
relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be
heard and determined in such Delaware Court of Chancery court or, if no such state court has proper jurisdiction, the in such Federal court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any such action or proceeding in any such Delaware Court of Chancery or Federal court, and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such Delaware Court of Chancery or Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.4. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law. Each party hereto agrees not to commence any legal proceedings relating to or arising out of this Agreement or the Transactions in any jurisdiction or courts other than
as provided herein. 
 Section 9.12 Waiver of Jury Trial. EACH PARTY IS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE OFFER AND MERGER CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS,
(B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.12. 
 Section 9.13 Assignment. This Agreement shall not be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion and without the consent of any other party, any or all of its rights, interests and obligations
hereunder to (i) Parent, (ii) to Parent and one or more direct or indirect wholly-owned Subsidiaries of Parent or (iii) to one or more direct or indirect wholly-owned Subsidiaries of Parent (each, an “Assignee”).
Subject to the preceding sentence, but without relieving any party hereto of any obligation hereunder, this Agreement will 
  

 75 

 
be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Notwithstanding anything to the
contrary contained herein, Parent, Purchaser and their affiliates shall have the right to collaterally assign in whole or in part this Agreement and any ancillary agreements or documents related to the Transactions and any of their respective rights
thereunder as security to one or more lenders or purchasers of debt securities who, in each case, are being granted a collateral interest in this Agreement or any ancillary agreements or documents related to the Transactions. 
 Section 9.14 Enforcement; Remedies. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties hereto shall be entitled seek an injunction or injunctions to prevent breaches of this Agreement and to specifically enforce the
terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. 
 [Signature Page Follows] 
  

 76 

 IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this Agreement to be signed by their
respective officers thereunto duly authorized as of the date first written above. 
  

			
	PARENT:
	
	 TELEFONAKTIEBOLAGET LM ERICSSON
 (publ)

		
	By	 	 /s/ CARL-HENRIC SVANBERG

	Name:	 	Carl-Henric Svanberg
	Title:	 	President & Chief Executive Officer
		
	By	 	 /s/ CARL OLOF BLOMQVIST

	Name:	 	Carl Olof Blomqvist
	Title:	 	Senior Vice President & General Counsel
	
	PURCHASER:
	
	MAXWELL ACQUISITION CORPORATION
		
	By	 	 /s/ JOHN MOORE

	Name:	 	John Moore
	Title:	 	Vice President
	
	COMPANY:
	
	REDBACK NETWORKS INC.
		
	By	 	 /s/ KEVIN DENUCCIO

	Name:	 	Kevin DeNuccio
	Title:	 	President & Chief Executive Officer

 SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER 

 ANNEX I 
 Notwithstanding any other provisions of the Offer, but subject to the terms and conditions set forth in the Merger Agreement, and in addition to (and not in limitation of) Purchaser’s rights and obligations to
extend or amend the Offer in accordance with the provisions of the Merger Agreement and any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act, Purchaser shall not be required to accept for payment or pay
for, and may delay the acceptance for payment of or, subject to the restrictions referred to above, the payment for, any validly tendered Shares if (i) the Minimum Condition shall not have been satisfied at any then scheduled Expiration Date,
(ii) any waiting period under the HSR Act applicable to the transactions contemplated by the Merger Agreement has not expired or terminated prior to the termination or expiration of the Offer at or prior to any then scheduled Expiration Date
(the “HSR Condition“), (iii) any other Required Governmental Approvals shall not have been obtained or any waiting period (or extension thereof) or mandated filing shall not have lapsed or been made either unconditionally or on
terms satisfactory to Parent at or prior to any then scheduled Expiration Date (collectively, the “Governmental Approval Condition“), or (iv) any of the following events has occurred and be continuing at the scheduled
Expiration Date: 
 (a) there shall be threatened in writing or pending any suit, action or proceeding by any Governmental Entity of competent
jurisdiction against Parent, Purchaser, the Company or any Company Subsidiary (i) challenging the acquisition by Purchaser (or Parent on Purchaser’s behalf) of any Shares pursuant to the Offer or seeking to restrain or prohibit the making
or consummation of the Offer or the Merger, (ii) seeking to impose material limitations on the ability of Purchaser (or Parent on Purchaser’s behalf), or render Purchaser (or Parent on Purchaser’s behalf) unable, to accept for
payment, pay for or purchase any or all of the Shares pursuant to the Offer or the Merger, or seeking to require divestiture thereof or any material assets of the Company or any Company Subsidiary, (iii) seeking to prohibit or impose any
material limitations on the ownership or operation by Parent (or any of its Subsidiaries) of all or any portion of businesses or assets of Parent, the Company or any of their respective Subsidiaries as a result of or in connection with the
Transactions, or to compel Parent, the Company or any of their respective Subsidiaries to dispose of, license or hold separate any material portion of the businesses or assets of Parent, the Company or any of their respective Subsidiaries as a
result of or in connection with the Transactions, (iv) seeking to impose material limitations on the ability of Parent or Purchaser effectively to exercise full rights of ownership of the Shares, including the right to vote the Shares purchased
by it on all matters properly presented to the stockholders of the Company, or (v) which otherwise would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; 
 (b) there shall be any statute, rule, regulation, judgment, order or injunction enacted, entered, enforced, promulgated or which is deemed applicable
pursuant to an authoritative interpretation by or on behalf of a Government Entity to the Offer, the Merger or any other transaction contemplated by the Merger Agreement, or 

  

 I-i 

 
any other action shall be taken by any Governmental Entity, other than the application to the Offer or the Merger of applicable waiting periods under HSR Act
or similar waiting periods with respect to the Required Governmental Approvals, that (x) is, in the reasonable judgment of Parent and Purchaser, likely, individually or in the aggregate, to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above, or (y) has the effect of making such transactions illegal or which has the effect of prohibiting or otherwise preventing the consummation of any of the
transactions contemplated by the Merger Agreement; 
 (c)(i) any of the representations and warranties of the Company contained in Sections
3.2, 3.3, 3.4 or 3.5(b) shall not be true and correct in all material respects, each as of the date hereof and as of the expiration date of the Offer with the same force and effect as if made on and as of such date, except for representations and
warranties that relate to a specific date or time (which need only be true and correct in all material respects as of such date or time), or (ii) except as has not had and would not reasonably be expected to have, individually or in the
aggregate with all other failures to be true or correct, a Company Material Adverse Effect, the representations and warranties of the Company contained in this Agreement, other than representations and warranties referenced in clause (i) of
this paragraph (c), shall not be true and correct in all respects (without giving effect to any references to any Company Material Adverse Effect or materiality qualifications and other qualifications based upon the concept of materiality or similar
phrases contained therein and without giving effect to any modifications or updates to the Company Disclosure Schedule) as of the date of the Merger Agreement and as of the expiration date of the Offer with the same force and effect as if made on
and as of such date, except for representations and warranties that relate to a specific date or time (which need only be true and correct (without giving effect to any references to any Company Material Adverse Effect or materiality qualifications
and other qualifications based upon the concept of materiality or similar phrases contained therein and without giving effect to any modifications or updates to the Company Disclosure Schedule) as of such date or time); 
 (d) since the date of the Merger Agreement, any fact(s), change(s), event(s), development(s) or circumstance(s) have occurred, arisen or come into
existence or become known to the Company, Parent or Purchaser, which is continuing and which has had or would reasonably be expected to have, individually or in the aggregate with all other such fact(s), change(s), event(s), development(s) or
circumstance(s), a Company Material Adverse Effect; 
 (e) the Company shall have breached or failed, in any material respect, to perform or
to comply with any agreement or covenant to be performed or complied with by it under the Merger Agreement prior to the expiration of the Offer (or, in the case of Section 6.1 hereof, shall have intentionally breached or failed in any material
respect to perform or comply with such Section 6.1) and such breach or failure shall not have been cured; 
 (f) Purchaser shall have
failed to receive a certificate of the Company, executed by the Chief Executive Officer and the Chief Financial Officer of the Company, dated as of the scheduled Expiration Date, to the effect that the conditions set forth in paragraphs (c) and
(e) of this Annex I have not occurred; or 
  

 I-ii 

 (g) the Merger Agreement shall have been terminated in accordance with its terms. 
 The foregoing conditions are for the sole benefit of Parent and Purchaser, may be asserted by Parent or Purchaser regardless of the circumstances giving
rise to such condition, and may be waived by Parent or Purchaser in whole or in part at any time and from time to time and in the sole discretion of Parent or Purchaser, subject in each case to the terms of the Merger Agreement. The foregoing
conditions shall be in addition to, and not a limitation of the rights of Parent and Purchaser to extend, terminate and/or modify the Offer pursuant to the terms and conditions of the Merger Agreement. Any reference in this Annex I or in the Merger
Agreement to a condition or requirement being satisfied shall be deemed met if such condition or requirements is so waived. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and, each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. 
 As used in this
Annex I, the term “Required Governmental Approvals” shall mean any applicable review process by CFIUS under the Exon-Florio Act (including, if applicable, any investigation commenced thereunder) and any other material approval or
consent of any Governmental Entity of competent jurisdiction reasonably deemed necessary, appropriate or desirable by Parent by the later of (i) ten business days after the date of the Merger Agreement, and (ii) five business days after
Parent has received all information from the Company which is reasonably necessary to enable Parent to determine which such approvals or consents may be necessary, appropriate or desirable under applicable law, as shall be evidenced by a list of
which will be delivered to the Company within such period. The other capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed, except that the term “Merger Agreement“ shall be
deemed to refer to the Agreement to which this Annex I is annexed. 
  

 I-iii 

 ANNEX II 
 Key Employees 
 Ebrahim Abassi 
 Georges Antoun 
 Thomas L. Cronan III 
 Rod W. Couvrey

 Kevin A. DeNuccio 
 Scott Marshall 
 Stephen Y. Tam 
 Simon Zarrin 
  

 II-i 

 Schedule 5.4 
 Promptly after the date of the Agreement, the Company will issue to and set aside with a disbursement agent (the “Disbursement Agent”) the maximum number of Shares that the Company would be required to issue
pursuant to the Reorganization Plan and the Bankruptcy Confirmation Order to the holders of such Unresolved Bankruptcy Claims/Interests were such Unresolved Bankruptcy Claims/Interests allowed in the respective maximum amounts claimed by such
holders (the “Escrowed Shares”). To the extent any Unresolved Bankruptcy Claims/Interests are allowed in a liquidated amount prior to the Effective Time, the Disbursement Agent shall promptly distribute the applicable portion of the
Escrowed Shares to the holders of such allowed Unresolved Bankruptcy Claims/Interests, and if all Unresolved Bankruptcy Claims/Interests have been resolved as of the Effective Time, then all Escrowed Shares not required to be distributed to any
holders of Unresolved Bankruptcy Claims/Interests shall be delivered by the Disbursement Agent to the Company and cancelled pursuant to Section 2.1(b) of the Agreement. If, as of the Effective Time, any Escrowed Shares remain undistributed, and
one or more Unresolved Bankruptcy Claims/Interests remain unresolved, then (i) that portion of the remaining Escrowed Shares that would be required to be issued pursuant to the Reorganization Plan and Bankruptcy Confirmation Order to the
holders of such Unresolved Bankruptcy Claims/Interests were such Unresolved Bankruptcy Claims/Interests allowed in the respective maximum amounts claimed by such holders shall be converted to the right to receive Merger Consideration pursuant to
Section 2.1(c) of the Agreement, and the applicable portion of such Merger Consideration shall be distributed to such holders as and when their Unresolved Bankruptcy Claims/Interests are allowed in a liquidated amount, and (ii) the
remaining portion of such Escrowed Shares shall be delivered by the Disbursement Agent to the Company and cancelled pursuant to Section 2.1(b) of the Agreement. Upon resolution and payment from the Merger Consideration of all Unresolved
Bankruptcy Claims/Interests that were unresolved as of the Effective Time, any remaining Merger Consideration shall be delivered by the Disbursement Agent to the Company and shall become unrestricted cash of the Company.

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