Statement of Ownership: Solicitation (sc 14d9)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

Solicitation/Recommendation Statement

Under Section 14(d)(4) of the Securities Exchange Act of 1934

PMC-SIERRA, INC.

(Name of Subject Company)

PMC-SIERRA, INC.

(Name of Person Filing Statement)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

69344F106

(CUSIP Number of Class of Securities)

Gregory S. Lang

President and Chief Executive Officer

1380 Bordeaux Drive

Sunnyvale, CA 94089

(408) 239-8000

(Name, address and telephone number of person authorized to receive notices and communications

on behalf of the person filing statement)

With copies to:

Kenton J. King, Esq.

Amr Razzak, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue, Suite 1100

Palo Alto, CA 94301

(650) 470-4500

¨	Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS


		Page
ITEM 1.	SUBJECT COMPANY INFORMATION		1
ITEM 2.	IDENTITY AND BACKGROUND OF FILING PERSON		1
ITEM 3.	PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS		3
ITEM 4.	THE SOLICITATION OR RECOMMENDATION		12
ITEM 5.	PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED		52
ITEM 6.	INTEREST IN SECURITIES OF THE SUBJECT COMPANY		53
ITEM 7.	PURPOSES OF THE TRANSACTIONS AND PLANS OR PROPOSALS		54
ITEM 8.	ADDITIONAL INFORMATION		54
ITEM 9.	EXHIBITS		63

Item 1.

SUBJECT COMPANY INFORMATION

Name and Address

The name of the subject company to which this Solicitation/Recommendation Statement on Schedule 14D-9 (this “Schedule 14D-9”) relates is PMC-Sierra, Inc., a Delaware corporation (the “Company” or “PMC”). The address of the principal executive offices of the Company is 1380 Bordeaux Drive, Sunnyvale, California 94089, and the telephone number of the principal executive offices of the Company is (408) 239-8000.

Class of Securities

The title of the class of equity securities to which this Schedule 14D-9 relates is shares of the Company’s common stock, par value $0.001 per share (each, a “Share”). As of the close of business on December 11, 2015, there were (1) 203,790,017 Shares issued and outstanding, (2) 6,126,983 Shares underlying outstanding Company stock options with exercise prices of $11.99 or below, (3) 6,829,991 Shares underlying outstanding Company restricted stock units, (4) 1,049,269 Shares underlying outstanding Company performance restricted stock units, (5) 98,393 Shares issuable on exchange or retraction of special shares of PMC-Sierra, Ltd., a Canadian subsidiary of the Company, and (6) up to 2,653,049 Shares that may be issued prior to the completion of the Offer and the Merger under the Company’s 2011 Employee Stock Purchase Plan.

Item 2.

IDENTITY AND BACKGROUND OF FILING PERSON

Name and Address

The Company is the subject company and the person filing this Schedule 14D-9. The Company’s name, address and business telephone number are set forth in Item 1 above under the heading “Subject Company Information—Name and Address.” The Company’s website address is www.pmcs.com. The information included in, or linked to through, the Company’s website should not be considered part of this statement. The Company has included its website address in this statement solely as a textual reference.

Tender Offer

This Schedule 14D-9 relates to the offer by Lois Acquisition Corp., a Delaware corporation (the “Purchaser”) and a wholly owned subsidiary of Microsemi Corporation, a Delaware corporation (“Parent” or “Microsemi”), to purchase all issued and outstanding Shares, in exchange for consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share (the “Offer Price”), subject to the terms and conditions set forth in the Prospectus/Offer to Exchange, dated December 16, 2015 (as it may be amended or supplemented, the “Offer to Exchange”), and the related Letter of Transmittal (as it may be amended or supplemented, the “Letter of Transmittal” and, together with the Offer to Exchange, the “Offer”). The Offer to Exchange and the Letter of Transmittal are filed as Exhibits (a)(1)(A) and (a)(1)(B) hereto, respectively, and are incorporated by reference herein. The Purchaser and Parent filed a Tender Offer Statement on Schedule TO dated December 16, 2015 (as it may be amended or supplemented from time to time, the “Schedule TO”) and a Registration Statement on Form S-4 dated December 16, 2015 (as amended, the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”).

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of November 24, 2015 (as it may be amended from time to time, the “Merger Agreement”), by and among Parent, the Purchaser and the Company. The Merger Agreement provides, among other things, that following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transactions”), with the Company continuing as the surviving corporation in the Merger (the “Surviving Corporation”) and a wholly owned subsidiary of Parent. Assuming the requirements of Section 251(h) of the General Corporation Law of the State of Delaware (“DGCL”) are satisfied, no stockholder vote will be required to adopt the Merger Agreement or to consummate the Merger. Acceptance for payment of

Shares pursuant to and subject to the conditions of the Offer shall occur promptly following the expiration of the Offer (which is expected to occur at 12:00 midnight, New York City time, at the end of the day on January 14, 2016, unless the Purchaser extends the Offer pursuant to the terms of the Merger Agreement). In the Merger, each Share issued and outstanding immediately prior to the date and time at which the Merger becomes effective (the “Effective Time”), other than (i) Shares owned by the Company, Parent, the Purchaser, or any of Parent’s other direct or indirect wholly owned subsidiaries, and (ii) Shares owned by stockholders who validly exercise appraisal rights under Delaware law with respect to such Shares, will be automatically converted into the right to receive the Offer Price, without interest thereon and less any required withholding taxes. As a result of the Merger, the Company will cease to be a publicly traded company and will become wholly owned by Parent.

As described in the Offer to Exchange, the Offer is subject to various conditions, including, among other things (a) that the Merger Agreement has not been terminated in accordance with its terms, and (b) the satisfaction of (i) the Minimum Condition (as defined below), (ii) the Regulatory Condition (as defined below), (iii) the Registration Statement Condition (as defined below), (iv) the Stock Exchange Listing Condition (as described below), (v) the Governmental Authority Condition (as defined below), and (iv) a Company Material Adverse Effect (as defined in the Offer to Exchange under the heading “Merger Agreement”) shall not have occurred since November 24, 2015 that continues to exist as of immediately prior to the expiration of the Offer (each of (a) and (b), along with all other conditions to the Offer described in the Offer to Exchange under the heading “Merger Agreement—Conditions to the Offer” are referred to as “Offer Conditions”).

The Minimum Condition requires that the number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn on or prior to 12:00 midnight, New York City time, at the end of the day on January 14, 2016 (the “Expiration Time”, unless the Purchaser shall have extended the period during which the Offer is open in accordance with the Merger Agreement, in which event “Expiration Time” shall mean the earliest time and date at which the Offer, as so extended by the Purchaser, shall expire), together with any Shares then owned by Parent and its controlled subsidiaries (including the Purchaser), shall equal at least a majority of all then outstanding Shares as of the Expiration Time.

The Regulatory Condition requires that any applicable waiting period (or any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), relating to the purchase of Shares pursuant to the Offer or consummation of the Merger have expired or otherwise been terminated.

The Registration Statement Condition requires that the Registration Statement shall have become effective under the Securities Act of 1933, as amended (the “Securities Act”), no stop order suspending the effectiveness of the Registration Statement shall have been issued, and no proceedings for that purpose shall have been initiated or be threatened by the SEC.

The Stock Exchange Listing Condition requires that the shares of Parent common stock issuable in the Offer and the Merger shall have been approved for listing on Nasdaq, subject to official notice of issuance.

The Governmental Authority Condition requires that no governmental authority shall have enacted, issued, promulgated, enforced, entered or deemed applicable any law or order or legal proceeding which has the effect of enjoining or otherwise prohibiting the making of the Offer or the consummation of the Offer or the Merger or otherwise imposing limitations on or altering the terms of the transactions contemplated by the Merger Agreement.

The Offer is also subject to other conditions as described in the Offer to Exchange under the heading “Merger Agreement—Conditions to the Offer.”

The Offer is not subject to a financing condition.

As set forth in the Offer to Exchange, the principal executive offices of the Purchaser and Parent are located at One Enterprise, Aliso Viejo, CA 92656 and its telephone number is (949) 380-6100.

The foregoing summary of the Offer is qualified in its entirety by the more detailed description and explanation contained in the Offer to Exchange and the Letter of Transmittal.

Information relating to the Offer, including this Schedule 14D-9 and related documents, can be obtained without charge from the SEC’s website at www.sec.gov.

Item 3.

PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS

Except as set forth in this Schedule 14D-9 or as incorporated herein by reference, to the knowledge of the Company, there are no material agreements or arrangements, nor any actual or potential conflicts of interest, between (i) the Company or any of its affiliates, on the one hand and (ii)(a) any of its executive officers, directors or affiliates, or (b) Parent, Acquisition Sub or any of their respective executive officers, directors or affiliates, on the other hand.

Relationship with Parent and its Subsidiaries

According to the Registration Statement, as of December 11, 2015, Parent and Parent’s subsidiaries (including the Purchaser) directly owned 100 Shares, representing less than 0.1% of the outstanding Shares, and for purposes of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) beneficially owned 100 Shares, representing less than 0.1% of the outstanding Shares.

Arrangements between the Company, Parent and the Purchaser

Confidentiality Agreement

In connection with Parent’s evaluation of the potential business combination that resulted in the Offer, Parent and the Company entered into a Confidentiality Agreement dated September 3, 2014, which was superseded by a second Confidentiality Agreement dated October 20, 2015, which was superseded by a third Confidentiality Agreement dated October 30, 2015 (as it may be amended from time to time, the “Confidentiality Agreement”). Pursuant to the Confidentiality Agreement, Parent agreed on behalf of itself and its representatives, among other things and subject to certain exceptions, (i) not to disclose and to keep confidential information concerning the Company or its subsidiaries obtained by Parent or its representatives and to use such information solely for the purpose of evaluating a possible transaction between the parties, and (ii) to certain employee non-solicitation provisions for a period of twelve (12) months following the date of the Confidentiality Agreement.

This summary does not purport to be complete and is qualified in its entirety by reference to the Confidentiality Agreement, which is filed as Exhibit (e)(2) to this Schedule 14D-9 and is incorporated by reference herein.

Merger Agreement

On November 24, 2015, the Company, Parent, and the Purchaser entered into the Merger Agreement. The summary of the Merger Agreement and the description of the terms and conditions of the Offer and related procedures and withdrawal rights contained in the Offer to Exchange are incorporated by reference herein. Such summary and description do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement, which is filed as Exhibit (e)(1) to this Schedule 14D-9 and is incorporated by reference herein.

The Merger Agreement has been provided solely to inform investors of its terms. The representations, warranties, covenants and conditions made and agreed to in the Merger Agreement by Parent, the Purchaser and the Company were qualified and subject to important limitations agreed to by Parent, the Purchaser and the Company in connection with negotiating the terms of the Merger Agreement. In particular, the representations and warranties and certain closing conditions contained in the Merger Agreement and incorporated by reference

into this Schedule 14D-9 were negotiated with the principal purposes of allocating risk between the parties to the Merger Agreement and establishing the limited circumstances in which a party to the Merger Agreement may have the right not to complete the Offer or consummate the Merger, and not as disclosures of factual matters. The representations and warranties set forth in the Merger Agreement may also be subject to a contractual standard of materiality different from that generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by each party to the other, which disclosures were not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Schedule 14D-9, may have changed since the date as of which the representations and warranties were made for purposes of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this Schedule 14D-9. The Company’s stockholders and other investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Parent, the Purchaser, or any of their respective subsidiaries or affiliates on any date.

Debt Commitment Letter

In connection with the execution and delivery of the Merger Agreement, Parent received a debt commitment letter dated November 17, 2015 from Morgan Stanley Senior Funding, Inc. (the “Debt Commitment Letter”). Each of Deutsche Bank Securities Inc. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. joined the Debt Commitment Letter as joint lead arrangers and Deutsche Bank AG New York Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd. joined as initial lenders. The Debt Commitment Letter provides for an aggregate of $2,925 million in debt financing to Parent (the “Debt Financing”), consisting of commitments for (i) an aggregate amount of $350 million under a senior secured revolving credit facility, (ii) an aggregate amount of $375 million under a senior secured term loan A facility, and (iii) an aggregate amount of $2,200 million under a senior secured term loan B facility. The proceeds from these facilities may be used to fund a portion of the Transactions and the fees, costs and expenses incurred in connection with the Transactions (including upfront fees and original issue discount if any), to pay for the refinancing of certain outstanding debt, and for working capital and other general corporate purposes.

This summary is qualified in its entirety by reference to the Debt Commitment Letter, a copy of which is filed as Exhibit (e)(3) hereto and is incorporated herein by reference.

Agreements or Arrangements with Executive Officers and Directors of the Company

Certain of the Company’s executive officers and directors have financial interests in the Transactions that are different from, or in addition to, the interests of the Company’s stockholders generally. The Company’s Board of Directors (the “Board”) was aware of these potentially differing interests and considered them, among other matters, in evaluating and negotiating the Merger Agreement and in reaching its decision to approve the Merger Agreement and the Transactions.

For further information with respect to the agreements or arrangements between the Company and its executive officers, directors and affiliates described in this Item 3, see the information included in Item 8 under the heading “Additional Information—Golden Parachute Compensation” below (which is incorporated by reference into this Item 3).

Treatment of Equity and Equity-Based Awards

Certain PMC directors and executive officers hold one or more of the following equity-based awards: PMC options to purchase shares of Company common stock (“Company stock options”), Restricted Stock Units (“Company RSUs”), and performance-based Restricted Stock Units (“Company PRSUs”), which equity-based awards will be treated as follows in connection with the Merger.

Company Stock Options

At the Effective Time, each outstanding Company stock option will, without any further action on the part of any holder thereof, (i) to the extent unvested, be fully vested, and (ii) be cancelled and the holder thereof will be entitled to receive as payment a combination of cash and Parent common stock that together equal the positive difference, if any, between the dollar value of the Offer Price and the exercise price applicable to the Company stock option, multiplied by the number of shares of Company common stock for which the Company stock option was exercisable, less any amount required to be withheld (which withholding will first be applied against the cash portion of such payment) (the “Option Consideration”). For the avoidance of doubt, if the Option Consideration for any Company stock option is zero or a negative number, such Company stock option will be cancelled at the Effective Time without any payment therefor. Following the Effective Time, any such cancelled Company stock option will no longer be exercisable for shares of Company common stock and will entitle the holder thereof to only the payment described in this paragraph, which the Surviving Corporation will make as of, or within two (2) Business Days after, the Effective Time.

Restricted Stock Units

At the Effective Time, each outstanding vested Company RSU (including those Company RSUs that become vested by their terms immediately prior to or as of the Effective Time) will, without any further action on the part of any holder thereof, be cancelled and extinguished, and the holder thereof will be entitled to receive (subject to any applicable withholding or other taxes or other amounts required by applicable law to be withheld, which withholding will first be applied against the cash portion of the consideration paid in respect of a vested Company RSU) (i) an amount in cash equal to the cash component of the Offer Price multiplied by the total number of shares of Company common stock subject to such Company RSU, and (ii) a number of shares of Parent common stock equal to the product of the non-cash component of the Offer Price and the total number of shares of Company common stock subject to such Company RSU, provided that any fraction of a share of Parent common stock resulting from such product will be cashed out to the nearest whole cent. The Surviving Corporation will make the payment described in this paragraph in the next practicable payroll following the Effective Time; provided, that payment will be made at such other time or times following the Effective Time consistent with the terms of the Company RSU to the extent necessary to avoid the imposition of additional income tax under Section 409A of the United States Internal Revenue Code of 1986, as amended (the “Code”).

At the Effective Time, the unvested Company RSUs outstanding immediately prior to the Effective Time will be converted into that number of Parent restricted stock units of Parent common stock, rounded down to the nearest whole share (“Converted RSUs”), equal to the product of (x) the number of shares of Company common stock subject to such Company RSUs and (y) the sum of (A) 0.0771 and (B) the quotient obtained by dividing (i) $9.22 by (ii) the volume weighted average trading price of Parent common stock on Nasdaq for the five (5) consecutive trading days ending on the trading day immediately preceding the closing date of the Merger (the sum, the “Equity Conversion Ratio”). Any Converted RSUs so issued will be subject to the same terms and conditions as were applicable under such Company RSUs (including any applicable change of control or other accelerated vesting provisions, with the terms and conditions modified as appropriate to reflect the assumption; provided, that all references to the “Company” in the applicable Company equity plans and award agreements will be references to Parent. Each Converted RSU that vests after the Effective Time will be settled in shares of Parent common stock; provided, that in the event that Parent reasonably determines at any time prior to the Effective Time that it would not be permitted to consummate the Merger or the other transactions contemplated by the Merger Agreement without the prior approval of Parent’s stockholders under applicable laws or the rules of Nasdaq, Parent will have the power to provide that any such Converted RSU that vests after the Effective Time will be settled by a cash payment equal to the value of a share of Parent common stock at the time of such settlement.

Notwithstanding the Company RSU treatment described above, unvested Company RSUs held by the Company’s non-employee directors will vest in full immediately prior to the Effective Time, pursuant to the

terms of a letter agreement between the Company and each of the non-employee directors, and will be treated as vested Company RSUs at the Effective Time.

Company Performance-Based Restricted Stock Units

At the Effective Time, the unvested Company PRSUs outstanding immediately prior to the Effective Time will be assumed and converted into a number of restricted stock units of Parent common stock, rounded down to the nearest whole share (“Converted PRSUs”), equal to the product of (x) the number of shares of Company common stock subject to such Company PRSUs, assuming achievement of target-level performance with respect to each performance period, performance cycle or measurement cycle applicable to such Company PRSUs and (y) the Equity Conversion Ratio. Any Converted PRSUs so issued will continue to be subject to the vesting schedule applicable to the Company PRSUs, including that the Converted PRSUs will be settled no later than the fifteenth (15th) day of the third (3rd) calendar month following the applicable vesting date (or as otherwise required by the applicable award agreement) subject only to the continued service of the grantee with the Surviving Corporation, Parent or an affiliate through each applicable vesting date or measurement cycle end date but will not be subject to any performance metrics following the Effective Time, and will otherwise be subject to the same terms and conditions (modified as appropriate to reflect the assumption) as were applicable under such Company PRSUs (after giving effect to and including any applicable change of control or other accelerated vesting provisions); provided, that all references to the “Company” in the applicable Company equity plans and award agreements will be references to Parent. Each Converted PRSU that vests after the Effective Time will be settled in shares of Parent common stock; provided, that in the event that Parent reasonably determines at any time prior to the Effective Time that it would not be permitted to consummate the Merger or the other transactions contemplated by the Merger Agreement without the prior approval of Parent’s stockholders under applicable laws or the rules of Nasdaq, Parent will have the power to provide that any such Converted PRSU that vests after the Effective Time will be settled by a cash payment equal to the value of a share of Parent common stock at the time of such settlement.

Company Stock Options and Restricted Stock Units to Be Cancelled in Exchange for a Payment

The following table sets forth Company stock option and Company RSU information related to the payments expected to be made to non-employee directors, named executive officers and other executive officers of the Company in exchange for cancellation of their awards. The amounts listed below are estimates based on an assumed closing date of December 11, 2015, and based on the per share transaction consideration payable for each share of Company common stock underlying each Company stock option and Company RSU, provided that such consideration will be reduced by the applicable exercise price with respect to Company stock options. However, the actual amounts, if any, to be received by a director or executive officer will depend on the outstanding Company stock options and Company RSUs held by such individuals as of the actual closing date of the Merger, which may differ from the amounts set forth below.


	Total Payment With Respect to Options				Total Payment With Respect to Vested RSUs				Total Payment With Respect to Options and Vested RSUs
Non-Employee Directors (1)	Shares		Value		Shares		Value
Richard E. Belluzzo		—		—		16,015	$	189,578	$	189,578
Michael R. Farese		160,000	$	543,141		16,015	$	189,578	$	732,719
Jonathan J. Judge		—		—		16,015	$	189,578	$	189,578
Michael A. Klayko		—		—		16,015	$	189,578	$	189,578
William H. Kurtz		170,000	$	680,938		16,015	$	189,578	$	870,516
Richard N. Nottenburg		—		—		16,015	$	189,578	$	189,578


	Total Payment With Respect to Options				Total Payment With Respect to Vested RSUs				Total Payment With Respect to Options and Vested RSUs
Named Executive Officers (2)	Shares		Value		Shares		Value
Gregory S. Lang		2,503,769	$	11,002,736		—		—	$	11,002,736
Steven J. Geiser		230,743	$	1,347,179		—		—	$	1,347,179
Travis Karr		139,701	$	739,963		—		—	$	739,963
Alinka Flaminia		97,076	$	513,792		—		—	$	513,792

Other Executive Officers	Shares		Value		Shares		Value
Ra’ed O. Elmurib		321,370	$	1,618,906		—		—	$	1,618,906
David Fein		84,600	$	380,867		—		—	$	380,867
Tom Sun		104,754	$	554,958		—		—	$	554,958

(1)	Company RSUs held by the Company’s non-employee directors will vest in full immediately prior to the Effective Time and will be treated as vested Company RSUs at the Effective Time.

(2)

Robert M. Liszt and Colin C. Harris are also named executive officers of PMC for whom disclosure was required in PMC’s most recent proxy statement. However, Mr. Liszt and Mr. Harris departed the Company in December 2014 and May 2015, respectively, and will not receive any payments or benefits in connection with the Merger.

Restricted Stock Units and Performance-Based Restricted Stock Units to Be Converted or Assumed in the Merger

The following table sets forth Company RSU and Company PRSU ownership information with regard to equity awards held by directors and executive officers that are not expected to be canceled and paid out at the Effective Time. The amounts listed below are estimates based on an assumed closing date of the Merger of December 11, 2015 and based on equity award holdings as of such date. However, the actual number of Company RSUs or Company PRSUs to be converted into Converted RSUs and Converted PRSUs, respectively, will depend on the number of outstanding Company RSUs and Company PRSUs held by such individuals that remain unvested on the actual closing date of the Merger, including new grants that may be made to such individuals prior to the closing of the Merger, consistent with the terms of the Merger Agreement. The table below reflects the Company shares subject to such awards. As described above, the unvested Company RSUs and Company PRSUs will be converted at the Effective Time into Converted RSUs of Parent based on the Equity Conversion Ratio described above.


	Conversion With Respect to Unvested RSUs		Conversion With Respect to Unvested PRSUs
Non-Employee Directors (1)	Shares		Shares
Richard E. Belluzzo		—		—
Michael R. Farese		—		—
Jonathan J. Judge		—		—
Michael A. Klayko		—		—
William H. Kurtz		—		—
Richard N. Nottenburg		—		—

Named Executive Officers	Shares		Shares
Gregory S. Lang		207,733		363,659
Steven J. Geiser		87,320		95,934
Travis Karr		90,328		105,374
Alinka Flaminia		44,325		64,037


	Conversion With Respect to Unvested RSUs		Conversion With Respect to Unvested PRSUs
Other Executive Officers	Shares		Shares
Ra’ed O. Elmurib		36,287		48,372
David Fein		49,350		37,300
Tom Sun		46,437		63,509

(1)	Company RSUs held by the Company’s non-employee directors will vest in full immediately prior to the Effective Time and will be treated as vested Company RSUs at the Effective Time.

Other Arrangements with Executive Officers

Change in Control Agreements

Under the terms of agreements between the Company and its named executive officers, each named executive officer (other than Mr. Liszt, who separated from the Company effective December 8, 2014, and Mr. Harris who separated from the Company effective May 29, 2015) would receive certain compensation and benefits upon a termination without “cause” or a “constructive termination,” in either case occurring 60 days prior to or two years following a “change of control,” as each such term is defined in the applicable agreement (an employment agreement in the case of Mr. Lang, and a change of control agreement in the case of the other named executive officers, with certain provisions also contained in applicable equity award agreements). The merger will constitute a “change in control” for purposes of these agreements. These payments and benefits, which are subject to applicable withholding, are as follows:

For Mr. Lang:

A lump sum cash payment equal to two times his then current base salary;

A lump sum cash payment equal to one times his Annual Bonus (as defined in Mr. Lang’s employment agreement), assuming achievement of target-level performance, under PMC’s Short Term Incentive Program;

Reimbursement of, or a lump sum payment for, the cost of 12 months of continued health and dental insurance;

Acceleration of vesting of all options and RSUs that are outstanding and unvested as of the date of separation from service, including, to the extent the compensation committee has not determined the number of earned RSUs as of such date, vesting in (i) the target number of operating plan-based Performance RSUs; (ii) the target number of certain total shareholder return-based Performance RSUs; and (iii) for certain total shareholder return-based Performance RSUs, a number of such total shareholder return-based Performance RSUs as determined by the compensation committee based on performance through the date of change in control; and

Twelve months (or, if shorter, the remaining option term) from the date of his separation from service to exercise all vested Company stock options.

Subject to the terms stated above, Mr. Lang will receive all of the foregoing severance benefits upon his satisfaction of the following requirements: (i) execution of a general release of all claims against the Company and its affiliates; (ii) continued compliance with the non-competition provisions contained in his offer letter for a twelve month period following his termination; and (iii) continued compliance with the terms of his Confidential Information, Invention Assignment and Arbitration Agreement, including the non-solicitation provisions therein, for a twelve month period following his termination. Should Mr. Lang breach such restrictions, he will immediately cease to be entitled to the severance payments and benefits listed above and the Company will also be entitled to recover at law any monetary damages for any additional economic loss caused by such breach and

may, to the maximum extent allowable under applicable law, seek equitable relief in the form of an injunction precluding Mr. Lang from continuing such breach.

For each of the other Executive Officers:

A lump sum cash payment equal to one times his or her then current base salary;

A lump sum cash payment equal to one times his or her Annual Bonus (as defined in the applicable agreement), assuming achievement of target-level performance, under the Company’s Short Term Incentive Program;

Reimbursement of, or a lump sum payment for, the cost of 12 months of continued health insurance;

Twelve months (or, if shorter, the remaining option term) from the date of separation from service to exercise all vested options.

Subject to the terms stated above, each named executive officer will receive all of the foregoing severance benefits upon his or her satisfaction of the following requirements: (i) execution of a general release of all claims against the Company and its affiliates and (ii) continued compliance with the non-competition and non-solicitation provisions contained in his or her change of control agreement for a twelve month period following his or her termination. Should any named executive officer breach such restrictions, he or she will immediately cease to be entitled to the severance payments and benefits listed above and the Company will also be entitled to recover at law any monetary damages for any additional economic loss caused by such breach and may, to the maximum extent allowable under applicable law, seek equitable relief in the form of an injunction precluding such named executive officer from continuing such breach.

In the event that any of the foregoing payments and benefits would be deemed to be parachute payments with respect to any of our executive officers, including Mr. Lang, each of Mr. Lang’s employment agreement and the executive officers’ change of control agreements provide that the payments and benefits will be reduced if such a reduction maximizes the executive’s net after tax benefit, after taking into account any excise taxes payable under Section 4999 of the Code.

For an estimate of the value of the amounts that would be payable to each of the Company’s named executive officers pursuant to the arrangements listed above, assuming that the closing of the Merger occurred on December 11, 2015 and each named executive officer’s employment terminated on such date, see the information included in Item 8 under the heading “Additional Information—Golden Parachute Compensation” below (which is incorporated by reference into this Item 3).

Section 16 Matters

Pursuant to the Merger Agreement, the respective board of directors of the Company and of Parent will adopt resolutions consistent with the interpretative guidance of the SEC to cause any disposition of all Shares (including derivative securities with respect to Shares) or acquisitions of shares of Parent common stock (including derivative securities with respect to Parent common stock) resulting from the Merger and Offer by

each individual who is subject to reporting requirements of Section 16(a) of the Exchange Act with respect to the Company or will become subject to such reporting requirements with respect to Parent, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Rule 14d-10(d) Matters

Pursuant to the Merger Agreement, independent directors of the Company, at a meeting to be held prior to the time the Purchaser accepts the Shares for payment, will duly adopt resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (i) each employment compensation, severance and other employee benefit plan of the Company, presented to the independent directors, (ii) the treatment of the Company stock awards in accordance with the terms set forth in the Merger Agreement, and (iii) the applicable terms of the Merger Agreement. In addition, the independent directors will take all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangement.

Director and Officer Indemnification and Insurance

Pursuant to the terms of the Merger Agreement, the Surviving Corporation and Parent agree to cause the Surviving Corporation, to the fullest extent permitted by law and the Company’s by-laws or the by-laws of any applicable subsidiary, to indemnify and hold harmless the individuals who at any time prior to the Effective Time were directors or officers of the Company or its present or former subsidiaries against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities in connection with actions or omissions occurring at or prior to the Effective Time, including the transactions contemplated by the Merger Agreement. After the Effective Time, Parent and the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) fulfill and honor to the maximum extent permitted by applicable law, all rights to exculpation or indemnification for acts or omissions occurring prior to the consummation of the merger existing as of the time the Merger is consummated in favor of directors and officers of the Company, its subsidiaries or any of its respective predecessors in their capacity as officers or directors, and the heirs, executors, trustees, fiduciaries and administrators of such officers or directors (each, a “D&O Indemnitee”), as provided in the Company or each of its subsidiary’s respective certificate of incorporation and by-laws (or comparable organizational or governing documents) or in any agreement, which shall survive the transactions contemplated by the Merger Agreement and shall continue in full force and effect in accordance with their terms.

For six years following the Merger, Parent and the Surviving Corporation will (and Parent shall cause the Surviving Corporation to) cause the certificate of incorporation and by-laws (or comparable organizational or governing documents) of the Surviving Corporation and its subsidiaries to contain provisions with respect to indemnification and exculpation that are at least as favorable as the indemnification and exculpation provisions contained in the Company and its subsidiaries’ certificates of incorporation and by-laws (or other similar organizational documents) immediately prior to the Effective Time, and during such six-year period such provisions shall not be amended, repealed or otherwise modified in any respect, except as required by applicable law.

The Company is required to (or, if it is unable to do so, Parent shall cause the Surviving Corporation as of the Effective Time to) obtain and fully pay the premium for the non-cancellable extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability insurance policies for a claims reporting or discovery period of at least six years from and after the Effective Time in an amount and scope at least as favorable as the Company’s existing policies, except that the cost of such policies may not exceed 300% of the annual premium currently paid by the Company for such coverage and provided further, that if the annual premiums of such insurance coverage exceed this 300% cap, the Parent shall cause the Surviving Corporation to obtain a policy with the greatest coverage

available, for a cost not exceeding 300% of the annual premium currently paid by the Company for such coverage.

These indemnification and directors’ and officers’ insurance requirements are intended to be for the benefit of, and enforceable by, each D&O Indemnitee and his or her heirs or representatives.

If Parent, the Surviving Corporation or any of their respective successors or assigns consolidates or amalgamates with or merges into any other entity and shall not be the continuing or surviving entity of such consolidation or merger, or transfers or conveys a majority of its properties and assets to any entity, then, and in each such case, proper provision shall be made so that the successors, assigns and transferees of Parent or the Surviving Corporation, or their respective successors or assigns, as the case may be, shall assume these obligations with respect to indemnification and directors’ and officers’ insurance.

The foregoing summary of the indemnification of directors and officers and directors’ and officers’ insurance does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which has been filed as Exhibit (e)(1) to this Schedule 14D-9 and is incorporated herein by reference.

Employee Matters

Treatment of Employee Benefits

The Merger Agreement provides that for a period of twelve (12) months following the Effective Time (or, if shorter, during an employee’s period of employment or until December 31, 2016), Parent will provide (i) each employee of the Company or its subsidiaries employed immediately prior to the Effective Time and who remains employed during such period with (x) a base salary or wage rate and (y) aggregate cash incentive compensation opportunity that is no less favorable than the base salary or wage rate and aggregate incentive compensation opportunity in effect for such employee immediately prior to the Effective Time (but without any requirement to provide comparability for any equity or cash awards granted in connection with or anticipation of the transactions contemplated by the Merger Agreement or with any change of control or retention features or as new hire awards), and (ii) such employees as a whole with employee benefits that, in the aggregate, are no less favorable than those benefits in effect for the employees on November 24, 2015 (excluding any change in control or retention benefits, defined benefit plans, and post-employment welfare benefits). In addition, Parent will, for not fewer than six months following the Effective Time, provide U.S. employees with severance benefits not less favorable than those available to such U.S. employees pursuant to the PMC U.S. Severance Guidelines. The treatment described above does not apply with respect to individuals covered by collective bargaining agreements or other collective representations, in which case the terms of the applicable collective bargaining agreement or collective representation will apply, or (other than with respect to equity-based incentive compensation) with respect to individuals subject to non-U.S. law, in which case Parent will comply with any applicable laws or employment agreements with respect to compensation and benefits.

Each continuing Company employee will be given credit for his or her years of service with the Company before the consummation of the merger to the same extent as under any similar Company benefit plan, for purposes of eligibility, vesting, vacation accrual, and severance benefit determinations under any benefit or compensation plan, program, agreement or arrangement that Microsemi or the Surviving Corporation or any subsidiary thereof may establish or maintain (except to the extent necessary to avoid duplication of benefits). At least two (2) business days prior to the scheduled expiration of the Offer, the Company will terminate its 401(k) plan, subject to the consummation of the Offer and the Merger, if Parent requires it to do so.

The Company’s Employee Stock Purchase Plan (the “ESPP”) will continue to be operated in accordance with its terms and past practice, provided that if the closing of the Merger is expected to occur prior to the end of an Offering Period (as defined in the ESPP), the Company will take action to provide for an earlier Exercise Date (as defined in the ESPP) in accordance with Section 19 of the ESPP. Such earlier Exercise Date (the “New

Exercise Date”) will be as reasonably close to the closing date of the Merger as is administratively practicable, and the Company will notify each participant in writing at least fifteen (15) days prior to the New Exercise Date that the Exercise Date for his or her option, including for purposes of determining the Purchase Price (as defined in the ESPP) of such option, has been changed to the New Exercise Date, and that his or her option will be exercised automatically on the New Exercise Date, unless prior to such date he or she has withdrawn from the Offering Period as provided in Section 11 of the ESPP. The Company will not begin an Offering Period after November 24, 2015.

Item 4.

THE SOLICITATION OR RECOMMENDATION

Recommendation

After careful consideration by the Board, including a review of the terms and conditions of the Offer, in consultation with the Company’s financial and legal advisors, at a meeting of the Board held on November 23, 2015, the Board has (i) determined that the Offer and the Merger are in the best interests of the Company and the Company’s stockholders, (ii) approved, declared advisable and adopted the Merger Agreement, (iii) approved the Transactions, and (iv) recommended that the Company’s stockholders accept the Offer and tender their Shares to the Purchaser pursuant to the Offer.

The Board unanimously recommends that the Company’s stockholders accept the Offer and tender their Shares to the Purchaser pursuant to the Offer.

On November 24, 2015, the Company and Parent issued a press release announcing that they had entered into the Merger Agreement. A copy of the press release is filed as Exhibit (a)(5)(C) to this Schedule 14D-9 and is incorporated by reference herein.

Background and Reasons for the Recommendation

Background of the Offer and the Merger

During the summer and fall of 2014, PMC’s Chief Executive Officer, Gregory Lang, was separately contacted by members of the management of Party A and Microsemi, each expressing interest in discussing a potential strategic transaction. At that time, the Board authorized Mr. Lang to provide nonpublic information to these parties under appropriate nondisclosure arrangements, and also authorized Mr. Lang to engage Qatalyst Partners LP (“Qatalyst Partners”) as financial advisor to PMC in connection with PMC’s evaluation of a potential strategic transaction. On September 11, 2014, Qatalyst Partners provided PMC with written responses to a conflicts questionnaire provided by PMC, disclosing that there were no material relationships between Qatalyst Partners and either of Party A or Microsemi since January 1, 2012. On September 30, 2014, PMC entered into a formal engagement letter with Qatalyst Partners that was dated as of September 5, 2014.

On July 31, 2014, PMC and Party A entered into a nondisclosure agreement. During August and September 2014, members of PMC’s management met with Party A to discuss PMC’s business and the possibility of a strategic transaction involving PMC and Party A, and PMC provided additional diligence information. PMC and Microsemi entered into a nondisclosure agreement dated as of September 3, 2014 that included a standstill that would expire on September 3, 2015, but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC recommends be accepted, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC. On September 5, 2014, Mr. Lang and other members of PMC’s management met with members of Microsemi’s management and discussed PMC’s business and the possibility of a strategic transaction involving PMC and Microsemi, and PMC provided additional diligence information. At the direction of the Board, during September 2014, members of PMC’s management met with members of management of Party B to discuss PMC’s business and the possibility of a strategic transaction involving PMC

and Party B. In addition, at the direction of the Board, representatives of Qatalyst Partners contacted three additional third parties, Party C, Party D and Party E, based on a discussion between the Board, members of PMC’s management and Qatalyst Partners regarding parties that may be interested in a strategic transaction involving PMC, none of which expressed interest in a meeting with PMC at that time. No proposal or indication of interest resulted from any of these discussions at that time.

On December 17, 2014, David Aldrich, the Chairman and Chief Executive Officer of Skyworks Solutions, Inc. (“Skyworks”), emailed Mr. Lang and suggested a meeting. On January 30, 2015, Mr. Lang called Mr. Aldrich and they discussed PMC’s business and the possibility of a strategic transaction between PMC and Skyworks.

On March 11, 2015, Mr. Aldrich emailed Mr. Lang and said he had discussed the possibility of a transaction involving PMC with members of Skyworks’ management and that they would be in touch soon to schedule another meeting. On April 21, 2015, Mr. Lang emailed Mr. Aldrich to discuss the agenda for their meeting scheduled for June 2, 2015.

On April 27, 2015, PMC announced PMC’s results for the first quarter of fiscal 2015. The closing price of PMC’s common stock on April 28, 2015, the next trading day after such announcement, was $8.67.

On May 6, 2015, consistent with the prior strategic discussions regularly conducted by the board of directors of Microsemi and Microsemi’s management, Microsemi sent PMC a non-binding written proposal to acquire PMC at a price of $7.20 in cash and 0.0819 shares of Microsemi stock for each share of PMC’s common stock, which proposal was promptly communicated to the Board. Based on the closing price per share of Microsemi common stock on the prior trading day, the value proposed was approximately $9.90 per share of PMC’s common stock, or a 19.9% premium to the closing price of PMC’s common stock on the prior trading day.

On May 7, 2015, the Board held a previously scheduled meeting, attended by representatives of PMC’s legal counsel, Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), at which the Board discussed PMC’s financial performance and business plans, among other business. After a representative of Skadden described the Board’s fiduciary duties in connection with evaluating Microsemi’s May 6, 2015 proposal, the Board discussed the proposal. Representatives of Qatalyst Partners then joined the meeting for a previously scheduled presentation regarding industry conditions and strategic alternatives and opportunities. After discussion of PMC’s prospects as a standalone business and the proposal from Microsemi with representatives of Qatalyst Partners, the Board determined that their preliminary view was that the execution of PMC’s current business strategy would deliver greater value to PMC’s stockholders than Microsemi’s May 6, 2015 proposal. However, the Board asked management to work with Qatalyst Partners to determine whether Microsemi would increase its offer.

Also on May 7, 2015, the board of directors of Microsemi met at a regularly scheduled meeting of the board of directors with representatives from Microsemi’s legal counsel, O’Melveny & Myers LLP (“O’Melveny”), present, and discussed, among other things, the proposed transaction with PMC.

On May 15, 2015, Mr. Lang emailed a member of Microsemi’s management a response, unanimously approved by the Board, informing Microsemi that the Board had concluded that its proposal significantly undervalued PMC and its future prospects.

On May 18, 2015, a representative of Microsemi’s financial advisor, Stifel, Nicolaus & Company, Incorporated (“Stifel”), communicated with a representative of Qatalyst Partners with questions regarding PMC’s response to Microsemi’s proposal, and on May 20, 2015, a representative of Stifel sent representatives of Qatalyst Partners a list of proposed diligence topics for a further meeting between PMC’s management and Microsemi management.

On May 21, 2015, the Board held a meeting and discussed, among other things, updates on developments with the non-binding proposal from Microsemi. On May 21, 2015, at the request of PMC’s management, a representative of Qatalyst Partners communicated with a representative of Stifel, offering to schedule a meeting, and proposing an extension of the standstill agreement contained in PMC’s September 3, 2014 nondisclosure agreement with Microsemi. Microsemi did not agree to the extension of the standstill agreement.

On May 30, 2015, a representative of Party F communicated with Ra’ed Elmurib, PMC’s Vice President of Corporate Development and General Manager of PMC’s Microprocessor Products Division, and expressed an unsolicited interest in scheduling a meeting to discuss a strategic transaction with PMC.

On June 2, 2015, members of PMC’s management met with members of Skyworks’ management and provided publicly available information concerning PMC’s business.

On June 8, 2015, members of PMC’s management met with representatives of Party F, and PMC provided publicly available information concerning PMC’s business. Party F expressed interest in seeking to put together a consortium of investors to make a bid for PMC.

On June 9, 2015, Mr. Lang and Mr. Elmurib met with members of Microsemi management, and PMC provided additional diligence information to Microsemi.

On June 10, 2015, in response to a request from PMC’s General Counsel, Alinka Flaminia, Skadden reviewed whether it had any prior or existing engagements with Skyworks and noted that a team based in its Boston office was engaged by Skyworks on unrelated matters. Thereafter, Skadden sought and obtained from Skyworks a conflict waiver and an undertaking to use counsel other than Skadden in any transaction with PMC.

On June 10, 2015, Microsemi sent Mr. Lang and the Board a revised non-binding proposal to acquire PMC at a price of $7.61 in cash and 0.0819 shares of Microsemi stock for each share of PMC common stock. Based on the closing price per share of Microsemi common stock on the prior trading day, the value proposed was approximately $10.48 per share of PMC’s common stock, or a 14.4% premium over the closing price of PMC’s common stock on the prior trading day.

On June 11, 2015, Mr. Elmurib met with a member of Party G’s Board on unrelated business and discussed the possibility of a strategic transaction involving the combination of PMC’s storage business with the business of Party G.

On June 18, 2015, Mr. Lang communicated with Mr. Aldrich by email, sending Mr. Aldrich a proposed form of nondisclosure agreement and standstill. The parties scheduled a meeting for June 22, 2015 to review PMC management’s presentation. On June 19, 2015, Thomas Schiller, Skyworks’ Vice President of Strategy and Corporate Development, sent Mr. Elmurib a list of business diligence questions in advance of the meeting.

On June 20, 2015, PMC entered into a nondisclosure agreement with Skyworks. The nondisclosure agreement provided for a standstill that would expire on December 20, 2016 but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC recommends be accepted, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC.

On June 22, 2015, Mr. Lang called the Chief Executive Officer of Party G and discussed further the possibility of a strategic transaction involving PMC and Party G.

On June 22, 2015, Mr. Lang and Mr. Elmurib met with Mr. Schiller and other members of Skyworks’ management, during which PMC presented its corporate overview and discussed certain anticipated restructuring activities.

On June 23, 2015, a member of Party H’s management communicated with Mr. Lang, requesting a meeting with Mr. Lang and Party H’s Chief Executive Officer to identify ways the companies may work together. Mr. Lang responded with possible dates.

On June 23, 2015, Mr. Elmurib provided additional diligence information to Skyworks in response to questions posed by Skyworks at the meeting on June 22, 2015.

On June 26, 2015, the Board held a meeting attended by representatives of Skadden and representatives of Qatalyst Partners to consider PMC’s financial performance compared to PMC’s operating plan and proposed cost reduction efforts, and to discuss Microsemi’s June 10, 2015 proposal, the status of discussions with the parties that had thus far expressed an interest in a potential strategic transaction, and other parties that could potentially be interested in a strategic transaction with PMC. Mr. Lang updated the Board on the discussions with the parties that had expressed interest in a strategic transaction, and expressed his recommendation that PMC stay engaged with Microsemi, Skyworks and Party F, seek to engage with Party G and Party H, and discuss any indications of interest from potentially interested parties at the next scheduled meeting of the Board on August 5, 2015, after PMC had announced PMC’s financial results for the second quarter of fiscal 2015. After discussion, the Board unanimously determined that PMC was not in a position to respond to Microsemi’s proposal until PMC had announced PMC’s financial results for the second quarter of fiscal 2015. After the meeting of the Board, Mr. Lang communicated the response from the Board to Microsemi’s Chief Executive Officer, James J. Peterson, and it was agreed that the parties would discuss the possibility of a transaction further after PMC announced PMC’s results for the second quarter of fiscal 2015.

After the June 26, 2015 meeting of the Board, Mr. Lang received a telephone call from Mr. Aldrich, who reiterated Skyworks’ interest in a potential strategic transaction, and a follow-up call between Mr. Aldrich and Mr. Lang was set for August 3, 2015, before the next meeting of the Board.

On June 29, 2015, Mr. Lang communicated with the Board regarding the results of his conversation with Mr. Peterson and the telephone call Mr. Lang received from Mr. Aldrich.

On July 17, 2015, Mr. Lang met with the Chief Executive Officer of Party H and discussed further the possibility of a strategic transaction involving PMC and Party H.

On July 20, 2015, Mr. Lang and Mr. Elmurib met with the Chief Executive Officer and another member of the management of Party G and discussed further the possibility of a strategic transaction involving PMC and Party G.

On July 23, 2015, PMC announced PMC’s results for the second quarter of fiscal 2015. The closing price of PMC’s common stock on July 24, 2015, the next trading day after such announcement, was $6.71.

On July 30, 2015, a representative of Party F communicated with Mr. Elmurib by email and requested a meeting. Mr. Elmurib met with the representative of Party F later that day, at which meeting the representative of Party F discussed its plans to try to put together an investment fund that would be interested in pursuing a strategic transaction involving PMC.

On August 3, 2015, Microsemi sent a letter to Mr. Lang re-affirming its June 10, 2015 proposal of $7.61 in cash and 0.0819 shares of Microsemi stock for each share of PMC’s common stock and requesting a response, which re-affirmed proposal was promptly communicated to the Board. Based on the closing price per share of Microsemi’s common stock on August 3, 2015, the value offered was approximately $10.28 per share of PMC’s common stock, or a 51.0% premium over the closing price of PMC’s common stock on August 3, 2015.

On August 3, 2015, a member of Party G’s management communicated with Mr. Lang that it was not interested in further discussions regarding a transaction of the size and complexity of a transaction involving PMC and Party G.

On August 3, 2015, Mr. Lang communicated with Mr. Aldrich by telephone and discussed PMC’s business and a possible strategic transaction.

On August 4, 2015, Party F sent a preliminary indication of interest in an acquisition of PMC, at a price of $10.00 to $11.00 in cash for each share of PMC’s common stock, and indicated that they were setting up a fund to pursue the acquisition and had located certain equity investors for the fund. The proposal was promptly communicated to the Board.

On August 5, 2015, the Board met and discussed Microsemi’s reaffirmed June 10, 2015 proposal and Party F’s August 4, 2015 indication of interest, as well as the conversations between PMC’s management and Skyworks and Party H. The Board instructed Qatalyst Partners to inform Microsemi and Party F that their proposed prices were not adequate, but that the Board was open to allowing business diligence to see if an acceptable price could be reached. After discussion with representatives of Qatalyst Partners regarding any additional parties who may have an interest, and the financial resources, to engage in a business combination with PMC, the Board also instructed representatives of Qatalyst Partners and PMC’s management to reach out to Skyworks, Party C, Party D, Party H, Party I, Party J, and Party K. The Board determined not to contact Party A at this time due to the pendency of a significant strategic transaction involving Party A that had been announced, and decided not to contact Party B and Party E based on feedback from conversations in 2014 regarding a potential strategic transaction.

Between August 6, 2015 and August 11, 2015, members of PMC’s management and representatives of Qatalyst Partners reached out to Party C, Party D, Party H, Party I, Party J and Party K to determine their interest in a possible strategic transaction involving PMC.

On August 6, 2015, a member of PMC’s management sent a proposed form of nondisclosure agreement to Party F.

On August 7, 2015, Mr. Lang communicated with Mr. Aldrich, and Mr. Aldrich informed Mr. Lang that Skyworks had discussed a possible strategic transaction involving PMC with its Board, and that they were supportive of a possible transaction, and that he expected to send a proposal the following week. Mr. Lang asked Skyworks to reach out to Qatalyst Partners, and a representative of Qatalyst Partners received a call from Mr. Schiller with the same message.

On August 7, 2015, a representative of Party F communicated with representatives of Qatalyst Partners regarding the investors they hoped would participate in a fund and their interest in a strategic transaction involving PMC.

On August 10, 2015, a member of Party C’s management communicated with a representative of Qatalyst Partners regarding the timeline and process contemplated by PMC and what additional information could be made available. The representative of Qatalyst Partners indicated that subject to agreement on a nondisclosure agreement, PMC’s management would hold a meeting with Party C management to share financial projections and discuss PMC’s strategy and operations, and that no deadline for proposals had been established, but it was important to schedule a meeting soon in order for Party C to remain competitive from a timing perspective.

On August 10, 2015, Skyworks sent a representative of Qatalyst Partners a written proposal to acquire PMC at a price of $8.25 in cash for each share of PMC’s common stock, subject to further diligence and approval from the board of directors of Skyworks, which proposal was promptly communicated to the Board.

On August 10, 2015, Microsemi requested and received PMC’s consent to share confidential information with a lender.

Between August 10, 2015 and August 11, 2015, members of the Board communicated with PMC’s management and Qatalyst Partners regarding Skyworks’ proposal. The Board unanimously authorized Qatalyst Partners to respond that the proposal was inadequate and to inform Skyworks that it would need to materially increase its proposal in order to be competitive. On August 11, 2015, a representative of Qatalyst Partners communicated the message to Skyworks, and informed PMC’s management that Skyworks had indicated it would respond with a list of diligence questions to see if it could increase its proposed price.

On August 11, 2015, a representative of Qatalyst Partners called a member of Party D’s management, who indicated that Party D was not interested in a possible strategic transaction with PMC.

On August 11, 2015, members of PMC’s management met with members of Microsemi’s management, with representatives of Qatalyst Partners and Stifel participating in the meeting. Later that day, PMC provided additional diligence information to Microsemi.

On August 11, 2015, representatives of Qatalyst Partners, having obtained permission from Skyworks, advised Ms. Flaminia that since January 1, 2013 Qatalyst Partners had provided, and was currently providing, financial advisory services to Skyworks on matters unrelated to the discussions between Skyworks and PMC. Ms. Flaminia requested that Qatalyst Partners provide updated responses to the conflicts questionnaire completed in September 2014 to cover all of the parties currently engaged in discussions with PMC, including Skyworks.

On August 11, 2015, a member of Party K’s management communicated with Mr. Lang that Party K was not interested in discussing a possible strategic transaction involving PMC.

On August 12, 2015, outside counsel for Party C contacted a representative of Skadden regarding entering into a nondisclosure agreement with PMC. Earlier on August 12, 2015, outside counsel for Party C informed Ms. Flaminia that they had been retained by Party C to assist in its review of a possible strategic transaction involving PMC and Party C.

On August 12, 2015, representatives of Qatalyst Partners communicated with Stifel, who requested clarification on the process that PMC intended to pursue in order to evaluate Microsemi’s proposal. On August 13, 2015, a representative of Stifel communicated with a representative of Qatalyst Partners and requested more information about PMC’s RF chipset business.

On August 13, 2015, Mr. Schiller sent a representative of Qatalyst Partners a list of requests for diligence information, to which PMC responded.

On August 17, 2015, members of PMC’s management held a conference call with members of Microsemi’s management, with representatives of Qatalyst Partners and Stifel participating in the call.

On August 18, 2015, PMC entered into a nondisclosure agreement with Party C. The nondisclosure agreement included a standstill that would expire on August 14, 2016, but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC fails to recommend be rejected, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC.

On August 19, 2015, PMC entered into a nondisclosure agreement with Party H and certain potential equity financing sources for Party H. The nondisclosure agreement included a standstill that would expire on August 19, 2016, but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC fails to recommend be rejected, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC. On August 19, 2015 and August 20, 2015, a member of Party H’s management communicated

with Mr. Elmurib, sending a list of proposed diligence questions and responding to a question from Mr. Elmurib regarding its plans to seek co-investors in connection with a strategic transaction involving PMC. PMC sent additional diligence information to Party H in response to its questions.

On August 19, 2015, Microsemi sent a revised written proposal to acquire PMC at a price of $7.61 and 0.0449 shares of Microsemi’s stock for each share of PMC common stock, and requesting a 21-day period of exclusivity, which proposal was promptly communicated to the Board. Based on the closing price per share of Microsemi common stock on the prior trading day, the value offered was approximately $9.08 per share of PMC’s common stock, a 12% reduction from the prior proposal, representing a premium of approximately 42% over the closing price of PMC’s common stock on the prior trading day.

On August 20, 2015, members of PMC’s management met separately with members of the management of each of Skyworks and Party H, and PMC responded to their diligence questions and provided each of them with additional diligence information. Representatives of Qatalyst Partners also participated in these meetings.

On August 20, 2015, PMC entered into a nondisclosure and standstill agreement with Party I. The nondisclosure agreement included a standstill that would expire on August 19, 2016, but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC recommends be accepted, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC.

On August 21, 2015, Mr. Peterson communicated with Mr. Lang, requesting a response to Microsemi’s August 19, 2015 proposal, and Mr. Lang responded that PMC would be holding a meeting of the Board at the end of the following week and would respond promptly thereafter.

On August 21, 2015, members of PMC’s management met separately with members of Party C’s management and members of Party I’s management, and PMC provided Party C and Party I with additional diligence information. Representatives of Qatalyst Partners also participated in these meetings.

On August 24, 2015, PMC entered into a nondisclosure agreement with Party J dated as of August 21, 2015, and PMC provided Party J with additional diligence information. The nondisclosure agreement provided for a standstill that would expire on August 21, 2016, but that would terminate upon the commencement by a third party of a tender or exchange offer that PMC fails to recommend be rejected, or PMC’s entry into a definitive agreement with a third party for a change of control of PMC.

On August 27, 2015, representatives of both Party H and Party I communicated with representatives of Qatalyst Partners that they were not going to continue discussions. In the case of Party H, they stated that their acquisition priorities had shifted from diversification to their core business. In the case of Party I, they cited internal disagreement as to whether the two businesses were sufficiently complementary, and the risks associated with migration to new architectures over the next three years.

On August 27, 2015, Mr. Schiller communicated with a representative of Qatalyst Partners and informed him that Skyworks intended to submit a revised proposal. Later that afternoon, Skyworks sent a written proposal to PMC’s management at a price of $10.00 for each share of PMC common stock, representing a 65% premium to the closing price of PMC’s shares of common stock on the previous day. The proposal was subject to further diligence, and contemplated a period of 55 days for diligence and negotiation. The proposal was promptly communicated to the Board.

On August 27, 2015, a representative of Qatalyst Partners followed up with Party C and was told that interest in a potential transaction was still being evaluated internally.

On August 28, 2015, the Board met to consider the proposals received from Microsemi and Skyworks, and after discussion, instructed Qatalyst Partners and PMC’s management to inform both Microsemi and Skyworks

that the prices proposed were inadequate, but that PMC was prepared to allow them to conduct further due diligence and enter into negotiations to see if a mutually acceptable price could be agreed.

On September 1, 2015, a representative of Qatalyst Partners communicated with Party F to inquire whether Party F still intended to execute a nondisclosure agreement and enter into negotiations with PMC.

On September 1, 2015, the board of directors of Microsemi held a special meeting, with representatives of Stifel and O’Melveny present, to discuss Microsemi’s recent proposal to acquire PMC. The board of directors of Microsemi discussed the due diligence process undertaken to date, the business rationale for the proposed acquisition, and the risks involved. Representatives of Stifel provided a valuation and combined business and prospects presentation on the potential acquisition of PMC and other potential bidders and Microsemi’s Executive Vice President and Chief Financial Officer, John W. Hohener, led a discussion regarding the potential debt financing. The board of directors of Microsemi affirmed its belief that the consummation of the proposed acquisition was advisable and in the best interest of Microsemi and its stockholders, and authorized management of Microsemi to enter into an acquisition transaction on terms consistent with those discussed by the board.

On September 2, 2015, Mr. Schiller communicated with a representative of Qatalyst Partners and indicated that Skyworks was working towards the anticipated deadline for proposals, which was prior to the end of the month, and would be retaining legal counsel and a financial advisor.

On September 2, 2015, counsel for Qatalyst Partners provided the updated written response to its prior conflicts disclosure with respect to Skyworks, Microsemi, and the other parties that were actively engaged in discussions with PMC at the time, confirming that Qatalyst Partners had no material relationships with the parties that were actively engaged in discussions with PMC at the time, other than the financial advisory work for Skyworks on unrelated matters as previously disclosed orally on August 11, 2015.

On September 2, 2015, Stifel communicated with representatives of Qatalyst Partners and informed them that Microsemi had discussed PMC’s response with the board of directors of Microsemi, and that the board of directors of Microsemi understood that PMC intended to allow Microsemi and other interested parties with which PMC was in discussions to conduct due diligence and that PMC intended to solicit higher proposals to determine if a mutually acceptable price could be agreed. Stifel requested that proposals be due on September 21, 2015, and that if agreement could be reached on a mutually acceptable price, that the parties enter into an agreement for the proposed transaction by September 28, 2015, and indicated that Microsemi intended to conduct further diligence to determine if it was able to increase the price it was proposing and requested additional diligence information.

On September 2, 2015, a member of Party C’s management communicated to a representative of Qatalyst Partners that there was interest in a potential transaction with PMC, but that they had concerns over valuation, and requested additional diligence information. On September 2, 2015 and September 3, 2015, representatives of Qatalyst Partners furnished additional diligence information to Party C on PMC’s behalf.

On September 2, 2015, members of PMC’s management held a conference call with Party C management, and PMC provided additional diligence information to Party C. Representatives of Qatalyst Partners participated in the call.

On September 2, 2015, a representative of Qatalyst Partners communicated with members of Party J management regarding scheduling a meeting and provided additional diligence information to Party J.

On September 3, 2015, PMC furnished access to an online data room with documents and other diligence information to Microsemi and Skyworks. Promptly after additional diligence information was furnished in response to diligence requests during this process, it was also furnished in the online data room to bidders other than the party that had originally requested such information.

On September 3, 2015, a member of Party J’s management communicated to a representative of Qatalyst Partners that it was not going to continue discussions, indicating that there was some internal interest, but also reservations at the size of a potential transaction, and it could not arrive at a consensus in support of a transaction.

On September 3, 2015 and September 4, 2015, Party F requested and received PMC’s consent to share confidential information with two additional co-investors.

On September 4, 2015, Microsemi requested and received PMC’s consent to share confidential information with a second lender.

On September 8, 2015, the board of directors of Microsemi met at a regularly scheduled meeting of the board of directors, with representatives of O’Melveny present, and discussed, among other things, the proposed transaction with PMC.

On September 9, 2015, a representative of Qatalyst Partners sent process letters to Microsemi and Skyworks calling on each to complete its due diligence and present an unconditional best and final offer, complete with a mark-up of a definitive acquisition agreement, by September 28, 2015.

On September 9, 2015, Mr. Elmurib met with a member of Party F’s management, who indicated that their process was taking longer than anticipated, and would be disrupted by some local holidays, but that they were hoping to get signatures from their proposed co-investors on the nondisclosure agreement soon, and proposed a meeting to follow-up in mid-October.

On September 10, 2015, Skyworks requested and received PMC’s consent to share confidential information with Barclays as a source of financing.

On September 11, 2015, a representative of Stifel and Mr. Schiller each separately communicated with a representative of Qatalyst Partners regarding supplemental requests for information and scheduling diligence meetings with PMC management. Over the following week, PMC provided additional diligence materials in response to their requests.

On September 14, September 15 and again on September 17, 2015, members of PMC’s management met with members of Skyworks’ management for further diligence meetings. Representatives of Qatalyst Partners were also present.

On September 15, 2015, at PMC’s request, Qatalyst Partners sent a draft merger agreement prepared by Skadden to each of Microsemi (contemplating a transaction in which the consideration would be cash and stock) and Skyworks (contemplating a transaction in which the consideration would be all cash).

On September 16, 2015, members of PMC’s management met with members of Microsemi’s management for diligence purposes, with representatives of Qatalyst Partners and representatives of Stifel participating in the meeting.

On September 16, 2015, Mr. Lang communicated with Party C’s management to discuss Party C’s level of interest in a strategic transaction with PMC, and to remind Party C of the upcoming deadline for the receipt of bids.

On September 18, 2015, members of PMC’s management participated in two conference calls with members of Microsemi’s management for diligence purposes, with representatives of Qatalyst Partners and representatives of Stifel participating in the calls. Also on September 18, 2015, representatives of Stifel communicated with a representative of Qatalyst Partners and indicated that Microsemi intended to provide detailed comments on the form of merger agreement proposed by PMC in an effort to resolve open issues with

respect to the merger agreement in advance of the final deadline for proposals. Later that evening, Microsemi’s legal counsel sent comments on the merger agreement to representatives of Skadden.

On September 19, 2015, the Board met to review information provided by Qatalyst Partners and Skadden with respect to their engagement by Skyworks on unrelated matters. The Board requested that Qatalyst Partners should be asked to terminate its representation of Skyworks, which Qatalyst Partners had offered to do, and that the Board should also retain a second financial advisor to advise it as to the fairness of the consideration to PMC’s stockholders in any transaction. The Board also determined that because the Skadden team working on PMC’s behalf was distinct from the Skadden team that has worked on behalf of Skyworks on unrelated matters, Skadden would continue to represent PMC in its evaluation of strategic alternatives. On September 21, 2015, Qatalyst Partners advised PMC that it had terminated the unrelated Skyworks representation as requested by the Board.

On September 22, 2015, Mr. Lang again communicated with Party C’s management to discuss Party C’s level of interest in a strategic transaction involving PMC and Party C, and to remind Party C of the upcoming deadline for the receipt of bids. Later that day, a member of Party C’s management communicated with a representative of Qatalyst Partners regarding its intention to submit a proposal at a price between $7.00 and $9.00 a share, and the representative of Qatalyst Partners informed Party C’s management that such a proposal would not be competitive. Later that day Party C sent a written proposal to acquire PMC at a price between $8.00 to $10.00 per share of PMC’s common stock, subject to further due diligence, which proposal was promptly communicated to the Board.

On September 23, 2015, representatives of Skadden held a conference call with representatives of O’Melveny to negotiate the terms of the merger agreement.

On September 23, 2015, Qatalyst Partners sent a process letter to Party C calling for it to complete its due diligence and present an unconditional best and final offer by September 28, 2015, as well as the form of merger agreement prepared by Skadden contemplating a transaction in which the consideration would be all cash. On September 23, 2015, Party C was granted access to the online data room PMC established for diligence purposes.

Between September 23, 2015 and September 28, 2015, members of PMC’s management held diligence meetings with members of the management of each of Microsemi and Party C, and diligence calls with members of the management of each of Skyworks, Microsemi and Party C, and PMC provided each of them with additional diligence information. During this period, members of PMC’s management also participated in diligence calls and a meeting with Microsemi with respect to PMC’s diligence investigation of Microsemi. Representatives of Qatalyst Partners participated in these calls, and in the meetings between members of PMC’s management and members of Party C’s management and between members of PMC’s management and members of Microsemi’s management. Representatives of Stifel also participated in the calls and meetings between members of PMC’s management and the members of Microsemi’s management.

On September 24, 2015, a member of Party C’s management communicated with Mr. Lang and indicated that Party C was interested in a potential strategic transaction with PMC, but was not likely to move quickly.

On September 24, 2015, a member of Party F’s management communicated with a representative of Skadden to indicate that Party F was prepared to execute the nondisclosure agreement; however, a number of their proposed equity investors were not yet willing to enter into the nondisclosure agreement.

On September 25, 2015, a representative of Skadden furnished initial drafts of the disclosure schedules to the merger agreement to legal counsel to Microsemi and Skyworks, and sent a revised draft of the merger agreement to Microsemi’s legal counsel reflecting PMC’s responses to the comments previously submitted by Microsemi.

On September 25, 2015, Mr. Peterson sent a letter addressed to the Board informing the Board that Microsemi intended to submit its best and final firm offer by 2:00 p.m. Pacific time on September 28, 2015, that the proposal would be fully financed, not subject to any further diligence or conditions, and would include a negotiated merger agreement, and that the offer would expire on September 29, 2015 at 5:00 p.m. Pacific time. Later that day, a representative of Qatalyst Partners communicated with a member of Microsemi’s management and informed them that the Board meeting would not take place until October 1, 2015, as previously communicated, and that the Board had determined that it would not be possible to change the timing of the meeting.

On September 26, 2015, with the approval of all members of the Board, Jonathan Judge, the Chairman of the Board, sent a letter to Mr. Peterson reminding him that PMC had scheduled a meeting of the Board for October 1, 2015 to consider all proposals from interested parties, including any proposal from Microsemi, informing him that if Microsemi withdrew its proposal or its proposal expired, PMC would have no choice but to view Microsemi’s proposal as withdrawn, and informing him that PMC looked forward to receiving Microsemi’s proposal.

On September 26, 2015, Mr. Elmurib contacted three financial advisory firms, including the firm that was ultimately retained, Needham & Company, LLC (“Needham & Company”) to discuss retaining one of them to serve as a second financial advisor in connection with PMC’s review of any proposed transactions.

On September 28, 2015, both Microsemi and Skyworks submitted written proposals to acquire PMC, including comments on the proposed form of merger agreement. Microsemi proposed $7.61 in cash and 0.0771 shares of Microsemi common stock for each share of PMC’s common stock, and the offer by its terms would expire at 6:00 p.m. EDT on September 29, 2015. Based on the closing price per share of Microsemi’s common stock on the prior trading day, the value proposed was approximately $10.00 per share of PMC’s common stock. Skyworks proposed $10.00 in cash per share of PMC’s common stock. Both proposals were promptly communicated to the Board. Each of the proposals represented a premium of approximately 57% over the closing price of PMC’s common stock on the prior trading day.

On September 29, 2015, representatives of each of Qatalyst Partners and Skadden contacted members of Microsemi’s management and its legal counsel, respectively, and asked them to extend the expiration of Microsemi’s proposal given the timing of the meeting of the Board on October 1, 2015, but both Qatalyst Partners and Skadden received no response. Additionally, representatives of Qatalyst Partners communicated with members of Microsemi’s management, and urged them to put forward their best and final bid.

On September 29, 2015, PMC entered into a formal engagement letter with Needham & Company to serve as a financial advisor in connection with PMC’s review of any proposed transactions, based on Needham & Company’s qualifications, expertise, reputation and knowledge of PMC’s business and affairs and the industry in which PMC operates.

On September 29, 2015, representatives of Skadden held a conference call with counsel to Skyworks for negotiations with respect to the merger agreement. On September 30, 2015, a representative of Skadden sent a revised draft of the merger agreement to Skyworks’ legal counsel reflecting PMC’s responses to the comments submitted by Skyworks on September 28, 2015.

On September 30, 2015, a representative of Qatalyst Partners communicated with Mr. Schiller and urged Skyworks to raise the price they were offering in order to distinguish their bid from the competition.

On the morning of October 1, 2015, the Board met to review the final bids that were received in response to PMC’s call for proposals, with representatives of Skadden, Qatalyst Partners and Needham & Company in attendance. Mr. Lang described the bids that had been received from Microsemi and Skyworks, noting that both Microsemi and Skyworks had sent proposals offering to pay $10.00 per share of PMC’s common stock, but the

Skyworks proposal was all cash, and the Microsemi proposal included $7.61 in cash and 0.0771 shares of Microsemi common stock, with a value of approximately $10.14 based on the closing price of the Microsemi common stock on the prior trading day. Mr. Lang noted that the proposal from Microsemi had expired in accordance with its terms on September 29, 2015, but that he recommended that the Board assess the merits of the proposal from Microsemi notwithstanding that the proposal had expired. Mr. Lang also said that he had received a voicemail from Mr. Aldrich suggesting that Skyworks may be able to raise its price. A representative of Qatalyst Partners then summarized the history of and status of the negotiations with Microsemi, Skyworks and Party C and the terms of the current proposals from Microsemi and Skyworks, noting that each party had been repeatedly urged to make its best and final proposal. The representative of Qatalyst Partners summarized the terms of the two bids received, noting that the transaction proposed by Skyworks would involve significantly lower leverage, and that negotiations with respect to the proposed form of merger agreement were at an advanced stage with both parties. Finally, the representative of Qatalyst Partners noted that Party C had moved slowly throughout the process, and that although Party C had been actively engaged and done a significant amount of work on diligence over the 10 days prior to the meeting of the Board, it had not yet submitted a proposal, notwithstanding that Party C understood the timing of PMC’s process. A representative of Skadden then described the fiduciary duties of the Board, and a representative of Qatalyst Partners discussed the financial aspects of the proposals. A representative of Skadden then summarized the status of the negotiations with each of Microsemi and Skyworks with respect to the merger agreement, reviewing the material terms of each of the agreements, highlighting the nature of the financing commitments and commitments to securing required regulatory clearances, and noting that both agreements contained customary “fiduciary out” provisions to allow the Board to terminate the agreement to accept a superior proposal if failure to do so would be inconsistent with the Board’s fiduciary duties, and that there were no material differences in the closing conditions and termination provisions. The representative of Skadden noted that while there were still open issues, neither proposed form of merger agreement contained any issues that were likely to prevent reaching agreement on the terms of a merger agreement, and that both bidders had agreed to full specific performance of their obligation to consummate the transaction.

During the meeting of the Board on October 1, 2015, a member of Microsemi’s management telephoned a representative of Qatalyst Partners to inform him that Microsemi’s proposal was still open even though the written offer had expired by its terms, and reiterated that the proposal they had submitted was their best and final proposal; the fact that Microsemi’s bid was still open was also subsequently confirmed in writing in a letter from Microsemi to PMC. After Qatalyst Partners completed its presentation, a discussion ensued among the members of the Board, Mr. Lang and the representatives of Qatalyst Partners regarding PMC’s ability to achieve and sustain the projected rates of growth and operating margins in light of the competitive environment, past performance and the risks of a market dislocation that could impact trading multiples and valuations, opportunities for growth, and the potential for a transaction with Microsemi or other potential interested parties at some point in the future, if PMC does not pursue a transaction at this point. After discussion of the merits of an all cash offer versus the cash and equity proposal from Microsemi, the possible market reaction to the level of leverage contemplated by the Microsemi proposal and the impact that would have on the value of the Microsemi proposal, and the risks inherent in achieving PMC’s standalone plan, the Board determined that the all cash proposal from Skyworks, inclusive of any expected increase pursuant to the voicemail left by Mr. Aldrich, was superior to the proposal from Microsemi, but directed management and Qatalyst Partners to ask both parties to raise their proposed prices, informing Skyworks that PMC would move quickly to enter into a definitive agreement if it would raise its offer to $10.50 per share, and informing Microsemi that its bid was not selected and it would not be the winning bidder at its current offer.

In the afternoon of October 1, 2015, Mr. Lang communicated with Mr. Aldrich by telephone and urged Skyworks to raise the price it was offering, and after negotiations, Mr. Aldrich agreed to propose a price of $10.50 per share, which Skyworks subsequently confirmed in writing.

In the afternoon of October 1, 2015, representatives of Qatalyst Partners communicated with a member of Microsemi’s management, who informed them that Microsemi would not increase its bid and confirmed that its

prior bid was its best and final proposal. Qatalyst Partners informed him that the Board had determined not to proceed with Microsemi’s proposal.

From October 2, 2015 to October 5, 2015, members of PMC’s management and representatives of Skadden participated in negotiations with Skyworks and its counsel with respect to the proposed merger agreement, including the scope of the representations and warranties, the restrictions on PMC’s operations between the signing of the merger agreement and the consummation of the merger, the obligation of Skyworks to enforce its debt commitment and the remedies if the transaction failed to close, the terms of the commitment letter for debt financing to be provided by Skyworks’ financing sources, the disclosure schedules with respect to the merger agreement, and other open issues with respect to the merger agreement and legal diligence effort.

At 9 a.m. on October 5, 2015, the Board met to review the status of the negotiations and the terms of the proposed transaction, attended by representatives of Qatalyst Partners, Needham & Company and Skadden, respectively. At the meeting, representatives of Qatalyst Partners discussed the financial aspects of the proposed transaction, updated to reflect changes in the market price of PMC’s shares of common stock since October 1, 2015. Representatives of Needham & Company then discussed the financial aspects of the proposed transaction. Skadden described the terms of and status with respect to the negotiation of the merger agreement. The meeting of the Board was adjourned until 1:00 p.m.

During the day on October 5, 2015, PMC management and legal counsel participated in negotiations with Skyworks and its legal counsel regarding the merger agreement and completed the preparation of the disclosure schedules to the merger agreement.

At 1 p.m. on October 5, 2015, the Board reconvened to hear an update on the status of the negotiations regarding the merger agreement from PMC’s management, legal counsel and financial advisors, attended by representatives of Qatalyst Partners, Needham & Company and Skadden, respectively. Ms. Flaminia and Mr. Lang described the status of negotiations with respect to the merger agreement. A representative of Qatalyst Partners indicated that he had communicated with a member of Party C’s management earlier that day regarding whether Party C still intended to submit a proposal, and the member of Party C’s management had indicated that Party C was likely to make a proposal, but would offer a price of around $9.00 per share, and that there was resistance internally to offering more than $9.00 per share of PMC’s common stock. The representative of Qatalyst Partners told the member of Party C’s management that such a proposal would not be competitive, but Party C had not expressed any willingness to increase its proposed price in response. Qatalyst Partners then rendered its oral opinion, subsequently confirmed in writing, that as of October 5, 2015 and based upon and subject to the various considerations, limitations and other matters set forth in its written opinion, the $10.50 per share cash consideration to be received by the holders of PMC’s common stock, other than Skyworks or any affiliates of Skyworks, pursuant to the merger agreement was fair, from a financial point of view, to such holders. Needham & Company delivered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated October 5, 2015, to the effect that, as of such date, and based upon and subject to the assumptions and other matters described in its written opinion, the consideration of $10.50 per share in cash to be received by the holders of PMC’s common stock (other than Skyworks, any affiliates of Skyworks and holders of dissenting shares who properly exercise their appraisal rights) pursuant to the merger agreement, was fair, from a financial point of view, to such holders. Skadden then described the proposed resolutions. Following a discussion, the resolutions approving the merger agreement and the merger contemplated thereby were unanimously approved by the Board members in attendance.

In the evening of October 5, 2015, PMC executed and delivered the merger agreement with Skyworks, and PMC and Skyworks issued a joint press release announcing the merger agreement after the close of trading on October 5, 2015. At that time, all standstill agreements with other parties automatically expired in accordance with their terms.

On October 8, 2015, the board of directors of Microsemi met, with representatives of Stifel and O’Melveny present, to review and discuss Microsemi’s proposal to acquire PMC. Mr. Peterson and Mr. Litchfield provided an update on the proposed acquisition, including the status of PMC’s merger agreement with Skyworks, revisions to the merger agreement that Microsemi would make were it to revise its proposal and proposed revised terms for the acquisition financing. Representatives of Stifel provided a financial valuation of Microsemi’s revised bid and comparable multiples/premiums used in PMC’s industry. At the meeting, the board of directors of Microsemi authorized management of Microsemi to execute and deliver a revised proposal on terms consistent with those discussed by the board of directors of Microsemi.

On October 19, 2015, Microsemi sent a written proposal to acquire PMC at a price of $8.75 in cash and 0.0736 shares of Microsemi stock for each share of PMC’s common stock, which proposal was contemporaneously publicly announced and promptly communicated to the Board. Based on the closing price per share of Microsemi’s common stock on the prior trading day, the value proposed was approximately $11.50 per share of PMC’s common stock. Later that day, the Board determined, after consultation with its financial advisors and outside legal counsel, that the Microsemi proposal would reasonably be expected to lead to a superior proposal, and that the failure to participate in discussions with Microsemi would reasonably be expected to be inconsistent with the Board’s fiduciary duties, and accordingly PMC provided Skyworks notice of PMC’s intent to engage in discussions with Microsemi.

After Microsemi and PMC had entered into a new non-disclosure agreement on October 20, 2015, between October 20, 2015 and October 26, 2015, PMC’s management and representatives of Skadden, Qatalyst Partners and Needham & Company participated in additional diligence meetings with members of Microsemi’s management and representatives of O’Melveny and Stifel, including meetings for purposes of reverse diligence regarding Microsemi, as well as negotiations with respect to the proposed merger agreement and disclosure schedules.

On October 22, 2015 and October 23, 2015, PMC provided updated information regarding preliminary financial results for the third quarter of fiscal 2015 and projected performance for the fourth quarter of fiscal 2015 to Microsemi and Skyworks, respectively.

The Board met on October 26, 2015 and determined that Microsemi’s proposal of $8.75 in cash and 0.0736 shares of Microsemi stock for each share of PMC’s common stock was superior to the $10.50 per share payable under the merger agreement with Skyworks, and PMC promptly gave notice to Skyworks of PMC’s intention to terminate the merger agreement to enter into an acquisition agreement with Microsemi if Skyworks did not submit a binding proposal to change the terms of the merger agreement such that the Microsemi proposal would no longer be a superior proposal on or before 5:00 p.m. on October 29, 2015, and PMC informed Skyworks of PMC’s willingness to engage in negotiations with Skyworks.

On October 27, 2015, during a pre-planned trip to meet with a PMC customer, Mr. Lang met with Mr. Aldrich to discuss Microsemi’s October 19, 2015 proposal, confirm Skyworks’ interest in PMC and request that Skyworks increase its proposed purchase price in response to Microsemi’s proposal. Between October 27, 2015 and October 29, 2015, representatives of Qatalyst Partners also communicated with representatives of Skyworks to urge them to increase their proposed purchase price.

On October 29, 2015, Skyworks submitted a proposed amended and restated merger agreement providing for a price of $11.60 per share in cash, and providing for an increase in the amount of the termination fee from $70 million to $88.5 million. The updated Skyworks proposal was promptly communicated to the Board. Representatives of Qatalyst Partners contacted representatives of Skyworks’ management seeking to have Skyworks increase its price and reverse the proposed increase in the termination fee. Mr. Lang communicated with Mr. Aldrich and requested that Skyworks withdraw its request to increase the termination fee. Representatives of Skadden contacted Skyworks’ outside legal counsel to request that Skyworks reverse its proposed increase in the termination fee. Representatives of Skyworks’ management and Skyworks’ outside legal counsel separately communicated to representatives of Qatalyst Partners and Skadden that Skyworks was not willing to further increase its proposed purchase price or reverse the proposed increase in the termination fee and

that the increase in the termination fee was an integral part of Skyworks’ willingness to increase its bid to $11.60 per share. Representatives of Qatalyst Partners communicated with members of Microsemi’s management and its financial advisor to ask them if Microsemi was willing to increase its bid and informed them that Microsemi should submit its best and final offer. Microsemi declined to increase its bid at this time, but indicated that it intended to keep pursuing a transaction with PMC. On the evening of October 29, 2015, after consultation with its financial advisors and outside legal counsel, the Board determined that the Microsemi proposal was not superior to the amended and restated merger agreement proposed by Skyworks. In connection with the Board’s determination to approve the amended and restated merger agreement with Skyworks, Qatalyst Partners rendered its oral opinion, subsequently confirmed in writing, that as of October 29, 2015 and based upon and subject to the various considerations, limitations and other matters set forth in its written opinion, the $11.60 per share cash consideration to be received by the holders of PMC’s common stock, other than Skyworks or any affiliates of Skyworks, pursuant to the merger agreement was fair, from a financial point of view, to such holders, and Needham & Company delivered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated October 29, 2015, to the effect that, as of such date, and based upon and subject to the assumptions and other matters described in its written opinion, the consideration of $11.60 per share in cash to be received by the holders of PMC’s common stock (other than Skyworks, any affiliates of Skyworks and holders of dissenting shares who properly exercise their appraisal rights) pursuant to the merger agreement, was fair, from a financial point of view, to such holders. Skadden then described the proposed resolutions. The Board discussed and unanimously approved resolutions approving the amended and restated merger agreement and the merger contemplated thereby. PMC entered into the amended and restated merger agreement proposed by Skyworks later that evening, and announced the amended and restated merger agreement with Skyworks before the opening of trading on October 30, 2015.

On October 29, 2015, the board of directors of Microsemi held a special meeting, with representatives of Stifel and O’Melveny present, to discuss the proposed acquisition of PMC. The board of directors of Microsemi discussed PMC’s merger agreement with Skyworks and representatives of Stifel provided a financial valuation and combined business and prospects presentation. The board of directors of Microsemi authorized management of Microsemi to execute and deliver a revised proposal on terms consistent with those discussed by the board of directors of Microsemi.

Mid-morning on October 30, 2015, Microsemi sent a written proposal to acquire PMC at a price of $9.04 in cash and 0.0771 shares of Microsemi stock for each share of PMC’s common stock, which proposal was also publicly announced. Based on Microsemi’s closing price on the prior trading day, the value proposed was approximately $11.88 per share of PMC’s common stock. Microsemi’s revised proposal did not include an updated debt commitment letter confirming its lenders’ approval of the new Microsemi proposal and contemplated a promissory note structure for payment of the Skyworks termination fee that would have caused PMC to violate the terms of its existing revolving credit agreement. In the evening of October 30, 2015, the Board determined, after consultation with its financial advisors and outside legal counsel, that the Microsemi proposal would reasonably be expected to lead to a superior proposal, and that the failure to participate in further discussions with Microsemi would reasonably be expected to be inconsistent with the Board’s fiduciary duties. Shortly after the meeting of the Board, PMC provided Skyworks notice of PMC’s intent to engage in further discussions with Microsemi and notified Microsemi of the determination of the Board.

After Microsemi entered into a new nondisclosure agreement, on October 31, 2015, representatives of Qatalyst Partners communicated with members of Microsemi’s management and its financial advisors and informed them of the determination of the Board, and encouraged them again to increase Microsemi’s proposed consideration and to provide its best and final offer. On the same day, representatives of Skadden communicated with Microsemi’s outside legal counsel and discussed the need for confirmation that Microsemi’s lenders had approved Microsemi’s revised bid and the elimination of the promissory note mechanic for payment of the termination fee under the Skyworks merger agreement, and informed them of the Board’s determination and the necessity of Microsemi putting forward its best and final offer at this time.

On October 31, 2015, Mr. Aldrich called Mr. Lang to discuss Microsemi’s proposal and PMC’s views of the proposal. Mr. Lang advised Mr. Aldrich that the Board would evaluate the proposal and make a determination.

On November 1, 2015, Microsemi submitted a revised proposal that included a debt commitment letter that confirmed its lenders’ approval of the revised Microsemi proposal, and provided for direct payment of the Skyworks termination fee by Microsemi without need of any promissory note from PMC, but this proposal did not provide for an increase in the proposed price. Representatives of Microsemi contacted representatives of Qatalyst Partners to discuss the value of the Microsemi proposal and Microsemi’s upcoming earnings announcement, scheduled for November 5, 2015. On the evening of November 1, 2015, the Board met to consider this latest Microsemi proposal, and after consultation with PMC’s financial advisors and outside legal counsel who were present at the meeting, the Board unanimously determined that the value of the Microsemi proposal of $9.04 in cash and 0.0771 shares of Microsemi stock for each share of PMC’s common stock was not superior to the value offered by the amended and restated merger agreement with Skyworks at that time, but that the Board would continue to monitor developments with respect to the value of Microsemi’s stock. Shortly after the meeting of the Board, PMC issued a press release announcing that the Board had been unable to conclude that the Microsemi proposal was superior to the amended and restated merger agreement with Skyworks at that time, and that the Board continued to recommend the merger agreement with Skyworks to PMC’s stockholders, because the Board believed that the mixed stock/cash consideration proposed by Microsemi did not provide superior value compared to the all cash $11.60 transaction with Skyworks, and because while Microsemi’s proposal was nominally higher than Skyworks’ proposal based on prices as of October 30, 2015, the Board believed that Skyworks’ all cash proposal provided more value certainty to stockholders than the stock and cash consideration provided in the Microsemi proposal. The Board also took into account the relatively modest timing difference between the two proposals.

On November 2, 2015, the board of directors of Microsemi held a special meeting, with representatives of O’Melveny and Stifel present, to discuss its proposal to acquire PMC, including the terms of the potential transaction, synergies, risks and opportunities available to Microsemi in connection with the proposed acquisition of PMC. Management of Microsemi agreed to provide a recommendation to the board of directors of Microsemi on the potential acquisition at the meeting of the board of directors on November 6, 2015.

On November 6, 2015, the board of directors of Microsemi held a special meeting, with representatives of Stifel and O’Melveny present, and determined, after consultation with and presentation from its financial advisors, to authorize Microsemi management to execute and deliver a merger agreement on terms consistent with those discussed by the board of directors of Microsemi.

On November 6, 2015, the Board held a meeting, and at that meeting the Board determined, after consultation with its financial advisors and outside legal counsel, to continue discussions with Microsemi regarding Microsemi’s proposal to acquire PMC in view of the increase in the price per share of Microsemi stock following its earnings announcement on November 5, 2015 and Microsemi’s reiteration and reaffirmation of its proposal to acquire PMC on November 2, 2015 and November 5, 2015. The Board directed its financial and legal advisors to notify Microsemi and its outside legal counsel of the Board’s determination and to clarify with Microsemi whether Microsemi intended to deliver the proposal in a binding manner capable of acceptance by PMC. Following the meeting of the Board, representatives of Qatalyst Partners contacted a representative of Microsemi and a representative of Skadden contacted a representative of Microsemi’s counsel as directed by the Board. On November 7, 2015, representatives of PMC’s management and Qatalyst Partners advised representatives of Skyworks’ management of the Board’s determination.

On November 8, 2015, Mr. Lang communicated with Mr. Aldrich regarding the decision by the Board to reassess the Microsemi proposal.

On November 8, 2015, at the request of Microsemi’s Executive Vice President and Chief Strategy Officer, Steven G. Litchfield, Mr. Peterson had a call with Jonathan Judge, PMC’s Chairman, and they discussed the Microsemi proposal.

On the night of November 8, 2015, PMC’s outside counsel received a letter from Skyworks addressed to the Board questioning whether PMC’s interactions with Microsemi in the wake of Microsemi’s reiteration of its proposal were consistent with PMC’s obligations under the non-solicitation provision of the amended and restated merger agreement with Skyworks. The letter was promptly made available to the Board.

On November 9, 2015, Microsemi delivered a proposal in a binding manner capable of acceptance by PMC, which was substantively identical to the proposal submitted on November 1, 2015, except that it provided for a commitment by Microsemi to commence an exchange offer within 10 business days, rather than 20 business days, of execution of a definitive merger agreement with PMC, and a reduced termination fee of $67 million rather than $88.5 million. The Board met in the evening on November 9, 2015 and determined, after consulting with PMC’s financial and legal advisors, that Microsemi’s proposal of $9.04 in cash and 0.0771 shares of Microsemi stock for each share of PMC’s common stock, which, based on the closing price per share of Microsemi common stock that day, represented nominal value of $11.97 per share of PMC’s common stock, was superior to the $11.60 in cash per share payable under the amended and restated merger agreement with Skyworks. PMC promptly gave notice to Skyworks of PMC’s intention to terminate the merger agreement to enter into an acquisition agreement with Microsemi if Skyworks did not submit a binding proposal to change the terms of the Skyworks merger agreement such that the Microsemi proposal would no longer be a superior proposal before the end of business on November 13, 2015, and representatives of Skadden informed Microsemi’s outside counsel of the Board’s determination. PMC also informed Skyworks of PMC’s willingness to engage in negotiations in good faith with Skyworks during such period. That night, PMC also sent a letter to Skyworks in response to the letter received from Skyworks the day before confirming that there had been no breach of any of PMC’s contractual obligations to Skyworks.

On November 10, 2015, members of PMC’s management spoke with members of Skyworks’ management regarding the Board’s determination that the Microsemi proposal constituted a superior proposal, and regarding whether Skyworks intended to propose to change the terms of the amended and restated merger agreement with Skyworks such that the Microsemi proposal would no longer be a superior proposal. In addition, on the same day, at the request of Skyworks, Mr. Judge had a telephone call with Kevin Beebe, a member of the board of directors of Skyworks.

On November 10, 2015, the board of directors of Microsemi held a regularly scheduled meeting, with representatives of O’Melveny present, and management of Microsemi provided an update on matters related to Microsemi’s proposed acquisition of PMC.

Between November 11, 2015 and November 13, 2015, Mr. Lang communicated with Mr. Aldrich on several occasions regarding whether Skyworks intended to propose changes to the terms of the amended and restated merger agreement with Skyworks, but notwithstanding PMC’s requests to improve the terms of PMC’s current transaction, Skyworks declined to do so.

The Board met on the evening of November 13, 2015 to consider once again whether the Microsemi proposal of $9.04 in cash and 0.0771 shares of Microsemi stock for each share of PMC’s common stock was superior to the $11.60 in cash per share payable under the amended and restated merger agreement with Skyworks. Based on the closing price of Microsemi’s stock on November 13, 2015, which had declined by approximately 6.6% from the closing price on November 9, 2015, the Microsemi proposal represented nominal value of $11.77 per share of PMC’s common stock. The Board unanimously determined, after receiving the advice of its financial advisors and outside legal counsel, that Microsemi’s latest proposal was not superior to PMC’s existing amended and restated merger agreement with Skyworks in light of the recent stock market volatility and concern regarding the market effect of geopolitical events. In light of the letter from Skyworks on November 8, 2015 questioning whether PMC’s interactions with Microsemi were consistent with its obligations under the nonsolicitation provision in the amended and restated merger agreement with Skyworks, prior to the meeting of the Board, PMC requested and received written assurances from Skyworks that it would not seek to terminate the amended and restated merger agreement with Skyworks in the event the Board determined it was superior to the proposal from Microsemi.

During the afternoon of November 14, 2015, a member of Microsemi’s management sent a letter addressed to the Board inquiring whether, if Microsemi increased its bid by approximately $0.105 in cash per share of PMC’s stock, such that the nominal value of its proposal, based on the closing price of the Microsemi stock on November 13, 2015, would be $11.88 per share of PMC’s stock, PMC would be permitted under the terms of the amended and restated merger agreement with Skyworks to, and willing to, accept such an updated Microsemi proposal over the weekend of November 14th–15th without providing Skyworks an opportunity to match the updated Microsemi proposal, and this proposal was promptly communicated to the Board and to Skyworks. Following PMC’s transmitting the letter from Microsemi to Skyworks, counsel to Skyworks communicated with a representative of Skadden in writing that to proceed as Microsemi had suggested would constitute a breach under PMC’s agreement with Skyworks—a view with which the Board agreed. Moreover, the Board unanimously determined that the latest Microsemi proposal was not reasonably likely to lead to a superior proposal. On November 15, 2015, a member of Microsemi’s management sent a letter addressed to the Board rescinding the proposal.

On November 17, 2015 Microsemi submitted a proposal in a binding manner capable of acceptance by PMC, to acquire PMC at a price of $9.22 in cash and 0.0771 shares of Microsemi stock for each share of PMC’s common stock, which was otherwise substantively identical to the proposal submitted on November 1, 2015.

On November 18, 2015, the Board met and determined, after consulting with its financial and legal advisors, that Microsemi’s proposal received on the previous day, which based on the closing price of Microsemi’s stock on November 18, 2015 represented nominal value of $12.07 per share of PMC’s common stock, was superior to the $11.60 per share payable under the amended and restated merger agreement with Skyworks. PMC promptly gave notice to Skyworks of PMC’s intention to terminate the merger agreement to enter into an acquisition agreement with Microsemi if Skyworks did not submit a binding proposal to change the terms of the Skyworks merger agreement such that the Microsemi proposal would no longer be a superior proposal before the end of business on November 23, 2015, and informed Skyworks of PMC’s willingness to engage in negotiations in good faith with Skyworks during such period.

Between November 18, 2015 and November 23, 2015, representatives of PMC, Qatalyst Partners and Skadden communicated with Skyworks regarding whether it intended to increase its bid. Skyworks indicated that it was not willing to increase its bid.

On the evening of November 23, 2015, the Board met and determined, after consultation with its financial advisors and outside legal counsel, that the Microsemi proposal constituted a superior proposal and that it would be inconsistent with its fiduciary duties not to terminate the amended and restated merger agreement with Skyworks and approve the proposed merger agreement with Microsemi. In connection with the Board’s determination to approve the merger agreement with Microsemi, Qatalyst Partners rendered its oral opinion, subsequently confirmed in writing, that as of November 23, 2015 and based upon and subject to the various considerations, limitations and other matters set forth in its written opinion, the consideration of $9.22 cash and 0.0771 shares of Microsemi stock per share to be received by the holders of PMC’s common stock, other than Microsemi or any affiliates of Microsemi, pursuant to the merger agreement was fair, from a financial point of view, to such holders, and Needham & Company delivered to the Board its oral opinion, which was confirmed by delivery of a written opinion dated November 23, 2015, to the effect that, as of such date, and based upon and subject to the assumptions and other matters described in its written opinion, the consideration of $9.22 cash and 0.0771 shares of Microsemi stock per share to be received by the holders of PMC’s common stock (other than Microsemi, any affiliates of Microsemi and holders of dissenting shares who properly exercise their appraisal rights) pursuant to the merger agreement, was fair, from a financial point of view, to such holders. Skadden then described the proposed resolutions. Following a discussion, the resolutions approving the termination of the amended and restated merger agreement with Skyworks, and approving merger agreement with Microsemi and the merger contemplated thereby, were unanimously approved by the Board members in attendance. PMC promptly delivered a notice of termination to Skyworks with respect to the amended and restated merger agreement with Skyworks.

On November 24, 2015, PMC executed and delivered the merger agreement with Microsemi, and PMC and Microsemi issued a joint press release announcing the merger agreement prior to the start of trading on November 24, 2015. Microsemi then paid the $88.5 million termination fee (which PMC was obligated to pay to Skyworks) to PMC, and PMC promptly paid such amount to Skyworks.

Reasons for the Board’s Recommendation

At a meeting held on November 23, 2015, the Board determined that the Offer and the Merger was advisable, fair to, and in the best interests of, our stockholders, approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and recommended that our stockholders tender their Shares in the Offer.

In evaluating the Offer, the Merger, and the Merger Agreement, the Board consulted with the Company’s senior management team, as well as the Company’s outside legal and financial advisors, and considered a number of factors, including the following material factors (not in any relative order of importance):

•

the fact that the proposed consideration to be received by the holders of the Company’s common stock of $9.22 in cash and 0.0771 shares of Parent common stock per share of the Company’s common stock represented a premium over the market price at which the Company’s common stock traded prior to the announcement of the execution of the original merger agreement with Skyworks dated October 5, 2015, as well as a significant premium over the price proposed to be paid under the amended and restated Merger Agreement with Skyworks dated October 29, 2015. Based upon the closing price of Parent’s common stock on November 20, 2015, the second to last trading day prior to the announcement of the Merger Agreement, the consideration represents an approximate premium of:

•

78% based on the closing price per share of $6.77 on September 30, 2015, the last full trading day prior to publication of a Bloomberg article speculating that the Company had hired a financial advisor to seek a sale of the Company; and

•

93% based on the average price per share of $6.25 over the 30 trading day period ending September 30, 2015;

•

the belief of the Board that the per share transaction consideration of $9.22 in cash and 0.0771 shares of Parent common stock per share of the Company’s common stock is more favorable to the Company’s stockholders than the consideration of $11.60 per share in cash per share of the Company’s common stock that was to be paid under the amended and restated merger agreement with Skyworks;

•

the fact that a portion of the transaction consideration is composed of shares of Microsemi common stock, so the Company’s stockholders may have an ability to participate in any future “upside” in the equity ownership of the combined company;

•

the Board’s expectations regarding the anticipated timing of the consummation of the Offer and the Merger, including the fact that because the Offer does not require regulatory approval from Chinese antitrust authorities, it could potentially close earlier than the proposed transaction with Skyworks. The potential for closing in a relatively short time frame could also reduce the amount of time in which the Company’s business would be subject to potential disruption and uncertainty pending closing and enable the Company’s stockholders to more quickly enjoy any accretive benefits of the Merger;

•

the belief of the Board that the Offer and the Merger are more favorable to the Company’s stockholders than the potential value that might result from the other alternatives reasonably available to the Company, including the alternative of remaining a stand-alone public company and other strategies that might be pursued as a stand-alone public company;

•

the fact that the price proposed by Parent reflected extensive negotiations between the Company and Parent and their respective advisors, as well as extensive negotiations between the Company and Skyworks, and their respective advisors;

•

the Board’s belief, after consultation with the Company’s financial advisors, that the prices proposed by Skyworks and Parent were the highest each would pay;

•

the oral opinion delivered by Qatalyst Partners to the Board on November 23, 2015, and subsequently confirmed by Qatalyst Partners’ written opinion to the Board dated such date, to the effect that, based upon and subject to the various considerations, limitations and other matters set forth therein, the consideration to be received by the holders of the Company’s common stock, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. You are urged to read Qatalyst Partners’ written opinion, which is set forth in its entirety in Annex A, and the description of the opinion and the related financial analyses presented by Qatalyst Partners provided in Item 4 under the heading “Opinions of the Company’s Financial Advisors—Opinion of Qatalyst Partners LP”;

•

the oral opinion delivered by Needham & Company to the Board on November 23, 2015, and subsequently confirmed by Needham & Company’s written opinion to the Board dated such date, to the effect that, based upon and subject to the assumptions and other matters set forth in the written opinion, the consideration to be received by the holders of the Company’s common stock, other than Parent, any affiliate of Parent or holders who have properly demanded appraisal rights, pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. You are urged to read Needham & Company’s written opinion, which is set forth in its entirety in Annex B, and the description of the opinion and the related financial analyses presented by Needham & Company provided in Item 4 under the heading “Opinions of the Company’s Financial Advisors—Opinion of Needham & Company, LLC”;

•

the Board’s belief that the Offer and the Merger will likely be consummated, based on, among other factors, the absence of any financing condition to consummation of the Offer or the Merger, and the delivery by Parent of a debt commitment letter setting forth financing commitments for financing to consummate the transactions under the Merger Agreement;

•

the Board’s assessment that Parent has adequate financial resources to pay the aggregate transaction consideration, including:

•

the limited, and high likelihood of satisfaction of, conditions to the debt financing commitment obtained by Parent;

•

Parent’s representations and covenants contained in the Merger Agreement relating to such financing; and

•

the Board’s assessment of Parent’s ability to obtain financing, after reviewing publicly available and other financial information with respect to Parent with the assistance of legal and financial advisors;

•

the terms and conditions of the Merger Agreement and related transaction documents, in addition to those described above (relating to regulatory approvals and clearances and financing) including:

•

the limited and otherwise customary conditions to the parties’ obligations to complete the Offer and the Merger, including the commitment by Parent to obtain applicable regulatory clearances and assume the risks related to certain conditions and requirements that may be imposed by regulators in connection with securing such clearance, in addition to the absence of a financing condition;

•

the requirement that consummation of the Offer is conditioned on the satisfaction of the minimum tender condition which, if satisfied, would demonstrate strong support for the Offer and the Merger by holders of the Company’s common stock;

•

the Company’s ability to seek to specifically enforce Parent’s obligations under the Merger Agreement, including Parent’s obligations to consummate the Offer and the Merger;

•

that the Purchaser is required to extend the Offer beyond the initial expiration date if any condition to consummation of the Offer is not satisfied and has not been waived, until 11:59 p.m. New York City time on March 31, 2016, as described in the Offer to Exchange under the heading “Exchange Offer Procedures—Extension, Termination and Amendment of Offer”;

•

the Company’s ability to seek damages in the event of fraud or a knowing and intentional breach by Parent of its obligations under the Merger Agreement;

•

the Company’s ability, under certain limited circumstances, to furnish information to, and conduct negotiations with, third parties regarding an acquisition proposal that is, or would reasonably be expected to lead to, a superior proposal;

•

the Company’s ability, subject to certain conditions, to terminate the Merger Agreement in order to accept a superior proposal, subject to paying or causing to be paid to Parent the termination fee of $88.5 million and repaying to Parent the termination fee of $88.5 million previously paid to Skyworks to terminate the amended and restated merger agreement with Skyworks. The Board determined, after discussion with its legal and financial advisors, that the proposed termination fee was reasonable in light of, among other things:

•

the benefits of the Merger to the Company’s stockholders;

•

the multiple proposals and counter-proposals made by each of Skyworks and Parent since the original merger agreement with Skyworks on October 5, 2015, and that no other potentially interested party engaged during the period after the Company’s entry into the original merger agreement with Skyworks on October 5, 2015, and the time the Company entered into the Merger Agreement with Parent on November 24, 2015;

•

the typical size of such fees in similar transactions; and

•

the belief that a fee of such size would not preclude or unreasonably restrict the emergence of alternative transaction proposals;

•

the ability of the Board, subject to certain conditions, to change its recommendation supporting the Merger in response to an intervening event, regardless of the existence of a competing or superior acquisition proposal, to the extent the Board determines that such action is necessary to comply with its fiduciary duties to the Company’s stockholders under applicable law;

•

the customary nature of the other representations, warranties and covenants of the Company in the Merger Agreement; and

•

the fact that the financial and other terms and conditions of the Merger Agreement minimize, to the extent reasonably practical, the risk that a condition to closing of the Offer or the Merger would not be satisfied and also provide a reasonable level of flexibility to operate the Company’s business during the pendency of the Merger;

•

the fact that the Company conducted a thorough process of exploring its strategic alternatives stretching over fourteen months, during which time the Company and its representatives discussed potential interest in a strategic transaction involving the Company with twelve different strategic and financial buyers, Party A, Party B, Party C, Party D, Party E, Party F, Party G, Party H, Party I, Party J, Parent and Skyworks, and entered into confidentiality agreements and provided other non-public information to seven of those potential acquirers, Party A, Party C, Party H, Party I, Party J, Parent and Skyworks, three of which, Party C, Parent and Skyworks, ultimately conducted full legal and financial due diligence investigations and submitted formal proposals, and two of which, Skyworks and Parent, entered into definitive agreements with the Company;

•

after lengthy meetings with management, the Board’s consideration of the Company’s business, strategy, assets, financial condition, capital requirements, results of operations, competitive position and historical and projected financial performance, and the nature of the industry and regulatory environment in which the Company competes, and related risks and upside potential and the potential

impact of those factors on the trading price of the Company’s common stock (which cannot be quantified numerically);

•

the risks and uncertainties associated with maintaining the Company’s existence as an independent company and the opportunities presented by the Merger, including the risks and uncertainties with respect to:

•

achieving its growth plans in light of the current and foreseeable market conditions, including the risks and uncertainties in the U.S. and global economy generally and the high-performance storage and semiconductor industries specifically;

•

the “risk factors” set forth in the Company’s Form 10-K for the fiscal year ended December 27, 2014 and subsequent reports filed with the SEC; and

•

the inherent uncertainty of attaining management’s internal financial projections, including those set forth in Item 4 under the heading “Certain Company Forecasts,” including the fact that the Company’s actual financial results in future periods could differ materially and adversely from the projected results;

•

the negotiation process with Skyworks and Parent, which was conducted at arm’s length, and the fact that the Company’s senior management and its legal and financial advisors were directly involved throughout the negotiations and updated the Board directly and regularly; and

•

the availability of appraisal rights under Delaware law to holders of the Company’s common stock who do not tender their Shares in the Offer and comply with all of the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have a Delaware court determine the fair value of their shares, which may be more than, less than, or the same as the amount such stockholders would have received under the Merger Agreement.

The Board also considered a variety of potentially negative factors in its deliberations concerning the Merger Agreement, the Offer and the Merger, including the following (not in any relative order of importance):

•

the fact that the transaction is not all cash, which precludes the Company’s stockholders from enjoying certainty of value for their shares of the Company’s common stock;

•

capital markets broadly, and semiconductor stocks specifically, have been highly volatile recently due to concerns about recent earnings results and outlook, slowing global economic growth, rising interest rates, and geopolitical uncertainties, which may result in fluctuations in the value of the portion of the consideration to the Company’s stockholders to be paid in Parent stock;

•

the risks and costs to the Company if the Merger does not close, including the diversion of management and employee attention, potential employee attrition and the potential effect on business and customer relationships;

•

that the Company is obligated to pay Parent a termination fee of $88.5 million in addition to repaying Parent the termination fee it has paid to Skyworks, on behalf of the Company, of $88.5 million if the Merger Agreement is terminated under certain circumstances, and, in certain other circumstances, reimburse potentially up to $15 million in expenses, which the Board believed, after consulting with its legal and financial advisors, would not preclude competing offers following the announcement of the transaction;

•

that the Merger is conditioned on the receipt of regulatory approvals and clearances, including the expiration or termination of the waiting period under the HSR Act, and, therefore, the Merger may not be completed in a timely manner or at all;

•

the risk that the Offer or the Merger may not be consummated despite the parties’ efforts or that consummation may be unduly delayed, even if the Minimum Condition is satisfied, including the possibility that conditions to the parties’ obligations to complete the Offer or the Merger may not be satisfied and the potential resulting disruptions to the Company’s business;

•

the fact that an insufficient number of holders of shares of the Company’s common stock may tender into the Offer to satisfy the Minimum Condition;

•

the risk that the debt financing contemplated by the debt commitment letter may not be obtained, resulting in Parent not having sufficient funds to complete the Merger;

•

the risks associated with the amount of indebtedness that Parent would incur in connection with the Offer and the Merger;

•

the Merger Agreement’s restrictions on the conduct of the Company’s business prior to the completion of the Merger, generally requiring the Company to conduct its business only in the ordinary course, subject to specific limitations, which may delay or prevent the Company from undertaking business opportunities that may arise pending completion of the Merger;

•

the fact that the Company is prohibited from paying dividends or making stock repurchases prior to the consummation of the Merger;

•

the fact that the Company’s executive officers and directors may have interests in the transactions contemplated by the Merger Agreement that are different from, or in addition to, those of the Company’s other stockholders, and the risk that these interests might influence their decision with respect to the transactions contemplated by the Merger Agreement, as more fully described under the heading “The Offer and the Merger—Interests of Certain Persons in the Offer and Merger—Other Arrangements with Executive Officers”;

•

the fact that the Company has incurred and will continue to incur significant transaction costs and expenses in connection with the proposed transaction, regardless of whether the Merger is consummated;

•

the fact that the receipt of a combination of cash and Parent stock in exchange for shares of the Company’s common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes; and

•

the risk that the cash offered by Skyworks may have a higher notional value at closing than the cash and stock offered by Parent, depending upon the performance of Parent’s common stock.

After considering the foregoing potentially positive and potentially negative factors, the Board concluded that the potential benefits of the Merger Agreement, the Offer and the Merger outweighed the risks and other potentially negative factors associated with the Merger Agreement, the Offer and the Merger.

The foregoing discussion of the information and factors considered by the Board is not intended to be exhaustive, but includes the material factors considered by the Board. In view of the variety of factors considered in connection with its evaluation of the Offer, the Merger and the Merger Agreement, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

For the reasons described above, and in light of other factors that they believed were appropriate, the Board approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and recommends that the Company’s stockholders tender their shares of the Company’s common stock pursuant to the Offer.

Intent to Tender

To the knowledge of the Company after making reasonable inquiry, to the extent permitted by applicable securities laws, rules or regulations, including Section 16(b) of the Exchange Act, all of the Company’s executive officers, directors and affiliates currently intend to tender, or cause to be tendered, all Shares held of record or beneficially owned by such person or entity pursuant to the Offer.

Opinions of the Company’s Financial Advisors

Opinion of Qatalyst Partners LP

The Company retained Qatalyst Partners to act as a financial advisor to the Board in connection with a potential transaction such as the Offer and the Merger and to evaluate whether the transaction consideration to be received by the holders of the Shares, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. The Company selected Qatalyst Partners to act as its financial advisor based on Qatalyst Partners’ qualifications, expertise, reputation and knowledge of the business and affairs of the Company and the industry in which it operates. Qatalyst Partners has provided its written consent to the reproduction of the Qatalyst Partners’ opinion in this Schedule 14D-9. At the meeting of the Board on November 23, 2015, Qatalyst Partners rendered its oral opinion, subsequently confirmed in writing, that, as of such date and based upon and subject to the considerations, limitations and other matters set forth therein, the consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share to be received by the holders of the Shares, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Qatalyst Partners delivered its written opinion, dated November 23, 2015, to the Board following the meeting of the Board.

The full text of Qatalyst Partners’ written opinion, dated November 23, 2015 to the Board is attached as Annex A and is incorporated by reference herein. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Qatalyst Partners in rendering its opinion. You should read the opinion carefully in its entirety. Qatalyst Partners’ opinion was provided to the Board and addresses only, as of the date of the opinion, the fairness, from a financial point of view, of the consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share to be received by the holders of the Shares, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement, and it does not address any other aspect of the Offer or the Merger. It does not constitute a recommendation as to whether any holder of Shares should tender such Shares in connection with the Offer or any other matter and does not in any manner address the price at which the Shares or Parent’s common stock will trade at any time. The summary of Qatalyst Partners’ opinion set forth herein is qualified in its entirety by reference to the full text of the opinion.

In arriving at its opinion, Qatalyst Partners reviewed the Merger Agreement, certain related documents, and certain publicly available financial statements and other business and financial information of the Company and Parent. Qatalyst Partners also reviewed (i) certain forward-looking information prepared by the Company’s management, including the financial projections by the Company’s management included below under the heading “Certain Company Forecasts;” (ii) certain forward-looking information prepared by the management of Parent, including financial projections and operating data of Parent (the “Parent Projections”); (iii) certain publicly available financial projections and operating data of Parent, including publicly available research analysts’ estimates (the “Parent Street Projections”); and (iv) information relating to certain strategic, financial and operational benefits anticipated from the Offer and the Merger prepared by the management of Parent, as adjusted by the management of the Company (the “Synergies”). Based upon the judgment of the Board and management of the Company that the Case I projections reflected the results that were more likely to be achieved, the Board instructed Qatalyst Partners to use the Case I projections (the “Company Projections”) as the basis for its financial analyses in connection with its opinion as to the fairness, from a financial point of view, of the consideration payable in the Merger to the holders of the Shares (other than Parent or any affiliates of Parent). Additionally, Qatalyst Partners discussed the past and current operations and financial condition and the prospects of the Company and Parent, including information relating to certain strategic, financial and operational benefits anticipated from the Offer and the Merger, with senior executives of the Company and Parent. Qatalyst Partners also reviewed the historical market prices and trading activity for the Company’s common stock and Parent’s common stock and compared the financial performance of the Company and Parent and the prices and trading activity of the Company’s common stock and Parent’s common stock with that of certain other selected publicly-traded companies and their securities. In addition, Qatalyst Partners reviewed the

financial terms, to the extent publicly available, of selected acquisition transactions and performed such other analyses, reviewed such other information and considered such other factors as Qatalyst Partners deemed appropriate.

In arriving at its opinion, Qatalyst Partners assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, Qatalyst Partners by the Company and Parent. With respect to the Company Projections, Qatalyst Partners was advised by management of the Company, and Qatalyst Partners assumed, that the Company Projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company of the future financial performance of the Company and other matters covered thereby. With respect to the Parent Projections, Qatalyst Partners was advised by the management of Parent, and Qatalyst Partners assumed, that the Parent Projections had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Parent of the future financial performance of Parent. With respect to the Parent Street Projections, Qatalyst Partners was advised by the management of the Company, and Qatalyst Partners assumed, that the Parent Street Projections reflected the best currently available estimates and judgments of the management of the Company of the future financial performance of Parent. With respect to the Synergies, Qatalyst Partners was advised by the management of the Company, and Qatalyst Partners assumed, that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company relating to the strategic, financial and operational benefits anticipated from the Offer and the Merger. Qatalyst Partners assumed that the Offer and the Merger will be consummated in accordance with the terms set forth in the Merger Agreement, without any modification, waiver or delay. In addition, Qatalyst Partners assumed, that in connection with the receipt of all the necessary approvals of the Offer and the Merger, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on the Company, Parent or the contemplated benefits expected to be derived in the Offer and the Merger. Qatalyst Partners did not make any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company or Parent, nor was Qatalyst Partners furnished with any such evaluation or appraisal. In addition, Qatalyst Partners relied, without independent verification, upon the assessment of the managements of the Company and Parent as to (i) the existing and future technology and products of the Company and Parent and the risks associated with such technology and products; (ii) their ability to integrate the businesses of the Company and Parent; and (iii) their ability to retain key employees of the Company and Parent. Qatalyst Partners’ opinion has been approved by Qatalyst Partners’ opinion committee in accordance with its customary practice.

Qatalyst Partners’ opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date of the opinion. Events occurring after the date of the opinion may affect Qatalyst Partners’ opinion and the assumptions used in preparing it, and Qatalyst Partners has not assumed any obligation to update, revise or reaffirm its opinion. Qatalyst Partners’ opinion does not address the underlying business decision of the Company to engage in the Offer or the Merger, or the relative merits of the Offer or the Merger as compared to any strategic alternatives that may be available to the Company. Qatalyst Partners’ opinion is limited to the fairness, from a financial point of view, of the consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share to be received by the holders of the Shares, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement, and Qatalyst Partners expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the officers, directors or employees of Parent or the Company, or any class of such persons, relative to such consideration.

The following is a brief summary of the material analyses performed by Qatalyst Partners in connection with its opinion dated November 23, 2015. The analyses and factors described below must be considered as a whole; considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Qatalyst Partners’ opinion. For purposes of its analyses, Qatalyst Partners utilized both the consensus of third-party research analysts’ projections of the future financial performance of the Company as of November 20, 2015 (the “Analyst Projections”) and the Company Projections. Some of the summaries of the financial analyses include information presented in tabular format.

The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Qatalyst Partners, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Qatalyst Partners’ financial analyses.

Illustrative Discounted Cash Flow Analysis

Qatalyst Partners performed an illustrative discounted cash flow (“DCF”) analysis, which is designed to imply a potential, present value per Share as of September 26, 2015 by:

•

adding:

•

the implied net present value of the estimated future unlevered free cash flows of the Company, as set forth in the Company Projections, for the fourth quarter of fiscal year 2015 through fiscal year 2020 (which implied present value was calculated by using a range of discount rates of 10.0% to 13.0%, based on an estimated weighted average cost of capital);

•

the implied net present value of a corresponding terminal value of the Company, calculated by multiplying the Company’s estimated net operating profit after taxes (“NOPAT”) in fiscal year 2021, based on the Company Projections, by a range of multiples of fully-diluted enterprise value to next-twelve-months NOPAT multiples of 9.0x to 16.0x, and discounted to present value using the same range of discount rates used in the calculation of the implied net present value of the estimated future unlevered free cash flows of the Company described above;

•

the estimated cash balance, net of the estimated debt outstanding, of the Company as of September 26, 2015, as provided by the Company’s management;

•

applying a dilution factor of approximately 13% to reflect the dilution to current stockholders, assuming no buybacks, over the projection period due to the effect of future equity award issuances projected by the Company’s management; and

•

dividing the resulting amount by the number of fully-diluted Shares outstanding, adjusted for Shares issuable upon exchange or retraction of outstanding PMC-Sierra Ltd. special shares, Company RSUs, Company PRSUs and Company stock options outstanding (assuming treasury stock method), as provided by the Company’s management as of September 26, 2015.

Based on the calculations set forth above, this analysis implied a range of values for the Company’s common stock of approximately $8.78 to $13.59 per share. Qatalyst Partners noted that the implied value of the consideration to be received by holders of the Shares pursuant to the Merger Agreement was $12.05 per share, based on Parent’s closing stock price on November 20, 2015.

Illustrative Selected Companies Analysis

Qatalyst Partners compared selected financial information and public market multiples for the Company with publicly available information and public market multiples for selected companies. The companies used in this comparison included companies listed below which were selected from publicly traded companies in the semiconductor industry by Qatalyst Partners based on its professional judgment, which included such factors as companies participating in similar lines of businesses to the Company, having similar financial performance, or having other relevant or similar characteristics.


Selected Company	CY2016E P/E Multiple
Avago Technologies Ltd.		12.8x
EZchip Semiconductor Ltd.		14.2x	(1)
Integrated Device Technology Inc.		18.9x
Inphi Corporation		25.9x
Mellanox Technologies, Ltd.		15.2x
Marvell Technology Group Ltd.		12.0x
Microsemi Corporation		11.1x
QLogic Corporation		13.4x
Semtech Corporation		16.0x
Xilinx, Inc.		22.3x

(1)	Calculated using the closing stock price of EZchip Semiconductor Ltd. on September 29, 2015, the date prior to the announcement of its proposed acquisition by Mellanox Technologies, Ltd.

Based upon research analyst consensus estimates for fiscal year 2016, and using the closing prices as of November 20, 2015 for shares of the selected companies (except that Qatalyst Partners used the closing stock price of EZchip Semiconductor Ltd. on September 29, 2015, the date prior to the announcement of its proposed acquisition by Mellanox Technologies, Ltd.), Qatalyst Partners calculated, among other things, the ratio of price to earnings per share for fiscal year 2016 (the “CY2016E P/E Multiples”) for each of the selected companies. The median CY2016E P/E Multiple among companies analyzed was 14.7x and the mean was 16.2x. The CY2016E P/E Multiple for the Company was 10.2x based on the Analyst Projections using the Company’s closing share price on September 30, 2015, which represented the last closing stock price of the Company prior to the appearance of a Bloomberg article speculating that the Company had hired a financial advisor to seek a sale of the Company.

Based on an analysis of the CY2016E P/E Multiples for the selected companies, Qatalyst Partners selected a representative range of 10.0x to 16.0x and applied this range to the Company’s estimated fiscal year 2016 per share earnings based on each of the Company Projections and the Analyst Projections. This analysis implied a range of values for the Company’s common stock of approximately $7.04 to $11.27 per share based on the Company Projections and approximately $6.64 to $10.63 per share based on the Analyst Projections. Qatalyst Partners noted that the implied value of the consideration to be received by holders of the Shares pursuant to the Merger Agreement was $12.05 per share, based on Parent’s closing stock price on November 20, 2015.

No company included in the selected companies analysis is identical to the Company. In evaluating the selected companies, Qatalyst Partners made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond the control of the Company, such as the impact of competition on the business of the Company and the industry in general, industry growth and the absence of any material adverse change in the financial condition and prospects of the Company or the industry or in the financial markets in general. Mathematical analysis, such as determining the arithmetic mean, median, or the high or low, is not in itself a meaningful method of using selected company data.

Illustrative Selected Transactions Analysis

Qatalyst Partners compared thirty-two selected public company transactions involving companies in the semiconductor industry announced between September 2006 and November 2015, including transactions involving companies participating in similar lines of businesses to the Company, having similar financial performance, or having other relevant or similar characteristics. These transactions are listed below:

Announcement Date

Target

Acquirer

Transaction Multiples

Revenue NTM

P/E NTM

November 18, 2015

Fairchild Semiconductor
International, Inc.

ON Semiconductor
Corporation

1.7x

18.8x

November 9, 2015

Pericom Semiconductor
Corporation

Diodes Incorporated

2.1x

19.9x

October 21, 2015

SanDisk Corporation

Western Digital
Corporation

3.1x

25.3x

September 30, 2015

EZchip Semiconductor Ltd.

Mellanox Technologies,
Ltd.

4.8x

16.2x

September 20, 2015

Atmel Corporation

Dialog Semiconductor plc

3.7x

29.8x

June 11, 2015

Integrated Silicon Solution,
Inc.

Uphill Investment Co.

1.9x

24.5x

June 1, 2015

Altera Corporation

Intel Corporation

7.7x

42.5x

May 28, 2015

Broadcom Corporation

Avago Technologies Ltd.

3.8x

19.0x

May 7, 2015

Micrel Incorporated

Microchip Technology
Inc.

3.0x

42.4x

April 30, 2015

OmniVision Technologies,
Inc.

Consortium led by Hua
Capital Management Co.,
Ltd

1.0x

22.0x

March 2, 2015

Freescale Semiconductor, Ltd.

NXP Semiconductor N.V.

3.4x

18.1x

February 25, 2015

Emulex Corporation

Avago Technologies Ltd.

1.5x

14.3x

January 27, 2015

Silicon Image, Inc.

Lattice Semiconductor
Corporation

1.9x

36.9x

December 1, 2014

Spansion Inc.

Cypress Semiconductor
Corporation

1.5x

16.8x

October 14, 2014

CSR plc

Qualcomm Incorporated

2.9x

27.1x

August 20, 2014

International Rectifier
Corporation

Infineon Technologies
AG

2.0x

26.3x

June 9, 2014

Hittite Microwave
Corporation

Analog Devices, Inc.

6.6x

31.6x

February 24, 2014

TriQuint Semiconductor, Inc.

RF Micro Devices, Inc.

1.8x

32.4x

December 16, 2013

LSI Corporation

Avago Technologies Ltd.

2.7x

17.1x

August 15, 2013

Volterra Semiconductor
Corporation

Maxim Integrated
Products Inc.

3.1x

30.5x

July 12, 2013

Spreadtrum Communications,
Inc.

Tsinghua Holdings Co.,
Ltd.

1.6x

10.6x

June 22, 2012

Mstar Semiconductor, Inc.

MediaTek Inc.

2.1x

15.8x

May 2, 2012

Standard Microsystems
Corporation

Microchip Technology
Inc.

1.8x

22.1x

September 22, 2011

Zarlink Semiconductor Inc.

Microsemi Corporation

2.0x

22.5x

September 12, 2011

NetLogic Microsystems, Inc.

Broadcom Corporation

8.3x

29.2x

April 4, 2011

National Semiconductor
Corporation

Texas Instruments
Incorporated

4.4x

21.5x

January 5, 2011

Atheros Communications,
Inc.

Qualcomm Incorporated

3.5x

23.5x

October 4, 2010

Actel Corporation

Microsemi Corporation

1.8x

15.0x

December 13, 2007

AMIS Holdings Inc.

ON Semiconductor
Corporation

1.7x

13.3x

August 13, 2007

Sirenza Microdevices Inc.

RF Micro Devices, Inc.

4.2x

22.8x

December 4, 2006

Agere Systems Inc.

LSI Corporation

2.5x

22.6x

September 15, 2006

Freescale Semiconductor Inc.

Investor Group

2.4x

20.3x

For each of the transactions listed above, Qatalyst Partners reviewed, among other things, the implied fully-diluted enterprise value of the target company as a multiple of analyst estimates of the next-twelve-months revenue of the target company, the median of which was 2.4x and the mean of which was 3.0x. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 2.0x to 3.5x applied to the Company’s estimated next-twelve-months revenue (calculated as the four quarters ending on September 26, 2016 and based on the Analyst Projections). Based on the calculations set forth above, then adding the net cash of the Company as of October 23, 2015 and then dividing the resulting amount by the fully-diluted shares of the Company’s common stock outstanding adjusted for shares of the Company’s common stock issuable upon exchange or retraction of outstanding PMC-Sierra Ltd. special shares, Company RSUs, Company PRSUs and Company stock options outstanding (assuming treasury stock method), as provided by the Company’s management as of October 22, 2015, this analysis implied a range of values for the Company’s common stock of approximately $6.59 to $10.45 per share. Qatalyst Partners noted that the implied value of the consideration to be received by holders of the Shares pursuant to the Merger Agreement was $12.05 per share, based on Parent’s closing stock price on November 20, 2015.

For each of the transactions listed above, Qatalyst Partners also reviewed the price per share paid for the target company as a multiple of analyst estimates of the next-twelve-months earnings per share of the target company, the median of which was 22.3x and the mean of which was 23.5x. Based on the analysis of such metrics for the transactions noted above, Qatalyst Partners selected a representative range of 16.0x to 26.0x applied to the Company’s estimated next-twelve-months earnings (calculated as the four quarters ending on September 26, 2016 and based on the Analyst Projections). Based on the calculations set forth above, this analysis implied a range of values for the Company’s common stock of approximately $10.32 to $16.77. Qatalyst Partners noted that the implied value of the consideration to be received by holders of the Shares pursuant to the Merger Agreement was $12.05 per share, based on Parent’s closing stock price on November 20, 2015.

No company or transaction utilized in the selected transactions analysis is identical to the Company, the Offer or the Merger. In evaluating the selected transactions, Qatalyst Partners made judgments and assumptions with regard to general business, market and financial conditions and other matters, many of which are beyond the control of the Company, such as the impact of competition on the business of the Company or the industry generally, industry growth and the absence of any material adverse change in the financial condition of the Company or the industry or in the financial markets in general, which could affect the public trading value of the companies and the aggregate value of the transactions to which they are being compared. Because of the unique circumstances of each of these transactions and the Offer and the Merger, Qatalyst Partners cautioned against placing undue reliance on this information.

Miscellaneous

In connection with the review of the Offer and the Merger by the Board, Qatalyst Partners performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily amenable to a partial analysis or summary description. In arriving at its opinion, Qatalyst Partners considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Qatalyst Partners believes that selecting any portion of its analyses, without considering all analyses as a whole, could create a misleading or incomplete view of the process underlying its analyses and opinion. In addition, Qatalyst Partners may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Qatalyst Partners’ view of the actual value of the Company. In performing its analyses, Qatalyst Partners made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company. Any estimates contained in Qatalyst Partners’ analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Qatalyst Partners conducted the analyses described above solely as part of its analysis of the fairness, from a financial point of view, of the consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share to be received by the holders of the Shares, other than Parent or any affiliates of Parent, pursuant to the Merger Agreement, and in connection with the delivery of its opinion to the Board. These analyses do not purport to be appraisals or to reflect the price at which the Company common stock might actually trade.

Qatalyst Partners’ opinion and its presentation to the Board was one of many factors considered by the Board in deciding to approve the Merger Agreement. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board with respect to the consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share to be received by the Company’s stockholders pursuant to the Offer and the Merger or of whether the Board would have been willing to agree to a different consideration. The consideration of $9.22 in cash and 0.0771 shares of Parent common stock per Share was determined through arm’s-length negotiations between the Company and Parent and was approved by the Board. Qatalyst Partners provided advice to the Company during these negotiations. Qatalyst Partners did not, however, recommend any specific consideration to the Company or that any specific consideration constituted the only appropriate consideration for the Offer and the Merger.

Qatalyst Partners provides investment banking and other services to a wide range of corporations and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst Partners may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of the Company, Parent or certain of their respective affiliates. During the two year period prior to November 23, 2015, the date of Qatalyst Partners’ written opinion, no material relationship existed between Qatalyst Partners or any of its affiliates and the Company or Parent pursuant to which compensation was received by Qatalyst Partners or its affiliates. Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to the Company or Parent or any of their respective affiliates for which it would expect to receive compensation.

Under the terms of its engagement letter, Qatalyst Partners provided the Company with financial advisory services in connection with the proposed Offer and the Merger for which it will be paid approximately $32 million (provided that the final actual fee will be, in part, based on an average of the closing price of Parent’s common stock over ten trading days up to and including the second trading day immediately preceding the closing of the Offer), $100,000 of which was payable upon the execution of its engagement letter, $1 million of which was payable upon delivery of its opinion dated October 5, 2015, $1 million of which was payable upon delivery of its opinion dated October 29, 2015, $1 million of which was payable upon delivery of its opinion dated November 23, 2015, and the remaining portion of which will be paid upon, and subject to, the closing of the Offer. The Company has also agreed to indemnify Qatalyst Partners and its affiliates, their respective members, directors, officers, partners, agents and employees and any person controlling Qatalyst Partners or any of its affiliates against certain liabilities, including liabilities under the federal securities laws, and expenses related to or arising out of Qatalyst Partners’ engagement.

Opinion of Needham & Company, LLC

The Company retained Needham & Company as a financial advisor in connection with a proposed merger and to render an opinion as to the fairness, from a financial point of view, to the holders of the Shares (other than Parent or any of its affiliates and other than holders who have properly demanded appraisal rights) of the consideration to be received by those holders pursuant to the Merger Agreement. Needham & Company was not authorized to, and did not, solicit third party indications of interest in acquiring all or any part of the Company or any alternative transaction. In addition, Needham & Company was not requested to, and did not, participate in the structuring or negotiation of the terms of the Offer or the Merger.

On November 23, 2015, Needham & Company delivered its oral opinion, which it subsequently confirmed in writing, to the Board that, as of that date and based upon and subject to the assumptions and other matters

described in the written opinion, the consideration of $9.22 in cash and 0.0771 of a share of Parent common stock per Share (referred to in this “Opinion of Needham & Company, LLC” section as the “Transaction Consideration”) to be received by the holders of the Shares (other than Parent or any of its affiliates and other than holders who have properly demanded appraisal rights) pursuant to the Merger Agreement was fair, from a financial point of view, to those holders. Needham & Company provided its opinion for the information and assistance of the Board in connection with and for the purpose of the Board’s evaluation of the transactions contemplated by the Merger Agreement. Needham & Company’s opinion relates only to the fairness, from a financial point of view, to the holders of the Shares (other than Parent or any of its affiliates and other than holders who have properly demanded appraisal rights) of the Transaction Consideration, which was determined through arm’s length negotiations between the Company and Parent and not by Needham & Company. Needham & Company’s opinion does not address any other aspect of the Offer, the Merger or any related transaction and does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Offer or vote or act on any matter relating to the Offer or the Merger.

The full text of Needham & Company’s opinion, dated November 23, 2015, which sets forth the assumptions made, procedures followed, matters considered, and qualifications and limitations on and scope of the review undertaken by Needham & Company, is attached to this Schedule 14D-9 as Annex B and is incorporated by reference herein. The summary of Needham & Company’s opinion set forth below is qualified in its entirety by reference to the full text of the opinion. You should read this opinion carefully and in its entirety.

In arriving at its opinion, Needham & Company, among other things:

•

reviewed a draft of the Merger Agreement dated November 17, 2015;

•

reviewed certain publicly available information concerning the Company and Parent and certain other relevant financial and operating data of the Company and Parent furnished to Needham & Company by the Company and Parent;

•

reviewed the historical stock prices and trading volumes of the Shares and Parent common stock;

•

held discussions with members of management of the Company and Parent concerning current operations of and future business prospects for the Company and Parent and joint prospects for the combined companies, including the potential cost savings and other synergies that may be achieved by the combined companies;

•

reviewed certain financial forecasts with respect to the Company and Parent prepared by the respective managements of the Company and Parent and held discussions with members of such managements concerning those forecasts;

•

reviewed certain research analyst projections with respect to the Company and Parent and held discussions with members of respective managements of the Company and Parent concerning those projections;

•

compared certain publicly available financial data of companies whose securities are traded in the public markets and that Needham & Company deemed generally relevant to similar data for the Company and Parent;

•

reviewed the financial terms of certain business combinations that Needham & Company deemed generally relevant; and

•

reviewed such other financial studies and analyses and considered such other matters as Needham & Company deemed appropriate.

In connection with its review and in arriving at its opinion, Needham & Company assumed and relied on the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or

reviewed by it for purposes of its opinion and did not independently verify, nor did Needham & Company assume responsibility for independent verification of, any of that information. Needham & Company assumed the accuracy of the representations and warranties contained in the Merger Agreement and all related agreements. In addition, Needham & Company assumed that the Offer and the Merger will be consummated on the terms and subject to the conditions set forth in the draft Merger Agreement furnished to Needham & Company without waiver, modification or amendment of any material term, condition or agreement of that agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the Offer and the Merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company, Parent or the contemplated benefits of the Offer and the Merger. Needham & Company assumed that financial forecasts for the Company and Parent provided to Needham & Company by the respective managements of the Company and Parent, including the financial projections by the Company’s management described below under the heading “Certain Company Forecasts,” were reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements, at the time of preparation, of the future operating and financial performance of the Company, Parent and the combined companies. Based upon the judgment of the Board and management of the Company that the Case I projections described under “Certain Company Forecasts” reflected the results that were more likely to be achieved, the Board instructed Qatalyst Partners and Needham & Company to use the Case I projections as the basis for their financial analyses in connection with their opinion as to the fairness, from a financial point of view, of the Transaction Consideration payable in the Offer and the Merger to the holders of the Shares (other than the holders of certain excluded shares described above). Needham & Company relied, without independent verification, on the estimates of management of the Company and Parent of the potential cost savings and other synergies, including the amount and timing thereof, that may be achieved as a result of the Offer and the Merger. Needham & Company also assumed, based on discussions with the respective managements of the Company and Parent, that the research analyst projections for the Company and Parent represent reasonable estimates of the future financial performance of the Company and Parent. Needham & Company expressed no opinion with respect to any of those forecasts (including cost savings and other synergies), estimates or projections or the assumptions on which they were based.

Needham & Company did not assume any responsibility for or make or obtain any independent evaluation, appraisal or physical inspection of the assets or liabilities of the Company, Parent or any of their respective subsidiaries nor did Needham & Company evaluate the solvency or fair value of the Company, Parent or any of their respective subsidiaries under any state or federal laws relating to bankruptcy, insolvency or similar matters. Needham & Company’s opinion states that it was based on economic, monetary and market conditions as they existed and could be evaluated as of its date, and Needham & Company assumed no responsibility to update or revise its opinion based upon circumstances and events occurring after its date. Needham & Company’s opinion is limited to the fairness, from a financial point of view, to the holders of the Shares (other than Parent or any of its affiliates and other than holders who have properly demanded appraisal rights) of the Transaction Consideration to be received by those holders pursuant to the Merger Agreement and Needham & Company expressed no opinion as to the fairness of the Offer or the Merger to, or any consideration received in connection with the Offer or the Merger by, the holders of any other class of securities, creditors or other constituencies of the Company, or as to the Company’s underlying business decision to engage in the Offer and the Merger or the relative merits of the Offer and the Merger as compared to other business strategies that might be available to the Company. In addition, Needham & Company expressed no opinion with respect to the amount or nature or any other aspect of any compensation payable to or to be received by any officers, directors or employees of any party to the Offer and the Merger, or any class of those persons, relative to the Transaction Consideration to be received by the holders of the Shares pursuant to the Merger Agreement or with respect to the fairness of any such compensation. Needham & Company expressed no opinion as to the value of Parent common stock if and when issued pursuant to the Offer and the Merger or the prices at which Parent common stock or the Shares will actually trade at any time.

The Company imposed no limitations on Needham & Company with respect to the investigations made or procedures followed by Needham & Company in rendering its opinion.

In preparing its opinion, Needham & Company performed a variety of financial and comparative analyses. The following paragraphs summarize the material financial analyses performed by Needham & Company in arriving at its opinion. As described above, Needham & Company used the Company’s management’s Case I projections as the basis for its financial analyses in connection with its opinion. The order of analyses described does not represent relative importance or weight given to those analyses by Needham & Company. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by Needham & Company, the tables must be read together with the full text of each summary. The following quantitative information, to the extent it is based on market data, is, except as otherwise indicated, based on market data as they existed on or prior to November 23, 2015, and is not necessarily indicative of current or future market conditions.

PMC Selected Companies Analysis

Using publicly available information, Needham & Company compared selected historical and projected financial and market data ratios for the Company to the corresponding data and ratios of publicly traded companies that Needham & Company deemed generally relevant because they have lines of business that may be considered similar to the Company’s lines of business because they provide similar products or are semiconductor companies with comparable financial profiles. These companies, referred to as the “Selected Companies,” consisted of the following:

Applied Micro Circuits Corporation

Avago Technologies Limited

Exar Corporation

Inphi Corporation

Maxim Integrated Products, Inc.

QLogic Corporation

Semtech Corporation

Texas Instruments Incorporated

The following tables set forth information concerning the following multiples for the Selected Companies and for the Company implied by the Merger:

•

enterprise value as a multiple of last 12 months, or LTM, revenues;

•

enterprise value as a multiple of projected calendar year, or CY, 2015, 2016 and 2017 revenues;

•

enterprise value as a multiple of LTM adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA;

•

enterprise value as a multiple of projected CY 2015, 2016 and 2017 adjusted EBITDA;

•

price as a multiple of LTM adjusted earnings per share, or EPS; and

•

price as a multiple of projected CY 2015, 2016 and 2017 adjusted EPS.

Needham & Company calculated multiples for the Selected Companies using consensus research analyst projections and the closing stock prices for the Selected Companies on November 23, 2015. Needham & Company calculated multiples for the Company based on the Transaction Consideration for two cases, one using the Company’s management’s Case I projections, referred to in the tables below as “target case,” and the other using consensus research analyst projections, referred to in the tables below as “street case.” Needham & Company calculated multiples for the Company using a Transaction Consideration value of $12.01 per Share, reflecting $9.22 in cash and 0.0771 of a share of Parent common stock at the November 23, 2015 closing price of Parent common stock of $36.21 per share.

All financial information used in the PMC Selected Companies Analysis, as well as in the Selected Transactions Analysis, Discounted Cash Flow Analysis and Microsemi Selected Companies Analysis described

below, excluded the impact of non-recurring items. Adjusted EBITDA and forward-looking adjusted EPS amounts used in those analyses as well as in the Pro Forma Transaction Analysis described below also excluded the impact of stock-based compensation expense.

Selected Companies

PMC Implied by
Merger

High

Low

Mean

Median

Street Case

Target
Case

Enterprise value to LTM revenues

5.8x

1.5x

3.6x

4.0x

4.3x

Enterprise value to projected CY 2015 revenues

5.4x

1.5x

3.6x

4.0x

4.3x

4.2x

Enterprise value to projected CY 2016 revenues

4.9x

1.5x

3.3x

3.4x

4.1x

4.0x

Enterprise value to projected CY 2017 revenues

4.3x

1.6x

3.2x

3.8x

3.5x

Enterprise value to LTM adjusted EBITDA

36.1x

6.2x

14.8x

11.8x

19.8x

Enterprise value to projected CY 2015 adjusted EBITDA

28.6x

7.1x

15.4x

13.2x

13.9x

17.8x

Enterprise value to projected CY 2016 adjusted EBITDA

19.1x

5.2x

11.6x

11.1x

11.7x

13.2x

Enterprise value to projected CY 2017 adjusted EBITDA

10.9x

6.5x

9.2x

9.6x

10.9x

Price to LTM adjusted EPS

38.3x

22.2x

29.2x

28.2x

27.5x

Price to projected CY 2015 adjusted EPS

31.6x

13.8x

20.4x

20.3x

25.6x

24.0x

Price to projected CY 2016 adjusted EPS

25.2x

12.9x

17.3x

16.4x

18.5x

17.1x

Price to projected CY 2017 adjusted EPS

19.8x

11.2x

15.7x

16.2x

13.9x

Selected Transactions Analysis

Needham & Company reviewed publicly available financial information for the following selected merger and acquisition transactions, which represent all of the transactions completed since January 1, 2012 that involved target companies that were publicly traded U.S. semiconductor companies:


Close Date	Acquirer	Target
August 3, 2015	Microchip Technology Incorporated	Micrel, Incorporated
July 2, 2015	Knowles Corporation	Audience, Inc.
May 5, 2015	Avago Technologies Limited	Emulex Corporation
April 30, 2015	MaxLinear, Inc.	Entropic Communications, Inc.
April 28, 2015	Microsemi Corporation	Vitesse Semiconductor Corporation
January 30, 2015	Infineon Technologies AG	International Rectifier Corporation
January 2, 2015	RF Micro Devices, Inc.	TriQuint Semiconductor, Inc.
December 12, 2014	Murata Electronics North America, Inc.	Peregrine Semiconductor Corporation
September 15, 2014	Cobham plc	Aeroflex Holding Corp.
August 12, 2014	Avago Technologies Limited	PLX Technology, Inc.
July 22, 2014	Analog Devices, Inc.	Hittite Microwave Corporation
May 6, 2014	Avago Technologies Limited	LSI Corporation
April 1, 2014	Microchip Technology Incorporated	Supertex, Inc.
December 18, 2013	M/A-COM Technology Solutions Holdings, Inc.	Mindspeed Technologies, Inc.
October 1, 2013	Maxim Integrated Products, Inc.	Volterra Semiconductor Corporation
November 20, 2012	Cypress Semiconductor Corporation	Ramtron International Corporation
August 2, 2012	Microchip Technology Incorporated	Standard Microsystems Corporation

In reviewing the selected transactions, Needham & Company calculated, for the selected transactions and for the Merger,

•

enterprise value as a multiple of LTM revenues; and

•

enterprise value as a multiple of LTM adjusted EBITDA.

Needham & Company calculated multiples for the Company based on the Transaction Consideration, using a Transaction Consideration value of $12.01 per Share.

The following table sets forth information concerning the multiples described above for the selected transactions and the same multiples implied by the Merger.

Selected Transactions

PMC Implied
by Merger

High

Low

Mean

Median

Enterprise value to LTM revenues

7.3x

0.9x

2.5x

2.2x

4.3x

Enterprise value to LTM adjusted EBITDA

26.2x

9.2x

15.4x

14.8x

19.8x

Premiums Paid Analysis

Needham & Company reviewed publicly available financial information for all 20 merger and acquisition transactions that represent transactions involving publicly-traded technology companies completed since January 1, 2012 with transaction values of between $1.5 billion and $3.0 billion. In examining these transactions, Needham & Company analyzed the premium of consideration offered to the acquired company’s stock price one trading day, five trading days and thirty trading days prior to the announcement of the transaction.

Needham & Company calculated premiums for the Company based on the Transaction Consideration, using a Transaction Consideration value of $12.01 per Share, and the closing prices per Share one trading day, five trading days and thirty trading days prior to October 1, 2015, as September 30, 2015 was the last trading day prior to speculation in the press regarding a possible transaction. The following table sets forth information concerning the stock price premiums in the selected transactions and the stock price premiums implied by the Merger.


	Selected Transactions												PMC / Microsemi Merger As of Sept. 30, 2015
	High			Low			Mean			Median			PMC / Microsemi Merger As of Sept. 30, 2015
One trading day stock price premium		73.8	%		5.4	%		32.7	%		29.9	%		77.4	%
Five trading day stock price premium		74.2	%		5.9	%		33.7	%		30.9	%		90.7	%
30 trading day stock price premium		76.6	%		17.0	%		39.1	%		39.9	%		89.8	%

Discounted Cash Flow Analysis

Needham & Company performed illustrative discounted cash flow analyses to determine indicators of illustrative implied equity values for the Company and illustrative implied equity values per Share based on the Company’s management’s Case I projections and for two projected time periods, a three year period and five year period. Needham & Company calculated a range of indications of the present value of unlevered free cash flows for the Company for the projected fourth quarter of fiscal year 2015 and, in the case of the three year period analysis, projected fiscal years 2016 through 2018, and, in the case of the five year period analysis, projected fiscal years 2016 through 2020. The unlevered free cash flows were derived from the Company’s management’s Case I projections and calculated as described below under the heading “Certain Company Forecasts.” In calculating the ranges of present values of unlevered cash flows, Needham & Company used discount rates ranging from 10.0% to 16.0%. The range of discount rates, reflecting an estimated range of weighted average costs of capital of the Company, was selected by Needham & Company utilizing its professional judgment and experience, and was calculated using an assumed equity market risk premium based upon data from Ibbotson Associates, a levered beta estimate based upon Bloomberg financial databases, an

assumed size-related risk premium based upon data from Ibbotson Associates, an assumed risk-free rate based on the U.S. Government 10-year Treasury note yield, and the after tax cost of the Company’s debt. Needham & Company then calculated a range of illustrative terminal enterprise values at the end of 2018, for the three year period analysis, and at the end of 2020, for the five year period analysis, by applying in each case multiples ranging from 8.0x to 12.0x to the Company’s management’s estimate of its fiscal year 2018 adjusted EBITDA, for the three year analysis, and fiscal year 2020 adjusted EBITDA, for the five year analysis. The range of multiples was selected by Needham & Company utilizing its professional judgment and experience by reference to the longer term EBITDA multiples for the Selected Companies and the Company. These illustrative terminal enterprise values were then discounted to calculate ranges of implied indications of present values using discount rates ranging from 10.0% to 16.0%. Needham & Company then added the ranges of the implied present values of the Company’s unlevered free cash flows for the projected periods to the ranges of implied present values of the Company’s terminal enterprise values to derive ranges of implied present enterprise values of the Company. Needham & Company then added the Company’s total cash, cash equivalents, short-term investments and investment securities at October 23, 2015 and subtracted the Company’s total debt at October 23, 2015 to arrive at the ranges of implied present equity values. Needham & Company calculated the Company’s estimated fully-diluted Shares outstanding at the end of fiscal year 2018, in the case of the three year period analysis, and the end of fiscal year 2020, in the case of the five year period analysis, based on the Company’s management’s estimates of 2.0% annual future share dilution to current stockholders resulting from issuances of equity compensation awards, and divided the implied present equity values by these estimated outstanding share numbers. The three year period analysis indicated an implied per Share equity value reference range for the Company of $8.57 to $12.99 and the five year period analysis indicated an implied per Share equity value reference range for the Company of $8.33 to $13.02.

For illustrative purposes only, Needham & Company also performed, in addition to the analyses described above that were performed with respect to Needham & Company’s opinion, illustrative discounted cash flow analyses based on the Company’s management’s Case II projections described below under the heading “Certain Company Forecasts.” As noted above, Needham & Company was instructed by the Board to base its opinion as to the fairness, from a financial point of view, of the per Share Transaction Consideration to the holders of the Shares (other than certain excluded holders) on the Case I projections. Needham & Company performed these analyses because Parent was also provided with the Company’s management’s Case II projections. These analyses used the same discount rates and multiples as the analyses described above that were based on the Company’s management’s Case I projections. Based on the Case II projections, the three year period analysis indicated an implied per Share equity value reference range for the Company of $9.96 to $15.25 and the five year period analysis indicated an implied per Share equity value reference range for the Company of $9.78 to $15.45.

Microsemi Selected Companies Analysis

Using publicly available information, Needham & Company compared selected historical and projected financial and market data ratios for Parent to the corresponding data and ratios of the Selected Companies.

The following tables set forth information concerning the following multiples for the Selected Companies and for Parent:

•

enterprise value as a multiple of LTM revenues;

•

enterprise value as a multiple of projected CY 2015, 2016 and 2017 revenues;

•

enterprise value as a multiple of LTM adjusted EBITDA;

•

enterprise value as a multiple of projected CY 2015, 2016 and 2017 adjusted EBITDA;

•

price as a multiple of LTM adjusted EPS; and

•

price as a multiple of projected CY 2015, 2016 and 2017 adjusted EPS.

Needham & Company calculated multiples for the Selected Companies using consensus research analyst projections and the closing stock prices for the Selected Companies on November 23, 2015. Needham & Company calculated multiples for Parent using consensus research analyst projections and the closing stock price for Parent common stock on November 23, 2015.

Selected Companies

Microsemi

High

Low

Mean

Median

Enterprise value to LTM revenues

5.8x

1.5x

3.6x

4.0x

3.5x

Enterprise value to projected CY 2015 revenues

5.4x

1.5x

3.6x

4.0x

3.4x

Enterprise value to projected CY 2016 revenues

4.9x

1.5x

3.3x

3.4x

3.2x

Enterprise value to projected CY 2017 revenues

4.3x

1.6x

3.2x

3.0x

Enterprise value to LTM adjusted EBITDA

36.1x

6.2x

14.8x

11.8x

13.5x

Enterprise value to projected CY 2015 adjusted EBITDA

28.6x

7.1x

15.4x

13.2x

13.4x

Enterprise value to projected CY 2016 adjusted EBITDA

19.1x

5.2x

11.6x

11.1x

9.3x

Enterprise value to projected CY 2017 adjusted EBITDA

10.9x

6.5x

9.2x

9.6x

9.0x

Price to LTM adjusted EPS

38.3x

22.2x

29.2x

28.2x

35.4x

Price to projected CY 2015 adjusted EPS

31.6x

13.8x

20.4x

20.3x

12.9x

Price to projected CY 2016 adjusted EPS

25.2x

12.9x

17.3x

16.4x

10.9x

Price to projected CY 2017 adjusted EPS

19.8x

11.2x

15.7x

16.2x

10.4x

Pro Forma Transaction Analysis

Needham & Company prepared pro forma analyses of the financial impact of the merger based on the Transaction Consideration, estimated financial results of the Company and Parent for calendar year 2016, and estimated transaction expenses, and assuming cost savings and other synergies resulting from the Merger. The estimated financial results and transaction expenses were based upon the Company’s and Parent’s managements’ estimates, and the estimated transaction expenses included the $88.5 million fee payable to Skyworks upon termination of the Company’s amended and restated merger agreement with Skyworks. The estimated cost savings and other synergies, aggregating $75 million by calendar year 2017 with $64 million realized in calendar year 2016, were based on Parent management estimates, as adjusted by the Company’s management for use in analyses. Based upon these estimates and assumptions, Needham & Company noted that the Merger would result in accretion to the estimated adjusted EPS of Parent for calendar year 2016, including under scenarios in which the estimated cost savings and other synergies were reduced in increments to zero. The actual operating or financial results achieved by the combined entity may vary from estimated results, and these variations may be material.

Miscellaneous

No company, transaction or business used in the “PMC Selected Companies Analysis,” “Selected Transactions Analysis,” “Premiums Paid Analysis” or “Microsemi Selected Companies Analysis” as a comparison is identical to the Company or Parent or to the Offer and the Merger. Accordingly, an evaluation of the results of these analyses is not entirely mathematical; rather, it involves complex considerations and judgments concerning differences in the financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the selected companies or selected transactions or the business segment, company or transaction to which they are being compared.

The summary set forth above does not purport to be a complete description of the analyses performed by Needham & Company in connection with the rendering of its opinion. The preparation of a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant quantitative and qualitative methods of financial analyses and the application of those methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Accordingly, Needham &

Company believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying its analyses and opinion. Needham & Company did not attribute any specific weight to any factor or analysis considered by it. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis.

In performing its analyses, Needham & Company made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the Company’s or Parent’s control. Any estimates contained in or underlying these analyses, including estimates of the Company’s and Parent’s future performance, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those estimates. Additionally, analyses relating to the values of businesses or assets do not purport to be appraisals or necessarily reflect the prices at which businesses or assets may actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. Needham & Company’s opinion and its related analyses were only one of many factors considered by the Board in their evaluation of the Offer and the Merger and should not be viewed as determinative of the views of the Board or management with respect to the Transaction Consideration or the Offer and the Merger.

Needham & Company is a nationally recognized investment banking firm. As part of its investment banking services, Needham & Company is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of securities, private placements and other purposes. Needham & Company believes that it was retained by the Board as a financial advisor to provide its opinion based on Needham & Company’s experience as a financial advisor in mergers and acquisitions as well as Needham & Company’s familiarity with the Company and its industry generally. Needham & Company has not in the past two years provided investment banking or financial advisory services to the Company unrelated to its current engagement for which it has received compensation. Needham & Company has not in the past two years provided investment banking or financial advisory services to Parent or the Purchaser for which it has received compensation. Needham & Company may in the future provide investment banking and financial advisory services to the Company, Parent, or their respective affiliates unrelated to the Offer or the Merger, for which services Needham & Company would expect to receive compensation. In the normal course of its business, Needham & Company may actively trade equity securities of the Company and Parent for its own account or for the account of its customers or affiliates and, therefore, may at any time hold a long or short position in those securities.

Certain Company Forecasts

The Company does not generally publish its business plans and strategies or make external disclosures of its anticipated financial position or results of operations other than for providing, from time to time, estimated ranges of certain expected financial results and operational metrics for the current quarter in its regular earnings press releases and other investor materials.

In August 2015, the Company’s management presented updated financial projections to the Board based upon the Company’s year-to-date performance that included a forecast of a target case (“Case I”) that represented management’s judgment as to the results that could be achieved, taking into account the Company’s management’s judgment as to the likelihood of winning the business for which the Company was competing, and whether there would be delays in when customers will roll out new products, among other risks, and a forecast of an upside case (“Case II”) based on a bottom-up analysis of projected sales that did not reflect any such judgment by management in each case for the current year and for the six subsequent years. In connection with the evaluation of the Company’s strategic alternatives, the Company’s management provided the Case I and Case II projections to parties interested in a potential strategic transaction with the Company that entered into confidentiality agreements with the Company, including to Parent. The Case I projections were also intended for use internally to evaluate management’s performance. The projections were provided by management with a view to showing potential bidders the potential performance of the Company, subject to certain assumptions

reflected therein. Both the Case I and Case II projections were provided to potential interested parties as well as to Qatalyst Partners and Needham & Company. Based upon the judgment of the Board and management that the Case I projections reflected the results that were more likely to be achieved, the Board instructed Qatalyst Partners and Needham & Company to use the Case I projections as the basis for their financial analyses in connection with their opinions as to the fairness, from a financial point of view, of the transaction consideration payable in the merger to the holders of the Shares (other than the holders of certain excluded shares).

These financial projections and forecasts were not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, International Financial Reporting Standards, or U.S. GAAP, and do not, and were not intended to, act as public guidance regarding the Company’s future financial performance. The inclusion of this information in this Schedule 14D-9 should not be regarded as an indication that the Company or any recipient of this information considered, now considers or will consider this information to be necessarily predictive of future results. The Company does not intend to update or otherwise revise the financial projections to correct any errors existing in such projections when made, to reflect circumstances existing after the date when made or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the financial projections are shown to be in error.

Although presented with numerical specificity, the financial projections and forecasts included in this Schedule 14D-9 are based on numerous estimates, assumptions and judgments (in addition to those described below) that may not be realized and are inherently subject to significant business, economic and competitive uncertainties and contingencies related to various factors, including growth rates of the end markets in which the Company participates, timely completion of the Company’s product development schedules, the competitiveness of the Company’s current or future products relative to those of the Company’s competitors, the production plans and product transition schedules of the Company’s customers, and the acceptance in the marketplace of the Company’s customers’ products that incorporate the Company’s products and the other factors listed in Item 8 under heading “Cautionary Note Regarding Forward-Looking Statements.” These or other factors may cause the financial projections or the underlying assumptions and estimates to be inaccurate. Since the financial projections cover multiple years, such information by its nature becomes less reliable with each successive year. The financial projections also do not take into account any circumstances or events occurring after the date they were prepared. The inclusion of the financial projections and forecasts in this Schedule 14D-9 shall not be deemed an admission or representation by us that such information is material. The inclusion of the projections should not be regarded as an indication that the Company considered or now considers them to be a reliable prediction of future results and you should not rely on them as such. Accordingly, there can be no assurance that the financial projections will be realized, and actual results may vary materially from those reflected in the projections. You should read the section entitled “Cautionary Statement Concerning Forward-Looking Information” in Item 8 for additional information regarding the risks inherent in forward-looking information such as the financial projections.

Certain of the financial projections set forth herein may be considered non-U.S. GAAP financial measures. A non-U.S. GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The Company believes that the additional non-U.S. GAAP measures are useful to investors for the purpose of financial analysis. Management uses these measures internally to evaluate the Company’s in-period operating performance before gains, losses and other charges that are considered by management to be outside of the Company’s core operating results. In addition, the measures are used for planning and forecasting of the Company’s future periods. However, non-U.S. GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-U.S. GAAP measures and presentation of results.

The projections for the Company’s fourth quarter of fiscal year 2015 through fiscal year 2021 exclude the effects of stock-based compensation, acquisition-related costs, termination costs, asset impairments, lease exit

costs, amortization of purchased intangible assets, foreign exchange loss (gain) on foreign tax liabilities, and accretion of discount on short-term and long-term obligations. The dollar amounts below are in millions of U.S. dollars, rounded to the nearest one million dollars.

Management Projections—Case I

($MM, except percentages and per share amounts)

Fiscal year

Q4
2015E (1)

2016E

2017E

2018E

2019E

2020E

2021E

Revenue

145

573

643

728

769

808

838

Adjusted EBITDA (2)

172

208

243

257

270

280

Operating Income (3)

152

186

218

230

241

250

NOPAT (4)

151

185

216

229

240

225

UFCF (5)

143

173

217

229

240

225

Earnings Per Share (6)

0.19

0.70

0.86

1.01

1.07

1.12

1.16

(1)	The projected financial data provided in this table has not been updated to reflect the Company’s current views of its future financial performance, and should not be treated as guidance with respect to projected results for the fourth quarter of 2015 or any other period.

(2)	Adjusted EBITDA represents earnings before interest and taxes, presented on a non-U.S. GAAP basis excluding amortization and stock based compensation as expenses, plus depreciation.

(3)	Operating income, as used in the Company’s projections, is a non-U.S. GAAP financial measure.

(4)	Net operating profit after taxes is a non-U.S. GAAP financial measure calculated by starting with operating income (as shown in the table above) and subtracting the Company’s estimated taxes payable in cash (such amounts include the effect of the Company’s estimated tax attributes).

(5)

Unlevered free cash flow is a non-U.S. GAAP financial measure calculated by starting with operating income (as shown in the table above) and subtracting taxes, capital expenditures, investment in working capital, cash payments associated with anticipated restructuring and deferred cash payments for acquisitions and then adding back depreciation expense.

(6)	Earnings per share, as used in the Company’s projections, is a non-U.S. GAAP financial measure.

Management Projections—Case II

($MM, except percentages and per share amounts)

Fiscal year

Q4
2015E (1)

2016E

2017E

2018E

2019E

2020E

2021E

Revenue

145

615

757

870

927

979

1,017

Adjusted EBITDA (2)

193

253

290

309

327

339

Operating Income (3)

172

227

260

277

292

304

NOPAT (4)

171

225

259

276

291

273

UFCF (5)

162

213

260

277

291

273

Earnings Per Share (6)

0.19

0.80

1.05

1.21

1.29

1.36

1.41

(1)	The projected financial data provided in this table has not been updated to reflect the Company’s current views of its future financial performance, and should not be treated as guidance with respect to projected results for the fourth quarter of 2015 or any other period.

(2)	Adjusted EBITDA represents earnings before interest and taxes, presented on a non-U.S. GAAP basis excluding amortization and stock based compensation as expenses, plus depreciation.

(3)	Operating income, as used in the Company’s projections, is a non-U.S. GAAP financial measure.

(4)	Net operating profit after taxes is a non-U.S. GAAP financial measure calculated by starting with operating income (as shown in the table above) and subtracting the Company’s estimated taxes payable in cash (such amounts include the effect of the Company’s estimated tax attributes).

(5)

(6)	Earnings per share, as used in the Company’s projections, is a non-U.S. GAAP financial measure.

Item 5.

PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED

The Company has retained Qatalyst Partners and Needham & Company to act as financial advisors to the Company in connection with the Offer and related matters.

Under the terms of the Company’s engagement letter with Needham & Company, the Company has paid or agreed to pay Needham & Company a $50,000 retainer upon the commencement of the engagement, a nonrefundable fee of $600,000, against which the retainer was credited, that became payable upon Needham & Company’s delivery of its opinion with respect to the original merger agreement with Skyworks on October 5, 2015, and a nonrefundable fee of $400,000 that became payable upon Needham & Company’s delivery of its opinion with respect to the amended and restated merger agreement with Skyworks on October 29, 2015. No additional fee was payable to Needham & Company in connection with the delivery of its opinion on November 23, 2015 with respect to the Merger Agreement and no portion of Needham & Company’s fees is contingent on the successful completion of the Offer or the Merger. In addition, the Company has agreed to reimburse Needham & Company for certain of its out-of-pocket expenses and to indemnify Needham & Company and related persons against various liabilities, including certain liabilities under the federal securities laws.

Except as otherwise described above, neither the Company nor any person acting on its behalf has employed, retained or compensated any person to make solicitations or recommendations to the Company’s stockholders on its behalf concerning the Offer or the Merger, except that such solicitations or recommendations may be made by directors, officers or employees of the Company, for which services no additional compensation will be paid.

Item 6.

INTEREST IN SECURITIES OF THE SUBJECT COMPANY

Other than as set forth below, no transactions with respect to Shares have been effected by the Company or, to the knowledge of the Company after making reasonable inquiry, by any of its executive officers, directors, affiliates or subsidiaries during the 60 days prior to the date of this Schedule 14D-9.


Identity of Person	Date of Transaction	Number of Shares		Price Per Share (1)		Nature of Transaction
Steven J. Geiser	11/25/2015		15,709	$	11.78	Securities deemed disposed of pursuant to tax withholding obligations due on the release of RSUs
David M. Fein	11/30/2015		65,075	$	8.69	Shares acquired pursuant to exercise of stock options
David M. Fein	11/30/2015		72,609	$	11.84	Disposition of equity securities
Gregory S. Lang	11/30/2015		290,168	$	6.61	Shares acquired pursuant to exercise of stock options
Gregory S. Lang	11/30/2015		290,168	$	11.83	Disposition of equity securities
Steven J. Geiser	11/30/2015		180,729	$	5.23	Shares acquired pursuant to exercise of stock options
Steven J. Geiser	11/30/2015		213,918	$	11.81	Disposition of equity securities
Travis Karr	11/30/2015		281,598	$	8.08	Shares acquired pursuant to exercise of stock options
Travis Karr	11/30/2015		345,762	$	11.84	Disposition of equity securities
Ra’ed O. Elmurib	12/1/2015		42,545	$	11.87	Disposition of equity securities
Tom Sun	12/1/2015		462,696	$	7.55	Shares acquired pursuant to exercise of stock options
Tom Sun	12/1/2015		494,081	$	11.86	Disposition of equity securities
Alinka Flaminia	12/2/2015		220,124	$	7.64	Shares acquired pursuant to exercise of stock options
Alinka Flaminia	12/2/2015		220,124	$	11.92	Disposition of equity securities
Ra’ed O. Elmurib	12/2/2015		44,900	$	10.97	Shares acquired pursuant to exercise of stock options
Ra’ed O. Elmurib	12/2/2015		44,900	$	11.93	Disposition of equity securities
Michael A. Klayko	12/3/2015		44,701	$	11.91	Disposition of equity securities
Ra’ed O. Elmurib	12/3/2015		12,612	$	7.29	Shares acquired pursuant to exercise of stock options
Ra’ed O. Elmurib	12/3/2015		12,612	$	11.93	Disposition of equity securities
Richard E. Belluzzo	12/3/2015		208,000	$	7.60	Shares acquired pursuant to exercise of stock options
Richard E. Belluzzo	12/3/2015		208,000	$	11.91	Disposition of equity securities
Richard Nottenburg	12/3/2015		103,845	$	5.91	Shares acquired pursuant to exercise of stock options
Richard Nottenburg	12/3/2015		103,845	$	11.90	Disposition of equity securities
Jonathan J. Judge	12/4/2015		252,463	$	7.34	Shares acquired pursuant to exercise of stock options
Jonathan J. Judge	12/4/2015		252,463	$	11.94	Disposition of equity securities
Ra’ed O. Elmurib	12/4/2015		95,118	$	5.56	Shares acquired pursuant to exercise of stock options
Ra’ed O. Elmurib	12/4/2015		95,118	$	11.93	Disposition of equity securities
Richard Nottenburg	12/4/2015		48,621	$	11.92	Disposition of equity securities
Travis Karr	12/7/2015		3,019	$	6.39	Shares acquired pursuant to exercise of stock options
Travis Karr	12/7/2015		3,019	$	11.93	Disposition of equity securities
Gregory S. Lang	12/8/2015		292,006	$	11.86	Disposition of equity securities
Steven J. Geiser	12/8/2015		60,828	$	6.47	Shares acquired pursuant to exercise of stock options
Steven J. Geiser	12/8/2015		60,828	$	11.86	Disposition of equity securities
Alinka Flaminia	12/9/2015		23,393	$	4.79	Shares acquired pursuant to exercise of stock options
Alinka Flaminia	12/9/2015		89,026	$	11.86	Disposition of equity securities
Gregory S. Lang	12/9/2015		328,153	$	9.06	Shares acquired pursuant to exercise of stock options
Gregory S. Lang	12/9/2015		328,153	$	11.89	Disposition of equity securities
Alinka Flaminia	12/10/2015		116,607	$	4.94	Shares acquired pursuant to exercise of stock options
Alinka Flaminia	12/10/2015		116,607	$	11.81	Disposition of equity securities
Gregory S. Lang	12/10/2015		251,264	$	7.26	Shares acquired pursuant to exercise of stock options
Gregory S. Lang	12/10/2015		251,264	$	11.83	Disposition of equity securities

(1)	Prices for acquisitions and dispositions reflect the weighted average price at which transactions were effected on that day.

Item 7.

PURPOSES OF THE TRANSACTIONS AND PLANS OR PROPOSALS

Except as set forth in this Schedule 14D-9 or as incorporated in this Schedule 14D-9 by reference, the Company is not undertaking or engaged in any negotiations in response to the Offer that relate to:

•

a tender offer or other acquisition of the Company’s securities by the Company, any subsidiary of the Company or any other person;

•

any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any subsidiary of the Company;

•

any purchase, sale or transfer of a material amount of assets by the Company or any subsidiary of the Company; or

•

any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company.

Except as set forth in this Schedule 14D-9 or as incorporated in this Schedule 14D-9 by reference, there are no transactions, resolutions of the Board, agreements in principle or signed contracts entered into in response to the Offer that relate to, or would result in, one or more of the matters referred to in the preceding paragraph.

Item 8.

ADDITIONAL INFORMATION

Stockholder Approval Not Required

Neither the Parent nor the Purchaser is, or at any time for the past three years has been, an “interested stockholder” of the Company as defined in Section 203 of the DGCL. If the Offer is consummated, the Company does not anticipate seeking the adoption of the Merger Agreement by, or any other approval of the Company’s remaining public stockholders before effecting the Merger. Section 251(h) of the DGCL provides that, subject to certain statutory provisions, if following consummation of a successful tender offer for a public corporation, the acquirer holds at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquirer can effect a merger without any action of the other stockholders of the target corporation. Therefore, the parties have agreed that, subject to the conditions specified in the Merger Agreement, the Merger will become effective as soon as practicable after the consummation of the Offer, without a meeting of the Company’s stockholders to adopt the Merger Agreement, in accordance with Section 251(h) of the DGCL.

Section 203 of the Delaware Business Combination Statute

As a Delaware corporation, the Company is subject to Section 203 of the DGCL. In general, Section 203 of the DGCL prevents a Delaware corporation from engaging in a “business combination” (defined to include mergers and certain other actions) with an “interested stockholder” (including a person who owns or has the right to acquire 15% or more of a corporation’s outstanding voting stock) for a period of three years following the date such person became an “interested stockholder” unless, among other things, the “business combination” is approved by the board of directors of such corporation before such person became an “interested stockholder.” The Board has taken all action required to be taken in order to exempt the Offer, the Merger, the Merger Agreement and the other transactions contemplated thereby from the restrictions on business combination of Section 203 of the DGCL.

A number of states have adopted laws which purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or which have substantial assets, stockholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which may have enacted such laws. Except as described herein, the Company does not

know whether any of these laws will, by their terms, apply to the Offer or the Merger, and the Company has not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, the Company believes that there are reasonable bases for contesting the application of such laws.

Appraisal Rights

The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, which is attached to this Schedule 14D-9 as Annex C. All references in Section 262 of the DGCL and in this summary to a “stockholder” or “holder of Shares” are to the record holder of Shares immediately prior to the Effective Time as to which appraisal rights are asserted. Under Delaware law, the procedures to properly demand and perfect appraisal rights must be carried out by and in the name of those registered as the holders of record of Shares. A person having a beneficial interest in Shares held of record in the name of another person, such as a broker or nominee, and who wish to demand appraisal rights, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. Stockholders should carefully review the full text of Section 262 of the DGCL as well as the information discussed below.

Under the DGCL, if the Merger is completed, holders of Shares immediately prior to the Effective Time who (i) did not tender their Shares in the Offer; (ii) follow the procedures set forth in Section 262 of the DGCL and (iii) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court of Chancery and to receive payment of the “fair value” of such Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, if any, as determined by such court (such Shares, collectively, “Dissenting Shares”). Any such judicial determination of the “fair value” of such Shares could be based upon considerations other than or in addition to the price paid in the Offer and the market value of Shares. Stockholders should recognize that the value so determined could be greater than, less than or the same as the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price). Moreover, the Purchaser may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of the Dissenting Shares is less than the price paid in the Offer and the Merger.

Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the surviving corporation within 10 days thereafter, will notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and will include in such notice a copy of Section 262. This Schedule 14D-9 constitutes the formal notice of appraisal rights under Section 262 of the DGCL.

ANY STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD REVIEW THE FOLLOWING DISCUSSION AND ANNEX C CAREFULLY AND IN ITS ENTIRETY AND IS URGED TO CONSULT WITH HIS, HER OR ITS LEGAL ADVISOR, BECAUSE FAILURE TO TIMELY AND PROPERLY COMPLY WITH SECTION 262 OF THE DGCL WILL RESULT IN THE LOSS OF APPRAISAL RIGHTS UNDER THE DGCL.

If a stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such stockholder must do all of the following:

•

within the later of the consummation of the Offer and 20 days following the mailing of this notice, deliver to the Company at the address indicated below, a written demand for appraisal of Shares held, which demand must reasonably inform the Company of the identity of the stockholder and that the stockholder is demanding appraisal;

•

not tender such Shares in the Offer; and

•

continuously hold of record Shares from the date on which the written demand for appraisal is made through the Effective Time.

If the Merger is consummated pursuant to Section 251(h) of the DGCL, Parent will cause the Surviving Corporation to deliver an additional notice of the Effective Time to all stockholders of the Company who delivered a written demand to the Company pursuant to the first bullet above within 10 days of the closing of the Merger, as required by Section 262(d)(2) of the DGCL. However, only stockholders who have provided notice in accordance with the first bullet above will receive such notice of the Effective Time. Because the Merger will be consummated pursuant to Section 251(h) of the DGCL, a failure to deliver a written demand for appraisal in accordance with the time periods specified in the first bullet above (or to take any of the other steps specified in Section 262 of the DGCL) will be deemed to be a waiver or a termination of your appraisal rights.

Written Demand by the Holder

All written demands for appraisal should be addressed to PMC-Sierra, Inc., 1380 Bordeaux Drive, Sunnyvale, CA 94089, Attention: General Counsel. The written demand for appraisal must be executed by or for the record holder of Shares, fully and correctly, as such holder’s name appears on the certificate(s) for Shares owned by such holder. If Shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand must be made in that capacity, and if Shares are owned of record by more than one person, such as in a joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including one of two or more joint owners, may execute the demand for appraisal for a holder of record. However, the agent must identify the record owner(s) and expressly disclose the fact that, in executing the demand, the agent is acting as agent for the record owner(s).

A beneficial owner of Shares held in “street name” who wishes to exercise appraisal rights should take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record holder of Shares. If Shares are held through a brokerage firm, bank or other nominee who in turn holds Shares through a central securities depository nominee, such as Cede & Co., a demand for appraisal of such Shares must be made by or on behalf of the depository nominee, and must identify the depository nominee as the record holder. Any beneficial owner who wishes to exercise appraisal rights and holds Shares through a nominee holder is responsible for ensuring that the demand for appraisal is timely made by the record holder of such Shares. The beneficial holder of such Shares should instruct the nominee holder that the demand for appraisal should be made by the record holder of such Shares, which may be a central securities depository nominee if such Shares have been so deposited.

Filing a Petition for Appraisal

Within 120 days after the Effective Time, but not thereafter, the Surviving Corporation, or any holder of Shares who has complied with the applicable provisions of Section 262 of the DGCL and is entitled to appraisal rights under Section 262, may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of Shares held by all holders who are entitled to appraisal. If no such petition is filed within such 120-day period, appraisal rights will be lost for all holders of Shares who had previously demanded appraisal of their Shares. The Company is under no obligation to and has no present intention to file a petition, and holders should not assume that the Company will file a petition or that it will initiate any negotiations with respect to the fair value of Shares. Accordingly, it is the obligation of the holders of Shares to initiate all necessary action to perfect their appraisal rights in respect of Shares within the period prescribed in Section 262 of the DGCL.

Within 120 days after the Effective Time, any holder of Shares who has complied with the applicable requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of Shares not tendered pursuant to the Offer and with

respect to which demands for appraisal have been received and the aggregate number of holders of such Shares. Such statement must be mailed within 10 days after a written request therefor has been received by the Surviving Corporation or within 10 days after the expiration of the period for delivery of demands for appraisal pursuant to the DGCL, whichever is later. Notwithstanding the foregoing requirement that a demand for appraisal must be made by or on behalf of the record owner of Shares, a person who is the beneficial owner of Shares held either in a voting trust or by a nominee on behalf of such person, and as to which demand has been properly made and not effectively withdrawn, may, in such person’s own name, file a petition for appraisal or request from the Surviving Corporation the statement described in this paragraph.

Upon the filing of such petition by any such holder of Shares, service of a copy thereof must be made upon the Surviving Corporation, which will then be obligated within 20 days to file with the Delaware Register in Chancery a duly verified list (the “Verified List”) containing the names and addresses of all stockholders who have demanded payment for their Shares and with whom agreements as to the value of their Shares has not been reached with the Company. Upon the filing of any such petition, the Delaware Court of Chancery may order that notice of the time and place fixed for the hearing on the petition be mailed to the Surviving Corporation and all of the stockholders shown on the Verified List. Such notice will also be published at least one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware, or in another publication determined by the Delaware Court of Chancery. The costs of these notices are borne by the Surviving Corporation.

After notice to the stockholders has been given as required by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 of the DGCL and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the stockholders who demanded payment for their Shares to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceeding and, if any stockholder fails to comply with the direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

Determination of Fair Value

After the Delaware Court of Chancery determines which stockholders are entitled to appraisal, the appraisal proceeding will be conducted in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court of Chancery will determine the fair value of Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the Effective Time and the date of payment of the judgment.

In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the Delaware Court of Chancery must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that were known or that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger[.]” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that

“elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering appraisal should be aware that the fair value of their Shares as so determined could be more than, the same as or less than the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price) and that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL. Although the Company believes that the Offer Price is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price). Neither the Purchaser nor the Company anticipates offering more than the Offer Price to any stockholder exercising appraisal rights, and reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262 of the DGCL, the fair value of a Share is less than the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price).

Upon application by the Surviving Corporation or by any holder of Shares entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any holder of Shares whose name appears on the Verified List and who has submitted such stockholder’s certificates of stock to the Delaware Register in Chancery, if such is required, may participate fully in all proceedings unless it is finally determined that such stockholder is not entitled to appraisal rights. The Delaware Court of Chancery will direct the payment of the fair value of Shares, together with interest, if any, by the Surviving Corporation to the stockholders entitled thereto. Payment will be so made to each such stockholder upon the surrender to the Surviving Corporation of such stockholder’s certificates. The Delaware Court of Chancery’s decree may be enforced as other decrees in such court may be enforced.

If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the action (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable. Upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by a stockholder in connection with an appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, to be charged pro rata against the value of all Shares entitled to appraisal. In the absence of such determination or assessment, each party bears its own expenses.

Any stockholder who has duly demanded and perfected appraisal rights in compliance with Section 262 of the DGCL will not, after the Effective Time, be entitled to vote his or her Shares for any purpose or be entitled to the payment of dividends or other distributions thereon, except dividends or other distributions payable to holders of record of Shares as of a date prior to the Effective Time.

If any stockholder who demands appraisal of Shares under Section 262 of the DGCL fails to perfect, successfully withdraws or loses such holder’s right to appraisal, such stockholder’s Shares will be deemed to have been converted at the Effective Time into the right to receive the transaction consideration. A stockholder will fail to perfect, or effectively lose, the stockholder’s right to appraisal if no petition for appraisal is filed within 120 days after the Effective Time.

At any time within 60 days after the Effective Time, any holder of Shares who has not commenced an appraisal proceeding or joined that proceeding as a named party will have the right to withdraw such demand for appraisal and to accept the terms offered in the Merger. Any stockholder may withdraw such stockholder’s demand for appraisal by delivering to the Surviving Corporation a written withdrawal of his or her demand for

appraisal and acceptance of the transaction consideration, except (i) that any such attempt to withdraw made more than 60 days after the Effective Time will require written approval of the Surviving Corporation and (ii) that no appraisal proceeding in the Delaware Court of Chancery may be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as such court deems just, provided, however, that such requirement will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered in the Merger within 60 days after the Effective Time.

If you wish to exercise your appraisal rights, you must not tender your Shares in the Offer and must strictly comply with the procedures set forth in Section 262 of the DGCL. If you fail to take any required step in connection with the exercise of appraisal rights, it will result in the termination or waiver of your appraisal rights.

The foregoing summary of the rights of the Company’s stockholders to seek appraisal rights under Delaware law does not purport to be a complete statement of the procedures to be followed by the Company’s stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict adherence to the applicable provisions of the DGCL. A copy of Section 262 of the DGCL is included as Annex C to this Schedule 14D-9.

Antitrust Compliance

Under the HSR Act and the rules and regulations promulgated thereunder by the U.S. Federal Trade Commission (the “FTC”), certain acquisition transactions may not be consummated until certain information and documentary material has been furnished for review by the FTC and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) and certain waiting period requirements have been satisfied. These requirements apply to Parent by virtue of the Purchaser’s acquisition of Shares in the Offer (and the Merger).

Under the HSR Act, the purchase of Shares in the Offer may not be completed until the expiration of a 30 calendar day waiting period following the filing of certain required information and documentary material concerning the Offer (and the Merger) with the FTC and the Antitrust Division, unless the waiting period is earlier terminated by the FTC and the Antitrust Division. The parties each filed such Premerger Notification and Report Forms pursuant to the HSR Act with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer on December 9, 2015, in advance of the 10 business day deadline set forth in the Merger Agreement. Under the HSR Act, the required waiting period will expire at 11:59 pm, New York City time on the 30th calendar day after the filing by Parent, unless earlier terminated by the FTC and the Antitrust Division or Parent receives a request for additional information or documentary material (“Second Request”) from either the FTC or the Antitrust Division prior to that time. If a Second Request is issued, the waiting period with respect to the Offer (and the Merger) would be extended for an additional period of 30 calendar days following the date of Parent’s substantial compliance with that request. If either the initial or the extended waiting period expires on a Saturday, Sunday or federal holiday, then the period is extended until 11:59 p.m. of the next day that is not a Saturday, Sunday or federal holiday. Only one automatic extension of the waiting period, pursuant to a Second Request, is authorized by the HSR Act rules. After that time, the waiting period could be extended only by court order or with Parent’s consent. The FTC or the Antitrust Division may terminate the additional 30 calendar day waiting period before its expiration. Complying with a Second Request can take a significant period of time. If a Second Request is issued and the resultant extension of the waiting period has not expired or been terminated prior to the scheduled expiration of the Offer, the Purchaser would extend the Offer for successive extension periods of up to 10 business days until the earlier of (i) such time as all waiting periods applicable to the Offer and the Merger under the HSR Act have expired or otherwise been terminated, and (ii) 11:59 p.m. (New York City Time) on March 31, 2016.

The FTC and the Antitrust Division frequently scrutinize the legality under the U.S. antitrust laws of transactions, such as the Purchaser’s acquisition of Shares in the Offer and the Merger. At any time before or after the Purchaser’s purchase of Shares in the Offer and the Merger, the FTC or the Antitrust Division could take any action under the antitrust laws that it either considers necessary or desirable in the public interest, including seeking (1) to enjoin the purchase of Shares in the Offer and the Merger, (2) the divestiture of Shares purchased in the Offer and Merger or (3) the divestiture of substantial assets of Parent, the Company or any of their respective subsidiaries or affiliates. Private parties, as well as state attorneys general, also may bring legal actions under the antitrust laws under certain circumstances. See the Offer to Exchange under the heading “Merger Agreement—Conditions to the Offer.”

Parent and the Company also conduct business outside of the United States. However, based on a review of the information currently available relating to the countries and businesses in which Parent and the Company are engaged, the Company, the Purchaser and Parent believe that no mandatory antitrust premerger notification filing are required outside the United States.

Based upon an examination of publicly available and other information relating to the businesses in which the Company is engaged, the Company, the Purchaser and Parent believe that the acquisition of Shares in the Offer and the Merger should not violate applicable antitrust laws. Nevertheless, the Company, the Purchaser and Parent cannot be certain that a challenge to the Offer and the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be. See the Offer to Exchange under the heading “Merger Agreement—Conditions to the Offer.”

Golden Parachute Compensation

The following table sets forth the information required by Item 402(t) of Regulation S-K regarding certain compensation that will or may be paid or become payable to each of the Company’s named executive officers and that is based on or otherwise relates to the Merger. This compensation is referred to as “golden parachute” compensation. The amounts set forth in the tables below are based on payments and benefits that may become payable under the terms of change of control or employment agreements or to which each Company named executive officer is a party, pursuant to the terms of equity awards or pursuant to the terms of the merger agreement. The terms and conditions of the change of control and severance agreements, as well as the treatment of equity awards under the merger agreement, are described in Item 3 under the heading “Agreements or Arrangements with Executive Officers and Directors of the Company—Change of Control and Severance Arrangements,” which is incorporated by reference herein. The amounts listed below are estimates based on multiple assumptions that may or may not actually occur, including the assumptions that the closing of the Merger occurred on December 11, 2015 and that each named executive officer will be terminated immediately following the closing of the Merger. The actual amounts, if any, to be received by a named executive officer may differ from the amounts set forth below.


Named Executive Officers (4)	Cash (1)		Equity (2)		Perquisites / Benefits (3)		Total
Gregory S. Lang	$	2,139,000	$	9,889,370	$	13,861	$	12,042,231
Steven J. Geiser	$	630,360	$	3,414,070	$	22,395	$	4,066,825
Travis Karr	$	463,680	$	2,947,166	$	2,293	$	3,413,139
Alinka Flaminia	$	529,152	$	1,723,633	$	16,451	$	2,269,236

(1)

Represents (i) for Mr. Lang, a lump sum cash payment equal to two times his base salary, and for each other named executive officer, a lump sum cash payment of one times his or her base salary and (ii) for each named executive officer a lump sum cash payment equal to one times the target amount of his or her annual bonus under the Company’s Short-Term Incentive Program. These amounts are “double trigger” payments that are payable upon a qualifying termination that occurs within a specified period following, or 60 days prior to but in connection with, a change of control.

(2)

Reflects payments in cancellation of stock and option awards, including the value of accelerated vesting in full of all Company stock options (less applicable exercise prices) and unvested Company RSUs and assumes vesting in the number of Company RSUs subject to outstanding unvested Company PRSUs, assuming achievement of target-level performance, which accelerated vesting is a “double-trigger” benefit as described above, calculated as follows:


	Value of Company Stock Option Payments (i)		Value of Company RSU Payments (ii)		Value of Company PRSU Payments (iii)		Value of All Equity Payments
Named Executive Officers
Gregory S. Lang	$	3,444,481	$	2,342,389	$	4,102,500	$	9,889,370
Steven J. Geiser	$	1,347,179	$	984,617	$	1,082,274	$	3,414,070
Travis Karr	$	739,963	$	1,018,535	$	1,188,668	$	2,947,166
Alinka Flaminia	$	501,432	$	499,807	$	722,395	$	1,723,633

(i).

Represents payments in cancellation of Company stock options, calculated as the Offer Price per share of PMC common stock underlying Company stock options, reduced by the applicable exercise price, multiplied by the number of Company stock options being canceled after giving effect to those Company stock options that would vest on an accelerated basis pursuant to the applicable agreement: For Mr. Lang, 644,583 Company stock options; for Mr. Geiser, 230,743 Company stock options; for Mr. Karr, 139,701 Company stock options; and for Ms. Flaminia, 94,834 Company stock options.

(ii).

Represents payments in cancellation of Company RSUs, calculated as the conversion of such Company RSUs into Converted RSUs followed by the cancellation of such Converted RSUs in consideration for a payment equal to the closing trading price of Parent common stock on Nasdaq on December 11, 2015, multiplied by the number of Converted RSU shares subject to accelerated vesting, based on the presumption that the executive’s employment will terminate immediately following the effective time of the merger: For Mr. Lang, 207,733 Company RSUs; for Mr. Geiser, 87,320 Company RSUs; for Mr. Karr, 90,328 Company RSUs; and for Ms. Flaminia, 44,325 Company RSUs.

(iii).

Represents payments in cancellation of Company PRSUs, calculated as the conversion of such Company PRSUs into Converted RSUs, assuming achievement of target-level performance, followed by the cancellation of such Converted RSUs in consideration for a payment equal to the closing trading price of Parent common stock on Nasdaq on December 11, 2015, multiplied by the number of Converted RSU subject to accelerated vesting, based on the presumption that the executive’s employment will terminate immediately following the effective time of the merger: For Mr. Lang, 363,659 Company PRSUs; for Mr. Geiser, 95,934 Company PRSUs; for Mr. Karr, 105,374 Company PRSUs; and for Ms. Flaminia, 64,037 Company PRSUs.

(3)

Represents reimbursement of, or a lump sum payment for, the cost of 12 months of continued health insurance (for Mr. Lang, the cost of 12 months of continued health and dental insurance). These amounts are “double trigger” payments, which, as described above, means that they are payable upon a qualifying termination that occurs within a specified period following (or 60 days prior to but in connection with) a change of control.

(4)

Robert M. Liszt and Colin C. Harris are also named executive officers of the Company for whom disclosure was required in PMC’s most recent proxy statement. However, Mr. Liszt and Mr. Harris departed the Company in December 2014 and May 2015, respectively, and will not receive any payments or benefits in connection with the merger.

Litigation

Since the announcement of the original merger with Skyworks on October 5, 2015, and before the Skyworks merger agreement was terminated, three lawsuits challenging the merger with Skyworks have been filed by purported Company stockholders. The complaints in these actions name as defendants Company, members of the Board, Skyworks and Skyworks’s subsidiary, Amherst Acquisition, Inc. Descriptions of such lawsuits that have been filed as of December 16, 2015 are set forth below.

California Actions

Commencing on October 8, 2015, two purported class actions captioned Bhakta v. PMC-Sierra, Inc., et al., Case No. 1-15-cv-286967, and Azzalini v. Lang, et al., Case No. 1-15-cv-287124 (the “California Actions”) were filed in the Superior Court of the State of California, County of Santa Clara. Plaintiffs in the California Actions allege that each of the members of the Board breached his fiduciary duties to the Company’s stockholders in connection with the Skyworks merger agreement. Among other things, plaintiffs in the California Actions allege that:

•

the consideration to have been paid to the Company’s stockholders in connection with the Skyworks merger was unfair and inadequate;

•

in the Bhakta action, that the Company’s directors agreed to unreasonable deal protection devices in the Skyworks merger agreement that precluded competing offers from emerging;

•

in the Azzalini action, that the Company’s directors failed to terminate the merger agreement with Skyworks and accept Parent’s proposal; and

•

the merger with Skyworks would have been the result of conflicts of interest on the part of the Company’s directors.

Plaintiffs in the California Actions also allege that Skyworks and Amherst Acquisition, Inc. aided and abetted the Company’s directors’ alleged breaches of fiduciary duty. The California Actions seek, among other things, injunctive relief preventing the parties from completing the merger with Skyworks (or, in the event the merger with Skyworks would have been completed, rescission thereof), an order directing defendants in the action to account to the Company’s stockholders for damages suffered as a result of the alleged wrongdoing, and an award of attorneys’ fees and expenses for plaintiff.

Delaware Action

On October 14, 2015, a purported class action captioned Pietrus Industries Ltd. v. PMC-Sierra, Inc., et al., C.A. No. 11610-VCG (the “Delaware Action”) was filed in the Delaware Court of Chancery. Plaintiff in the Delaware Action alleges that each of the members of the Board breached his fiduciary duties to the Company’s stockholders in connection with the Skyworks merger agreement. Among other things, plaintiff in the Delaware Action alleges that:

•

the consideration to have been paid to the Company’s stockholders in connection with the Skyworks merger was unfair and inadequate;

•

the Company’s directors agreed to unreasonable deal protection devices in the Skyworks merger agreement that precluded competing offers from emerging; and

•

the merger with Skyworks would have been the result of conflicts of interest on the part of the Company’s directors.

Plaintiff in the Delaware Action also alleges that the Company and Skyworks aided and abetted the Company’s directors’ alleged breaches of fiduciary duty. The Delaware Action seeks, among other things, injunctive relief preventing the parties from completing the merger with Skyworks (or, in the event the merger with Skyworks would have been completed, rescission thereof), an order directing defendants in the action to account to the Company’s stockholders for damages suffered as a result of the alleged wrongdoing, and awards of attorneys’ fees and expenses for plaintiff. On October 22, 2015, the Company and the Company’s directors answered the complaint in the Delaware Action.

Cautionary Note Regarding Forward-Looking Statements

Certain statements made in the foregoing paragraphs, including, for example, the expected date of closing of the Merger and the potential benefits of the Merger, are “forward-looking statements” within the meaning of the

Private Securities Litigation Reform Act of 1965, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections.

The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that could be instituted against the Company or its directors or Parent related to the Merger Agreement; the possibility that various conditions to the consummation of the Offer and the Merger may not be satisfied or waived, including the receipt of all regulatory approvals related to the Merger; the failure of Parent to obtain the necessary financing pursuant to the arrangements set forth in the debt commitment letters delivered pursuant to the merger agreement or otherwise; uncertainty as to how many Shares will be tendered into the Offer; the risk that the Offer and the Merger will not close within the anticipated time periods; risks related to the ultimate outcome and results of integrating the operations of Parent and the Company, the ultimate outcome of Parent’s operating strategy applied to the Company and the ultimate ability to realize synergies; the effects of the business combination of Parent and the Company, including the combined company’s future financial condition, operating results, strategy and plans; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the Merger; risks related to Parent’s ability to successfully implement its acquisitions strategy or integrate other acquired companies; uncertainty as to the future profitability of businesses acquired by Parent, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions by Parent; risks related to Parent’s reliance on government contracts for a significant portion of its sales, including impacts of any termination or renegotiation of such contracts, uncertainties of governmental appropriations and national defense policies and priorities and effects of any past or future government shutdowns; the risk of downturns in the highly cyclical semiconductor industry; the effects of local and national economic, credit and capital market conditions on the economy in general, and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC, including, but not limited to, those detailed in the Company’s Annual Report on Form 10-K for the year ended December 27, 2014 and its most recent quarterly report filed with the SEC and Parent’s Annual Report on Form 10-K for the year ended September 27, 2015 and its most recent quarterly report filed with the SEC. The forward-looking statements contained herein are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Item 9.

EXHIBITS


Exhibit No.		Description

(a)(1)(A)		Prospectus/Offer to Exchange, dated December 16, 2015 (incorporated by reference to the Form S-4, filed by Microsemi Corporation with the SEC on December 16, 2015).

(a)(1)(B)		Form of Letter of Transmittal (incorporated by reference to Exhibit 99.3 to the Form S-4, filed by Microsemi Corporation with the SEC on December 16, 2015).

(a)(1)(C)		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit 99.4 to the Form S-4, filed by Microsemi Corporation with the SEC on December 16, 2015).

(a)(1)(D)		Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (incorporated by reference to Exhibit 99.5 to the Form S-4, filed by Microsemi Corporation with the SEC on December 16, 2015).


Exhibit No.		Description

(a)(2)(A)		Opinion of Qatalyst Partners LP, dated November 23, 2015 (included as Annex A to this Schedule 14D-9).*

(a)(2)(B)		Opinion of Needham & Company, LLC dated November 23, 2015 (included as Annex B to this Schedule 14D-9).*

(a)(5)(A)		Press Release issued by the Company, dated October 20, 2015, announcing receipt of an unsolicited proposal to acquire all of its outstanding shares by Microsemi Corporation (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by PMC-Sierra, Inc. on October 20, 2015).

(a)(5)(B)		Press Release issued by the Company, dated October 30, 2015, announcing receipt of an unsolicited proposal to acquire all of its outstanding shares by Microsemi Corporation (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by PMC-Sierra, Inc. on October 30, 2015).

(a)(5)(C)		Joint Press Release issued by PMC-Sierra, Inc. and Microsemi Corporation, dated November 24, 2015, announcing execution of definitive agreement (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by PMC-Sierra, Inc. on November 24, 2015).

(a)(5)(D)		E-Mail from Greg Lang to PMC Employees, dated November 24, 2015 (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by PMC-Sierra, Inc. on November 24, 2015).

(a)(5)(E)		PMC FAQs for Employees, dated November 24, 2015 (incorporated by reference to Exhibit 99.2 to the Form 8-K filed by PMC-Sierra, Inc. on November 24, 2015).

(a)(5)(F)		PMC and Microsemi Letter to Customers, dated November 24, 2015 (incorporated by reference to Exhibit 99.3 to the Form 8-K filed by PMC-Sierra, Inc. on November 24, 2015).

(a)(5)(G)		Slide presentation entitled “PMC-Sierra Welcome Meeting” (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by PMC-Sierra, Inc. on November 30, 2015).

(e)(1)		Agreement and Plan of Merger, dated as of November 24, 2015, by and among, Microsemi Corporation, Lois Acquisition Corp. and PMC-Sierra, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 24, 2015).

(e)(2)		Confidentiality Agreement, dated October 30, 2015, by and between the Company and Microsemi Corporation (incorporated by reference to Exhibit (d)(2) to the Tender Offer Statement on Schedule TO, filed by Microsemi Corporation with the SEC on December 16, 2015).

(e)(3)		Debt Commitment Letter, dated November 17, 2015, from Morgan Stanley Senior Funding, Inc. to Microsemi Corporation.*

(e)(4)		Joinder Agreement to Commitment Letter, dated November 5, 2015, from Morgan Stanley Senior Funding, Inc. to Microsemi Corporation, The Bank of Tokyo-Mitsubishi UJF, Ltd. and Deutsche Bank Securities Inc.*

(e)(5)		Acknowledgment and Consent Letter, dated November 17, 2015, from Morgan Stanley Senior Funding, Inc. to Microsemi Corporation, The Bank of Tokyo-Mitsubishi UJF, Ltd. and Deutsche Bank Securities Inc.*

(e)(6)		Form of Indemnification Agreement between the Company and its directors and officers, as amended and restated (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-K filed with the SEC on March 28, 2003).

(e)(7)		1994 Incentive Stock Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-K filed with the SEC on March 1, 2007).


Exhibit No.		Description

(e)(8)		2001 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-K filed with the SEC on March 1, 2007).

(e)(9)		2008 Equity Plan (incorporated by reference to Exhibit 4.2 to the Company’s Form S-8 filed with the SEC on August 12, 2008).

(e)(10)		2011 Employee Stock Purchase Plan, as amended (incorporated by reference to Proposal No. 5 to the Company’s Form DEF14A filed with the SEC on March 20, 2015).

(e)(11)		Form of Amended and Restated Change of Control Agreement by and between the Company and the executive officers (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-K filed with the SEC on February 28, 2013).

(e)(12)		Amended and Restated Executive Employment Agreement by and between PMC-Sierra, Inc. and Gregory S. Lang, effective as of December 16, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed December 19, 2014).

(e)(13)		Offer of Employment/Position by and between the Registrant and Steven J. Geiser (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-K filed with the SEC on February 28, 2013).

(e)(14)		PMC-Sierra, Inc. Restricted Stock Unit Agreement (Performance-Based Vesting Award) between PMC-Sierra, Inc. and Gregory S. Lang (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed August 27, 2012).

*	Filed herewith.


Annex A		Opinion of Qatalyst Partners LP, dated November 23, 2015
Annex B		Opinion of Needham & Company, LLC dated November 23, 2015
Annex C		Section 262 of the General Corporation Law of the State of Delaware

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


Date: December 16, 2015	PMC-SIERRA, INC.

	By:	/s/ Alinka Flaminia
		Alinka Flaminia
		Vice President, General Counsel and Corporate Secretary

Annex A

OPINION OF QATALYST PARTNERS LP

LOGO

November 23, 2015

Board of Directors

PMC-Sierra, Inc.

1380 Bordeaux Drive

Sunnyvale, CA 94089

Members of the Board:

We understand that PMC-Sierra, Inc. (the “Company”), Microsemi Corporation (“Parent”) and Lois Acquisition Corp., a wholly-owned subsidiary of Parent (“Sub”), propose to enter into an Agreement and Plan of Merger, substantially in the form of the draft delivered by Parent on November 17, 2015 (the “Merger Agreement”), which provides, among other things, for (i) the commencement by Sub of a tender offer (the “Tender Offer”) for any and all outstanding shares of common stock of the Company, par value $0.001 per share (“Company Common Stock”), for (x) $9.22 in cash (the “Cash Consideration”) and (y) 0.0771 shares (the “Exchange Ratio” and together with the Cash Consideration, the “Per Share Amount”) of common stock of Parent, par value $0.20 per share (“Parent Common Stock”); and (ii) the subsequent merger of Sub with and into the Company (the “Merger” and, together with the Tender Offer, the “Transaction”). Pursuant to the Merger, the Company will become a wholly-owned subsidiary of Parent, and each issued and outstanding share of Company Common Stock, other than shares held in treasury by the Company, shares held by Parent or Sub or any direct or indirect wholly-owned subsidiary of Parent and Dissenting Shares (as defined in the Merger Agreement), will be converted into the right to receive the Per Share Amount. The terms and conditions of the Tender Offer and the Merger are more fully set forth in the Merger Agreement.

You have asked for our opinion as to whether the Per Share Amount to be received by the holders of shares of Company Common Stock, other than Parent or any affiliates of Parent (the “Holders”), pursuant to the Merger Agreement is fair, from a financial point of view, to such Holders.

For purposes of the opinion set forth herein, we have reviewed a draft of the Merger Agreement, as delivered by Parent on November 17, 2015 (the “Draft Merger Agreement”), certain related documents and certain publicly available financial statements and other business and financial information of the Company and Parent. We have also reviewed (i) certain forward-looking information prepared by the management of the Company, including financial projections and operating data of the Company (the “Company Projections”); (ii) certain forward-looking information prepared by the management of Parent, including financial projections and operating data of Parent (the “Parent Projections”); (iii) certain publicly available financial projections and operating data of Parent, including publicly available research analysts’ estimates (the “Parent Street Projections”); and (iv) information relating to certain strategic, financial and operational benefits anticipated from the Transaction prepared by the management of Parent, as adjusted by the management of the Company (the “Synergies”). Additionally, we discussed the past and current operations and financial condition and the prospects of the Company and Parent, including information relating to certain strategic, financial and operational benefits anticipated from the Transaction, with senior executives of the Company and Parent. We

One Maritime Plaza | 24^th Floor | San Francisco, CA 94111

Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914

A-1

LOGO

also reviewed the historical market prices and trading activity for Company Common Stock and Parent Common Stock and compared the financial performance of the Company and Parent and the prices and trading activity of Company Common Stock and Parent Common Stock with that of certain other selected publicly-traded companies and their securities. In addition, we reviewed the financial terms, to the extent publicly available, of selected acquisition transactions and performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate.

In arriving at our opinion, we have assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, us by the Company and Parent. With respect to the Company Projections, we have been advised by the management of the Company, and have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company of the future financial performance of the Company. With respect to the Parent Projections, we have been advised by the management of Parent, and have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Parent of the future financial performance of Parent. With respect to the Parent Street Projections, we have been advised by the management of the Company, and have assumed, that they reflect the best currently available estimates and judgments of the management of the Company of the future financial performance of Parent. With respect to the Synergies, we have been advised by the management of the Company, and have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company relating to the strategic, financial and operational benefits anticipated from the Transaction. We have assumed that the Transaction will be consummated in accordance with the terms set forth in the Draft Merger Agreement, without any modification, waiver or delay. We also have assumed that the final executed Merger Agreement will not differ in any material respect from the Draft Merger Agreement reviewed by us. In addition, we have assumed that in connection with the receipt of all the necessary approvals of the proposed Transaction, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on the Company, Parent or the contemplated benefits expected to be derived in the proposed Transaction. We have not made any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company or Parent, nor have we been furnished with any such evaluation or appraisal. In addition, we have relied, without independent verification, upon the assessments of the managements of the Company and Parent as to (i) the existing and future technology and products of the Company and Parent and the risks associated with such technology and products, (ii) their ability to integrate the businesses of the Company and Parent and (iii) their ability to retain key employees of the Company and Parent.

We have acted as financial advisor to the Board of Directors of the Company in connection with this transaction and will receive a fee for our services, a portion of which has been earned, and a further portion of which will become payable upon rendering of this opinion. We will also receive an additional, larger fee if the Tender Offer is consummated. In addition, the Company has agreed to reimburse our expenses and indemnify us for certain liabilities arising out of our engagement. During the two year period prior to the date hereof, no material relationship existed between Qatalyst or any of its affiliates and the Company or Parent pursuant to which compensation was received by Qatalyst or its affiliates; however, Qatalyst and/or its affiliates may in the future provide investment banking and other financial services to the Company or Parent and their respective affiliates for which we would expect to receive compensation.

One Maritime Plaza | 24^th Floor | San Francisco, CA 94111

Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914

A-2

LOGO

Qatalyst provides investment banking and other services to a wide range of corporations and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of the Company, Parent or certain of their respective affiliates.

This opinion has been approved by our opinion committee in accordance with our customary practice. This opinion is for the information of the Board of Directors of the Company and may not be used for any other purpose without our prior written consent. This opinion does not constitute a recommendation as to whether any Holder should tender shares of Company Common Stock in connection with the Tender Offer and does not in any manner address the price at which Parent Common Stock or Company Common Stock will trade at any time.

Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this opinion and the assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this opinion. Our opinion does not address the underlying business decision of the Company to engage in the Transaction, or the relative merits of the Transaction as compared to any strategic alternatives that may be available to the Company. Our opinion is limited to the fairness, from a financial point of view, of the Per Share Amount to be received by the Holders pursuant to the Merger Agreement, and we express no opinion with respect to the fairness of the amount or nature of the compensation to any of officers, directors or employees of Parent or the Company, or any class of such persons, relative to such Per Share Amount.

Based on and subject to the foregoing, we are of the opinion on the date hereof that the Per Share Amount to be received by the Holders pursuant to the Merger Agreement is fair, from a financial point of view, to such Holders.

Yours faithfully,

/s/ Qatalyst Partners LP

QATALYST PARTNERS LP

One Maritime Plaza | 24^th Floor | San Francisco, CA 94111

Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914

A-3

Annex B

OPINION OF NEEDHAM & COMPANY, LLC

LOGO

Needham & Company, LLC 445 Park Avenue, New York, NY 10022-4406 (212) 371-8300

November 23, 2015

Board of Directors

PMC-Sierra, Inc.

1380 Bordeaux Drive

Sunnyvale, CA 94089

Gentlemen:

We understand that Microsemi Corporation (“Parent”), PMC-Sierra, Inc. (the “Company”), and Lois Acquisition Corp., a wholly-owned subsidiary of Parent (“Purchaser”), propose to enter into an Agreement and Plan of Merger (the “Merger Agreement”) that provides for Purchaser to commence an exchange offer (the “Offer”) to purchase all of the outstanding shares of common stock, $0.001 par value, of the Company (“Company Common Stock”) at a consideration per share of $9.22 per share in cash, without interest (the “Cash Amount”), plus 0.0771 of a share of common stock, $0.20 par value per share, of Parent (“Parent Common Stock”) (the “Stock Amount” and, together with the Cash Amount, the “Consideration”). We also understand that, pursuant to the Merger Agreement, following consummation of the Offer, Purchaser will merge with and into the Company and the Company will become a wholly-owned subsidiary of Parent (the “Merger”), and each issued and outstanding share of Company Common Stock, other than shares held by the Company as treasury shares, shares held by Parent, Purchaser or any other direct or indirect subsidiary of Parent, and Dissenting Shares (as defined in the Merger Agreement), will be converted into the right to receive the Consideration. The terms and conditions of the Offer and the Merger (collectively, the “Transaction”) will be set forth more fully in the Merger Agreement.

You have asked us to advise you as to the fairness, from a financial point of view, to the holders of Company Common Stock (other than Parent or any of its affiliates and other than holders of Dissenting Shares) of the Consideration to be received by such holders pursuant to the Merger Agreement.

For purposes of this opinion we have, among other things: (i) reviewed a draft of the Merger Agreement dated November 17, 2015; (ii) reviewed certain publicly available information concerning the Company and Parent and certain other relevant financial and operating data of the Company and Parent furnished to us by the Company and Parent; (iii) reviewed the historical stock prices and trading volumes of Company Common Stock and Parent Common Stock; (iv) held discussions with members of management of the Company and Parent concerning the current operations of and future business prospects for the Company and Parent and joint prospects for the combined companies, including the potential cost savings and other synergies that may be achieved by the combined companies; (v) reviewed certain financial forecasts with respect to the Company and Parent prepared by the respective managements of the Company and Parent and held discussions with members of such managements concerning those forecasts; (vi) reviewed certain research analyst projections with respect to the Company and Parent and held discussions with members of the respective managements of the Company and Parent concerning those projections; (vii) compared certain publicly available financial data of companies

B-1

Boston Office: One Federal Street, Boston, MA 02110 (617) 457-0910

California Offices: 3000 Sand Hill Road, Building 3, Menlo Park, CA 94025 (650) 854-9111

535 Mission Street, San Francisco, CA 94105 (415) 262-4860

Chicago Office: 180 North LaSalle, Suite 3700, Chicago, IL 60601 (312) 981-0412

Board of Directors

PMC-Sierra, Inc.

November 23, 2015

Page 2

Needham & Company, LLC

whose securities are traded in the public markets and that we deemed generally relevant to similar data for the Company and Parent; (viii) reviewed the financial terms of certain business combinations that we deemed generally relevant; and (ix) reviewed such other financial studies and analyses and considered such other matters as we have deemed appropriate.

In connection with our review and in arriving at our opinion, we have assumed and relied on the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by us for purposes of this opinion and have neither attempted to verify independently nor assumed responsibility for verifying any of such information. We have assumed the accuracy of the representations and warranties contained in the Merger Agreement and all agreements related thereto. In addition, we have assumed, with your consent, that the Transaction will be consummated upon the terms and subject to the conditions set forth in the draft Merger Agreement dated November 17, 2015 without waiver, modification or amendment of any material term, condition or agreement thereof and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the Transaction, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company, Parent or the contemplated benefits of the Transaction. With respect to the financial forecasts for the Company and Parent provided to us by the respective managements of the Company and Parent, we have assumed, with your consent and based upon discussions with such managements, that such forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements, at the time of preparation, of the future operating and financial performance of the Company, Parent and the combined companies. We have relied, without independent verification, upon the estimates of management of the Company and Parent of the potential cost savings and other synergies, including the amount and timing thereof, that may be achieved as a result of the proposed Transaction. With respect to the research analyst projections for the Company and Parent, we have assumed, with your consent and based upon discussions with the respective managements of the Company and Parent, that such projections represent reasonable estimates of the future financial performance of the Company and Parent. We express no opinion with respect to any of such forecasts (including such cost savings and other synergies), estimates or projections or the assumptions on which they were based.

We have not assumed any responsibility for or made or obtained any independent evaluation, appraisal or physical inspection of the assets or liabilities of the Company, Parent or any of their respective subsidiaries nor have we evaluated the solvency or fair value of the Company, Parent or any of their respective subsidiaries under any state or federal laws relating to bankruptcy, insolvency or similar matters. Further, our opinion is based on economic, monetary and market conditions as they exist and can be evaluated as of the date hereof and we assume no responsibility to update or revise our opinion based upon circumstances and events occurring after the date hereof. Our opinion as expressed herein is limited to the fairness, from a financial point of view, to the holders of Company Common Stock (other than Parent or any of its affiliates and other than holders of Dissenting Shares) of the Consideration to be received by such holders pursuant to the Merger Agreement and we express no opinion as to the fairness of the Transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of the Company, or as to the Company’s underlying business decision to engage in the Transaction or the relative merits of the Transaction as compared to other business strategies that might be available to the Company. We were not authorized to and did not solicit any indications of interest from any third party with respect to the purchase of all or any part of the Company or any alternative transaction and we have not been requested to and did not participate in the structuring or negotiation of the terms of the Transaction. In addition, we express no opinion with respect to the amount or nature or any other aspect of any compensation payable to or to be received by any officers, directors

B-2

Board of Directors

PMC-Sierra, Inc.

November 23, 2015

Page 3

Needham & Company, LLC

or employees of any party to the Transaction, or any class of such persons, relative to the Consideration to be received by the holders of Company Common Stock pursuant to the Merger Agreement or with respect to the fairness of any such compensation. Our opinion does not constitute a recommendation to any stockholder of the Company as to whether such stockholder should tender shares of Company Common Stock in connection with the Offer or how such stockholder should vote or act on any matter relating to the Transaction.

We are not expressing any opinion as to the value of Parent Common Stock if and when issued pursuant to the Transaction or the prices at which Parent Common Stock or Company Common Stock will actually trade at any time.

We have been engaged by the Company as financial advisor to render this opinion and will receive fees for our services that are not contingent on the consummation of the Offer or the Merger. In addition, the Company has agreed to indemnify us for certain liabilities arising out of the rendering of this opinion and to reimburse us for certain of our out-of-pocket expenses. We have not in the past two years provided investment banking or financial advisory services to the Company unrelated to our current engagement with respect to the proposed Transaction for which we have received compensation. We have not in the past two years provided investment banking or financial advisory services to Parent or Purchaser for which we have received compensation. We may in the future provide investment banking and financial advisory services to the Company, Parent and their respective affiliates unrelated to the Transaction, for which services we would expect to receive compensation. In the ordinary course of our business, we may actively trade the equity securities of the Company and Parent for our own account or for the accounts of customers or affiliates and, accordingly, may at any time hold a long or short position in such securities.

This letter and the opinion expressed herein are provided at the request and for the information of the Board of Directors of the Company and may not be disclosed publicly, quoted or referred to, or used for any other purpose without our prior written consent, except that this letter may be disclosed in connection with any proxy, information or solicitation/recommendation statement used in connection with the Transaction provided that this letter is quoted in full in such proxy, information or solicitation/recommendation statement. This opinion has been approved by a fairness committee of Needham & Company, LLC.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Consideration to be received by the holders of Company Common Stock (other than Parent or any of its affiliates and other than holders of Dissenting Shares) pursuant to the Merger Agreement is fair, from a financial point of view, to such holders.

Very truly yours,

/s/ Needham & Company, LLC

NEEDHAM & COMPANY, LLC

B-3

Annex C

SECTION 262 OF DELAWARE GENERAL CORPORATION LAW

§ 262. Appraisal rights.

(a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.

(b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section, § 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:

(1) Provided, however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title.

(2) Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except:

a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;

b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;

c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or

d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section.

(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 251(h), § 253 or § 267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

C-1

(4) In the event of an amendment to a corporation’s certificate of incorporation contemplated by § 363(a) of this title, appraisal rights shall be available as contemplated by § 363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as practicable, with the word “amendment” substituted for the words “merger or consolidation”, and the word “corporation” substituted for the words “constituent corporation” and/or “surviving or resulting corporation”.

(c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or

(2) If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the tender or exchange offer contemplated by § 251(h) of this title and 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to

C-2

§ 251(h) of this title, later than the later of the consummation of the tender or exchange offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

(e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder’s written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection.

(f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.

(h) After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing

C-3

appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.

(i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.

(j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.

(l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.

C-4

Exhibit (e)(3)

Execution Version

MORGAN STANLEY SENIOR FUNDING, INC.

1585 Broadway

New York, NY 10036

CONFIDENTIAL

November 17, 2015

Microsemi Corporation

One Enterprise

Aliso Viejo, CA 92656

Attention: John Hohener

Chief Financial Officer

Project Forest

$350,000,000 Senior Secured Revolving Credit Facility

$375,000,000 Senior Secured Term Loan A Facility

$2,200,000,000 Senior Secured Term Loan B Facility

Second Amended and Restated Commitment Letter

Ladies and Gentlemen:

This second amended and restated commitment letter amends, restates and supersedes that certain amended and restated commitment letter dated as of November 9, 2015 (the “Amended and Restated Commitment Letter”) from Morgan Stanley Senior Funding, Inc. (as defined below) to Microsemi Corporation, a Delaware corporation (“you” or the “Borrower”), and such Amended and Restated Commitment Letter shall be of no further force or effect. You have advised Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”, “we”, “us” and, together with any Additional Arranger appointed, in each case, pursuant to Section 2 below, the “Commitment Parties”) that you intend to acquire (the “Acquisition”), directly or indirectly, the Target (as defined in Exhibit A) and consummate the other transactions described in Exhibit A. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Exhibits attached hereto (such Exhibits, together with this letter, collectively, the “Commitment Letter”).

1. Commitments.

In connection with the Transactions (as defined in Exhibit A), Morgan Stanley is pleased to advise you of its commitment to provide to you 100% of each of (a) the aggregate principal amount of the $350,000,000 Senior Secured Revolving Credit Facility, (b) the aggregate principal amount of the $375,000,000 Senior Secured Term Loan A Facility and (c) the aggregate principal amount of the $2,200,000,000 Senior Secured Term Loan B Facility, in each case, on the terms set forth in the Summary of Principal Terms and Conditions attached as Exhibit B (and, together with Exhibit C, collectively, the “Term Sheets”), and in each case subject only to the satisfaction or waiver of the conditions set forth in Section 6 hereof.

2. Titles and Roles.

3. Syndication.

The Lead Arranger reserves the right, prior to or after the Closing Date (as defined below), to syndicate all or a portion of the Initial Lenders’ commitments hereunder to a group of banks, financial institutions and other institutional lenders (together with the Initial Lenders, the “Lenders”) identified by the Lead Arranger in consultation with you and acceptable to you such acceptance not to be unreasonably withheld, delayed or conditioned); provided that (a) the Lead Arranger agrees not to syndicate its commitments to (i) competitors of the Borrower, the Target and their respective subsidiaries specified to us by you in writing from time to time, (ii) any persons that are engaged as principals primarily in private equity, mezzanine financing or venture capital and certain banks, financial institutions, other institutional lenders and other entities, in each case, that have been specified to us by you in writing on or prior to October 18, 2015 (the “Original Signing Date”) and (iii) as to any entity referenced in each case of clauses (i) and (ii) above (the “Primary Disqualified Lender”), any of such Primary Disqualified Lender’s known affiliates readily identifiable by name, but excluding any affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Lender does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity (clauses (i), (ii) and (iii) above collectively, the “Disqualified Lenders”) and (b) notwithstanding the Lead Arranger’s right to syndicate the Credit Facilities and receive commitments with respect thereto, (A) the Initial Lenders shall not be relieved, released or novated from their obligations hereunder (including their obligation to fund the Credit Facilities on the date of the consummation of the Acquisition with the proceeds of the initial funding under the Credit Facilities (the date of such funding, the “Closing Date”)) in connection with any syndication, assignment or participation of the Credit Facilities, including their commitments in respect thereof, until after the Closing Date has occurred, (B) except as contemplated in Section 2 above, no assignment or novation shall become effective with respect to all or any portion of the Initial Lenders’ commitments in respect of the Credit Facilities until the initial funding of the Credit Facilities and (C) unless you otherwise agree in writing, each Commitment Party shall retain exclusive

control over all rights and obligations with respect to its commitments in respect of the Credit Facilities, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred.

Without limiting your obligations to assist with syndication efforts as set forth herein prior to the Syndication Date (as defined below), it is understood that the Initial Lender’s commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, the Credit Facilities and in no event shall the commencement or successful completion of syndication of the Credit Facilities constitute a condition to the availability of the Credit Facilities on the Closing Date. The Lead Arranger may commence syndication efforts promptly upon the execution of this Commitment Letter and, as part of our syndication efforts, it is our intent to have Lenders commit to the Credit Facilities prior to the Closing Date (subject to the limitations set forth in the preceding paragraph). Until the earlier of (a) the date on which a Successful Syndication (as defined in the Fee Letter) is achieved and (b) the date that is 60 days following the Closing Date (the “Syndication Date”), you agree to actively assist the Lead Arranger in completing a timely syndication that is reasonably satisfactory to us and you. Such assistance shall include, until the later of the Syndication Date and the Closing Date, (i) your using commercially reasonable efforts to ensure that any syndication efforts benefit from your existing lending and investment banking relationships, (ii) direct contact between senior management, certain representatives and certain advisors of the Borrower, on the one hand, and the proposed Lenders, on the other hand, in all such cases at times and locations mutually agreed upon, (iii) your assistance in the preparation of the Information Materials and other customary marketing materials to be used in connection with the syndication of the Credit Facilities, (iv) your using commercially reasonable efforts to obtain, at your expense, prior to the launch of general syndication of the Credit Facilities, public ratings for the Term Loan B Facility from each of Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”) and a public corporate credit rating and a public corporate family rating in respect of the Borrower after giving effect to the Transactions from each of S&P and Moody’s, respectively, (v) the hosting, with the Lead Arranger, of a reasonable number of meetings or conference calls to be mutually agreed upon of prospective Lenders at reasonable times and locations to be mutually agreed upon and upon reasonable advance notice, (vi) your promptly preparing and providing pro forma financial projections of the Borrower and its subsidiaries, including pro forma balance sheets and income statements, for a five year period, which shall be on a quarterly basis for first year following the Closing Date and on an annual basis thereafter and (vii) your ensuring that, prior to the later of the Syndication Date and the Closing Date, there will not be any competing issues, offerings, placements or arrangements of debt securities or credit facilities by or on behalf of you or any of your subsidiaries (and, in the case of a Negotiated Transaction (as defined in Exhibit A hereto), your using commercially reasonable efforts to cause the Target to ensure that there will not be any competing issues, offerings, placements or arrangements of debt securities or credit facilities of the Target or its subsidiaries) being offered, placed or arranged (other than the Credit Facilities, ordinary course capital leases, purchase money indebtedness and equipment financings, deferred purchase price obligations, obligations under the Acquisition Agreement, indebtedness of the Target and its subsidiaries disclosed or otherwise permitted under the Acquisition Agreement or other indebtedness that has otherwise been consented to by the Lead Arranger) without the consent of the Lead Arranger, if such issuance, offering, placement or arrangement would materially impair the primary syndication of the Credit Facilities. Notwithstanding anything to the contrary contained in this Commitment Letter, the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, your obligations to assist in syndication efforts as provided herein (including commercially reasonable efforts to obtain the ratings referenced above) shall not constitute a condition to the commitments hereunder or the funding of the Credit Facilities on the Closing Date and shall terminate on the later of the Syndication Date and the Closing Date.

Except as otherwise expressly provided herein, the Lead Arranger, in its capacities as such, will manage all aspects of any syndication of the Credit Facilities, in consultation with you, including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate (subject to your prior consent (not to be unreasonably withheld, delayed or conditioned) and excluding Disqualified Institutions), the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist the Lead Arranger in its syndication efforts, you agree to promptly prepare and provide (and, in the case of a Negotiated Transaction, to use commercially reasonable efforts to cause the Target to promptly prepare and provide) to us, in each case prior to the later of the Syndication Date and the Closing Date, such customary information with respect to the Borrower, the Target and each of their respective subsidiaries and the Transactions, including all financial information and projections prepared by you (including financial estimates, financial models, forecasts and other forward-looking information, the “Projections”), as the Lead Arranger may reasonably request in connection with the structuring, arrangement and syndication of the Credit Facilities. Notwithstanding anything herein to the contrary, the only financial statements that shall be required to be provided to the Commitment Parties in connection with the syndication of the Credit Facilities shall be those required to be delivered pursuant to paragraph 6 of Exhibit C.

You hereby acknowledge that (a) the Lead Arranger will make available Information (as defined below), Projections and other marketing material and presentations, including confidential information memoranda to be used in connection with the syndication of the Credit Facilities (any such memorandum, an “Information Memorandum”, and such Information, Projections, other marketing material and Information Memoranda, collectively with the Term Sheets, the “Information Materials”) on a confidential basis to the proposed syndicate of Lenders by posting the Information Materials on IntraLinks, Debt X, SyndTrak Online or another similar electronic system and (b) certain of the Lenders may be “public side” Lenders (i.e., Lenders that wish to receive only information that (i) is publicly available or of a type that would be publicly available if the Borrower and the Target were public reporting companies or (ii) is not material with respect to you, the Borrower, the Target or your or their respective subsidiaries or securities for purposes of United States federal and State securities laws (collectively, the “Public Side Information”; any information that is not Public Side Information, “Private Side Information”)) and who may be engaged in investment and other market related activities with respect to you, the Borrower, the Target or your or their respective subsidiaries or securities (each, a “Public Sider”, and each Lender that is not a Public Sider, a “Private Sider”). You will be solely responsible for the contents of the Information Materials and the Commitment Parties shall be entitled to use and rely upon the information contained therein without responsibility for independent verification thereof.

You agree to assist (and, in the case of a Negotiated Transaction, use commercially reasonable efforts to cause the Target to assist) us in preparing an additional version of the Information Materials to be used in connection with the syndication of the Credit Facilities that includes only Public Side Information with respect to you, the Borrower, the Target and/or any of your or their respective subsidiaries or securities, to be used by Public Siders. It is understood that in connection with your assistance described above, customary authorization letters will be included in any Information Materials that (i) contain a customary “10b-5” representation and a customary representation by you to the Commitment Parties that any Public Side Information does not include any Private Side Information and (ii) exculpate us and our affiliates with respect to any liability related to the use of the contents by the recipients thereof and exculpate you and your affiliates, the Target and its affiliates (including, without limitation, the Seller (as defined in Exhibit A)), in the event of any unauthorized use or misuse of any of the Information Materials or related marketing materials by the recipients thereof. Before distribution of any Information Materials, at our request, you agree to identify that portion of the Information Materials that may be distributed to the Public Siders as “Public Information”, which, at a minimum, shall mean

that the word “PUBLIC” shall appear prominently on the first page thereof. By marking Information Materials as “PUBLIC”, you shall be deemed to have authorized the Commitment Parties and the proposed Lenders to treat such Information Materials as containing only Public Side Information (it being understood that you shall not be under any obligation to mark the Information Materials “PUBLIC”). We will not make any materials not marked “PUBLIC” available to Public Siders.

You acknowledge and agree that the following documents, without limitation, may be distributed to both Private Siders and Public Siders, unless you advise the Lead Arranger in writing (including by email) within a reasonable time prior to its intended distribution that such materials should only be distributed to Private Siders, provided you have been given a reasonable opportunity to review such materials and comply with federal securities laws’ disclosure obligations: (a) administrative materials prepared by the Lead Arranger for prospective Lenders (such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda), (b) term sheets (including revisions thereto) and notification of changes in the Credit Facilities’ terms and conditions, (c) drafts and final versions of the Facilities Documentation (as defined below) and (d) financial statements of the Target and its subsidiaries of the type that would be included in public filings with the United States Securities and Exchange Commission if the Target were a public reporting company. If you advise us in writing (including by email), within a reasonable period of time prior to dissemination, that any of the foregoing should be distributed only to Private Siders, then Public Siders will not receive such materials without your consent.

4. Information.

You hereby represent and warrant that (with respect to information relating to the Target or any of its subsidiaries, to the best of your knowledge), (a) all written information other than (i) the Projections and (ii) forward looking information and other information of a general economic or industry specific nature (the “Information”) that has been or will be made available to the Commitment Parties, directly or indirectly, by you or by any of your representatives on your behalf in connection with the transactions contemplated hereby, when taken as a whole, is or will be correct in all material respects and does not or will not, when taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto prior to the Original Signing Date or, in the case of Information provided after the Original Signing Date, prior to the date such Information is provided) and (b) the Projections that have been or will be made available to us by you or your representatives in connection with the transactions contemplated hereby have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time when made and at the time delivered to us, it being understood that the Projections are as to future events and are not to be viewed as facts, the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, no assurance can be given that any particular Projection will be realized and actual results during the period or periods covered by any such Projection may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the later of the Syndication Date and the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect (with respect to information relating to the Target or any of its subsidiaries or any controlled affiliate of any thereof, to the best of your knowledge) if the Information and the Projections were being furnished, and such representations were being made, at such time, then you will (or, in the case of a Negotiated Transaction, prior to the Closing Date, with respect to the Information and such Projections relating to the Target, will use commercially reasonable efforts to) promptly supplement the Information and Projections such that such representations and warranties are (prior to the Closing Date with respect to information relating to the Target or any of its subsidiaries, to the best of your knowledge) correct in all material respects under those circumstances. In arranging and syndicating the Credit Facilities, the Commitment Parties will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof and does not assume responsibility for the accuracy or completeness of the Information or Projections.

5. Fees.

As consideration for the commitments of the Initial Lenders hereunder and for the agreement of the Lead Arranger to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheets and in the Second Amended and Restated Fee Letter, dated the date hereof, and delivered herewith with respect to the Credit Facilities (the “Fee Letter”), if and to the extent payable in accordance with the terms thereof. Once paid, except as provided herein or in the Fee Letter, such fees shall not be refundable under any circumstances. Notwithstanding anything to the contrary herein or otherwise, if the Transactions are not consummated and the Closing Date does not occur, no fees, costs or expenses (other than amounts payable pursuant to clause (a) of Section 7 below, but not any fees, costs, expenses or disbursements of counsel pursuant to clause (b) of Section 7 below, except to the extent required to be paid pursuant to “Break Up Compensation” in the Fee Letter), shall be payable or reimbursable by you pursuant to this Commitment Letter, the Fee Letter or any other agreement entered into between you and the Lead Arranger, any Administrative Agent, any Commitment Party and/or any of their respective affiliates (other than the Alternate Transaction Fee (as defined in the Fee Letter) solely to the extent such fee would be required to be paid pursuant to the terms of the Fee Letter).

6. Conditions.

The commitments of the Initial Lenders hereunder to fund the Credit Facilities on the Closing Date are subject solely to (a) the conditions set forth in the section entitled “Conditions to Initial Borrowing” in Exhibit B hereto, (b) delivery of a customary borrowing notice (clauses (a) and (b) subject, on the Closing Date, to the Certain Funds Provisions (as defined below)); provided that such notice shall not include any representation or statement as to the absence (or existence) of any default or event of default under the Facilities Documentation, (c) the conditions expressly set forth in this Section 6 and (d) the conditions set forth in Exhibit C hereto, and, upon satisfaction (or waiver by the Lead Arranger) of such conditions, the initial funding of the Credit Facilities shall occur.

be perfected by the delivery of a certificate representing such interests, if any, and (B) the pledge and perfection of security interests in Collateral with respect to which a lien may be perfected by the filing of financing statements under the Uniform Commercial Code in the applicable office in the respective jurisdiction of organization of the Borrower or any Guarantor (as defined in Exhibit B) (the Collateral described in this clause (B), the “Filing Collateral”)) after your use of commercially reasonable efforts to do so, then the provision and/or perfection of a security interest in any such Collateral shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date, but shall instead be provided after the Closing Date pursuant to arrangements and timing (which shall, in any event, be not less than 90 days after the Closing Date or such later date as the Administrative Agent and the Borrower mutually agree upon in good faith) to be mutually agreed by the Administrative Agent and the Borrower acting reasonably. Further, it is hereby understood and agreed that, notwithstanding anything to the contrary in this Commitment Letter or otherwise, any obligation of Borrower, Target or their respective subsidiaries to deliver Collateral related to the Target and its subsidiaries or for any of the Target or its subsidiaries to become Guarantors shall be as set forth in the Facilities Documentation (but in any event shall occur within 30 days following the Closing Date or as the Administrative Agent may agree in its sole discretion) and shall not be a condition precedent to the Credit Facilities. For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower and the Guarantors to be set forth in the Facilities Documentation relating to organizational status of the Borrower and the Guarantors, no conflicts of the Facilities Documentation with charter documents of the Borrower and the Guarantors in each case, related to the entering into and performance of the Facilities Documentation, organizational power and authority to enter into the Facilities Documentation, due authorization, due execution, delivery and enforceability, in each case, relating to the entering into and performance of the Facilities Documentation, solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries on a consolidated basis (such representation and warranty to be consistent with the solvency certificate in the form set forth in Annex I to Exhibit C), Federal Reserve margin regulations, the Investment Company Act, OFAC, the PATRIOT Act, the use of the loan proceeds not violating the FCPA, the status of the Credit Facilities and the guarantees thereof provided for in Exhibit B hereto, respectively, as senior debt and, subject to the immediately preceding sentence, the creation, validity and perfection of security interests in the Filing Collateral (subject to permitted liens to be mutually agreed and the preceding provisions of this Section 6). This paragraph and the provisions herein shall be referred to as the “Certain Funds Provisions”.

The definitive documentation for the Credit Facilities (the “Facilities Documentation”) shall (a) be consistent with this Commitment Letter (including the Certain Funds Provisions), the Term Sheet set forth in Exhibit B hereto, and the Fee Letter, and contain only those conditions precedent, mandatory prepayments, representations, warranties, affirmative covenants, negative covenants, financial covenants and events of default expressly set forth in the Term Sheets (subject only to the exercise of any “market flex” expressly provided in the section of the Fee Letter entitled “Market Flex”) and, to the extent such terms are not expressly set forth in the Term Sheets, but are instead to be determined in accordance with a specified standard or principle, such terms will be negotiated in good faith in accordance with such standard or principle (it being understood that all conditions precedent to fund the Credit Facilities on the Closing Date are expressly set forth in this Section 6), (b) subject to clauses (a) and (d) be based on the Amended and Restated Credit Agreement dated as of October 13, 2011 as amended by Amendment No. 3 dated as of February 17, 2012, Amendment No. 4 dated as of February 19, 2013, Amendment No. 5 dated as of March 18, 2014 and Amendment No. 6 dated as of March 31, 2015 (as so amended and as amended and supplemented by incremental joinders prior to the date hereof and as it may be further amended, modified or supplemented prior to the date hereof, the “Existing Credit Agreement”) among the Borrower, the lenders party thereto and Bank of America, N.A. as administrative agent, (c) subject to clauses (a) and (d) of this paragraph, be based on the operational requirements of the Borrower and its subsidiaries (after giving effect to the Acquisition) in light of their size, structure, industries, businesses, business practices, matters disclosed in the Acquisition Agreement and proposed business plan and

operations, which will include, for the avoidance of doubt, increases in the size of certain “baskets” and thresholds to be mutually agreed, (d) give due regard to the most recent model delivered to the Lead Arranger prior to the Original Signing Date, and (e) be negotiated in good faith by the Borrower and the Lead Arranger to finalize such documentation, giving effect to the Certain Funds Provisions, as promptly as practicable after the acceptance of this Commitment Letter. This paragraph and the provisions herein are referred to as the “Documentation Principles”.

7. Indemnity.

To induce the Commitment Parties to enter into this Commitment Letter and the Fee Letter and to proceed with the documentation of the Credit Facilities, you agree (a) to indemnify and hold harmless each Commitment Party, its respective affiliates and the respective officers, directors, employees, agents, controlling persons, equityholders, partners, members and other representatives of each of the foregoing (each, an “Indemnified Person”), from and against any and all losses, claims, damages and liabilities of any kind or nature and reasonable and documented out-of-pocket fees and expenses, joint or several, to which any such Indemnified Person may become subject to the extent arising out of, resulting from or in connection with, any claim, litigation, investigation or proceeding (including any inquiry or investigation) relating to any of the foregoing (any of the foregoing, a “Proceeding”) in connection with this Commitment Letter, the Fee Letter, the Transactions, the Credit Facilities or any use of the proceeds thereof, regardless of whether any such Indemnified Person is a party thereto and whether or not such Proceeding is brought by you, your equityholders, your affiliates, creditors or any other third person, and to reimburse each such Indemnified Person promptly following written demand (together with back-up documentation supporting such reimbursement request) for any reasonable and documented out-of-pocket legal expenses of one firm of counsel for all such Indemnified Persons, taken as a whole, and, in the case of an actual or perceived conflict of interest, one additional firm of counsel to the affected Indemnified Persons taken as a whole, and, if necessary, of a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all such Indemnified Persons taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of counsel to the affected Indemnified Persons taken as a whole), and other reasonable and documented out-of-pocket fees and expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to any loss, claim, damage, liability, cost or expense to the extent (i) it has been determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from (A) the willful misconduct, bad faith or gross negligence of such Indemnified Person or (B) a material breach of the obligations of such Indemnified Person under this Commitment Letter or the Fee Letter, (ii) resulting from any Proceeding between or among Indemnified Persons that does not involve an action or omission by you or your affiliates (other than claims against any Commitment Party in its capacity or in fulfilling its role as the agent or arranger or any other similar role under the Credit Facilities (excluding its role as a Lender)) and (b) if the Transactions are consummated and the Closing Date occurs, to reimburse Morgan Stanley and its affiliates, from time to time, for all reasonable and documented out-of-pocket expenses, due diligence expenses, syndication expenses, travel expenses and reasonable fees, disbursements and other charges of the single firm of counsel to Morgan Stanley specified in the Term Sheets, and of a single local counsel to Morgan Stanley in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions), in each case incurred in connection with the Credit Facilities and the preparation, negotiation and enforcement of this Commitment Letter, the Fee Letter, the Facilities Documentation and any security arrangements in connection therewith. The foregoing provisions in this paragraph shall be superseded in each case, to the extent covered thereby, by the applicable provisions contained in the Facilities Documentation upon execution thereof and thereafter shall have no further force and effect.

Notwithstanding any other provision of this Commitment Letter, (a) no Indemnified Person shall be liable for any damages arising from the use by others of information or other materials obtained through internet, electronic, telecommunications or other information transmission systems, except to the extent that such damages have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person (as determined by a court of competent jurisdiction in a final non-appealable judgment) and (b) none of you, the Indemnified Persons, the Target, the Borrower or any of your or their respective affiliates or the respective directors, officers, employees, advisors and agents of the foregoing shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Transactions (including the Credit Facilities and the use of proceeds thereunder), or with respect to any activities related to the Credit Facilities, including the preparation of this Commitment Letter, the Fee Letter and the Facilities Documentation; provided that nothing in this sentence shall limit your indemnification obligations set forth herein to the extent such indirect, special, punitive or consequential damages are included in any third party claim in connection with which such Indemnified Person is entitled to indemnification hereunder. Notwithstanding the foregoing, each Indemnified Person shall be obligated to refund and return promptly any and all amounts paid by you under the immediately preceding paragraph to such Indemnified Person for any such losses, claims, damages, liabilities and expenses to the extent it has been determined by a court of competent jurisdiction in a final, non-appealable judgment that such Indemnified Person is not entitled to payment of such amounts in accordance with the terms hereof.

You shall not be liable for any settlement of any Proceeding effected without your written consent (which consent shall not be unreasonably withheld, delayed or conditioned), but if settled with your written consent or if there is a final and non-appealable judgment by a court of competent jurisdiction for the plaintiff against any Indemnified Person in any such Proceeding, you agree to indemnify and hold harmless such Indemnified Person in the manner set forth above.

You shall not, without the prior written consent of any Indemnified Person (which consent shall not be unreasonably withheld, delayed or conditioned), effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (a) includes an unconditional release of such Indemnified Person from all liability arising out of such Proceedings and (b) does not include any statement as to, or any admission of, fault, culpability, wrongdoing or a failure to act by or on behalf of such Indemnified Person.

8. Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.

You acknowledge that the Commitment Parties and their respective affiliates may be providing debt financing, equity capital or other services (including, without limitation, investment banking and financial advisory services, securities trading, hedging, financing and brokerage activities and financial planning and benefits counseling) to other persons in respect of which you, the Target and your and their respective affiliates may have conflicting interests regarding the transactions described herein and. No Commitment Party or its affiliates will use confidential information obtained from you, the Target or your or its affiliates or representatives by virtue of the transactions contemplated by this Commitment Letter or their other relationships with you in connection with the performance by them or their respective affiliates of services for other persons, and no Commitment Party or its affiliates will furnish any such information to other persons in contravention of Section 9. You also acknowledge that no Commitment Party or its affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.

The Commitment Parties and their respective affiliates may have economic interests that conflict with those of you or the Target. You agree that the Commitment Parties will act under this Commitment

Letter as an independent contractor and that nothing in this Commitment Letter or the Fee Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you or the Target, your or its respective equityholders or your or its respective affiliates. You acknowledge and agree that (a) the transactions contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial transactions between the Commitment Parties and, if applicable, their respective affiliates, on the one hand, and you, on the other, (b) in connection therewith and with the process leading to such transactions, the Commitment Parties and their applicable affiliates (as the case may be) are acting solely as principals and not as agents or fiduciaries of you, the Target, your or their respective management, equityholders, creditors or affiliates, (c) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether any Commitment Party or any of their respective affiliates have advised or are currently advising you or the Target on other matters), except the obligations expressly set forth in this Commitment Letter and the Fee Letter, (d) you have consulted your own legal, accounting and financial advisory, regulatory and tax advisors to the extent you deem appropriate, and (e) you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto. You agree that you will not claim, and hereby waive any such claim, that any Commitment Party or any of their respective affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with such transaction or the process leading thereto.

9. Confidentiality.

You agree that you will not disclose, directly or indirectly, the Fee Letter or the contents thereof or this Commitment Letter or the contents hereof to any person or entity without the prior written approval of the Lead Arranger (such approval not to be unreasonably withheld, delayed or conditioned), except (a) to your affiliates and officers, directors, agents, employees, attorneys, accountants, advisors, members, partners, stockholders, controlling persons or equityholders of the foregoing, (b) if the Commitment Parties consent in writing to such proposed disclosure or (c) pursuant to the order of any court or administrative agency in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities, in each case based on the reasonable advice of your legal counsel (in which case you agree, to the extent practicable and not prohibited by applicable law, to inform us promptly thereof prior to disclosure); provided that (i) you may disclose this Commitment Letter and its contents (but not the Fee Letter except as provided in clause (vi) below) to the Seller, the Target, the Target’s subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, members, partners, stockholders, controlling persons or equityholders of the foregoing, in each case, who are informed of the confidential nature of this Commitment Letter, the Fee Letter and the contents hereof and thereof and who are or have been advised of their obligation to keep the same confidential, (ii) you may disclose this Commitment Letter and its contents (but not the Fee Letter or its contents) in any syndication or other marketing materials in connection with the Credit Facilities (including the Information Materials) or in connection with any proxy or public filing, (iii) you may disclose the Term Sheets and other Exhibits and annexes to this Commitment Letter, and the contents thereof, to potential Lenders and to rating agencies in connection with obtaining ratings for the Borrower or the Credit Facilities, (iv) you may disclose the aggregate fee amount contained in the Fee Letter as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts in connection with the Transactions in marketing materials for the Credit Facilities or in any proxy or public filing, (v) you may make public disclosure of the existence and amount of the commitments hereunder and of the identities of the Administrative Agent, the Lead Arranger and the Additional Arrangers, (vi) to the extent portions thereof have been redacted in a manner to be reasonably

satisfactory to us and you (including the portions thereof addressing fees payable to the Commitment Parties and/or the Lenders), you may disclose the Fee Letter and the contents thereof to the Target, its subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, members, partners, stockholders, controlling persons or equityholders of the foregoing on a confidential and need to know basis (with you being responsible for such person’s compliance with this paragraph), (vii) you may disclose this Commitment Letter, the Fee Letter and the contents hereof and thereof to the extent this Commitment Letter, the Fee Letter or the contents hereof or thereof, as applicable, become publicly available other than by reason of disclosure by you in breach of this Commitment Letter, and (viii) you may disclose this Commitment Letter, the Fee Letter and contents hereof and thereof to the extent required by applicable law, rule or regulation, subpoena or other compulsory legal process (in which case, you agree, to the extent practicable and not prohibited by law, to inform us promptly thereof prior to disclosure).

The Commitment Parties and their respective affiliates will use all information provided to it or such affiliates by or on behalf of you hereunder or in connection with the Acquisition and the Transactions solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge such information; provided that nothing herein shall prevent any Commitment Party or their respective affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (b) upon the request or demand of any regulatory authority having jurisdiction over any Commitment Party or any of their respective affiliates (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (c) to the extent that such information becomes publicly available other than by reason of disclosure by the Commitment Parties or any of their respective affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, the Target, the Seller or any of your or their respective affiliates (including those set forth in this paragraph), (d) to the extent that such information is received by any Commitment Party from a third party that is not, to such Commitment Party’s knowledge, subject to contractual or fiduciary confidentiality obligations owing to you, the Target, the Seller or any of your or their respective affiliates or related parties, (e) to each Commitment Party’s affiliates and to their respective officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and who are subject to customary confidentiality obligations of professional practice or who are or have been advised to keep the same confidential (with the applicable Commitment Party responsible for such person’s compliance with this paragraph), (f) to potential or prospective Additional Arrangers, Lenders, participants or assignees and to any direct or indirect contractual counterparty to any swap or derivative transaction (each a “Swap Counterparty”) relating to the Borrower or any of its subsidiaries, in each case other than Disqualified Institutions; provided that the disclosure of any such information to any Lenders, participants, assignees or Swap Counterparties or prospective Lenders, participants, assignees or Swap Counterparties referred to above shall be made subject to the acknowledgment and acceptance by such Lender, participant, assignee or Swap Counterparty or prospective Lender, participant, assignee or Swap Counterparty that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties, including as expressly agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes of the Commitment Parties or customary market

standards for dissemination of such type of information, (g) to rating agencies in connection with obtaining ratings for the Borrower or the Credit Facilities, (h) for purposes of establishing a “due diligence” or similar defense in connection with or arising out of the making of loans pursuant to this Commitment Letter, (i) with your prior written consent or (j) to enforce their rights and remedies hereunder or under the Fee Letter. Upon the entering into of the Facilities Documentation, the Commitment Parties and their respective affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the Facilities Documentation upon the initial funding thereunder.

10. Miscellaneous.

This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (other than, subject to the limitations set forth in Section 3, by the Initial Lenders to any other Lender), in each case, immediately prior to or otherwise substantially concurrently with the consummation of the Acquisition) without the prior written consent of each other party hereto (such consent not to be unreasonably withheld, delayed or conditioned) (and any attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended to be solely for the benefit of the parties hereto (and Indemnified Persons to the extent expressly set forth herein) and are not intended to and do not confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons to the extent expressly set forth herein). Subject to the limitations set forth in Section 2 and Section 3 above, the Commitment Parties reserve the right to employ the services of their respective affiliates in providing services contemplated hereby and to allocate, in whole or in part, to their affiliates certain fees payable to the Commitment Parties in such manner as such Commitment Party and its affiliates may agree in their sole discretion and, to the extent so employed, such affiliates shall be entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of, the Commitment Parties hereunder (provided that the applicable Commitment Party shall be liable for the actions or inactions of any such person whose services are so employed). This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (e.g., a “PDF” or “TIFF”) shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter (including the Exhibits hereto), together with the Fee Letter, (i) are the only agreements that have been entered into among the parties hereto with respect to the Credit Facilities, and (ii) supersede all prior understandings, whether written or oral, among us with respect to the Credit Facilities and set forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES; PROVIDED, HOWEVER, THAT (A) THE ACCURACY OF ANY SPECIFIED ACQUISITION AGREEMENT REPRESENTATIONS AND WHETHER YOU HAVE THE RIGHT TO TERMINATE YOUR OBLIGATIONS UNDER THE ACQUISITION AGREEMENT OR DECLINE TO CONSUMMATE THE ACQUISITION (IN EACH CASE, IN ACCORDANCE WITH THE TERMS OF THE ACQUISITION AGREEMENT) AS A RESULT OF A BREACH OF SUCH REPRESENTATIONS AND WARRANTIES IN THE ACQUISITION AGREEMENT AND (B) WHETHER THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE ACQUISITION AGREEMENT SHALL, IN EACH CASE, BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER, THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such federal court, (b) 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 Commitment Letter or the transactions contemplated hereby in any New York State or in any such federal court, (c) 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, and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other matter provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action or proceeding brought in any such court.

We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), we and each of the Lenders may be required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower and the Guarantors in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for each of us and the Lenders.

The indemnification, compensation (if applicable), reimbursement (if applicable), sharing of information, absence of fiduciary relationships, no agency, affiliate activities, jurisdiction, governing law, venue, waiver of jury trial, syndication (including the “Market Flex” provisions in the Fee Letter) and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether Facilities Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Initial Lenders’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication of such commitments (including supplementing and/or correcting Information and Projections) prior to the later of the Syndication Date and the Closing Date, (b) confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facilities Documentation upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time, and (c) as of the Closing Date the provisions of Section 7 shall be superseded to the extent the Facilities Documentation includes indemnification and expense reimbursement provisions. You may terminate this Commitment Letter and/or the Initial Lenders’ commitments with respect to the Credit Facilities (or any portion thereof) hereunder at any time subject to the provisions of the preceding sentence.

Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and the Fee Letter by returning to the Commitment Parties executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City time, on November 17, 2015. The Initial Lenders’ commitments and the obligations of the Lead Arranger hereunder will expire at such time in the event that the Commitment Parties have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, we agree to hold our commitment available for you until the earliest of (i) after execution of the Acquisition Agreement and prior to the consummation of the Transactions, the termination of the Acquisition Agreement in accordance with its terms, (ii) the consummation of the Acquisition with or without the funding of the Credit Facilities, (iii) 11:59 p.m., New York City time, on March 31, 2016 and (iv) the date on which you elect to terminate this Commitment Letter pursuant to the second preceding paragraph hereof (such earliest date being the “Termination Date”). Upon the occurrence of the Termination Date, this Commitment Letter and the commitments of the Commitment Parties hereunder and the agreement of the Lead Arranger to provide the services described herein shall automatically terminate unless the Commitment Parties shall, in their discretion, agree to an extension in writing (including by email).

[Remainder of this page intentionally left blank]

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


Very Truly yours, MORGAN STANLEY SENIOR FUNDING, INC.

By:		/s/ Jonathon Rauen
		Name: Jonathon Rauen
		Title: Authorized Signatory

[SIGNATURE PAGE TO PROJECT FOREST COMMITMENT LETTER]


Accepted and agreed to as of the date first above written

MICROSEMI CORPORATION

By:	/s/ John W. Hohener
	Name:	John W. Hohener
	Title:	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

[SIGNATURE PAGE TO FOREST COMMITMENT LETTER]

EXHIBIT A

Project Forest Transaction Description

Capitalized terms used but not defined in this Exhibit A shall have the meanings given to them in the Commitment Letter to which this Exhibit A is attached, including the other Exhibits thereto. In the event any such capitalized term is subject to multiple or differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the context in which it is used.

Microsemi Corporation, a Delaware corporation (the “Borrower”), intends to acquire (the “Acquisition”) 100% of the capital stock of PMC-Sierra, Inc., a Delaware corporation (the “Target”) pursuant to either (A) a tender offer by a newly created wholly-owned direct or indirect subsidiary of the Borrower (the “Merger Sub”) followed by a merger of Merger Sub with and into the Target or (B) a merger of Merger Sub with and into the Target as more fully described below. In connection therewith, it is intended that:

(a) The Acquisition will be consummated by means of either (i) the public announcement of your desire to acquire, or the announcement of a proposed tender offer to acquire, shares of the Target, in each case, followed by an actual tender offer to acquire such shares without the prior approval and consent of the board of directors and/or stockholders or other equity holders of the Target to acquire not less than a majority of the outstanding capital stock of the Target (the “Non-Consensual Tender Offer” or a “Hostile Transaction”) that is made by MergerSub followed by a merger of Merger Sub with and into the Target or (ii) a tender offer and/or merger by MergerSub pursuant to a negotiated transaction approved by the board directors and/or stockholders or other equity holders of the Target (a “Negotiated Transaction”) which may follow the entering into by the Borrower and the Target of a definitive merger/acquisition agreement (any such merger/acquisition agreement, the “Acquisition Agreement”) which Acquisition Agreement may provide that the Borrower will acquire the capital stock of the Target either through a tender offer followed by a merger or a merger from the holders of such capital stock (collectively, the “Seller”) with the Seller receiving consideration consisting of cash and equity in the Borrower in accordance with the terms of, and subject to adjustment as provided in, the Acquisition Agreement (such consideration or any other consideration for the capital stock of the Target, the “Acquisition Consideration”).

(b) The Borrower will obtain $350,000,000 in commitments under the senior secured revolving credit facility described in Exhibit B to the Commitment Letter (the “Revolving Credit Facility”).

(c) The Borrower will obtain $375,000,000 in commitments under the senior secured term loan A facility described in Exhibit B to the Commitment Letter (the “Term Loan A Facility”).

(d) The Borrower will obtain $2,200,000,000 in commitments under the senior secured term loan B facility described in Exhibit B to the Commitment Letter (the “Term Loan B Facility” and, together with the Revolving Credit Facility and the Term Loan A Facility, the “Credit Facilities”).

(e) After giving effect to the Transactions, all existing third party indebtedness for borrowed money of the Borrower and its subsidiaries (including, for the avoidance of doubt, the Target and its subsidiaries) (including indebtedness existing under, and all commitments to extend credit under, the Target’s existing credit facilities, if any), other than (i) the Revolving Credit Facility, (ii) the Term Loan A Facility, (iii) the Term Loan B Facility, (iv) indebtedness permitted to remain outstanding under the Acquisition Agreement and (v) existing capital leases, purchase money debt, indebtedness permitted to be outstanding under the Facilities Documentation and other indebtedness to be agreed upon by the Borrower and the Lead Arranger, will be refinanced, repaid or terminated, and all security and guaranties in respect thereof discharged and released (the “Refinancing”).

A-1

(f) The proceeds of (i) cash on hand of the Borrower, (ii) the Term Loan A Facility, (iii) the Term Loan B Facility and (iv) if the Borrower so elects, the Revolving Credit Facility will be applied to pay (A) the Acquisition Consideration, (B) the fees, costs and expenses incurred in connection with the Transactions (including upfront fees and original issue discount) (such fees, costs and expenses, the “Transaction Costs”) and (C) for the Refinancing; provided that, the Revolving Credit Facility may only be drawn on the Closing Date (x) to fund original issue discount (“OID”) and/or upfront fees required to be paid pursuant to the “market flex” provisions of the Fee Letter, (y) to pay for part of the Acquisition Consideration and fund other Transaction Costs, and (z) to backstop or replace or cash collateralize letters of credit outstanding on the Closing Date under facilities no longer available to the Borrower or its subsidiaries (the foregoing clauses (x), (y) and (z), “Permitted Closing Date Revolving Extensions of Credit”); provided, further, that the Borrower shall repay (for the avoidance of doubt, without a permanent reduction of the commitments under the Revolving Credit Facility) any amount drawn under the Revolving Credit Facility on the Closing Date for the purposes of financing amounts referred to in clause (y) above (such amount, the “Transaction Costs Revolving Amount”) within 30 days of the Closing Date in an amount equal to the Transaction Costs Revolving Amount minus $225 million.

The transactions described in clauses (a) through (f) above (including the payment of Transaction Costs) are collectively referred to herein as the “Transactions”.

A-2

EXHIBIT B

Project Forest

Senior Secured Revolving Credit Facility

Senior Secured Term Loan A Facility

Senior Secured Term Loan B Facility

Summary of Principal Terms and Conditions¹


Borrower:		Microsemi Corporation.

Transactions:		As set forth in Exhibit A to the Commitment Letter.

Administrative Agent:		Morgan Stanley Senior Funding, Inc. (“*Morgan Stanley”) will act as sole and exclusive administrative agent and collateral agent for the Credit Facilities (in such capacity, the “Administrative Agent”) for a syndicate of banks, financial institutions and other entities acceptable to the Borrower (such acceptance not to be unreasonably withheld, delayed or conditioned) and which syndicate shall not include any Disqualified Institutions (together with the Initial Lenders, the “Lenders*”).

Lead Arranger and Bookrunner:		Morgan Stanley will act as lead arranger and bookrunner for each of the Credit Facilities (the “*Lead Arranger*”) and will perform the duties customarily associated with such roles.

Credit Facilities:		A senior secured revolving credit facility (the “*Revolving* *Credit Facility” and the Lenders with a commitment under the Revolving Credit Facility, the “Revolving Lenders”) in an aggregate principal amount of $350,000,000 (the loans thereunder, together with (unless the context otherwise requires), the swingline borrowings referred to below, the “Revolving Loans*”) on the terms and conditions set forth herein.

		A senior secured term loan A facility (the “*Term Loan A* *Facility”) in an aggregate principal amount of $375,000,000 (the loans thereunder, the “Term A Loans*”) on the terms and conditions set forth herein.

		A senior secured term loan B facility (the “*Term Loan B* *Facility”; together with the Term Loan A Facility, the “Term* *Facilities”) in an aggregate principal amount of $2,200,000,000 (the loans thereunder, the “Term B Loans”; together with the Term A Loans, the “Term Loans”; and, the Term Loans together with the Revolving Loans, the “Loans*”) on the terms and conditions set forth herein.

All capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this Term Sheet is attached, including the Exhibits thereto. In the event any such capitalized term is subject to multiple or differing definitions, the appropriate meaning thereof in this Exhibit B shall be determined by reference to the context in which it is used.

B-1


Purpose:		The proceeds of the Term Facilities will be used directly or indirectly to finance a portion of the Transactions, including upfront fees and original issue discount, if any.

		The letters of credit and proceeds of the Revolving Loans will be used by the Borrower and its subsidiaries (a) on the Closing Date, exclusively for Permitted Closing Date Revolving Extensions of Credit and (b) after the Closing Date, for working capital and other general corporate purposes, including the financing of permitted acquisitions and other permitted investments.

Availability:		The Term Loans shall be made in a single drawing on the Closing Date. Repayments and prepayments of the Term Loans may not be reborrowed.

		Revolving Loans may be borrowed, repaid and reborrowed on and after the Closing Date (without premium or penalty) and prior to the maturity date for the Revolving Credit Facility in accordance with the terms of the Facilities Documentation.

Swingline Loans:		In connection with the Revolving Credit Facility, the Administrative Agent (in such capacity, the “*Swingline* *Lender*”) will make available, in its sole discretion, to the Borrower a swingline facility under which the Borrower may make short-term borrowings upon same-day notice (in minimum amounts to be mutually agreed upon and integral multiples to be agreed upon) of up to $25,000,000. Except for purposes of calculating the commitment fee described in Annex I hereto, any such swingline borrowings will reduce availability under the Revolving Facility on a dollar-for-dollar basis.

		Upon notice from the Swingline Lender, the Revolving Lenders will be unconditionally obligated to purchase participations in any swingline loan pro rata based upon their commitments under the Revolving Facility.

		If any Revolving Lender becomes a Defaulting Lender (to be defined in a manner consistent with the Documentation Principles), then the swingline exposure of such defaulting Revolving Lender will automatically be reallocated among the non-defaulting Revolving Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non-defaulting Revolving Lender does not exceed its commitments. In the event such reallocation does not fully cover the exposure of such defaulting Revolving Lender, the Swingline Lender may require the Borrower to repay such “uncovered” exposure in respect of the swingline loans and

B-2


		will have no obligation to make new swingline loans to the extent such swingline loans would exceed the commitments of non-defaulting Revolving Lenders.

Incremental Facilities:		The Facilities Documentation will permit the Borrower after the Closing Date to add one or more incremental term loan facilities to the Credit Facilities (each, an “*Incremental Term* *Facility”) and/or increase commitments under the Revolving Credit Facility (any such increase, and “Incremental* *Revolving Increase”; together with the Incremental Term Facilities, and collectively referred to as the “Incremental* *Facilities”) in an aggregate amount (the “Available* *Incremental Amount”) of up to (a) an amount equal to $300.0 million, plus (b) an amount equal to all voluntary prepayments of Term Loans and voluntary prepayments of Revolving Loans to the extent accompanied by a permanent reduction in the commitments thereof (in each case, to the extent not financed with the proceeds from the incurrence of long-term indebtedness), plus (c) an unlimited amount, so long as after giving effect to the borrowings under such Incremental Facility on the effective date thereof on a pro forma* basis (as defined below), the Consolidated Net Leverage Ratio is equal to or less than 3.00:1.00 (assuming that any Incremental Revolving Increase is fully drawn and it being understood that cash proceeds of any such Incremental Facility shall not be netted for the purpose of testing such Consolidated Net Leverage Ratio).

		The availability of the Incremental Facilities shall be subject solely to the following terms and conditions: (a) no existing Lender shall be required to participate in any such Incremental Facility without its consent; (b) no default or event of default under the Credit Facilities shall have occurred and be continuing or would exist immediately after giving effect thereto (except in connection with permitted acquisitions or investments, which shall be subject to no payment or bankruptcy event of default under the Credit Facilities); (c) such Incremental Facility may, at the discretion of the Borrower, (i) rank pari passu in right of payment with the Credit Facilities, (ii) be subordinated in right of payment to the Credit Facilities, (iii) be secured on a pari passu basis with the Credit Facilities, (iv) be secured on a junior lien basis to the Credit Facilities or (v) be unsecured; provided that if subordinated or secured on a junior lien basis (except to the extent incurred under the Facilities Documentation (as defined below)), any intercreditor or lien subordination arrangements shall be reasonably satisfactory to the Administrative Agent, and if secured on an equal basis with the Credit Facilities, such Incremental Facilities shall be on terms and pursuant to documentation applicable to the Credit Facilities; (d) the maturity date of any such Incremental Term Facility shall be

B-3


		no earlier than the then latest maturity date of the Term Facilities or, if the Incremental Term Facility is structured as a “Term A” facility, the latest maturity date of the Term Loan A Facility; (e) the weighted average life to maturity of any such Incremental Term Facility shall be no shorter than the then remaining weighted average life to maturity of the Term Loans or, if the Incremental Term Facility is structured as a “Term A” facility, the then remaining weighted average life to maturity of the Term Loan A Facility; (f) in the case of an Incremental Revolving Increase, the maturity date of such Incremental Revolving Increase shall be the same as the maturity date of the Revolving Credit Facility, such Incremental Revolving Increase shall require no scheduled amortization of mandatory commitment reduction prior to the final maturity of the Revolving Credit Facility and the Incremental Revolving Increase shall be on the same terms and pursuant to the exact same documentation applicable to the Revolving Credit Facility, (g) subject to clauses (d) and (e) above, the amortization schedules applicable to any such Incremental Term Facility shall be as determined by the Borrower and the lenders thereunder; (h) the representations and warranties in the Facilities Documentation shall be true and correct in all material respects immediately after giving effect to the incurrence of such Incremental Term Facility, subject to “SunGard” provisions substantially identical to the Certain Funds Provisions to the extent the proceeds of such Incremental Facility are used to finance, in whole or in part, permitted acquisitions or investments; (i) any fees payable in connection with such Incremental Facility shall be determined by the Borrower and the arrangers and/or lenders providing such Incremental Facility; (j) such Incremental Term Facility may provide for the ability to participate on a pro rata basis or less than pro rata basis in any voluntary or mandatory prepayments of the Term Loans; (k) during the period commencing on the Closing Date and ending on the date that is 12 months after the Closing Date only, the interest rate, upfront fees and original issue discount for any term loans under such Incremental Term Facility shall be as determined by the Borrower and the lenders providing such Incremental Term Facility; provided that in the event that the yield on such Incremental Term Facility (taking into account interest margins, minimum Adjusted LIBOR (as defined in Annex I to Exhibit B), minimum ABR, upfront fees and OID on such term loans, with upfront fees and OID being equated to interest margins based on an assumed four year life to maturity, but exclusive of any arrangement, syndication, structuring, commitment or other fees payable in connection therewith) (the “*Incremental Yield*”) (other than any Incremental Term Facility that is unsecured, subordinated or secured on a junior-lien basis) exceeds the yield on the Term Loan B Facility or, if the Incremental Term Facility is

B-4


		structured as a “Term A” facility, the Term Loan A Facility (determined as provided above), by more than 0.50% per annum, then the interest margins for the Term B Loans and/or the Term A Loans, as applicable, shall automatically be increased to a level such that the yield on the Term B Loans and/or the Term A Loans, as applicable, shall be 0.50% below the Incremental Yield (it being agreed that any increase in yield to any existing facility required due to the application of an Adjusted LIBOR or ABR “floor” on any Incremental Term Facility shall be effected solely through an increase therein (or implementation thereof, as applicable); and (l) except as otherwise provided above, all other terms of such Incremental Term Facility, if not consistent with the terms of the existing Term Facilities, will be as agreed between the Borrower and the lenders providing such Incremental Term Facilities, with such other terms not consistent with the existing Term Facilities to be reasonably satisfactory to the Administrative Agent.

		The Borrower may seek commitments in respect of the Incremental Facilities from existing Lenders (each of which shall be entitled to agree or decline to participate in its sole discretion) and additional banks, financial institutions and other institutional lenders or investors who will become Lenders in connection therewith; provided that the consent of the Administrative Agent, the Swing Line Lender and the Issuing Banks (not to be unreasonably withheld, delayed or conditioned) shall be required with respect to any such additional lender if such consent would be required under the caption “Assignments and Participations” for an assignment to such additional lender.

		The proceeds of the Incremental Facilities will be used for general corporate purposes of the Borrower and its subsidiaries (including for capital expenditures, acquisitions, restricted payments, refinancing of Indebtedness and any other transaction not prohibited by the Facilities Documentation). The Facilities Documentation shall be amended to give effect to any Incremental Facility by documentation executed by the Lenders making the commitments with respect thereto, the Administrative Agent and the Borrower and without the consent of any other existing Lender. The Facilities Documentation will also permit amendments thereof with the consent of only the Administrative Agent and the Borrower to permit extensions of credit under the Incremental Facilities and the accrued interest and fees in respect thereof to share in the benefits of the Facilities Documentation and to include the Lenders holding such facilities in the definition of Required Lenders and Majority Facility Lenders.

B-5


		In addition, the Borrower may, in lieu of adding Incremental Term Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Term Debt, subject to customary terms and conditions (such as customary intercreditor documentation reasonably acceptable to the Administrative Agent, if applicable).

		“*Incremental Equivalent Term Debt*” means Indebtedness in an amount not to exceed the then Available Incremental Amount consisting of the issuance of senior secured or junior lien notes, subordinated notes or senior unsecured notes, in each case issued in a public offering, Rule 144A or other private placement or bridge facility in lieu of the foregoing, or secured or unsecured “mezzanine” debt, in each case on customary terms and conditions; provided that (a) such Incremental Equivalent Term Debt shall not be subject to the requirement set forth in clause (h) or the proviso of clause (k) of the second paragraph in this “Incremental Facilities” section, (b) the maturity date of such Incremental Equivalent Term Debt shall be no earlier than the maturity date of the Term Facilities and (c) the weighted average life to maturity of such Incremental Equivalent Term Debt shall be no shorter than the remaining average life to maturity of the Term Facilities.

Refinancing Facilities:		The Facilities Documentation will permit the Borrower to refinance loans under the Term Facilities and any Incremental Term Facility or commitments under the Revolving Credit Facility from time to time, in whole or in part, with (a) one or more new term facilities (each, a “*Refinancing Facility”) under the Facilities Documentation with the consent of the Borrower, the Administrative Agent (not to be unreasonably withheld, delayed or conditioned) and the entities providing Refinancing Facility, (b) other than in the case of the Revolving Credit Facility, one or more series of senior unsecured notes or loans, (c) other than in the case of the Revolving Credit Facility, one or more series of senior secured notes or loans that will be secured by the Collateral on a pari passu* basis with the Credit Facilities, or (d) other than in the case of the Revolving Credit Facility, one or more series of junior lien senior secured notes or loans that will be secured on a subordinated basis to the Credit Facilities, which will be subject to customary intercreditor and/or subordination arrangements reasonably satisfactory to the Administrative Agent and the Borrower (any such notes or loans, “*Term* *Refinancing Notes*”), subject, in each case, solely to the following terms and conditions: (i) any such Refinancing Facility or Term Refinancing Notes shall not mature prior to the maturity date of, or have a shorter weighted average life to

B-6


		maturity than, the loans under the applicable Credit Facility or Incremental Facility being refinanced; (ii) any Refinancing Facility or Term Refinancing Notes shall not be guaranteed by any person that is not a Guarantor (as defined below); and (iii) to the extent secured, any Refinancing Facility or Term Refinancing Notes shall not be secured by any assets that do not constitute Collateral; (iv) the other terms and conditions of such Refinancing Facility or Term Refinancing Notes (excluding pricing and optional prepayment or redemption terms) shall be substantially identical to, or not materially more favorable (taken as a whole) to the lenders providing such Refinancing Facility or Term Refinancing Notes, as applicable, than those applicable to the Facility or Incremental Facility being refinanced are to the Lenders (except for covenants or other provisions applicable only to periods after the latest final maturity date of the Term Facilities or Incremental Facility existing at the time of such refinancing).

Letters of Credit:		An aggregate amount to be agreed of the Revolving Credit Facility will be available to the Borrower and its subsidiaries for the purpose of issuing letters of credit. Letters of credit under the Revolving Facility will be issued by the Administrative Agent up to $50,000,000 (it being understood that the Administrative Agent shall only issue standby letters of credit) and/or Lenders reasonably acceptable to the Borrower and the Administrative Agent (such consent not to be unreasonably withheld or delayed) who agree to issue letters of credit (each an “*Issuing Bank”)); provided* that, no Issuing Bank shall be obligated to issue any letters of credit or fund participations in the reimbursement obligations of such letters of credit in an aggregate amount exceeding such Issuing Bank’s unused commitment under the Revolving Credit Facility on a pro rata basis. Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance or such longer period as may be agreed by the applicable Issuing Bank and (b) the third business day prior to the final maturity of the Revolving Facility; provided that any letter of credit may provide for renewal thereof for additional periods of up to 12 months or such longer period as may be agreed by the applicable Issuing Bank (which in no event shall extend beyond the date referred to in clause (b) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank). The face amount of any outstanding letter of credit (and, without duplication, any unpaid drawing in respect thereof) will reduce availability under the Revolving Facility on a dollar-for-dollar basis.

		Drawings under any letter of credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of loans under the Revolving Facility) within one business day

B-7


		after notice of such drawing is received by the Borrower from the relevant Issuing Bank. The Revolving Lenders will be irrevocably and unconditionally obligated to acquire participations in each letter of credit, pro rata in accordance with their commitments under the Revolving Facility, and to fund such participations in the event the Borrower does not reimburse an Issuing Bank for drawings within the time period specified above.

		If any Revolving Lender becomes a Defaulting Lender, then the letter of credit exposure of such defaulting Revolving Lender will automatically be reallocated among the non- defaulting Revolving Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non- defaulting Revolving Lender does not exceed its commitments. In the event that such reallocation does not fully cover the exposure of such defaulting Revolving Lender, the applicable Issuing Bank may require the Borrower to cash collateralize such “uncovered” exposure in respect of each outstanding letter of credit and will have no obligation to issue new letters of credit, or to extend, renew or amend existing letters of credit to the extent the letter of credit exposure would exceed the commitments of the non-defaulting Revolving Lenders, unless such “uncovered” exposure is cash collateralized to such Issuing Bank’s reasonable satisfaction.

Interest Rate and Fees:		As set forth in Annex I to this Exhibit B.

Default Rate:		Upon the occurrence and during the continuance of (i) a principal payment or bankruptcy-related Event of Default, or (ii) any other payment Event of Default, at the election of Required Lenders, overdue principal shall bear interest at the applicable interest rate plus 2.0% per annum, and any other overdue interest and fees shall bear interest at the interest rate applicable to ABR loans (as defined in Annex I to this Exhibit B) plus 2.0% per annum, and in each case, shall be payable on demand and shall begin to accrue from the date of such Event of Default.

Final Maturity and Amortization:		The Term A Loans will mature on the date that is five years after the Closing Date (the “*Term Loan A Maturity Date*”); provided that the Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Term A Loans upon the request of the Borrower and without the consent of any other Lender (subject to customary terms and conditions). The Term A Loans shall be payable in equal quarterly installments in an aggregate annual amount equal to (x) in respect of each of the first two years following the Closing Date, 5.0% of the original principal amount to the Term Loan A Facility and (y) in respect of each of the third, fourth and fifth year following

B-8


		the Closing Date, 10.0% of the original principal amount of the Term Loan A Facility with the balance payable on the Term Loan A Maturity Date; provided that if the Term Loan A Maturity Date for individual Lenders is extended beyond the fifth anniversary of the Closing Date, such extended Term A Loans shall be subject to amortization as agreed by the Borrower and such extending Lenders.

		The Term B Loans will mature on the date that is seven years after the Closing Date (the “*Term Loan B Maturity Date*”); provided that the Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Term B Loans upon the request of the Borrower and without the consent of any other Lender (subject to customary terms and conditions). The Term B Loans shall be payable in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount of the Term Loan B Facility with the balance payable on the Term Loan B Maturity Date; provided that if the Term Loan B Maturity Date for individual Lenders is extended beyond the seventh anniversary of the Closing Date, such extended Term B Loans shall be subject to amortization as agreed by the Borrower and such extending Lenders.

		The Revolving Credit Facility will mature, and commitments thereunder will terminate, on the Term Loan A Maturity Date; provided that the Facilities Documentation shall provide the right for individual Revolving Lenders to agree to extend the maturity date of all or a portion of their Revolving Credit Facility commitments upon the request of the Borrower and without the consent of any other Revolving Lender (subject to customary terms and conditions).

Guarantees:		Subject to the Certain Funds Provisions, all obligations of the Borrower under the Credit Facilities and under any interest rate protection or other swap or hedging arrangements (other than any obligation of any Guarantor to pay or perform under any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (a “*Swap”), if, and to the extent that, all or a portion of the guarantee by such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation, or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof)), or cash management arrangements entered into with a Lender, the Administrative Agent or any person that at the time such arrangements were entered into was an affiliate of a Lender or the Administrative Agent (“Hedging/Cash Management*

B-9


		*Arrangements”)* will be unconditionally guaranteed jointly and severally on a senior secured basis by, subject to certain exceptions, each existing and subsequently acquired or organized direct or indirect wholly owned subsidiary of the Borrower organized under the laws of the United States or any state thereof (the “*Guarantors”); provided* that Guarantors shall not include, (a) immaterial subsidiaries (to be defined as set forth in the Existing Credit Agreement with such changes as may be mutually agreed consistent with the Documentation Principles), (b) any subsidiary that is prohibited or restricted by applicable law, rule or regulation or by any contractual obligation existing on the Closing Date or at the time of acquisition thereof after the Closing Date, in each case, from guaranteeing the Credit Facilities or which would require governmental (including regulatory) consent, approval, license or authorization to provide a bank guarantee unless such consent, approval, license or authorization has been received, (c) not-for-profit subsidiaries, if any, (d) any non- United States subsidiary for which the providing of a bank guarantee could reasonably be expected to result in any violation or breach of, or conflict with, fiduciary duties of such subsidiary’s officers, directors or managers, (e) any foreign subsidiary that is a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code, as amended (a “*CFC”), (f) any direct or indirect subsidiary of a CFC, (g) any direct or indirect subsidiary of the Borrower or a Guarantor that owns no material assets other than equity interests in one or more subsidiaries that are CFCs (a “CFC Holdco*”) or another CFC Holdco, (h) certain special purpose entities, (i) any subsidiary acquired pursuant to an acquisition permitted under the Facilities Documentation financed with secured Indebtedness permitted to be incurred pursuant to the Facilities Documentation as assumed Indebtedness (and not incurred in contemplation of such acquisition) and any subsidiary thereof that guarantees such Indebtedness, in each case to the extent such secured Indebtedness prohibits such subsidiary from becoming a Guarantor) and subject to a cap to be agreed and (j) certain other subsidiaries as set forth in the Facilities Documentation to be agreed.

Security:		Subject to the limitations set forth below and subject to the Certain Funds Provisions, the obligations of the Borrower and the Guarantors in respect of the Credit Facilities and the Hedging/Cash Management Arrangements shall be secured by (a) a perfected pledge of the equity securities of each Guarantor and of each direct, subsidiary of the Borrower, and of each subsidiary Guarantor (which pledge, (i) in the case of voting equity interests in any CFC or any CFC Holdco, shall be limited to 65% of the voting equity interests in such subsidiary and (ii) shall not extend to any equity interest in

B-10


		any direct or indirect subsidiary of a CFC) (provided that except as set forth below, any such pledge of the equity securities of a subsidiary (other than Guarantor) organized under laws other than the United States or any state thereof shall not be required to be perfected under the laws of their jurisdiction of organization), and (b) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of the Borrower and each subsidiary Guarantor (including but not limited to accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, material intercompany notes and proceeds of the foregoing) (the items described in clauses (a) and (b) above, but excluding the Excluded Assets (as defined below), collectively, the “*Collateral”)*.

		Notwithstanding anything to the contrary, the Collateral shall exclude the following: (i) any fee-owned real property with a fair market value of less than $10,000,000 (with all required mortgages being permitted to be delivered post-closing) and all real property leasehold interests (including requirements to deliver landlord lien waivers, estoppels and collateral access letters); (ii) motor vehicles and other assets subject to certificates of title to the extent a lien thereon cannot be perfected by filing a UCC financing statement; (iii) pledges and security interests prohibited by applicable law, rule or regulation; (iv) equity interests in any person other than wholly owned subsidiaries to the extent not permitted by the terms of such person’s organizational or joint venture documents; (v) any lease, license or other agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money arrangement or create a right of termination in favor of any other party thereto (other than the Borrower or a Guarantor) (in each case, except to the extent such prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibition); (vi) those assets as to which the Administrative Agent and the Borrower reasonably agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby; (vii) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby (in each case, except to the extent such

B-11


		prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibition); (viii) “intent-to-use” trademark applications; (ix) other customary exclusions under applicable local law or in applicable local jurisdiction as mutually agreed by the Administrative Agent and the Borrower; (x) margin stock; (xi) any voting equity interests of a CFC or any CFC Holdco in excess of 65% of such equity interests; (xii) assets to the extent a security interest in such assets would result in material adverse tax consequences or material adverse regulatory consequences, in each case, as reasonably determined by the Borrower and notified to the Administrative Agent; and (xiii) other exceptions to be mutually agreed upon (the foregoing described in clauses (i) through (xiii) are, collectively, the “*Excluded Assets*”). In addition, in no event shall (a) control agreements or control or similar arrangements be required with respect to deposit or securities accounts, (b) notices be required to be sent to account debtors or other contractual third-parties prior to the occurrence and during the continuance of an event of default or (c) perfection (except to the extent perfected through the filing of Uniform Commercial Code financing statements) be required with respect to letter of credit rights and commercial tort claims.

		All the above-described pledges, security interests and mortgages shall be created on terms to be set forth in the Facilities Documentation; and none of the Collateral shall be subject to other pledges, security interests or mortgages (except permitted liens and other exceptions and baskets to be set forth in the Facilities Documentation).

Mandatory Prepayments:		The Term B Loans shall be prepaid, on a ratable basis, with, commencing with the 2017 fiscal year, 50% of Excess Cash Flow (to be defined in a manner consistent with the Existing Credit Agreement except as provided below or as mutually agreed), stepping down to 0% upon achievement of a Consolidated Net Leverage Ratio equal to or less than 3.00:1.00; provided that, for any fiscal year, (x) any voluntary prepayments of loans under the Term Facilities (or any Incremental Term Facility) and Revolving Credit Facility (to the extent commitments thereunder are permanently reduced by the amount of such prepayments) or open market or dutch auction repurchases of Term Loans to the extent of the cash payments made in connection therewith, made during such fiscal year or, without giving duplicative effect, after year-end and prior to the time such Excess Cash Flow prepayment is

B-12


		due, other than prepayments funded with the proceeds of incurrences of long term Indebtedness, issuances of equity and non-ordinary course asset sales and insurance and condemnation proceeds, shall be credited against Excess Cash Flow prepayment obligations on a dollar-for-dollar basis for such fiscal year (without duplication of any such credit in any prior or subsequent fiscal year) and (y) Excess Cash Flow shall be reduced for, among other things, cash used for capital expenditures, certain permitted investments, permitted acquisitions and certain restricted payments to be agreed, in each case, to the extent financed with internally generated funds made during such fiscal year.

		The Loans shall be prepaid with:

		(a) 100% of the net cash proceeds of all non-ordinary course asset sales by the Borrower and its subsidiaries (including insurance and condemnation proceeds, but with exceptions for ordinary course dispositions, dispositions of obsolete or worn-out property and property no longer useful in the business, and other exceptions consistent with the Documentation Principles) subject to thresholds to be mutually agreed and the right of the Borrower to reinvest 100% of such proceeds, if such proceeds are reinvested (or committed to be reinvested) within 12 months and, if so committed to be reinvested, so long as such reinvestment is actually completed within 180 days after the expiration of such 12-month period; and

		(b) 100% of the net cash proceeds of issuances of debt obligations of the Borrower and its subsidiaries after the Closing Date (other than debt permitted under the Facilities Documentation (excluding the proceeds of any Refinancing Facility or Term Refinancing Notes)).

		Mandatory prepayments shall be applied, without premium or penalty, subject to reimbursement of the Lenders’ usual and customary breakage costs (excluding loss of profit), in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period, (x) in the case of an Excess Cash Flow prepayment, to the Term B Loans pro rata to the remaining scheduled amortization payments under the Term Loan B Facility (including any Incremental Term Facility) and (y) in the case of any other mandatory prepayment, first, ratably to the Term A Loans and the Term B Loans, in each case pro rata to the remaining scheduled amortization payments under such Term Facility (including any Incremental Term Facility), then, ratably to the Revolving Loans (without any permanent reduction of the commitments under the Revolving Credit Facility).

B-13


		Any Lender may elect not to accept its pro rata portion of any mandatory prepayment other than a mandatory prepayment with proceeds of any Refinancing Facility or other indebtedness permitted under the Facilities Documentation that is incurred for the purpose of refinancing Loans (each, a “*Declining Lender*”). Any prepayment amount declined by a Declining Lender may be retained by the Borrower.

		Prepayments from subsidiaries’ Excess Cash Flow and asset sale proceeds will be limited under the Facilities Documentation to the extent such prepayments (including the repatriation of cash in connection therewith) would (a) be prohibited or delayed by applicable law or (b) result in material adverse tax consequences.

Voluntary Prepayments:		Voluntary prepayments of loans under the Revolving Credit Facility, Term Facilities and any Incremental Term Facilities will be permitted at any time, in minimum principal amounts to be mutually agreed upon, without premium or penalty, subject to reimbursement of the Lenders’ usual and customary breakage costs actually incurred (excluding loss of profit) in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period.

		All voluntary prepayments of loans under the Term Facilities will be applied as directed by the Borrower (and absent such direction, in direct order of maturity thereof).

		In the event that a Repricing Event (as defined below) occurs on or prior to the date that is six months after the Closing Date, a 1.00% prepayment premium shall be paid on the principal amount of Term B Loans prepaid, repaid, assigned or subject to an amendment.

		“*Repricing Event*” shall mean (i) any prepayment or repayment of Term B Loans, in whole or in part, with the proceeds of, or conversion of any portion of any tranche of Term B Loans into, any new or replacement tranche of syndicated term loans under credit facilities bearing interest with an all-in yield less than the all-in yield applicable to such portion of the Term B Loans (as such comparative yields are determined in the reasonable judgment of the Administrative Agent consistent with generally accepted financial practices) and (ii) any amendment to the Term Loan B Facility which reduces the all-in yield applicable to the Term B Loans, but excluding, in any such case, any new or replacement syndicated term loans incurred in connection with a change of control, initial public offering or a transformative acquisition.

B-14


		If on or prior to the date that is six months after the Closing Date any Lender is forced to assign its loans under the First Term Loan B Facility following the failure of such Lender to consent to an amendment of the definitive documentation for the Term Loan B Facility that would have the effect of reducing the all-in yield applicable to such loans, such Lender shall be paid a 1.00% fee on the principal amount of the Term B Loans so assigned.

Facilities Documentation:		The definitive documentation for the Credit Facilities (the “*Facilities Documentation*”) shall be subject to the Documentation Principles.

		Notwithstanding anything to the contrary in the Commitment Letter, all leases of the Borrower and its subsidiaries that would be treated as operating leases for purposes of GAAP as in effect on the date hereof shall continue to be accounted for as operating leases for purposes of the Facilities Documentation, regardless of any change to GAAP following such date that would otherwise require such leases to be treated as capital leases.

		Consolidated total assets and financial ratios will be calculated on a pro forma basis.

		The representations and warranties, covenants and events of default contained in the Facilities Documentation shall consist solely of the provisions described below, in each case, applicable to the Borrower and the Borrower’s subsidiaries.

Representations and Warranties:		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its subsidiaries only and subject, in each case, to materiality thresholds, baskets and other exceptions and qualifications to be agreed upon): organizational status and good standing; power and authority, execution, delivery and enforceability of Facilities Documentation; with respect to Facilities Documentation, no violation of, or conflict with, law, organizational documents or material agreements; compliance with law (including PATRIOT Act); no litigation that could reasonably be expected to have a Material Adverse Effect (to be defined in a manner mutually agreed which shall in no event be less favorable to the Borrower than the Existing Credit Agreement definition); margin regulations; investment company act; material governmental approvals; after the Closing Date, no material adverse change since the date of the most recent audited financial statements delivered prior to the Closing Date; materially accurate and complete disclosure in all material respects; insurance; taxes; ERISA; equity interest and ownership of subsidiaries; intellectual property; environmental laws; use of proceeds; ownership of properties;

B-15


		subject to the Certain Funds Provisions and the restrictions described under the caption “Security”, creation, validity and perfection of liens and other security interests; consolidated Closing Date solvency of the Borrower and its subsidiaries; and Patriot Act, OFAC, FCPA and anti-money laundering laws.

Conditions to Initial Borrowing:		The availability of the borrowing and other extensions of credit under the Credit Facilities on the Closing Date will be subject solely to the applicable conditions set forth in Section 6 (including by reference to Exhibit C) of the Commitment Letter and, subject to the Certain Funds Provisions, clause (a) below under “Conditions to All Borrowings”.

Conditions to All Borrowings:		The making of each extension of credit under the Credit Facilities shall be conditioned upon (a) subject to the Certain Funds Provisions (in the case of an extension of credit on the Closing Date), delivery of a customary borrowing notice, (b) after the Closing Date, the accuracy of representations and warranties in all material respects and (c) after the Closing Date, the absence of defaults or events of defaults at the time of, and after giving effect to the making of, such extension of credit.

Affirmative Covenants:		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its subsidiaries only and subject, in each case, to materiality thresholds, baskets and other exceptions and qualifications to be agreed upon): delivery of annual audited and quarterly unaudited consolidated financial statements (limited, in the case of quarterly financial statements, to the first three fiscal quarters of a fiscal year only), and, in the case of the annual financial statements, an opinion of an independent accounting firm (which opinion shall not be subject to any “going concern” or like qualification or exception (other than a “going concern” or like qualification or exception resulting solely from (x) an upcoming maturity date under the Credit Facilities occurring within one year from the time such opinion is delivered or (y) or any prospective or actual default of any financial covenant under the Facilities Documentation)); annual budget reports (with delivery time periods to be consistent with the delivery requirements for the audited financial statements); notices of knowledge of events of default, ERISA events and litigation that could reasonably be expected to result in a Material Adverse Effect; commercially reasonable efforts to maintain public ratings; maintenance of property (subject to casualty, condemnation and normal wear and tear) and customary insurance; visitation rights; maintenance of existence; maintenance of books and records; payment of taxes; compliance with laws and

B-16


		regulations (including ERISA, environmental and PATRIOT Act); OFAC, FCPA and anti-money laundering laws; additional Guarantors and Collateral (subject to limitations set forth under the caption “Security”); use of proceeds; annual lender calls and, at the reasonable request of the Administrative Agent, quarterly lender calls; and further assurances on collateral matters.

Negative Covenants:		Consistent with the Documentation Principles and limited to the following (except as otherwise expressly indicated, to be applicable to the Borrower and its subsidiaries):

		Indebtedness. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

		1. obligations under the Credit Facilities, any Incremental Facilities, and Refinancing Facilities (and Term Refinancing Notes);

		2. obligations under Incremental Equivalent Debt;

		3. intercompany Indebtedness among the Borrower and its wholly-owned subsidiaries, and (ii) intercompany Indebtedness owing by any non-wholly-owned subsidiary that is not a Guarantor to the Borrower or another Guarantor (together with investments in non- Guarantor non-wholly-owned subsidiaries permitted under “Investments” below (considered without double-counting)) to an aggregate amount not to exceed, in the case of this clause (ii), $175.0 million;

		4. any Indebtedness permitted to survive after the Closing Date under the terms of the Acquisition Agreement;

		5. Indebtedness with respect to capital leases and purchase money Indebtedness in an aggregate amount not to exceed $75.0 million at any time;

		6. Indebtedness of a person existing at the time such person became a subsidiary of the Borrower or any Guarantor in an aggregate principal amount not to exceed $100.0 million;

		7. Junior Indebtedness so long as, on a pro forma basis after giving effect to such incurrence, the Borrower would be in compliance with the Financial Covenants;

B-17


		8. Indebtedness of foreign subsidiaries of the Borrower in an aggregate amount not to exceed $100.0 million at any time;

		9. Indebtedness in an aggregate amount not to exceed $100.0 million at any time; and

		10. other customary exceptions and exceptions consistent with the Documentation Principles.

		Liens. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, create, incur or assume any lien on or with respect to any of its properties or assets except:

		1. liens securing the Credit Facilities, any Incremental Facilities, Refinancing Facilities and Indebtedness of the Borrower and its subsidiaries permitted under the Acquisition Agreement to remain outstanding after the Closing Date;

		2. liens securing Incremental Equivalent Debt;

		3. liens securing Indebtedness described in clauses 5, 6 and 7 under the caption “Indebtedness” above subject to terms and conditions consistent with the Existing Credit Agreement or as mutually agreed; 4. liens on assets of foreign subsidiaries of the Borrower to the extent the Indebtedness secured thereby is permitted and does not exceed $100.0 million in the aggregate at any time;

		5. liens not otherwise permitted so long as the aggregate amount secured thereby does not exceed $100.0 million at any time; and

		6. other customary permitted liens consistent with the Documentation Principles.

		Dispositions. The Borrower shall not, nor shall it permit any of its subsidiaries to, sell, transfer or otherwise dispose of all or any part of its business, assets or property, except:

		1. dispositions not to exceed the greater of (i) 25% of the consolidated total assets of the Borrower in the aggregate for any fiscal year of the Borrower and (ii) $10.0 million in any fiscal year of the Borrower, so long as at least 75% of the consideration is in the form of cash or cash equivalents or exchanged for other useful assets;

B-18


		2. dispositions of real property owned in fee for fair market value not to exceed $25.0 million in the aggregate for all such dispositions; and

		3. other customary exceptions and exceptions consistent with the Documentation Principles.

		Investments. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, make or own any investment in any other person, except:

		1. (i) intercompany investments among the Borrower and its wholly-owned subsidiaries (including intercompany loans), and (ii) intercompany investments by the Borrower or any Guarantor in any non-wholly-owned subsidiary that is not a Guarantor, in an aggregate amount not to exceed, in the case of this clause (ii), $175.0 million at any time (together with intercompany Indebtedness of non-Guarantor non-wholly owned subsidiaries permitted under “Indebtedness” above (considered without double-counting);

		2. loans and advances to officers, directors, employees and consultants of the Borrower (or any direct or indirect parent thereof) and its subsidiaries in an aggregate amount not to exceed $5.0 million at any time;

		3. acquisitions (“*Permitted Acquisitions”); provided that (a) no event of default has occurred and is continuing immediately before any such acquisition or investment or would result immediately after giving effect to such acquisition or investment, (b) on a pro* forma basis after giving effect to such acquisition, the Borrower would be in compliance with the Financial Covenants and (c) with respect to the acquisitions of entities that do not become Guarantors, the total consideration paid will respect to such entities (exclusive of consideration consisting of common stock of the Borrower or the Available Amount) shall not exceed (i) $450 million plus (ii) an unlimited amount so long as the Consolidated Net Leverage Ratio is less than or equal to 3.00:1.00; provided, further, that clause (c) of this proviso shall not apply to acquisitions where the target is a domestic entity who becomes a Guarantor and where the subsidiaries of such target who do not become Guarantors together with their assets do not comprise a substantial portion

B-19


		of the assets of such target and its subsidiaries taken as a whole as further set forth in the Facilities Documentation;

		4. investments in cash and cash equivalents;

		5. so long as no event of default has occurred and is continuing, additional investments out of the Available Amount Basket (as defined below);

		6. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is less than or greater than 3.00:1.00, additional investments;

		7. additional investments in an aggregate amount (valued at cost, if applicable) not to exceed $50,000,000 at any time outstanding; and

		8. other customary exceptions and exceptions consistent with the Documentation Principles.

		In addition, the Borrower shall be permitted to designate unrestricted subsidiaries in an aggregate amount to be mutually agreed. Notwithstanding anything herein to the contrary, the provisions of the Facilities Documentation shall be revised as customary to include the concept of unrestricted subsidiaries and exclude unrestricted subsidiaries from the covenant package as shall be mutually agreed.

		Restricted Payments. The Borrower shall not, nor shall it permit any of its subsidiaries to, pay any dividends or distributions on, or redemptions of, the Borrower’s or such subsidiary’s equity, except:

		1. restricted payments to pay cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for equity interests of the Borrower;

		2. restricted payments consisting of the cashless exercise of options and warrants of the equity interests of Borrower or any of its subsidiaries;

		3. (i) restricted payments by the Borrower to (i) purchase capital stock from present or former officers, directors, employees or consultants of the Borrower or any of its subsidiaries upon the death, disability or

B-20


		termination of employment or services of such individual, and (ii) redeem or otherwise acquire capital stock from the employees, officers, directors and consultants of the Borrower or any of its subsidiaries by net exercise, net withholding or otherwise, pursuant to the terms of any employee stock option, incentive stock or other equity-based plan or arrangement (provided, that the aggregate amount of payments under clauses (i) and (ii) shall not exceed $5.0 million in any fiscal year of the Borrower and $10.0 million over the life of the Credit Facilities plus, in each case, any proceeds received by the Borrower after the Closing Date in connection with the issuance of common equity that are used for the purposes described in this clause 3);

		4. exceptions for restricted payments by subsidiaries shall be consistent with the Existing Credit Agreement with such changes as may be mutually agreed;

		5. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is equal to or less than 4.00:1.00, other restricted payments out of the Available Amount Basket;

		6. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is equal to or less than 3.00:1.00, other restricted payments; and

		7. other customary exceptions and exceptions consistent with the Documentation Principles.

		Payments on/modifications to Subordinated or Junior Lien Debt. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly: (a) make payments in cash on any permitted subordinated or junior lien debt (other than (i) regularly scheduled payments of principal and interest, mandatory offers to repay or mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, (ii) refinancings, conversions or exchanges of such debt for like or junior debt, subject to conditions to be agreed, (iii) payments with, or conversions to, equity (other than disqualified stock), or (iv) other payments of such debt to be mutually agreed upon); provided that notwithstanding the foregoing, so long as no event of default has occurred and is continuing, repayments or redemptions of other debt shall be permitted out of the Available Amount Basket and shall be permitted if restricted payments are permitted under clause 5 under the caption

B-21


		“Restricted Payments” above; or (b) modify the terms of any permitted subordinated or junior lien debt to the extent such modification is materially adverse to the Lenders (it being understood that the foregoing limitation shall not otherwise prohibit debt refinancing or replacing or in exchange for the foregoing debt subject to limitations to be agreed upon).

		Sale and Leaseback Transactions. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, enter into any sale and leaseback transaction, except customary exceptions and exceptions consistent with the Documentation Principles.

		Transactions with Affiliates. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any affiliate of the Borrower on terms that are materially less favorable to the Borrower or such subsidiary, as the case may be, than those that might be obtained at the time from a person who is not such an affiliate; provided that the foregoing restriction shall not apply to:

		1. transactions among the Borrower and the Guarantors (collectively, “*Loan Parties*”);

		2. transactions among non-Loan Parties;

		3. transactions expressly permitted under other provisions of the negative covenants; and

		4. other customary exceptions and exceptions consistent with the Documentation Principles.

		Negative Pledge Restrictions. The Borrower shall not, nor shall any of its subsidiaries enter into any agreement prohibiting the creation or assumption of any lien upon any of its properties or assets to secure the obligations under the Credit Facilities or restricting distributions by subsidiaries, subject to customary exceptions and exceptions consistent with the Documentation Principles.

		Nature of Business. The Borrower shall not, nor shall it permit any of its subsidiaries to, engage in any business other than the businesses engaged in on the Closing Date and similar, corollary, related, incidental, ancillary or complementary businesses.

		Fiscal Year. The Borrower shall not change its fiscal year end.

		Fundamental Changes. The Borrower shall not, nor shall it permit any of its subsidiaries to, enter into any transaction of

B-22


		merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) or sell, transfer or otherwise dispose of all or substantially all of its assets, subject to customary exceptions and exceptions consistent with the Documentation Principles.

		Amendment and Waivers of Organizational Documents. The Borrower shall not, nor shall it permit any Loan Party or any subsidiary whose equity is pledged as part of the Collateral to amend, waive or otherwise modify any provision of such person’s organizational documents if such amendment, waiver or modification could reasonably be expected to have a Material Adverse Effect.

		“*Available Amount Basket*” shall mean a cumulative amount equal to (a) an amount equal to $100 million, plus (b) the retained portion of Excess Cash Flow (i.e., Excess Cash Flow as defined for purposes of the Excess Cash Flow mandatory prepayment requirements set forth herein and not otherwise applied to mandatorily prepay the Term B Loans; provided that the retained portion of Excess Cash Flow for any fiscal year shall not be less than zero), plus (c) the cash proceeds of new public or private equity issuances of the Borrower or any parent of the Borrower (other than disqualified stock, any equity contributed as a Specified Equity Contribution (as defined below) to the extent the proceeds thereof are contributed to the Borrower as qualified equity and equity used to incur Equity Proceeds Indebtedness (to be defined as mutually agreed)), plus (d) capital contributions to the Borrower made in cash or cash equivalents (other than in respect of disqualified stock, any equity contributed as a Specified Equity Contribution and any capital contributions used to incur Equity Proceeds Indebtedness), plus (e) returns, profits, distributions and similar amounts received in cash or cash equivalents by the Borrower and its subsidiaries on or proceeds of dispositions of investments made using the Available Amount Basket, plus (f) the aggregate amount of Indebtedness (other than Indebtedness owing to the Borrower or any of its subsidiaries) that has been converted into or exchanged for equity interests (other than disqualified stock) of the Borrower, plus (g) any mandatory prepayment amount declined by a Declining Lender.

		The Available Amount Basket may be used for investments, restricted payments and the prepayment, repurchase or redemption of junior capital/subordinated debt or other Indebtedness as provided above.

Financial Covenants:		Consistent with the Documentation Principles, the Facilities Documentation will contain the following financial covenants (the “*Financial Covenants”) which will be calculated on a pro forma basis* with regard to the Borrower and its

B-23


		subsidiaries on a consolidated basis, solely for the benefit of the Revolving Lenders and the Lenders under the Term Loan A Facility:

		(a) Maintenance of a maximum Consolidated Net Leverage Ratio of no greater than (i) during the period from the Closing Date through the end of the fiscal quarter ending after the second year anniversary of the Closing Date, 5.00:1.00, (ii) during the period commencing after the end of the period described in clause (i) through the end of the fiscal quarter ending after the third anniversary of the Closing Date, 4.50:1.00 and (iii) thereafter, 4.00:1.00, which ratio will be applicable only to the Revolving Credit Facility and the Term Loan A Facility and will be tested, commencing with the first full fiscal quarter after the Closing Date provided that the Borrower shall be permitted one time at the Borrower’s election (upon written notice to the Administrative Agent) during the term of the Credit Facilities, solely in connection with a permitted acquisition with cash (or cash-equivalent) consideration in excess of $50,000,000, to increase the maximum Consolidated Net Leverage levels set forth above by 0.50x for the next four test periods following the closing date of such acquisition (stepping down by 0.25x on an annual basis following the completion of such four test periods (to no less than 4.00:1.00)); provided, further, that in no event shall such Consolidated Leverage Ratio level be set above 5.00:1.00.

		(b) Maintenance of a minimum Fixed Charge Coverage Ratio (as defined below) of no less than 1.25:1.00, which ratio will be applicable only to the Revolving Credit Facility and the Term Loan A Facility and will be tested, commencing with the first full fiscal quarter after the Closing Date.

Financial Definitions:		“*Consolidated EBITDA*” means, for any period, for the Borrower and its subsidiaries on a consolidated basis, without duplication, an amount equal to Consolidated Net Income (to be defined in a manner consistent with Documentation Principles) for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans) for such period, (ii) the provision for federal, state, local and foreign income taxes payable by the Borrower and its subsidiaries for such period, (iii) depreciation and amortization expense, (iv) non-cash stock-based

B-24


		compensation expense for such period, (v) all extraordinary, unusual or nonrecurring losses, expenses and charges, (vi) any restructuring charges and reserves and any losses on related sales of personal and real property, including any charges and losses incurred in connection with the closure of any operational facilities of the Borrower and its subsidiaries for such period, (vii) effects of adjustments in any line item in the Borrower’s consolidated financial statements resulting from the application of purchase accounting (including any step-ups with respect to re-valuing assets and liabilities) in relation to the Transactions and any investment, acquisition, merger or consolidation or the depreciation, amortization or write-off of any amounts thereof, (viii) customary costs and expenses incurred in connection with the Transactions, (ix) all customary costs and expenses incurred or paid in connection with permitted investments (including Permitted Acquisitions) or permitted dispositions whether or not such permitted investment or permitted disposition is consummated or occurred or occurs prior to or after the date hereof, including, without limitation, the Acquisition, (x) all customary costs and expenses incurred in connection with the issuance, prepayment or amendment or refinancing of permitted Indebtedness or issuance of capital stock, including, without limitation, the Acquisition, (xi) other expenses of the Borrower and its subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period and (xii) the aggregate net loss on the disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business, and less (b) the following to the extent added in calculating such Consolidated Net Income (A) all interest income for such period, (B) all income tax benefits included in Consolidated Net Income for such period, (C) non-cash purchase accounting adjustments, (D) the aggregate net gain from the disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business, all as determined on a consolidated basis and (E) all non-cash items increasing Consolidated Net Income which do not represent a cash item in such period or any future period.

		*“Consolidated Fixed Charge Coverage Ratio”* means, for any period of four consecutive fiscal quarters, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges (as defined below) for such period.

		*“Consolidated Fixed Charges”* means, for any period, the sum (without duplication) of (a) Consolidated Interest Expense (to be defined in a manner consistent with the Documentation Principles) for such period, (b) scheduled amortization payments made during such period on account of

B-25


		principal of Indebtedness of the Borrower or any of its subsidiaries (including scheduled amortization principal payments in respect of the Term Loans but excluding the Revolving Loans), (c) income taxes paid in cash during such period, (d) Capital Expenditures (to be defined in a manner consistent with the Documentation Principles) paid in cash during such period (excluding the principal amount of Indebtedness incurred during such period to finance such expenditures, but including any repayments of any Indebtedness incurred during such period or any prior period to finance such expenditures), and (e) restricted payments pursuant to clauses (3) and (5) under the caption “Restricted Payments” paid in cash during such period.

		*“Consolidated Funded Debt”* shall be defined in a manner consistent with the Documentation Principles.

		*“Consolidated Net Leverage Ratio”* means at any date, the ratio of (a) the total of (i) Consolidated Funded Debt as of such date minus (ii) unrestricted cash and cash equivalents of the Borrower and its subsidiaries as of such date up to $300 million to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of any fiscal quarter, the most recently completed fiscal quarter for which financial statements are required to have been delivered to the Administrative Agent).

		*“Indebtedness”* shall be defined in a manner consistent with the Documentation Principles.

		*“Material Acquisition”* means the Acquisition and any other acquisition of property or series of related acquisitions of property that (1) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the equity interests of a person and (2) involves the payment of consideration by the Borrower and its subsidiaries in excess of $20,000,000.

		*“Material Disposition”* means any disposition of property or series of related dispositions of property that yields gross proceeds to the Borrower or any of its subsidiaries in excess of $20,000,000.

		*“pro forma basis” or “pro forma effect”* means, with respect to compliance with any test or covenant, compliance with such test or covenant after giving effect to (i) any Material Acquisition, (ii) any incurrence or repayment of Indebtedness or (iii) any Material Disposition (including (a) pro forma adjustments arising out of events which are directly attributable to any proposed Material Acquisition, any incurrence or repayment of Indebtedness or any Material Disposition, are factually supportable and are expected to

B-26


		have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the staff of the Securities and Exchange Commission, (b) pro forma adjustments determined in good faith by the Borrower that are consented to by the Administrative Agent (such consent not to be unreasonably withheld) arising out of operating and other expense reductions attributable to such transaction being given pro forma effect that (1) have been realized or (2) will be implemented within 18 months following such transaction and are supportable and quantifiable and, in each case, including (A) reduction in personnel expenses, (B) reduction of costs related to administrative functions, (C) reduction of costs related to leased or owned properties and (D) reductions from the consolidation of operations and streamlining of corporate overhead, and (c) such other adjustments as determined in good faith by the Borrower that are consented to by the Administrative Agent (such consent not to be unreasonably withheld), in each case as certified by an officer of the Borrower) using, for purposes of determining such compliance, the historical financial statements of all entities or assets so acquired and the consolidated financial statements of the Borrower and its subsidiaries and assuming that all Material Acquisitions that have been consummated during the period, any Material Disposition and any Indebtedness or other liabilities repaid in connection therewith had been consummated and incurred or repaid at the beginning of such period (and assuming that such Indebtedness to be incurred bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the interest rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination).

Events of Default:		Limited to the following (except as otherwise expressly indicated, to be applicable to the Loan Parties): failure to pay any principal when due; non-payment of interest, fees or other amounts after a five business day grace period; default under any covenant or agreement in the Facilities Documentation (subject (i) in the case of certain affirmative covenants, to a 30 day grace period or, in the case of certain other affirmative covenants, a shorter grace period and (ii) with respect to the Financial Covenants, a breach shall only result in an event of default with respect to the Term Loan B Facility when the Revolving Lenders and Lenders under the Term Loan A Facility have terminated the commitments under the Revolving Credit Facility and accelerated any Revolving Loans and Term A Loans then outstanding); actual or asserted invalidity of a material Guarantor’s guaranty or material security interest; inaccuracy of representations or warranties

B-27


		in any material respect; cross-default and cross-acceleration to other Indebtedness in excess of $75 million, insolvency or bankruptcy of the Borrower or its material subsidiaries (with a 60 day grace period for involuntary events); ERISA events with respect to the Borrower and its subsidiaries that could reasonably be expected to result in a Material Adverse Effect; change of control (to be defined in a mutually satisfactory manner which shall be no less favorable to the Borrower than the definition in the Existing Credit Agreement); and monetary judgments in respect of the Borrower and its subsidiaries (not vacated, discharged, stayed or bonded pending appeal within 30 days) in an amount in excess of $75 million (to the extent not covered by insurance).

Voting:		Amendments and waivers of the Facilities Documentation will require the approval of Lenders holding more than 50% of the aggregate amount of the loans and commitments under the Credit Facilities (the “*Required Lenders”); provided that (a) the consent of each Lender directly and adversely affected thereby shall be required with respect to (i) increases in or extensions of the commitment of such Lender, (ii) reductions of principal, interest (other than a waiver of default interest) or fees (it being understood that an amendment to the Financial Covenants or defined terms used in the Financial Covenants shall not constitute a reduction in the rate of interest or fees), (iii) extensions of any scheduled amortization payments, the date for payment of any interest or fees or the final maturity and (iv) changes to the pro rata* sharing provisions (with exceptions for certain transactions to be agreed, including amend and extend transactions) ); provided that no amendment or waiver of a required mandatory prepayment or the mandatory prepayment provisions or related definitions shall constitute an amendment or waiver to which this clause (a) is applicable, (b) the consent of 100% of the Lenders will be required with respect to (i) modifications to any of the voting percentages and (ii) releases of all or substantially all Guarantors or releases of all or substantially all of the Collateral (other than in connection with any sale of Collateral or of the relevant Guarantor permitted by the Facilities Documentation), (c) the consent of the Administrative Agent shall be required for any amendment that modifies agency specific provisions, (d) the consent of the Issuing Banks shall be required for any amendment that modifies letter of credit specific provisions, (e) the consent of the Swing Line Lenders shall be required for any amendment that modifies swingline specific provisions, and (f) any amendment or waiver that by its terms affects the rights or duties of Lenders holding loans or commitments of a particular class (but not the Lenders holding loans or commitments of any other class) will require only the requisite percentage in interest of the affected class of Lenders that would be required to consent thereto if such class of Lenders were the only class of Lenders.

B-28


		Notwithstanding the foregoing, amendments and waivers of the Financial Covenants only require the approval of Lenders holding more than 50% of the sum of the aggregate amount of the commitments under the Revolving Facility (other than any Defaulting Lender) and the aggregate amount of the Term Loan A Facility.

		Defaulting Lenders shall not be included in the calculation of Required Lenders or other requisite Lenders; provided that, subject to the Borrower’s right to replace Defaulting Lenders described under the caption “Replacement of Lenders” below, Defaulting Lenders shall be included therein with respect to (x) any amendment that would disproportionately affect the obligation of the Borrower to make payment of the loans or commitments under the Credit Facilities of such Defaulting Lender as compared to other Lenders holding the same class of loans or commitments and (y) any amendment relating to (a) increases in the commitment of such Defaulting Lender, (b) reductions of principal, interest, fees or premium applicable to the loans or commitments of such Defaulting Lender, (c) extensions of final maturity or the due date of any amortization, interest, fee or premium payment applicable to the loans or commitments of such Defaulting Lender, and (d) the definition of Required Lenders.

		The Facilities Documentation will permit amendments thereof without the approval or consent of the Lenders to effect a permitted “repricing transaction” (i.e., a transaction in which any tranche of Term Loans is refinanced with a replacement tranche of term loans, or is modified with the effect of, bearing a lower rate of interest) other than any Lender holding Term Loans subject to such “repricing transaction” that will continue as a Lender in respect of the repriced tranche of Term Loans or modified Term Loans.

		The Facilities Documentation will contain customary “amend and extend” provisions (on terms to be mutually agreed by the Administrative Agent and the Borrower) pursuant to which the Borrower may extend commitments and/or outstandings pursuant to one or more tranches with only the consent of the respective extending Lenders; provided that it is understood that no existing Lender will have any obligation to commit to any such extension.

		In addition, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error, omission or inconsistency of a technical nature in the Facilities Documentation, then the Administrative Agent and the Borrower shall be permitted to amend such provision without any further action or consent of any other party.

B-29


Cost and Yield Protection:		The Facilities Documentation will contain customary provisions protecting the Lenders in the event of prepayment or failure to borrow (funding indemnity), unavailability of funding, capital adequacy requirements and increased costs due to changes in law or regulation after the date of the Credit Facilities or, if later, the date on which the applicable Lender becomes a Lender; provided that a Lender shall not be entitled to submit a claim for compensation based upon a change in law or regulation unless it shall have determined that the making of such claim is consistent with its general practices under similar circumstances in respect of similarly situated borrowers with credit facilities entitling it to make such claims (it being agreed that no Lender shall be required to disclose any confidential or proprietary information in connection with such determination or the making of such claim). The obligation of the Borrower and the Guarantors to gross up for and/or to indemnify Lenders for taxes imposed on payments will be subject to customary mitigation requirements and other exceptions, including the requirement to provide applicable tax-related documentation, it being understood that the gross-up obligations shall not apply to withholding taxes imposed by Sections 1471 through 1474 of the Internal Revenue Code (and any amended or successor provisions to the extent substantially comparable thereto) and any regulations promulgated thereunder or guidance issued pursuant thereto.

		Customary protections for increased costs imposed as a result of the Dodd-Frank Act or Basel III shall be included subject to the limitation in the proviso of the first sentence of the immediately preceding paragraph.

Assignments and Participations:		After the Closing Date, the Lenders will be permitted to assign loans and/or commitments under the Term Facilities with the consent of the Borrower and the Administrative Agent (in each case, not to be unreasonably withheld, delayed or conditioned) and loans and commitments under the Revolving Credit Facility with the consent of the Borrower, the Swingline Lender, the Issuing Banks and the Administrative Agent (in each case not to be unreasonably withheld or delayed); provided that (i) no consent of the Borrower shall be required (A) with respect to the Term Facilities, if such assignment is made to another Lender or an affiliate or approved fund of such Lender, (B) with respect to the Revolving Credit Facility, if such assignment is made to another Revolving Lender or an affiliate or approved fund of such Revolving Lender or (C) after the occurrence and during the continuance of an event of default, (ii) the Borrower’s consent shall be deemed to have been given if the Borrower

B-30


		has not responded within ten business days of an assignment request made in writing and (iii) no consent of the Administrative Agent shall be required with respect to any assignment if such assignment is an assignment to another Lender, an affiliate of a Lender or an approved fund of a Lender; provided, further, that no assignments shall be made to any Disqualified Institutions.

		Each assignment (other than to another Lender, an affiliate of a Lender or an approved fund) will be in an amount of an integral multiple of $1,000,000 in the case of the Term Facilities and a minimum amount of $5,000,000 in the case of the Revolving Credit Facility (or lesser amounts, if agreed between the Borrower and the Administrative Agent) or, if less, all of such Lender’s remaining loans and commitments of the applicable class. Assignments will be by novation and will not be required to be pro rata among the Credit Facilities.

		The Lenders will be permitted to sell participations in loans without restriction in accordance with applicable law and consistent with the Documentation Principles. Voting rights of participants shall be limited to matters set forth under the caption “Voting” with respect to which the unanimous vote of all Lenders (or all directly and adversely affected Lenders, if the participant is directly and adversely affected) would be required.

		Subject to the provisions below, non-pro rata distributions will be permitted in connection with loan buy-back programs on terms to be mutually agreed.

		Assignments of Term Loans (and loans under any Incremental Term Facilities) to, and purchases by, the Borrower and its subsidiaries will be permitted without any consent solely through Dutch auctions open to all applicable Lenders on a pro rata basis in accordance with customary procedures to be mutually agreed upon, so long as (i) no event of default has occurred and is continuing, (ii) the loans purchased are immediately cancelled and (iii) no proceeds from any Revolving Loan are used to fund such assignments.

Expenses and Indemnification:		If the Closing Date occurs, the Borrower shall pay all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent and, in the case of clause (x) below, Morgan Stanley and, in the case of clause (y) below, the Commitment Parties (in each case, without duplication and promptly after a written demand therefor, together with backup documentation supporting such reimbursement request, except with respect to reimbursements payable on the Closing Date) associated with (x) the preparation, execution and delivery, amendment, modification, waiver and/or (y) enforcement of the Facilities Documentation (including, in

B-31


		any case, the reasonable and documented legal fees of a single firm of counsel (which shall be the counsel identified herein until the Closing Date) (and in the case of any actual or perceived conflict of interests, one additional counsel for the affected Lender(s) taken as a whole), and, if necessary, a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions)).

		The Borrower will indemnify the Administrative Agent, the Commitment Parties, the Lenders and their affiliates (without duplication) and the officers, directors, employees, advisors, agents, controlling persons, equityholders, partners, members and other representatives and their respective successors and permitted assigns of each of the foregoing, from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket fees and expenses (limited to reasonable and documented legal fees of a single firm of counsel for all indemnified parties, taken as a whole, and, if necessary, one firm of local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all indemnified parties taken as a whole (and, in the case of an actual or perceived conflict of interest, where the indemnified person affected by such conflict informs the Borrower of such conflict and thereafter retains its own counsel, of another firm of counsel for each group of affected indemnified persons similarly situated, taken as a whole)) of any such indemnified person arising out of or relating to any claim or any litigation or other proceeding (regardless of whether such indemnified person is a party thereto and whether or not such proceedings are brought by the Borrower, its equityholders, its affiliates, creditors or any other third person) that relates to the Transactions, including the financing contemplated hereby; provided that no indemnified person will be indemnified for any loss, claim, damage, liability, cost or expense to the extent (a) it has been determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from (i) the gross negligence, bad faith or willful misconduct of such indemnified person or any of its affiliates or controlling persons or any of the equityholders, officers, directors, employees, partners, members, agents, advisors or other representatives of any of the foregoing or (ii) a material breach of the obligations of such indemnified person or any of its affiliates under the Facilities Documentation or (b) any proceeding between and among indemnified persons that do not involve an act or omission by the Borrower or its subsidiaries (other than claims against any Commitment Party in its capacity or in fulfilling its role as the agent or arranger or any other similar role under the Credit Facilities (excluding its role as a Lender)).

B-32


Replacement of Lenders:		The Borrower or the Administrative Agent shall, subject to usual and customary conditions, have the right to replace a Lender or, so long as no event of default has occurred and is continuing, prepay such Lender’s outstanding Term Loans in full on a non-pro rata basis without premium or penalty (a) in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby so long as the consent of a majority of the Lenders or of the Lenders affected thereby has been obtained, (b) if such Lender asserts a claim for any funding protection, whether for increased costs, taxes, required indemnity payments or otherwise, and (c) if such Lender becomes a Defaulting Lender.

Governing Law and Forum:		New York.

Counsel to the Administrative Agent:		Shearman & Sterling LLP

B-33

ANNEX I to

EXHIBIT B


Interest Rates:		At the option of the Borrower, Adjusted LIBOR plus the Applicable Margin or ABR plus the Applicable Margin.

		“*Applicable Margin” shall mean (x) in respect of the Revolving Credit Facility and the Term Loan A Facility (i) if the Consolidated Net Leverage Ratio is greater than, or equal to, 4.00:1.00, 125 bps in the case of ABR loans and 225 bps in the case of LIBOR loans, (ii) if the Consolidated Net Leverage Ratio is less than 4.00:1.00 but greater than, or equal to, 2.00:1.00, 100 bps in the case of ABR loans and 200 bps in the case of LIBOR loans and (iii) if the Consolidated Net Leverage Ratio is less than 2.00:1.00, 75 bps in the case of ABR loans and 175 bps in the case of LIBOR loans (provided* that clause (x)(i) shall apply until delivery by the Borrower to the Administrative Agent of financial statements for the first full fiscal quarter completed after the Closing Date) and (y) in respect of the Term Loan B Facility, 275 bps in the case of ABR loans and 375 bps in the case of LIBOR loans.

		All Swingline Loans will be ABR loans.

		With respect to the Term Loan B Facility, there shall be a minimum Adjusted LIBOR (i.e. Adjusted LIBOR prior to adding any applicable interest rate margins thereto) requirement of 0.75% per annum. With respect to the Revolving Credit Facility and the Term Loan A Facility, there shall be a minimum Adjusted LIBOR requirement (i.e. Adjusted LIBOR prior to adding any applicable interest rate margins thereto) of 0.00% per annum.

		The Borrower may elect interest periods of one, two, three or six months (or, if made available by all relevant Lenders, 12 months or a shorter period) for Adjusted LIBOR borrowings.

		Interest on any Term Loan and all fees will be payable in arrears on the basis of a 360-day year (calculated on the basis of the actual number of days elapsed); provided that interest on ABR loans, when based on the prime rate, will be payable in arrears on the basis of a 365-day year (or a 366-day year in a leap year), in each case calculated on the basis of the actual number of days elapsed. Interest will be payable on Adjusted LIBOR loans on the last day of the applicable interest period (and at the end of each three months, in the case of interest periods longer than three months) and upon prepayment, and on ABR loans quarterly and upon prepayment.

Adjusted LIBOR:		“*Adjusted LIBOR*” shall mean the London interbank offered rates for dollars, adjusted for statutory reserve requirements.

Annex I-B-1


ABR:		“*ABR*” shall mean the Alternate Base Rate, which shall be the highest of (i) the prime commercial lending rate published by the Wall Street Journal as the “prime rate”, (ii) the Federal Funds Effective Rate plus 1/2 of 1.0% and (iii) the one-month Adjusted LIBOR plus 1.0% per annum.

Letter of Credit Fee:		A per annum fee equal to the spread over Adjusted LIBOR under the Revolving Credit Facility will accrue on the aggregate face amount of outstanding letters of credit under the Revolving Credit Facility, payable in arrears at the end of each quarter and upon the termination of the respective letter of credit, in each case for the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Revolving Lenders pro rata in accordance with the amount of each such Revolving Lender’s Revolving Credit Facility commitment, with exceptions for Defaulting Lenders. In addition, the Borrower shall pay to each Issuing Bank, for its own account, (a) a fronting fee equal to 0.125% upon the aggregate face amount of outstanding letters of credit, payable in arrears at the end of each quarter and upon the termination of the Revolving Credit Facility, calculated based upon the actual number of days elapsed over a 360-day year and (b) customary issuance and administration fees.

Commitment Fees:		The Borrower shall pay a commitment fee of (i) if the Consolidated Net Leverage Ratio is greater than, or equal to, 4.00:1.00, 35 bps per annum, (ii) if the Consolidated Net Leverage Ratio is less than 4.00:1.00 but greater than, or equal to, 2.00:1.00, 30 bps per annum and (iii) if the Consolidated Net Leverage Ratio is less than 2.00:1.00, 25 bps per annum, in each case, calculated on the average daily unused portion of the Revolving Credit Facility (provided that clause (i) shall apply until delivery by the Borrower to the Administrative Agent of financial statements for the first full fiscal quarter completed after the Closing Date), payable quarterly in arrears commencing with the last business day of the first full fiscal quarter ending after Closing Date, calculated based upon the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Revolving Lenders (other than the Swingline Lender in its capacity as such) pro rata in accordance with the amount of each such Revolving Lender’s Revolving Credit Facility commitment, with exceptions for Defaulting Lenders.

Annex I-B-2

EXHIBIT C

Project Forest

Summary of Additional Conditions²

The initial borrowings under the Credit Facilities shall be subject to the following conditions (subject in all respects to the Certain Funds Provisions):

Solely to the extent of a Hostile Transaction, (i) the final documentation for the Non-Consensual Tender Offer shall be reasonably satisfactory to the Lead Arranger, (ii) the Non-Consensual Tender Offer shall be (unless the Target and the Borrower or one or more of the subsidiaries of the Borrower shall have entered into an acquisition agreement reasonably satisfactory to the Lead Arranger) for not less than 90% of the outstanding capital stock (on a fully diluted basis) of the Target (or such lesser percentage of capital stock as the Lead Arranger may agree), (iii) the Non-Consensual Tender Offer shall be consummated concurrently with the initial borrowing under the Credit Facilities, in compliance with law and in accordance with the final documentation referred to in clause (i) above, in each case, in all material respects and (iv) the Non-Consensual Tender Offer shall be in full force and effect with no provision thereof amended, waived or otherwise modified or supplemented that is materially adverse to the interests of the Lenders or the Lead Arranger without the prior written consent of the Lead Arranger and the Administrative Agent (which approval shall not be unreasonably withheld, delayed or conditioned); provided that (a) any reduction in the purchase price shall be deemed to be not materially adverse to the Lenders but any such reduction in the cash component of the purchase price in excess of 10% of the purchase price shall be allocated dollar-for-dollar to reduce the Term Loan A Facility and the Term Loan B Facility ratably, (b) any increase in the purchase price shall be deemed to be not materially adverse to the Lenders so long as such increase is not funded with indebtedness and (c) any reduction in the minimum tender offer condition without the prior written consent of the Lead Arranger (not to be unreasonably withheld or delayed) shall be deemed to be materially adverse to the interests of the Lenders and the Lead Arranger.

Solely to the extent of a Negotiated Transaction, the Acquisition shall have been consummated, or substantially simultaneously with the initial borrowing under the Credit Facilities shall be consummated, in all material respects in accordance with the terms of the Acquisition Agreement after giving effect to any modifications, amendments, consents or waivers by you thereto, other than those that are materially adverse to the interests of the Lenders, without the prior consent of the Lead Arranger (not to be unreasonably withheld, delayed or conditioned); provided that (a) any reduction in the purchase price for the Acquisition shall be deemed to be not materially adverse to the Lenders but any such reduction in the cash component of the purchase price in excess of 10% of the purchase price shall be allocated dollar-for-dollar to reduce the Term Loan A Facility and the Term Loan B Facility ratably, (b) any increase in the purchase price shall be deemed to be not materially adverse to the Lenders so long as such increase is not funded with indebtedness, (c) the granting of any consent under the Acquisition Agreement that is not materially adverse to the interests of the Initial Lenders shall not otherwise constitute an amendment or waiver, (d) the Acquisition Agreement shall be reasonably satisfactory to the Lead Arranger, it being

All capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this Term Sheet is attached, including the Exhibits thereto. In the event any such capitalized term is subject to multiple or differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used.

C-1

understood that the Acquisition Agreement executed by the Borrower on November 17, 2015 that we received is satisfactory and (e) any amendment, waiver or other modification to the definition of “Company Material Adverse Effect” set forth in the Acquisition Agreement or to the “Xerox” provisions in the Acquisition Agreement without the prior written consent of the Lead Arranger (not to be unreasonably withheld or delayed) shall be deemed to be materially adverse to the interests of the Lenders and the Lead Arranger.

3.	The Refinancing shall have been consummated substantially concurrently with the funding of the Credit Facilities.

Solely to the extent that the Acquisition is not consummated pursuant to a Negotiated Transaction, since the day immediately before the Borrower’s announcement of its offer to acquire shares of Target, there shall not have not occurred a “Company Material Adverse Effect” (as defined in the Acquisition Agreement referred to in paragraph 2 above).

5.	In the case of a Negotiated Transaction, since the date of the Acquisition Agreement, there shall not have occurred a “Company Material Adverse Effect” (as defined in the Acquisition Agreement).

The Lead Arranger shall have received (a) unaudited consolidated balance sheets and related statements of income and cash flows of the Target for each fiscal quarter (that is not the last fiscal quarter of a fiscal year) commencing on or after June 28, 2015 and ended at least 45 days prior to the Closing Date, (b) audited consolidated balance sheets and related statements of income and cash flows of the Target for the three most recently completed fiscal years ended at least 90 days before the Closing Date and (c) a pro forma consolidated balance sheet and related pro forma income statement of the Borrower as of and for the 12-month period ending on the last day of the most recently completed four fiscal quarter period ended at least 90 days prior to the Closing Date (if the end of such period is a fiscal year-end of the Borrower) or ended at least 45 days prior to the Closing Date (if the end of such period is not a fiscal year-end of the Target), in each case, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of income). The Lead Arranger acknowledges receipt of the financial statements referred to in clause (b) through the fiscal year ended December 27, 2014.

Subject in all respects to the Certain Funds Provisions and the limitations described under the caption “Security” in Exhibit B to the Commitment Letter, all documents and instruments required to create and perfect the Administrative Agent’s security interest in the Collateral shall have been executed and delivered and, if applicable, be in proper form for filing.

The Administrative Agent and the Lead Arranger shall have received, no later than three business days prior to the Closing Date, all documentation and other information about the Borrower and the Guarantors as has been reasonably requested in writing by the Administrative Agent and the Lead Arranger at least seven business days prior to the Closing Date that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act.

(a) The execution and delivery of the Facilities Documentation by the Borrower and the Guarantors party thereto on the Closing Date, which shall be in accordance with the terms of the Commitment Letter (subject to modifications, as applicable, pursuant to the “market flex” provisions in the Fee Letter) and subject to the Certain Funds Provisions set forth in the Commitment Letter including Section 6 of the Commitment Letter and (b) the delivery to the

C-2

Lead Arranger of customary legal opinions, customary officer’s closing certificates, organizational documents, customary evidence of authorization and good standing certificates in jurisdictions of formation/organization, in each case of the Borrower and the Guarantors (to the extent applicable) and a solvency certificate in the form set forth in Annex I to this Exhibit C, signed by the Chief Financial Officer (or similar officer) of the Borrower as of the Closing Date and after giving effect to the Transactions with respect to the Borrower and its subsidiaries, on a consolidated basis.

10.

All fees required to be paid on the Closing Date pursuant to the Commitment Letter and the Fee Letter and reasonable and documented out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter, to the extent invoiced at least three business days prior to the Closing Date, shall, upon the initial borrowing under the Credit Facilities, have been paid (which amounts may be offset against the proceeds of the Credit Facilities).

11.

(a) In the case of a Negotiated Transaction, the Specified Acquisition Agreement Representations (to the extent required by the Certain Funds Provisions) shall be true and correct in all material respects (except in the case of any Specified Acquisition Agreement Representations to which expressly relates to a given date or period, such representation or warranty shall be true and correct in all material respects as of the respective date or period, as the case may be); provided this condition shall be deemed satisfied unless the Borrower has (or an affiliate of the Borrower has) the right to terminate its obligations under the Acquisition Agreement or decline to consummate the Acquisition (in each case, in accordance with the terms of the Acquisition Agreement) as a result of such breach and (b) the Specified Representations shall be true and correct in all material respects (except in the case of any Specified Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or period, as the case may be).

12.

The Lead Arranger shall have been afforded a period of at least 15 consecutive business days (ending no later than the business day immediately prior to the Closing Date) following delivery by the Borrower of information required for the Information Memorandum (other than portions thereof customarily provided by financing arrangers and limited, in the case of financial information, to the financial statements described in paragraph 6 above) (the “Marketing Information,” and such period, the “Marketing Period”) to seek to syndicate the Credit Facilities; provided that (i) November 27, 2015 shall not be considered a business day for the purposes of the Marketing Period and (ii) the Marketing Period shall either end on or prior to December 18, 2015 or, if the Marketing Period has not ended on or prior to December 18, 2015, then the Marketing Period shall commence no earlier than January 4, 2016; provided, that if the Borrower shall in good faith reasonably believe that the Marketing Information has been delivered, the Borrower may deliver to the Lead Arranger a written notice to that effect (stating when the Borrower believes the delivery of the Marketing Information to the Lead Arranger was completed), in which case the Borrower shall be deemed to have complied with such obligation to furnish the Marketing Information and the Lead Arranger shall be deemed to have received the Marketing Information, unless the Lead Arranger in good faith reasonably believes that the Borrower has not completed the delivery of such Marketing Information and, not later than 5:00 p.m. (New York time) two business days after the delivery of such notice by the Borrower, delivers a written notice to the Borrower to that effect (stating with specificity which such Marketing Information has not been delivered); provided, that notwithstanding the foregoing, the delivery of the Marketing Information shall be satisfied at any time at which (and so long as) the Lead Arranger shall have actually received the Marketing Information, regardless of whether or when any such notice is delivered by the Borrower.

C-3

ANNEX I to

EXHIBIT C

Form of Solvency Certificate

SOLVENCY CERTIFICATE

THE BORROWER

AND ITS SUBSIDIARIES

Pursuant to the Credit Agreement, the undersigned hereby certifies, solely in such undersigned’s capacity as [chief financial officer] of Microsemi Corporation (the “Borrower”), and not individually, as follows:

As of the date hereof, after giving effect to the consummation of the Transactions, including the making of the Loans under the Credit Agreement on the date hereof, and after giving effect to the application of the proceeds of such indebtedness:

The fair value of the assets of the Borrower and its subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their debts and liabilities, subordinated, contingent or otherwise;

The present fair saleable value of the property of the Borrower and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured;

The Borrower and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured; and

The Borrower and its subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which they have unreasonably small capital.

For purposes of this Solvency Certificate, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement, as applicable.

[Signature Page Follows]

Annex I-C-1

IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate in such undersigned’s capacity as [chief financial officer] of the Borrower, on behalf of the Borrower, and not individually, as of the date first stated above.


MICROSEMI CORPORATION

By:
		Name:
		Title:

Annex I-C-2

Exhibit (e)(4)

EXECUTION VERSION

MORGAN STANLEY SENIOR FUNDING, INC.

1585 Broadway

New York, NY 10036

CONFIDENTIAL

November 5, 2015

Microsemi Corporation

One Enterprise

Aliso Viejo, CA 92656

Attention: John Hohener

Chief Financial Officer

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”)

1251 Avenue of the Americas

New York, New York 10020

Deutsche Bank Securities Inc. (“DBSI”)

Deutsche Bank AG New York Branch (“DBNY”)

60 Wall Street

New York, NY 10005

Joinder Agreement to Commitment Letter

Ladies and Gentlemen:

Reference is hereby made to the Commitment Letter dated as of October 18, 2015 (the “Commitment Letter”), a copy of which is attached hereto as Annex A, from Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”) addressed to Microsemi Corporation, a Delaware corporation. Capitalized terms used in this joinder letter agreement (this “Joinder Agreement”) but not defined herein shall have the meanings assigned to such terms in the Commitment Letter.

Each of BTMU and DBSI (each an “Additional Arranger”, and collectively, the “Additional Arrangers”) has advised Morgan Stanley that it desires to join the Commitment Letter as a joint lead arranger and bookrunner under the Commitment Letter.

1. Each of BTMU and DBNY (each an “Additional Initial Lender”) is pleased to advise Morgan Stanley of its commitment to provide 26.25% and 25.0%, respectively, of each of (a) the aggregate principal amount of the $350,000,000 Senior Secured Revolving Credit Facility, (b) the aggregate principal amount of the $375,000,000 Senior Secured Term Loan A Facility and (c) the aggregate principal amount of the $2,200,000,000 Senior Secured Term Loan B Facility (collectively, the “Assumed Commitments”), in each case, on a several and not joint basis, subject only, as applicable, to the satisfaction of the conditions set forth or referenced in Section 6 of the Commitment Letter and the commitments of Morgan Stanley under the Commitment Letter shall be reduced on a dollar-for-dollar basis by the aggregate amount of the Assumed Commitments of the Additional Arrangers.

2. Each of the parties hereto acknowledges and agrees that for all purposes, the Additional Arrangers shall have the right to act (and each Additional Arranger hereby undertakes and agrees to act) as a Commitment Party and an “Additional Arranger” (as referred to in the Commitment Letter) in connection with the Credit Facilities. Each of the Additional Initial Lenders and Morgan Stanley, acknowledges and agrees that for all purposes, the Additional Initial Lenders shall have the right to act (and each Additional Initial Lender hereby undertakes and agrees to act) as a Commitment Party and as an Initial Lender in connection with the Credit Facilities. It is hereby agreed and understood that notwithstanding anything to the contrary, Morgan Stanley will appear on the top left of the cover page of any marketing materials for the Credit Facilities, and will hold the roles and responsibilities conventionally understood to be associated with such name placement.

3. In consideration of the foregoing, notwithstanding anything to the contrary set forth in the Commitment Letter, to the extent paid to it, Morgan Stanley agrees to pay to each Additional Arranger a closing fee in an amount equal to (x) if the Acquisition shall have been approved by the board of directors and/or the stockholders or other equity holders of the Target prior to the commencement of an actual tender offer to acquire not less than a majority of the outstanding capital stock of the Target without the prior approval and consent of the board of directors and/or stockholder or other equityholders of the Target, 1.375% of the commitment of such Additional Arranger in respect of the Credit Facilities in effect on the date hereof, payable in full on the date of the consummation of the acquisition and the “Closing Date” (as referred to in the Commitment Letter) and (y) in all other cases, the sum of (i) 0.25% of the commitment of such Additional Arranger in respect of the Credit Facilities in effect on the date hereof, earned and payable on the earlier of the date that is 45 days after October 18, 2015 (the “Commitment Letter’s Execution Date”) (unless the Borrower has terminated the Commitment Letter prior to such date) (irrespective of whether the Closing Date occurs) and the Closing Date, (ii) 0.25% of the of the aggregate amount of the commitment of such Additional Arranger in respect of the Credit Facilities in effect on the date hereof, earned and payable on the earlier of the date that is 90 days after the Commitment Letter’s Execution Date (unless the Borrower has terminated the Commitment Letter prior to such date) (irrespective of whether the Closing Date occurs) and the Closing Date and (iii) 1.25% of the commitment of such Additional Arranger in respect of the Credit Facilities in effect on the date hereof, payable on, and subject to, the occurrence of, the Closing Date.

4. Each Additional Arranger hereby acknowledges that it has, independently and without reliance upon Morgan Stanley or any of Morgan Stanley’s affiliates, or any of Morgan Stanley’s officers, directors, employees, agents, advisors or representatives, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to join the Commitment Letter as set forth herein.

5. This Joinder Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Joinder Agreement by facsimile transmission or other electronic transmission (i.e., a “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart hereof.

6. SECTION 10 OF THE COMMITMENT LETTER IS HEREBY INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS, AND SHALL APPLY HEREUNDER AS IF FULLY SET FORTH HEREIN.

7. Each party hereto agrees to maintain the confidentiality of this Joinder Agreement and the terms hereof, subject to the applicable confidentiality and disclosure provisions set forth in the Commitment Letter.

8. Without limiting the provisions of the last paragraph of this Joinder Agreement, each party hereto agrees that this Joinder Agreement shall remain in full force and effect so long as the Commitment Letter remains in full force and effect and will automatically terminate and be of no further force and effect, solely as and to the extent the Commitment Letter terminates in accordance with its terms. For the avoidance of doubt, the Additional Arranger shall have the benefit of and shall be subject to any and all provisions of the Commitment Letter that “survive” the expiration or termination of the Commitment Letter.

If you are in agreement with the foregoing, please sign and return to Morgan Stanley the enclosed copy of this Joinder Agreement by no later than 5:00 P.M. (New York time) on November 5, 2015, otherwise this Joinder Agreement shall expire at such time. This Joinder Agreement shall become effective and the undertaking of the parties thereunder shall become effective to the extent and in the manner provided hereby on the date the Additional Arranger delivers to Morgan Stanley an executed copy hereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


Very truly yours,

MORGAN STANLEY SENIOR FUNDING, INC.

By:		/s/ Jonathon Rauen
		Name: Jonathon Rauen Title: Authorized Signatory

ACCEPTED AND AGREED

on , 2015:


MICROSEMI CORPORATION

By:		/s/ John Hohener
Name: Title:		John Hohener CFO

[Joinder Agreement to Commitment Letter]

ACCEPTED AND AGREED

on November 5, 2015:


THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Additional Arranger and Initial Lender

By:		/s/ Timothy P. Dilworth
Name: Title:		Timothy P. Dilworth Managing Director

[Joinder Agreement to Commitment Letter]

ACCEPTED AND AGREED

on Nov 4, 2015:


DEUTSCHE BANK SECURITIES INC., as Additional Arranger

By:		/s/ Ian Dorrington
Name: Title:		Ian Dorrington Managing Director



By:		/s/ Christopher Blum
Name: Title:		Christopher Blum Managing Director


DEUTSCHE BANK AG NEW YORK BRANCH, as Initial Lender

By:		/s/ Ian Dorrington
Name: Title:		Ian Dorrington Managing Director



By:		/s/ Christopher Blum
Name: Title:		Christopher Blum Managing Director

[Joinder Agreement to Commitment Letter]

ANNEX A

[Commitment Letter]

Execution Version

MORGAN STANLEY SENIOR FUNDING, INC.

1585 Broadway

New York, NY 10036

CONFIDENTIAL

October 18, 2015

Microsemi Corporation

One Enterprise

Aliso Viejo, CA 92656

Attention: John Hohener

Chief Financial Officer

Project Forest

$350,000,000 Senior Secured Revolving Credit Facility

$375,000,000 Senior Secured Term Loan A Facility

$2,200,000,000 Senior Secured Term Loan B Facility

Commitment Letter

Ladies and Gentlemen:

Microsemi Corporation, a Delaware corporation (“you” or the “Borrower”), has advised Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”, “we”, “us” and, together with any Additional Arranger appointed, in each case, pursuant to Section 2 below, the “Commitment Parties”) that you intend to acquire (the “Acquisition”), directly or indirectly, the Target (as defined in Exhibit A) and consummate the other transactions described in Exhibit A. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Exhibits attached hereto (such Exhibits, together with this letter, collectively, the “Commitment Letter”).

1. Commitments.

2. Titles and Roles.

It is agreed that (a) Morgan Stanley will act as a lead arranger and bookrunner for each of the Credit Facilities (as defined in Exhibit A) (in such capacities, the “Lead Arranger”) and (b) Morgan Stanley will act as sole administrative agent and collateral agent (in such capacity, the “Administrative Agent”) for the Credit Facilities (as defined in Exhibit A). It is further agreed that Morgan Stanley shall have “left side” designation and shall appear on the top left of any Information Materials (as defined below) and all other marketing materials in respect of the Credit Facilities and will hold the leading role and responsibilities conventionally associated with such “left” placement, including maintaining sole physical books in respect of the Credit Facilities. You agree that no other agents, co-agents, arrangers or bookrunners will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any Lender (as defined below) in order to obtain its commitment to participate in the Credit Facilities unless you and we shall so agree. Notwithstanding anything to the contrary herein, Morgan Stanley may, subject to your consent if required by clause (a) in the proviso to this sentence, appoint up to five (5) additional financial institutions or other entities, and Morgan Stanley will, to the extent required by clause (b) in the proviso to this sentence, appoint additional financial institutions or other entities appointed by you (the “Additional Arrangers”; together with Morgan Stanley and any affiliate of an Additional Arranger to whom Morgan Stanley assigns a portion of its commitments pursuant to this Section 2, the “Initial Lenders”) as additional agents, arrangers, bookrunners or managers and obtain commitments from the Additional Arrangers or one or more of their affiliates to provide a portion of the aggregate principal amount of each of the Revolving Credit Facility, Term Loan A Facility and the Term Loan B Facility, and Morgan Stanley agrees to assign a portion of its commitments hereunder (in such amounts as determined by Morgan Stanley) to each Additional Arranger (or its affiliates); provided that (a) Morgan Stanley shall have the right to assign a portion of its commitments not to exceed 10% of the aggregate principal amount of the commitments set forth in Section 1 to (i) in its sole discretion, Additional Arrangers who are lenders holding an aggregate principal amount as of the date hereof of at least $40,000,000 of Revolving Loans and Incremental Term Loans (each as defined in the Existing Credit Agreement (as defined below)) in the form of term A loans under the Existing Credit Agreement (as defined below) and/or (ii) other Additional Arrangers with the consent of the Borrower (such consent not to be unreasonably withheld or delayed), (b) the Borrower shall have the right to designate Additional Arrangers with the consent of Morgan Stanley (such consent not to be unreasonably withheld or delayed) pursuant to this sentence within fourteen days following the date hereof who assume a portion of Morgan Stanley’s commitments not to exceed 25% of the aggregate principal amount of the commitments set forth in Section 1, (c) each Additional Arranger shall be required to assume a pro rata portion of the commitments of Morgan Stanley under each Credit Facility and execute and deliver customary joinder documentation reasonably acceptable to you and us, (d) the commitments of Morgan Stanley immediately prior to such appointment will be reduced by the amount of the commitments assumed from Morgan Stanley by such other financial institutions or entities and (e) in no event shall Morgan Stanley’s commitments be reduced to an aggregate principal amount of less than 65% of the aggregate principal amount of the commitments set forth in Section 1 as the result of assignments under this Section 2.

3. Syndication.

us by you in writing from time to time, (ii) any persons that are engaged as principals primarily in private equity, mezzanine financing or venture capital and certain banks, financial institutions, other institutional lenders and other entities, in each case, that have been specified to us by you in writing on or prior to the date hereof and (iii) as to any entity referenced in each case of clauses (i) and (ii) above (the “Primary Disqualified Lender”), any of such Primary Disqualified Lender’s known affiliates readily identifiable by name, but excluding any affiliate that is primarily engaged in, or that advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which the Primary Disqualified Lender does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity (clauses (i), (ii) and (iii) above collectively, the “Disqualified Lenders”) and (b) notwithstanding the Lead Arranger’s right to syndicate the Credit Facilities and receive commitments with respect thereto, (A) the Initial Lenders shall not be relieved, released or novated from their obligations hereunder (including their obligation to fund the Credit Facilities on the date of the consummation of the Acquisition with the proceeds of the initial funding under the Credit Facilities (the date of such funding, the “Closing Date”)) in connection with any syndication, assignment or participation of the Credit Facilities, including their commitments in respect thereof, until after the Closing Date has occurred, (B) except as contemplated in Section 2 above, no assignment or novation shall become effective with respect to all or any portion of the Initial Lenders’ commitments in respect of the Credit Facilities until the initial funding of the Credit Facilities and (C) unless you otherwise agree in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Credit Facilities, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred.

basis thereafter and (vii) your ensuring that, prior to the later of the Syndication Date and the Closing Date, there will not be any competing issues, offerings, placements or arrangements of debt securities or credit facilities by or on behalf of you or any of your subsidiaries (and, in the case of a Negotiated Transaction (as defined in Exhibit A hereto), your using commercially reasonable efforts to cause the Target to ensure that there will not be any competing issues, offerings, placements or arrangements of debt securities or credit facilities of the Target or its subsidiaries) being offered, placed or arranged (other than the Credit Facilities, ordinary course capital leases, purchase money indebtedness and equipment financings, deferred purchase price obligations, obligations under the Acquisition Agreement, indebtedness of the Target and its subsidiaries disclosed or otherwise permitted under the Acquisition Agreement or other indebtedness that has otherwise been consented to by the Lead Arranger) without the consent of the Lead Arranger, if such issuance, offering, placement or arrangement would materially impair the primary syndication of the Credit Facilities. Notwithstanding anything to the contrary contained in this Commitment Letter, the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, your obligations to assist in syndication efforts as provided herein (including commercially reasonable efforts to obtain the ratings referenced above) shall not constitute a condition to the commitments hereunder or the funding of the Credit Facilities on the Closing Date and shall terminate on the later of the Syndication Date and the Closing Date.

“Public Sider”, and each Lender that is not a Public Sider, a “Private Sider”). You will be solely responsible for the contents of the Information Materials and the Commitment Parties shall be entitled to use and rely upon the information contained therein without responsibility for independent verification thereof.

4. Information.

date such Information is provided) and (b) the Projections that have been or will be made available to us by you or your representatives in connection with the transactions contemplated hereby have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time when made and at the time delivered to us, it being understood that the Projections are as to future events and are not to be viewed as facts, the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, no assurance can be given that any particular Projection will be realized and actual results during the period or periods covered by any such Projection may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the later of the Syndication Date and the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect (with respect to information relating to the Target or any of its subsidiaries or any controlled affiliate of any thereof, to the best of your knowledge) if the Information and the Projections were being furnished, and such representations were being made, at such time, then you will (or, in the case of a Negotiated Transaction, prior to the Closing Date, with respect to the Information and such Projections relating to the Target, will use commercially reasonable efforts to) promptly supplement the Information and Projections such that such representations and warranties are (prior to the Closing Date with respect to information relating to the Target or any of its subsidiaries, to the best of your knowledge) correct in all material respects under those circumstances. In arranging and syndicating the Credit Facilities, the Commitment Parties will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof and does not assume responsibility for the accuracy or completeness of the Information or Projections.

5. Fees.

As consideration for the commitments of the Initial Lenders hereunder and for the agreement of the Lead Arranger to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheets and in the Fee Letter, dated the date hereof, and delivered herewith with respect to the Credit Facilities (the “Fee Letter”), if and to the extent payable in accordance with the terms thereof. Once paid, except as provided herein or in the Fee Letter, such fees shall not be refundable under any circumstances. Notwithstanding anything to the contrary herein or otherwise, if the Transactions are not consummated and the Closing Date does not occur, no fees, costs or expenses (other than amounts payable pursuant to clause (a) of Section 7 below, but not any fees, costs, expenses or disbursements of counsel pursuant to clause (b) of Section 7 below, except to the extent required to be paid pursuant to “Break Up Compensation” in the Fee Letter), shall be payable or reimbursable by you pursuant to this Commitment Letter, the Fee Letter or any other agreement entered into between you and the Lead Arranger, any Administrative Agent, any Commitment Party and/or any of their respective affiliates (other than the Alternate Transaction Fee (as defined in the Fee Letter) solely to the extent such fee would be required to be paid pursuant to the terms of the Fee Letter).

6. Conditions.

Notwithstanding anything in this Commitment Letter (including the immediately preceding paragraph), the Fee Letter, the Facilities Documentation or any other agreement or other undertaking concerning the financing of the Transactions to the contrary, (a) the only representations or warranties the accuracy of which shall be a condition to the availability and funding of the Credit Facilities on the Closing Date shall be (i) such of the representations and warranties made with respect to the Target and its subsidiaries in the Acquisition Agreement, if any, as are material to the interests of the Lenders, but only to the extent that you or your applicable affiliates have the right to terminate your obligations under the Acquisition Agreement or decline to consummate the Acquisition as a result of a breach of such representations or warranties in the Acquisition Agreement (the “Specified Acquisition Agreement Representations”) if any Acquisition Agreement is executed prior to the Closing Date and (ii) the Specified Representations (as defined below), and (b) the terms of the Facilities Documentation shall be in a form such that they do not impair the availability or funding of the Credit Facilities on the Closing Date if the conditions set forth in this Section 6 are satisfied or waived by the Lead Arranger. Notwithstanding anything to the contrary herein or otherwise, to the extent any security interest in any Collateral is not or cannot be provided and/or perfected on the Closing Date (other than (A) the pledge and perfection of security interests, to the extent required by the Term Sheets, in the equity interests of the material wholly owned domestic subsidiaries of the Borrower (excluding (x) the Target and its material wholly owned domestic subsidiaries (it being understood that the pledge and perfection of the equity interests of the Target and its material wholly owned domestic subsidiaries shall be governed by the succeeding sentence) and (y) including subsidiaries that are Guarantors) with respect to which a lien may be perfected by the delivery of a certificate representing such interests, if any, and (B) the pledge and perfection of security interests in Collateral with respect to which a lien may be perfected by the filing of financing statements under the Uniform Commercial Code in the applicable office in the respective jurisdiction of organization of the Borrower or any Guarantor (as defined in Exhibit B) (the Collateral described in this clause (B), the “Filing Collateral”)) after your use of commercially reasonable efforts to do so, then the provision and/or perfection of a security interest in any such Collateral shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date, but shall instead be provided after the Closing Date pursuant to arrangements and timing (which shall, in any event, be not less than 90 days after the Closing Date or such later date as the Administrative Agent and the Borrower mutually agree upon in good faith) to be mutually agreed by the Administrative Agent and the Borrower acting reasonably. Further, it is hereby understood and agreed that, notwithstanding anything to the contrary in this Commitment Letter or otherwise, any obligation of Borrower, Target or their respective subsidiaries to deliver Collateral related to the Target and its subsidiaries or for any of the Target or its subsidiaries to become Guarantors shall be as set forth in the Facilities Documentation (but in any event shall occur within 30 days following the Closing Date or as the Administrative Agent may agree in its sole discretion) and shall not be a condition precedent to the Credit Facilities. For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower and the Guarantors to be set forth in the Facilities Documentation relating to organizational status of the Borrower and the Guarantors, no conflicts of the Facilities Documentation with charter documents of the Borrower and the Guarantors in each case, related to the entering into and performance of the Facilities Documentation, organizational power and authority to enter into the Facilities Documentation, due authorization, due execution, delivery and enforceability, in each case, relating to the entering into and performance of the Facilities Documentation, solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries on a consolidated basis (such representation and warranty to be consistent with the solvency certificate in the form set forth in Annex I to Exhibit C), Federal Reserve margin regulations, the Investment Company Act, OFAC, the PATRIOT Act, the use of the loan proceeds not violating the FCPA, the status of the Credit Facilities and the guarantees thereof provided for in Exhibit B hereto, respectively, as senior debt and, subject to the immediately preceding sentence, the creation, validity and perfection of security interests in the Filing Collateral (subject to permitted liens to be mutually agreed and the preceding provisions of this Section 6). This paragraph and the provisions herein shall be referred to as the “Certain Funds Provisions”.

7. Indemnity.

competent jurisdiction in a final, non-appealable judgment to have resulted from (A) the willful misconduct, bad faith or gross negligence of such Indemnified Person or (B) a material breach of the obligations of such Indemnified Person under this Commitment Letter or the Fee Letter, (ii) resulting from any Proceeding between or among Indemnified Persons that does not involve an action or omission by you or your affiliates (other than claims against any Commitment Party in its capacity or in fulfilling its role as the agent or arranger or any other similar role under the Credit Facilities (excluding its role as a Lender)) and (b) if the Transactions are consummated and the Closing Date occurs, to reimburse Morgan Stanley and its affiliates, from time to time, for all reasonable and documented out-of-pocket expenses, due diligence expenses, syndication expenses, travel expenses and reasonable fees, disbursements and other charges of the single firm of counsel to Morgan Stanley specified in the Term Sheets, and of a single local counsel to Morgan Stanley in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions), in each case incurred in connection with the Credit Facilities and the preparation, negotiation and enforcement of this Commitment Letter, the Fee Letter, the Facilities Documentation and any security arrangements in connection therewith. The foregoing provisions in this paragraph shall be superseded in each case, to the extent covered thereby, by the applicable provisions contained in the Facilities Documentation upon execution thereof and thereafter shall have no further force and effect.

8. Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.

The Commitment Parties and their respective affiliates may have economic interests that conflict with those of you or the Target. You agree that the Commitment Parties will act under this Commitment Letter as an independent contractor and that nothing in this Commitment Letter or the Fee Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you or the Target, your or its respective equityholders or your or its respective affiliates. You acknowledge and agree that (a) the transactions contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial transactions between the Commitment Parties and, if applicable, their respective affiliates, on the one hand, and you, on the other, (b) in connection therewith and with the process leading to such transactions, the Commitment Parties and their applicable affiliates (as the case may be) are acting solely as principals and not as agents or fiduciaries of you, the Target, your or their respective management, equityholders, creditors or affiliates, (c) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether any Commitment Party or any of their respective affiliates have advised or are currently advising you or the Target on other matters), except the obligations expressly set forth in this Commitment Letter and the Fee Letter, (d) you have consulted your own legal, accounting and financial advisory, regulatory and tax advisors to the extent you deem appropriate, and (e) you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto. You agree that you will not claim, and hereby waive any such claim, that any Commitment Party or any of their respective affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with such transaction or the process leading thereto.

9. Confidentiality.

us promptly thereof prior to disclosure); provided that (i) you may disclose this Commitment Letter and its contents (but not the Fee Letter except as provided in clause (vi) below) to the Seller, the Target, the Target’s subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, members, partners, stockholders, controlling persons or equityholders of the foregoing, in each case, who are informed of the confidential nature of this Commitment Letter, the Fee Letter and the contents hereof and thereof and who are or have been advised of their obligation to keep the same confidential, (ii) you may disclose this Commitment Letter and its contents (but not the Fee Letter or its contents) in any syndication or other marketing materials in connection with the Credit Facilities (including the Information Materials) or in connection with any proxy or public filing, (iii) you may disclose the Term Sheets and other Exhibits and annexes to this Commitment Letter, and the contents thereof, to potential Lenders and to rating agencies in connection with obtaining ratings for the Borrower or the Credit Facilities, (iv) you may disclose the aggregate fee amount contained in the Fee Letter as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts in connection with the Transactions in marketing materials for the Credit Facilities or in any proxy or public filing, (v) you may make public disclosure of the existence and amount of the commitments hereunder and of the identities of the Administrative Agent, the Lead Arranger and the Additional Arrangers (if any), (vi) to the extent portions thereof have been redacted in a manner to be reasonably satisfactory to us and you (including the portions thereof addressing fees payable to the Commitment Parties and/or the Lenders), you may disclose the Fee Letter and the contents thereof to the Target, its subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, members, partners, stockholders, controlling persons or equityholders of the foregoing on a confidential and need to know basis (with you being responsible for such person’s compliance with this paragraph), (vii) you may disclose this Commitment Letter, the Fee Letter and the contents hereof and thereof to the extent this Commitment Letter, the Fee Letter or the contents hereof or thereof, as applicable, become publicly available other than by reason of disclosure by you in breach of this Commitment Letter, and (viii) you may disclose this Commitment Letter, the Fee Letter and contents hereof and thereof to the extent required by applicable law, rule or regulation, subpoena or other compulsory legal process (in which case, you agree, to the extent practicable and not prohibited by law, to inform us promptly thereof prior to disclosure).

owing to you, the Target, the Seller or any of your or their respective affiliates or related parties, (e) to each Commitment Party’s affiliates and to their respective officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and who are subject to customary confidentiality obligations of professional practice or who are or have been advised to keep the same confidential (with the applicable Commitment Party responsible for such person’s compliance with this paragraph), (f) to potential or prospective Additional Arrangers, Lenders, participants or assignees and to any direct or indirect contractual counterparty to any swap or derivative transaction (each a “Swap Counterparty”) relating to the Borrower or any of its subsidiaries, in each case other than Disqualified Institutions; provided that the disclosure of any such information to any Lenders, participants, assignees or Swap Counterparties or prospective Lenders, participants, assignees or Swap Counterparties referred to above shall be made subject to the acknowledgment and acceptance by such Lender, participant, assignee or Swap Counterparty or prospective Lender, participant, assignee or Swap Counterparty that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties, including as expressly agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes of the Commitment Parties or customary market standards for dissemination of such type of information, (g) to rating agencies in connection with obtaining ratings for the Borrower or the Credit Facilities, (h) for purposes of establishing a “due diligence” or similar defense in connection with or arising out of the making of loans pursuant to this Commitment Letter, (i) with your prior written consent or (j) to enforce their rights and remedies hereunder or under the Fee Letter. Upon the entering into of the Facilities Documentation, the Commitment Parties and their respective affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the Facilities Documentation upon the initial funding thereunder.

10. Miscellaneous.

only agreements that have been entered into among the parties hereto with respect to the Credit Facilities, and (ii) supersede all prior understandings, whether written or oral, among us with respect to the Credit Facilities and set forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES; PROVIDED, HOWEVER, THAT (A) THE ACCURACY OF ANY SPECIFIED ACQUISITION AGREEMENT REPRESENTATIONS AND WHETHER YOU HAVE THE RIGHT TO TERMINATE YOUR OBLIGATIONS UNDER THE ACQUISITION AGREEMENT OR DECLINE TO CONSUMMATE THE ACQUISITION (IN EACH CASE, IN ACCORDANCE WITH THE TERMS OF THE ACQUISITION AGREEMENT) AS A RESULT OF A BREACH OF SUCH REPRESENTATIONS AND WARRANTIES IN THE ACQUISITION AGREEMENT AND (B) WHETHER THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE ACQUISITION AGREEMENT SHALL, IN EACH CASE, BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

venue, waiver of jury trial, syndication (including the “Market Flex” provisions in the Fee Letter) and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether Facilities Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Initial Lenders’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication of such commitments (including supplementing and/or correcting Information and Projections) prior to the later of the Syndication Date and the Closing Date, (b) confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facilities Documentation upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time, and (c) as of the Closing Date the provisions of Section 7 shall be superseded to the extent the Facilities Documentation includes indemnification and expense reimbursement provisions. You may terminate this Commitment Letter and/or the Initial Lenders’ commitments with respect to the Credit Facilities (or any portion thereof) hereunder at any time subject to the provisions of the preceding sentence.

Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and the Fee Letter by returning to the Commitment Parties executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City time, on October 27, 2015. The Initial Lenders’ commitments and the obligations of the Lead Arranger hereunder will expire at such time in the event that the Commitment Parties have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, we agree to hold our commitment available for you until the earliest of (i) after execution of the Acquisition Agreement and prior to the consummation of the Transactions, the termination of the Acquisition Agreement in accordance with its terms, (ii) the consummation of the Acquisition with or without the funding of the Credit Facilities, (iii) 11:59 p.m., New York City time, on March 31, 2016 and (iv) the date on which you elect to terminate this Commitment Letter pursuant to the second preceding paragraph hereof (such earliest date being the “Termination Date”). Upon the occurrence of the Termination Date, this Commitment Letter and the commitments of the Commitment Parties hereunder and the agreement of the Lead Arranger to provide the services described herein shall automatically terminate unless the Commitment Parties shall, in their discretion, agree to an extension in writing (including by email).

[Remainder of this page intentionally left blank]

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


Very truly yours,

MORGAN STANLEY SENIOR FUNDING, INC.

By:
		Name: Title:

[SIGNATURE PAGE TO FOREST COMMITMENT LETTER]

Accepted and agreed to as

of the date first above written:

MICROSEMI CORPORATION



By:
		Name: Title:

[SIGNATURE PAGE TO FOREST COMMITMENT LETTER]

EXHIBIT A

Project Forest Transaction Description

(c) The Borrower will obtain $375,000,000 in commitments under the senior secured term loan A facility described in Exhibit B to the Commitment Letter (the “Term Loan A Facility”).

A-1

The transactions described in clauses (a) through (f) above (including the payment of Transaction Costs) are collectively referred to herein as the “Transactions”.

A-2

EXHIBIT B

Project Forest

Senior Secured Revolving Credit Facility

Senior Secured Term Loan A Facility

Senior Secured Term Loan B Facility

Summary of Principal Terms and Conditions¹


Borrower:		Microsemi Corporation.

Transactions:		As set forth in Exhibit A to the Commitment Letter.

Administrative Agent:		Morgan Stanley Senior Funding, Inc. (“*Morgan Stanley”) will act as sole and exclusive administrative agent and collateral agent for the Credit Facilities (in such capacity, the “Administrative Agent”) for a syndicate of banks, financial institutions and other entities acceptable to the Borrower (such acceptance not to be unreasonably withheld, delayed or conditioned) and which syndicate shall not include any Disqualified Institutions (together with the Initial Lenders, the “Lenders*”).

Lead Arranger and Bookrunner:		Morgan Stanley will act as lead arranger and bookrunner for each of the Credit Facilities (the “*Lead Arranger*”) and will perform the duties customarily associated with such roles.

Credit Facilities:		A senior secured revolving credit facility (the “*Revolving Credit Facility” and the Lenders with a commitment under the Revolving Credit Facility, the “Revolving Lenders”) in an aggregate principal amount of $350,000,000 (the loans thereunder, together with (unless the context otherwise requires), the swingline borrowings referred to below, the “Revolving Loans*”) on the terms and conditions set forth herein.

		A senior secured term loan A facility (the “*Term Loan A Facility”) in an aggregate principal amount of $375,000,000 (the loans thereunder, the “Term A Loans*”) on the terms and conditions set forth herein.

		A senior secured term loan B facility (the “*Term Loan B* *Facility”; together with the Term Loan A Facility, the “Term* *Facilities”) in an aggregate principal amount of $2,200,000,000 (the loans thereunder, the “Term B Loans”; together with the Term A Loans, the “Term Loans”; and, the Term Loans together with the Revolving Loans, the “Loans*”) on the terms and conditions set forth herein

B-1


Purpose:		The proceeds of the Term Facilities will be used directly or indirectly to finance a portion of the Transactions, including upfront fees and original issue discount, if any.

		The letters of credit and proceeds of the Revolving Loans will be used by the Borrower and its subsidiaries (a) on the Closing Date, exclusively for Permitted Closing Date Revolving Extensions of Credit and (b) after the Closing Date, for working capital and other general corporate purposes, including the financing of permitted acquisitions and other permitted investments.

Availability:		The Term Loans shall be made in a single drawing on the Closing Date. Repayments and prepayments of the Term Loans may not be reborrowed.

		Revolving Loans may be borrowed, repaid and reborrowed on and after the Closing Date (without premium or penalty) and prior to the maturity date for the Revolving Credit Facility in accordance with the terms of the Facilities Documentation.

Swingline Loans:		In connection with the Revolving Credit Facility, the Administrative Agent (in such capacity, the “*Swingline* *Lender*”) will make available, in its sole discretion, to the Borrower a swingline facility under which the Borrower may make short-term borrowings upon same-day notice (in minimum amounts to be mutually agreed upon and integral multiples to be agreed upon) of up to $25,000,000. Except for purposes of calculating the commitment fee described in Annex I hereto, any such swingline borrowings will reduce availability under the Revolving Facility on a dollar-for-dollar basis.

		Upon notice from the Swingline Lender, the Revolving Lenders will be unconditionally obligated to purchase participations in any swingline loan pro rata based upon their commitments under the Revolving Facility.

		If any Revolving Lender becomes a Defaulting Lender (to be defined in a manner consistent with the Documentation Principles), then the swingline exposure of such defaulting Revolving Lender will automatically be reallocated among the non-defaulting Revolving Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non- defaulting Revolving Lender does not exceed its commitments. In the event such reallocation does not fully cover the exposure of such defaulting Revolving Lender, the Swingline Lender may require the Borrower to repay such “uncovered” exposure in respect of the swingline loans and

B-2


		will have no obligation to make new swingline loans to the extent such swingline loans would exceed the commitments of non-defaulting Revolving Lenders.

Incremental Facilities:		The Facilities Documentation will permit the Borrower after the Closing Date to add one or more incremental term loan facilities to the Credit Facilities (each, an “*Incremental Term* *Facility”) and/or increase commitments under the Revolving Credit Facility (any such increase, and “Incremental* *Revolving Increase”; together with the Incremental Term Facilities, and collectively referred to as the “Incremental* *Facilities”) in an aggregate amount (the “Available* *Incremental Amount”) of up to (a) an amount equal to $300.0 million, plus (b) an amount equal to all voluntary prepayments of Term Loans and voluntary prepayments of Revolving Loans to the extent accompanied by a permanent reduction in the commitments thereof (in each case, to the extent not financed with the proceeds from the incurrence of long-term indebtedness), plus (c) an unlimited amount, so long as after giving effect to the borrowings under such Incremental Facility on the effective date thereof on a pro forma* basis (as defined below), the Consolidated Net Leverage Ratio is equal to or less than 3.00:1.00 (assuming that any Incremental Revolving Increase is fully drawn and it being understood that cash proceeds of any such Incremental Facility shall not be netted for the purpose of testing such Consolidated Net Leverage Ratio).

		The availability of the Incremental Facilities shall be subject solely to the following terms and conditions: (a) no existing Lender shall be required to participate in any such Incremental Facility without its consent; (b) no default or event of default under the Credit Facilities shall have occurred and be continuing or would exist immediately after giving effect thereto (except in connection with permitted acquisitions or investments, which shall be subject to no payment or bankruptcy event of default under the Credit Facilities); (c) such Incremental Facility may, at the discretion of the Borrower, (i) rank pari passu in right of payment with the Credit Facilities, (ii) be subordinated in right of payment to the Credit Facilities, (iii) be secured on a pari passu basis with the Credit Facilities, (iv) be secured on a junior lien basis to the Credit Facilities or (v) be unsecured; provided that if subordinated or secured on a junior lien basis (except to the extent incurred under the Facilities Documentation (as defined below)), any intercreditor or lien subordination arrangements shall be reasonably satisfactory to the Administrative Agent, and if secured on an equal basis with the Credit Facilities, such Incremental Facilities shall be on terms and pursuant to documentation applicable to the Credit Facilities; (d) the maturity date of any such Incremental Term Facility shall be

B-3



		no earlier than the then latest maturity date of the Term Facilities or, if the Incremental Term Facility is structured as a “Term A” facility, the latest maturity date of the Term Loan A Facility; (e) the weighted average life to maturity of any such Incremental Term Facility shall be no shorter than the then remaining weighted average life to maturity of the Term Loans or, if the Incremental Term Facility is structured as a “Term A” facility, the then remaining weighted average life to maturity of the Term Loan A Facility; (f) in the case of an Incremental Revolving Increase, the maturity date of such Incremental Revolving Increase shall be the same as the maturity date of the Revolving Credit Facility, such Incremental Revolving Increase shall require no scheduled amortization of mandatory commitment reduction prior to the final maturity of the Revolving Credit Facility and the Incremental Revolving Increase shall be on the same terms and pursuant to the exact same documentation applicable to the Revolving Credit Facility, (g) subject to clauses (d) and (e) above, the amortization schedules applicable to any such Incremental Term Facility shall be as determined by the Borrower and the lenders thereunder; (h) the representations and warranties in the Facilities Documentation shall be true and correct in all material respects immediately after giving effect to the incurrence of such Incremental Term Facility, subject to “SunGard” provisions substantially identical to the Certain Funds Provisions to the extent the proceeds of such Incremental Facility are used to finance, in whole or in part, permitted acquisitions or investments; (i) any fees payable in connection with such Incremental Facility shall be determined by the Borrower and the arrangers and/or lenders providing such Incremental Facility; (j) such Incremental Term Facility may provide for the ability to participate on a pro rata basis or less than pro rata basis in any voluntary or mandatory prepayments of the Term Loans; (k) during the period commencing on the Closing Date and ending on the date that is 12 months after the Closing Date only, the interest rate, upfront fees and original issue discount for any term loan sunder such Incremental Term Facility shall be as determinedby the Borrower and the lenders providing such Incremental Term Facility; provided that in the event that the yield on such Incremental Term Facility (taking into account interest margins, minimum Adjusted LIBOR (as defined in Annex I to Exhibit B), minimum ABR, upfront fees and OID on such term loans, with upfront fees and OID being equated to interest margins based on an assumed four year life to maturity, but exclusive of any arrangement, syndication, structuring, commitment or other fees payable in connection therewith) (the “*Incremental Yield*”) (other than any Incremental Term Facility that is unsecured, subordinated or secured on a junior-lien basis) exceeds the yield on the Term Loan B Facility or, if the Incremental Term Facility is

B-4


		structured as a “Term A” facility, the Term Loan A Facility (determined as provided above), by more than 0.50% per annum, then the interest margins for the Term B Loans and/or the Term A Loans, as applicable, shall automatically be increased to a level such that the yield on the Term B Loans and/or the Term A Loans, as applicable, shall be 0.50% below the Incremental Yield (it being agreed that any increase in yield to any existing facility required due to the application of an Adjusted LIBOR or ABR “floor” on any Incremental Term Facility shall be effected solely through an increase therein (or implementation thereof, as applicable); and (l) except as otherwise provided above, all other terms of such Incremental Term Facility, if not consistent with the terms of the existing Term Facilities, will be as agreed between the Borrower and the lenders providing such Incremental Term Facilities, with such other terms not consistent with the existing Term Facilities to be reasonably satisfactory to the Administrative Agent.

		The Borrower may seek commitments in respect of the Incremental Facilities from existing Lenders (each of which shall be entitled to agree or decline to participate in its sole discretion) and additional banks, financial institutions and other institutional lenders or investors who will become Lenders in connection therewith; provided that the consent of the Administrative Agent, the Swing Line Lender and the Issuing Banks (not to be unreasonably withheld, delayed or conditioned) shall be required with respect to any such additional lender if such consent would be required under the caption “Assignments and Participations” for an assignment to such additional lender.

		The proceeds of the Incremental Facilities will be used for general corporate purposes of the Borrower and its subsidiaries (including for capital expenditures, acquisitions, restricted payments, refinancing of Indebtedness and any other transaction not prohibited by the Facilities Documentation). The Facilities Documentation shall be amended to give effect to any Incremental Facility by documentation executed by the Lenders making the commitments with respect thereto, the Administrative Agent and the Borrower and without the consent of any other existing Lender. The Facilities Documentation will also permit amendments thereof with the consent of only the Administrative Agent and the Borrower to permit extensions of credit under the Incremental Facilities and the accrued interest and fees in respect thereof to share in the benefits of the Facilities Documentation and to include the Lenders holding such facilities in the definition of Required Lenders and Majority Facility Lenders.

B-5


		In addition, the Borrower may, in lieu of adding Incremental Term Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Term Debt, subject to customary terms and conditions (such as customary intercreditor documentation reasonably acceptable to the Administrative Agent, if applicable).

		“*Incremental Equivalent Term Debt*” means Indebtedness in an amount not to exceed the then Available Incremental Amount consisting of the issuance of senior secured or junior lien notes, subordinated notes or senior unsecured notes, in each case issued in a public offering, Rule 144A or other private placement or bridge facility in lieu of the foregoing, or secured or unsecured “mezzanine” debt, in each case on customary terms and conditions; provided that (a) such Incremental Equivalent Term Debt shall not be subject to the requirement set forth in clause (h) or the proviso of clause (k) of the second paragraph in this “Incremental Facilities” section, (b) the maturity date of such Incremental Equivalent Term Debt shall be no earlier than the maturity date of the Term Facilities and (c) the weighted average life to maturity of such Incremental Equivalent Term Debt shall be no shorter than the remaining average life to maturity of the Term Facilities.

Refinancing Facilities:		The Facilities Documentation will permit the Borrower to refinance loans under the Term Facilities and any Incremental Term Facility or commitments under the Revolving Credit Facility from time to time, in whole or in part, with (a) one or more new term facilities (each, a “*Refinancing Facility”) under the Facilities Documentation with the consent of the Borrower, the Administrative Agent (not to be unreasonably withheld, delayed or conditioned) and the entities providing Refinancing Facility, (b) other than in the case of the Revolving Credit Facility, one or more series of senior unsecured notes or loans, (c) other than in the case of the Revolving Credit Facility, one or more series of senior secured notes or loans that will be secured by the Collateral on a pari passu* basis with the Credit Facilities, or (d) other than in the case of the Revolving Credit Facility, one or more series of junior lien senior secured notes or loans that will be secured on a subordinated basis to the Credit Facilities, which will be subject to customary intercreditor and/or subordination arrangements reasonably satisfactory to the Administrative Agent and the Borrower (any such notes or loans, “*Term* *Refinancing Notes*”), subject, in each case, solely to the following terms and conditions: (i) any such Refinancing Facility or Term Refinancing Notes shall not mature prior to the maturity date of, or have a shorter weighted average life to

B-6


		maturity than, the loans under the applicable Credit Facility or Incremental Facility being refinanced; (ii) any Refinancing Facility or Term Refinancing Notes shall not be guaranteed by any person that is not a Guarantor (as defined below); and (iii) to the extent secured, any Refinancing Facility or Term Refinancing Notes shall not be secured by any assets that do not constitute Collateral; (iv) the other terms and conditions of such Refinancing Facility or Term Refinancing Notes (excluding pricing and optional prepayment or redemption terms) shall be substantially identical to, or not materially more favorable (taken as a whole) to the lenders providing such Refinancing Facility or Term Refinancing Notes, as applicable, than those applicable to the Facility or Incremental Facility being refinanced are to the Lenders (except for covenants or other provisions applicable only to periods after the latest final maturity date of the Term Facilities or Incremental Facility existing at the time of such refinancing).

Letters of Credit:		An aggregate amount to be agreed of the Revolving Credit Facility will be available to the Borrower and its subsidiaries for the purpose of issuing letters of credit. Letters of credit under the Revolving Facility will be issued by the Administrative Agent up to $50,000,000 (it being understood that the Administrative Agent shall only issue standby letters of credit) and/or Lenders reasonably acceptable to the Borrower and the Administrative Agent (such consent not to be unreasonably withheld or delayed) who agree to issue letters of credit (each an “*Issuing Bank”)); provided* that, no Issuing Bank shall be obligated to issue any letters of credit or fund participations in the reimbursement obligations of such letters of credit in an aggregate amount exceeding such Issuing Bank’s unused commitment under the Revolving Credit Facility on a pro rata basis. Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance or such longer period as may be agreed by the applicable Issuing Bank and (b) the third business day prior to the final maturity of the Revolving Facility; provided that any letter of credit may provide for renewal thereof for additional periods of up to 12 months or such longer period as may be agreed by the applicable Issuing Bank (which in no event shall extend beyond the date referred to in clause (b) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank). The face amount of any outstanding letter of credit (and, without duplication, any unpaid drawing in respect thereof) will reduce availability under the Revolving Facility on a dollar-for-dollar basis.

		Drawings under any letter of credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of loans under the Revolving Facility) within one business day

B-7


		after notice of such drawing is received by the Borrower from the relevant Issuing Bank. The Revolving Lenders will be irrevocably and unconditionally obligated to acquire participations in each letter of credit, pro rata in accordance with their commitments under the Revolving Facility, and to fund such participations in the event the Borrower does not reimburse an Issuing Bank for drawings within the time period specified above.

		If any Revolving Lender becomes a Defaulting Lender, then the letter of credit exposure of such defaulting Revolving Lender will automatically be reallocated among the non- defaulting Revolving Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non- defaulting Revolving Lender does not exceed its commitments. In the event that such reallocation does not fully cover the exposure of such defaulting Revolving Lender, the applicable Issuing Bank may require the Borrower to cash collateralize such “uncovered” exposure in respect of each outstanding letter of credit and will have no obligation to issue new letters of credit, or to extend, renew or amend existing letters of credit to the extent the letter of credit exposure would exceed the commitments of the non-defaulting Revolving Lenders, unless such “uncovered” exposure is cash collateralized to such Issuing Bank’s reasonable satisfaction.

Interest Rate and Fees:		As set forth in Annex I to this Exhibit B.

Default Rate:		Upon the occurrence and during the continuance of (i) a principal payment or bankruptcy-related Event of Default, or (ii) any other payment Event of Default, at the election of Required Lenders, overdue principal shall bear interest at the applicable interest rate plus 2.0% per annum, and any other overdue interest and fees shall bear interest at the interest rate applicable to ABR loans (as defined in Annex I to this Exhibit B) plus 2.0% per annum, and in each case, shall be payable on demand and shall begin to accrue from the date of such Event of Default.

Final Maturity and Amortization:		The Term A Loans will mature on the date that is five years after the Closing Date (the “*Term Loan A Maturity Date*”); provided that the Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Term A Loans upon the request of the Borrower and without the consent of any other Lender (subject to customary terms and conditions). The Term A Loans shall be payable in equal quarterly installments in an aggregate annual amount equal to (x) in respect of each of the first two years following the Closing Date, 5.0% of the original principal amount to the Term Loan A Facility and (y) in respect of each of the third, fourth and fifth year following

B-8


		the Closing Date, 10.0% of the original principal amount of the Term Loan A Facility with the balance payable on the Term Loan A Maturity Date; provided that if the Term Loan A Maturity Date for individual Lenders is extended beyond the fifth anniversary of the Closing Date, such extended Term A Loans shall be subject to amortization as agreed by the Borrower and such extending Lenders.

		The Term B Loans will mature on the date that is seven years after the Closing Date (the “*Term Loan B Maturity Date*”); provided that the Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Term B Loans upon the request of the Borrower and without the consent of any other Lender (subject to customary terms and conditions). The Term B Loans shall be payable in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount of the Term Loan B Facility with the balance payable on the Term Loan B Maturity Date; provided that if the Term Loan B Maturity Date for individual Lenders is extended beyond the seventh anniversary of the Closing Date, such extended Term B Loans shall be subject to amortization as agreed by the Borrower and such extending Lenders.

		The Revolving Credit Facility will mature, and commitments thereunder will terminate, on the Term Loan A Maturity Date; provided that the Facilities Documentation shall provide the right for individual Revolving Lenders to agree to extend the maturity date of all or a portion of their Revolving Credit Facility commitments upon the request of the Borrower and without the consent of any other Revolving Lender (subject to customary terms and conditions).

Guarantees:		Subject to the Certain Funds Provisions, all obligations of the Borrower under the Credit Facilities and under any interest rate protection or other swap or hedging arrangements (other than any obligation of any Guarantor to pay or perform under any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (a “*Swap”), if, and to the extent that, all or a portion of the guarantee by such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation, or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof)), or cash management arrangements entered into with a Lender, the Administrative Agent or any person that at the time such arrangements were entered into was an affiliate of a Lender or the Administrative Agent (“Hedging/Cash Management*

B-9


		*Arrangements”) will be unconditionally guaranteed jointly and severally on a senior secured basis by, subject to certain exceptions, each existing and subsequently acquired or organized direct or indirect wholly owned subsidiary of the Borrower organized under the laws of the United States or any state thereof (the “Guarantors”); provided* that Guarantors shall not include, (a) immaterial subsidiaries (to be defined as set forth in the Existing Credit Agreement with such changes as may be mutually agreed consistent with the Documentation Principles), (b) any subsidiary that is prohibited or restricted by applicable law, rule or regulation or by any contractual obligation existing on the Closing Date or at the time of acquisition thereof after the Closing Date, in each case, from guaranteeing the Credit Facilities or which would require governmental (including regulatory) consent, approval, license or authorization to provide a bank guarantee unless such consent, approval, license or authorization has been received, (c) not-for-profit subsidiaries, if any, (d) any non-United States subsidiary for which the providing of a bank guarantee could reasonably be expected to result in any violation or breach of, or conflict with, fiduciary duties of such subsidiary’s officers, directors or managers, (e) any foreign subsidiary that is a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code, as amended (a “*CFC”), (f) any direct or indirect subsidiary of a CFC, (g) any direct or indirect subsidiary of the Borrower or a Guarantor that owns no material assets other than equity interests in one or more subsidiaries that are CFCs (a “CFC Holdco*”) or another CFC Holdco, (h) certain special purpose entities, (i) any subsidiary acquired pursuant to an acquisition permitted under the Facilities Documentation financed with secured Indebtedness permitted to be incurred pursuant to the Facilities Documentation as assumed Indebtedness (and not incurred in contemplation of such acquisition) and any subsidiary thereof that guarantees such Indebtedness, in each case to the extent such secured Indebtedness prohibits such subsidiary from becoming a Guarantor) and subject to a cap to be agreed and (j) certain other subsidiaries as set forth in the Facilities Documentation to be agreed.

Security:		Subject to the limitations set forth below and subject to the Certain Funds Provisions, the obligations of the Borrower and the Guarantors in respect of the Credit Facilities and the Hedging/Cash Management Arrangements shall be secured by (a) a perfected pledge of the equity securities of each Guarantor and of each direct, subsidiary of the Borrower, and of each subsidiary Guarantor (which pledge, (i) in the case of voting equity interests in any CFC or any CFC Holdco, shall be limited to 65% of the voting equity interests in such subsidiary and (ii) shall not extend to any equity interest in

B-10


		any direct or indirect subsidiary of a CFC) (provided that except as set forth below, any such pledge of the equity securities of a subsidiary (other than Guarantor) organized under laws other than the United States or any state thereof shall not be required to be perfected under the laws of their jurisdiction of organization), and (b) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of the Borrower and each subsidiary Guarantor (including but not limited to accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, material intercompany notes and proceeds of the foregoing) (the items described in clauses (a) and (b) above, but excluding the Excluded Assets (as defined below), collectively, the “*Collateral*”).

		Notwithstanding anything to the contrary, the Collateral shall exclude the following: (i) any fee-owned real property with a fair market value of less than $10,000,000 (with all required mortgages being permitted to be delivered post-closing) and all real property leasehold interests (including requirements to deliver landlord lien waivers, estoppels and collateral access letters); (ii) motor vehicles and other assets subject to certificates of title to the extent a lien thereon cannot be perfected by filing a UCC financing statement; (iii) pledges and security interests prohibited by applicable law, rule or regulation; (iv) equity interests in any person other than wholly owned subsidiaries to the extent not permitted by the terms of such person’s organizational or joint venture documents; (v) any lease, license or other agreement or any property subject to a purchase money security interest or similar arrangement to the extent that a grant of a security interest therein would violate or invalidate such lease, license or agreement or purchase money arrangement or create a right of termination in favor of any other party thereto (other than the Borrower or a Guarantor) (in each case, except to the extent such prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibition); (vi) those assets as to which the Administrative Agent and the Borrower reasonably agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby; (vii) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby (in each case, except to the extent such

B-11


		prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the Uniform Commercial Code notwithstanding such prohibition); (viii) “intent-to-use” trademark applications; (ix) other customary exclusions under applicable local law or in applicable local jurisdiction as mutually agreed by the Administrative Agent and the Borrower; (x) margin stock; (xi) any voting equity interests of a CFC or any CFC Holdco in excess of 65% of such equity interests; (xii) assets to the extent a security interest in such assets would result in material adverse tax consequences or material adverse regulatory consequences, in each case, as reasonably determined by the Borrower and notified to the Administrative Agent; and (xiii) other exceptions to be mutually agreed upon (the foregoing described in clauses (i) through (xiii) are, collectively, the “*Excluded Assets*”). In addition, in no event shall (a) control agreements or control or similar arrangements be required with respect to deposit or securities accounts, (b) notices be required to be sent to account debtors or other contractual third-parties prior to the occurrence and during the continuance of an event of default or (c) perfection (except to the extent perfected through the filing of Uniform Commercial Code financing statements) be required with respect to letter of credit rights and commercial tort claims.

		All the above-described pledges, security interests and mortgages shall be created on terms to be set forth in the Facilities Documentation; and none of the Collateral shall be subject to other pledges, security interests or mortgages (except permitted liens and other exceptions and baskets to be set forth in the Facilities Documentation).

Mandatory Prepayments:		The Term B Loans shall be prepaid, on a ratable basis, with, commencing with the 2017 fiscal year, 50% of Excess Cash Flow (to be defined in a manner consistent with the Existing Credit Agreement except as provided below or as mutually agreed), stepping down to 0% upon achievement of a Consolidated Net Leverage Ratio equal to or less than 3.00:1.00; provided that, for any fiscal year, (x) any voluntary prepayments of loans under the Term Facilities (or any Incremental Term Facility) and Revolving Credit Facility (to the extent commitments thereunder are permanently reduced by the amount of such prepayments) or open market or dutch auction repurchases of Term Loans to the extent of the cash payments made in connection therewith, made during such fiscal year or, without giving duplicative effect, after year-end and prior to the time such Excess Cash Flow prepayment is

B-12


		due, other than prepayments funded with the proceeds of incurrences of long term Indebtedness, issuances of equity and non-ordinary course asset sales and insurance and condemnation proceeds, shall be credited against Excess Cash Flow prepayment obligations on a dollar-for-dollar basis for such fiscal year (without duplication of any such credit in any prior or subsequent fiscal year) and (y) Excess Cash Flow shall be reduced for, among other things, cash used for capital expenditures, certain permitted investments, permitted acquisitions and certain restricted payments to be agreed, in each case, to the extent financed with internally generated funds made during such fiscal year.

		The Loans shall be prepaid with:

		(a) 100% of the net cash proceeds of all non-ordinary course asset sales by the Borrower and its subsidiaries (including insurance and condemnation proceeds, but with exceptions for ordinary course dispositions, dispositions of obsolete or worn-out property and property no longer useful in the business, and other exceptions consistent with the Documentation Principles) subject to thresholds to be mutually agreed and the right of the Borrower to reinvest 100% of such proceeds, if such proceeds are reinvested (or committed to be reinvested) within 12 months and, if so committed to be reinvested, so long as such reinvestment is actually completed within 180 days after the expiration of such 12-month period; and

		(b) 100% of the net cash proceeds of issuances of debt obligations of the Borrower and its subsidiaries after the Closing Date (other than debt permitted under the Facilities Documentation (excluding the proceeds of any Refinancing Facility or Term Refinancing Notes)).

		Mandatory prepayments shall be applied, without premium or penalty, subject to reimbursement of the Lenders’ usual and customary breakage costs (excluding loss of profit), in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period, (x) in the case of an Excess Cash Flow prepayment, to the Term B Loans pro rata to the remaining scheduled amortization payments under the Term Loan B Facility (including any Incremental Term Facility) and (y) in the case of any other mandatory prepayment, first, ratably to the Term A Loans and the Term B Loans, in each case pro rata to the remaining scheduled amortization payments under such Term Facility (including any Incremental Term Facility), then, ratably to the Revolving Loans (without any permanent reduction of the commitments under the Revolving Credit Facility).

B-13


		Any Lender may elect not to accept its pro rata portion of any mandatory prepayment other than a mandatory prepayment with proceeds of any Refinancing Facility or other indebtedness permitted under the Facilities Documentation that is incurred for the purpose of refinancing Loans (each, a “*Declining Lender*”). Any prepayment amount declined by a Declining Lender may be retained by the Borrower.

		Prepayments from subsidiaries’ Excess Cash Flow and asset sale proceeds will be limited under the Facilities Documentation to the extent such prepayments (including the repatriation of cash in connection therewith) would (a) be prohibited or delayed by applicable law or (b) result in material adverse tax consequences.

Voluntary Prepayments:		Voluntary prepayments of loans under the Revolving Credit Facility, Term Facilities and any Incremental Term Facilities will be permitted at any time, in minimum principal amounts to be mutually agreed upon, without premium or penalty, subject to reimbursement of the Lenders’ usual and customary breakage costs actually incurred (excluding loss of profit) in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period.

		All voluntary prepayments of loans under the Term Facilities will be applied as directed by the Borrower (and absent such direction, in direct order of maturity thereof).

		In the event that a Repricing Event (as defined below) occurs on or prior to the date that is six months after the Closing Date, a 1.00% prepayment premium shall be paid on the principal amount of Term B Loans prepaid, repaid, assigned or subject to an amendment.

		“*Repricing Event*” shall mean (i) any prepayment or repayment of Term B Loans, in whole or in part, with the proceeds of, or conversion of any portion of any tranche of Term B Loans into, any new or replacement tranche of syndicated term loans under credit facilities bearing interest with an all-in yield less than the all-in yield applicable to such portion of the Term B Loans (as such comparative yields are determined in the reasonable judgment of the Administrative Agent consistent with generally accepted financial practices) and (ii) any amendment to the Term Loan B Facility which reduces the all-in yield applicable to the Term B Loans, but excluding, in any such case, any new or replacement syndicated term loans incurred in connection with a change of control, initial public offering or a transformative acquisition.

B-14


		If on or prior to the date that is six months after the Closing Date any Lender is forced to assign its loans under the First Term Loan B Facility following the failure of such Lender to consent to an amendment of the definitive documentation for the Term Loan B Facility that would have the effect of reducing the all-in yield applicable to such loans, such Lender shall be paid a 1.00% fee on the principal amount of the Term B Loans so assigned.

Facilities Documentation:		The definitive documentation for the Credit Facilities (the “*Facilities Documentation*”) shall be subject to the Documentation Principles.

		Notwithstanding anything to the contrary in the Commitment Letter, all leases of the Borrower and its subsidiaries that would be treated as operating leases for purposes of GAAP as in effect on the date hereof shall continue to be accounted for as operating leases for purposes of the Facilities Documentation, regardless of any change to GAAP following such date that would otherwise require such leases to be treated as capital leases.

		Consolidated total assets and financial ratios will be calculated on a pro forma basis.

		The representations and warranties, covenants and events of default contained in the Facilities Documentation shall consist solely of the provisions described below, in each case, applicable to the Borrower and the Borrower’s subsidiaries.

Representations and Warranties:		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its subsidiaries only and subject, in each case, to materiality thresholds, baskets and other exceptions and qualifications to be agreed upon): organizational status and good standing; power and authority, execution, delivery and enforceability of Facilities Documentation; with respect to Facilities Documentation, no violation of, or conflict with, law, organizational documents or material agreements; compliance with law (including PATRIOT Act); no litigation that could reasonably be expected to have a Material Adverse Effect (to be defined in a manner mutually agreed which shall in no event be less favorable to the Borrower than the Existing Credit Agreement definition); margin regulations; investment company act; material governmental approvals; after the Closing Date, no material adverse change since the date of the most recent audited financial statements delivered prior to the Closing Date; materially accurate and complete disclosure in all material respects; insurance; taxes; ERISA; equity interest and ownership of subsidiaries; intellectual property; environmental laws; use of proceeds; ownership of properties;

B-15


		subject to the Certain Funds Provisions and the restrictions described under the caption “Security”, creation, validity and perfection of liens and other security interests; consolidated Closing Date solvency of the Borrower and its subsidiaries; and Patriot Act, OFAC, FCPA and anti-money laundering laws.

Conditions to Initial Borrowing:		The availability of the borrowing and other extensions of credit under the Credit Facilities on the Closing Date will be subject solely to the applicable conditions set forth in Section 6 (including by reference to Exhibit C) of the Commitment Letter and, subject to the Certain Funds Provisions, clause (a) below under “Conditions to All Borrowings.”

Conditions to All Borrowings:		The making of each extension of credit under the Credit Facilities shall be conditioned upon (a) subject to the Certain Funds Provisions (in the case of an extension of credit on the Closing Date), delivery of a customary borrowing notice, (b) after the Closing Date, the accuracy of representations and warranties in all material respects and (c) after the Closing Date, the absence of defaults or events of defaults at the time of, and after giving effect to the making of, such extension of credit.

Affirmative Covenants:		Consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its subsidiaries only and subject, in each case, to materiality thresholds, baskets and other exceptions and qualifications to be agreed upon): delivery of annual audited and quarterly unaudited consolidated financial statements (limited, in the case of quarterly financial statements, to the first three fiscal quarters of a fiscal year only), and, in the case of the annual financial statements, an opinion of an independent accounting firm (which opinion shall not be subject to any “going concern” or like qualification or exception (other than a “going concern” or like qualification or exception resulting solely from (x) an upcoming maturity date under the Credit Facilities occurring within one year from the time such opinion is delivered or (y) or any prospective or actual default of any financial covenant under the Facilities Documentation)); annual budget reports (with delivery time periods to be consistent with the delivery requirements for the audited financial statements); notices of knowledge of events of default, ERISA events and litigation that could reasonably be expected to result in a Material Adverse Effect; commercially reasonable efforts to maintain public ratings; maintenance of property (subject to casualty, condemnation and normal wear and tear) and customary insurance; visitation rights; maintenance of existence; maintenance of books and records; payment of taxes; compliance with laws and

B-16


		regulations (including ERISA, environmental and PATRIOT Act); OFAC, FCPA and anti-money laundering laws; additional Guarantors and Collateral (subject to limitations set forth under the caption “Security”); use of proceeds; annual lender calls and, at the reasonable request of the Administrative Agent, quarterly lender calls; and further assurances on collateral matters.

Negative Covenants:		Consistent with the Documentation Principles and limited to the following (except as otherwise expressly indicated, to be applicable to the Borrower and its subsidiaries):

		Indebtedness. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

		1. obligations under the Credit Facilities, any Incremental Facilities, and Refinancing Facilities (and Term Refinancing Notes); 2. obligations under Incremental Equivalent Debt; 3. intercompany Indebtedness among the Borrower and its wholly-owned subsidiaries, and (ii) intercompany Indebtedness owing by any non-wholly-owned subsidiary that is not a Guarantor to the Borrower or another Guarantor (together with investments in non-Guarantor non-wholly-owned subsidiaries permitted under “Investments” below (considered without double-counting)) to an aggregate amount not to exceed, in the case of this clause (ii), $175.0 million; 4. any Indebtedness permitted to survive after the Closing Date under the terms of the Acquisition Agreement; 5. Indebtedness with respect to capital leases and purchase money Indebtedness in an aggregate amount not to exceed $75.0 million at any time; 6. Indebtedness of a person existing at the time such person became a subsidiary of the Borrower or any Guarantor in an aggregate principal amount not to exceed $100.0 million; 7. Junior Indebtedness so long as, on a pro forma basis after giving effect to such incurrence, the Borrower would be in compliance with the Financial Covenants;

B-17


		8. Indebtedness of foreign subsidiaries of the Borrower in an aggregate amount not to exceed $100.0 million at any time;

		9. Indebtedness in an aggregate amount not to exceed $100.0 million at any time; and

		10. other customary exceptions and exceptions consistent with the Documentation Principles.

		Liens. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, create, incur or assume any lien on or with respect to any of its properties or assets except:

		1. liens securing the Credit Facilities, any Incremental Facilities, Refinancing Facilities and Indebtedness of the Borrower and its subsidiaries permitted under the Acquisition Agreement to remain outstanding after the Closing Date;

		2. liens securing Incremental Equivalent Debt;

		3. liens securing Indebtedness described in clauses 5, 6 and 7 under the caption “Indebtedness” above subject to terms and conditions consistent with the Existing Credit Agreement or as mutually agreed;

		4. liens on assets of foreign subsidiaries of the Borrower to the extent the Indebtedness secured thereby is permitted and does not exceed $100.0 million in the aggregate at any time;

		5. liens not otherwise permitted so long as the aggregate amount secured thereby does not exceed $100.0 million at any time; and

.		6. other customary permitted liens consistent with the Documentation Principles.

		Dispositions. The Borrower shall not, nor shall it permit any of its subsidiaries to, sell, transfer or otherwise dispose of all or any part of its business, assets or property, except:

		1. dispositions not to exceed the greater of (i) 25% of the consolidated total assets of the Borrower in the aggregate for any fiscal year of the Borrower and (ii) $10.0 million in any fiscal year of the Borrower, so long as at least 75% of the consideration is in the form of cash or cash equivalents or exchanged for other useful assets;

B-18



		2. dispositions of real property owned in fee for fair market value not to exceed $25.0 million in the aggregate for all such dispositions; and

		3. other customary exceptions and exceptions consistent with the Documentation Principles.

		Investments. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, make or own any investment in any other person, except:

		1. (i) intercompany investments among the Borrower and its wholly-owned subsidiaries (including intercompany loans), and (ii) intercompany investments by the Borrower or any Guarantor in any non-wholly-owned subsidiary that is not a Guarantor, in an aggregate amount not to exceed, in the case of this clause (ii), $175.0 million at any time (together with intercompany Indebtedness of non-Guarantor non-wholly owned subsidiaries permitted under “Indebtedness” above (considered without double-counting);

		2. loans and advances to officers, directors, employees and consultants of the Borrower (or any direct or indirect parent thereof) and its subsidiaries in an aggregate amount not to exceed $5.0 million at any time;

		3. acquisitions (*“Permitted Acquisitions”); provided that (a) no event of default has occurred and is continuing immediately before any such acquisition or investment or would result immediately after giving effect to such acquisition or investment, (b) on a pro* forma basis after giving effect to such acquisition, the Borrower would be in compliance with the Financial Covenants and (c) with respect to the acquisitions of entities that do not become Guarantors, the total consideration paid will respect to such entities (exclusive of consideration consisting of common stock of the Borrower or the Available Amount) shall not exceed (i) $450 million plus (ii) an unlimited amount so long as the Consolidated Net Leverage Ratio is less than or equal to 3.00:1.00; provided, further, that clause (c) of this proviso shall not apply to acquisitions where the target is a domestic entity who becomes a Guarantor and where the subsidiaries of such target who do not become Guarantors together with their assets do not comprise a substantial portion

B-19


		of the assets of such target and its subsidiaries taken as a whole as further set forth in the Facilities Documentation;

		4. investments in cash and cash equivalents;

		5. so long as no event of default has occurred and is continuing, additional investments out of the Available Amount Basket (as defined below);

		6. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is less than or greater than 3.00:1.00, additional investments;

		7. additional investments in an aggregate amount (valued at cost, if applicable) not to exceed $50,000,000 at any time outstanding; and

		8. other customary exceptions and exceptions consistent with the Documentation Principles. In addition, the Borrower shall be permitted to designate unrestricted subsidiaries in an aggregate amount to be mutually agreed. Notwithstanding anything herein to the contrary, the provisions of the Facilities Documentation shall be revised as customary to include the concept of unrestricted subsidiaries and exclude unrestricted subsidiaries from the covenant package as shall be mutually agreed.

		Restricted Payments. The Borrower shall not, nor shall it permit any of its subsidiaries to, pay any dividends or distributions on, or redemptions of, the Borrower’s or such subsidiary’s equity, except:

		1. restricted payments to pay cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for equity interests of the Borrower;

		2. restricted payments consisting of the cashless exercise of options and warrants of the equity interests of Borrower or any of its subsidiaries;

		3. (i) restricted payments by the Borrower to (i) purchase capital stock from present or former officers, directors, employees or consultants of the Borrower or any of its subsidiaries upon the death, disability or

B-20


		termination of employment or services of such individual, and (ii) redeem or otherwise acquire capital stock from the employees, officers, directors and consultants of the Borrower or any of its subsidiaries by net exercise, net withholding or otherwise, pursuant to the terms of any employee stock option, incentive stock or other equity-based plan or arrangement (provided, that the aggregate amount of payments under clauses (i) and (ii) shall not exceed $5.0 million in any fiscal year of the Borrower and $10.0 million over the life of the Credit Facilities plus, in each case, any proceeds received by the Borrower after the Closing Date in connection with the issuance of common equity that are used for the purposes described in this clause 3);

		4. exceptions for restricted payments by subsidiaries shall be consistent with the Existing Credit Agreement with such changes as may be mutually agreed;

		5. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is equal to or less than 4.00:1.00, other restricted payments out of the Available Amount Basket;

		6. so long as no event of default has occurred and is continuing and the Consolidated Net Leverage Ratio is equal to or less than 3.00:1.00, other restricted payments; and

		7. other customary exceptions and exceptions consistent with the Documentation Principles.

		Payments on/modifications to Subordinated or Junior Lien Debt. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly: (a) make payments in cash on any permitted subordinated or junior lien debt (other than (i) regularly scheduled payments of principal and interest, mandatory offers to repay or mandatory prepayments of principal, premium and interest, and payment of fees, expenses and indemnification obligations, (ii) refinancings, conversions or exchanges of such debt for like or junior debt, subject to conditions to be agreed, (iii) payments with, or conversions to, equity (other than disqualified stock), or (iv) other payments of such debt to be mutually agreed upon); provided that notwithstanding the foregoing, so long as no event of default has occurred and is continuing, repayments or redemptions of other debt shall be permitted out of the Available Amount Basket and shall be permitted if restricted payments are permitted under clause 5 under the caption

B-21


		“Restricted Payments” above; or (b) modify the terms of any permitted subordinated or junior lien debt to the extent such modification is materially adverse to the Lenders (it being understood that the foregoing limitation shall not otherwise prohibit debt refinancing or replacing or in exchange for the foregoing debt subject to limitations to be agreed upon).

		Sale and Leaseback Transactions. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, enter into any sale and leaseback transaction, except customary exceptions and exceptions consistent with the Documentation Principles.

		Transactions with Affiliates. The Borrower shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any affiliate of the Borrower on terms that are materially less favorable to the Borrower or such subsidiary, as the case may be, than those that might be obtained at the time from a person who is not such an affiliate; provided that the foregoing restriction shall not apply to:

		1. transactions among the Borrower and the Guarantors (collectively, *“Loan Parties”*);

		2. transactions among non-Loan Parties;

		3. transactions expressly permitted under other provisions of the negative covenants; and

		4. other customary exceptions and exceptions consistent with the Documentation Principles.

		Negative Pledge Restrictions. The Borrower shall not, nor shall any of its subsidiaries enter into any agreement prohibiting the creation or assumption of any lien upon any of its properties or assets to secure the obligations under the Credit Facilities or restricting distributions by subsidiaries, subject to customary exceptions and exceptions consistent with the Documentation Principles.

		Nature of Business. The Borrower shall not, nor shall it permit any of its subsidiaries to, engage in any business other than the businesses engaged in on the Closing Date and similar, corollary, related, incidental, ancillary or complementary businesses.

		Fiscal Year. The Borrower shall not change its fiscal year end.

		Fundamental Changes. The Borrower shall not, nor shall it permit any of its subsidiaries to, enter into any transaction of

B-22


		merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) or sell, transfer or otherwise dispose of all or substantially all of its assets, subject to customary exceptions and exceptions consistent with the Documentation Principles.

		Amendment and Waivers of Organizational Documents. The Borrower shall not, nor shall it permit any Loan Party or any subsidiary whose equity is pledged as part of the Collateral to amend, waive or otherwise modify any provision of such person’s organizational documents if such amendment, waiver or modification could reasonably be expected to have a Material Adverse Effect.

		*“Available Amount Basket”* shall mean a cumulative amount equal to (a) an amount equal to $100 million, plus (b) the retained portion of Excess Cash Flow (i.e., Excess Cash Flow as defined for purposes of the Excess Cash Flow mandatory prepayment requirements set forth herein and not otherwise applied to mandatorily prepay the Term B Loans; provided that the retained portion of Excess Cash Flow for any fiscal year shall not be less than zero), plus (c) the cash proceeds of new public or private equity issuances of the Borrower or any parent of the Borrower (other than disqualified stock, any equity contributed as a Specified Equity Contribution (as defined below) to the extent the proceeds thereof are contributed to the Borrower as qualified equity and equity used to incur Equity Proceeds Indebtedness (to be defined as mutually agreed)), plus (d) capital contributions to the Borrower made in cash or cash equivalents (other than in respect of disqualified stock, any equity contributed as a Specified Equity Contribution and any capital contributions used to incur Equity Proceeds Indebtedness), plus (e) returns, profits, distributions and similar amounts received in cash or cash equivalents by the Borrower and its subsidiaries on or proceeds of dispositions of investments made using the Available Amount Basket, plus (f) the aggregate amount of Indebtedness (other than Indebtedness owing to the Borrower or any of its subsidiaries) that has been converted into or exchanged for equity interests (other than disqualified stock) of the Borrower, plus (g) any mandatory prepayment amount declined by a Declining Lender.

		The Available Amount Basket may be used for investments, restricted payments and the prepayment, repurchase or redemption of junior capital/subordinated debt or other Indebtedness as provided above.

Financial Covenants:		Consistent with the Documentation Principles, the Facilities Documentation will contain the following financial covenants (the *“Financial Covenants”) which will be calculated on a pro forma basis* with regard to the Borrower and its

B-23


		subsidiaries on a consolidated basis, solely for the benefit of the Revolving Lenders and the Lenders under the Term Loan A Facility:

		(a) Maintenance of a maximum Consolidated Net Leverage Ratio of no greater than (i) during the period from the Closing Date through the end of the fiscal quarter ending after the second year anniversary of the Closing Date, 5.00:1.00, (ii) during the period commencing after the end of the period described in clause (i) through the end of the fiscal quarter ending after the third anniversary of the Closing Date, 4.50:1.00 and (iii) thereafter, 4.00:1.00, which ratio will be applicable only to the Revolving Credit Facility and the Term Loan A Facility and will be tested, commencing with the first full fiscal quarter after the Closing Date provided that the Borrower shall be permitted one time at the Borrower’s election (upon written notice to the Administrative Agent) during the term of the Credit Facilities, solely in connection with a permitted acquisition with cash (or cash-equivalent) consideration in excess of $50,000,000, to increase the maximum Consolidated Net Leverage levels set forth above by 0.50x for the next four test periods following the closing date of such acquisition (stepping down by 0.25x on an annual basis following the completion of such four test periods (to no less than 4.00:1.00)); provided, further, that in no event shall such Consolidated Leverage Ratio level be set above 5.00:1.00.

		(b) Maintenance of a minimum Fixed Charge Coverage Ratio (as defined below) of no less than 1.25:1.00, which ratio will be applicable only to the Revolving Credit Facility and the Term Loan A Facility and will be tested, commencing with the first full fiscal quarter after the Closing Date.

Financial Definitions:		*“Consolidated EBITDA”* means, for any period, for the Borrower and its subsidiaries on a consolidated basis, without duplication, an amount equal to Consolidated Net Income (to be defined in a manner consistent with Documentation Principles) for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans) for such period, (ii) the provision for federal, state, local and foreign income taxes payable by the Borrower and its subsidiaries for such period, (iii) depreciation and amortization expense, (iv) non-cash stock-based

B-24


		compensation expense for such period, (v) all extraordinary, unusual or nonrecurring losses, expenses and charges, (vi) any restructuring charges and reserves and any losses on related sales of personal and real property, including any charges and losses incurred in connection with the closure of any operational facilities of the Borrower and its subsidiaries for such period, (vii) effects of adjustments in any line item in the Borrower’s consolidated financial statements resulting from the application of purchase accounting (including any step-ups with respect to re-valuing assets and liabilities) in relation to the Transactions and any investment, acquisition, merger or consolidation or the depreciation, amortization or write-off of any amounts thereof, (viii) customary costs and expenses incurred in connection with the Transactions, (ix) all customary costs and expenses incurred or paid in connection with permitted investments (including Permitted Acquisitions) or permitted dispositions whether or not such permitted investment or permitted disposition is consummated or occurred or occurs prior to or after the date hereof, including, without limitation, the Acquisition, (x) all customary cost sand expenses incurred in connection with the issuance, prepayment or amendment or refinancing of permitted Indebtedness or issuance of capital stock, including, without limitation, the Acquisition, (xi) other expenses of the Borrower and its subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period and (xii) the aggregate net loss on the disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business, and less (b) the following to the extent added in calculating such Consolidated Net Income (A) all interest income for such period, (B) all income tax benefits included in Consolidated Net Income for such period, (C) non-cash purchase accounting adjustments, (D) the aggregate net gain from the disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business, all as determined on a consolidated basis and (E) all non-cash items increasing Consolidated Net Income which do not represent a cash item in such period or any future period.

		*“Consolidated Fixed Charge Coverage Ratio”* means, for any period of four consecutive fiscal quarters, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges (as defined below) for such period.

		*“Consolidated Fixed Charges”* means, for any period, the sum (without duplication) of (a) Consolidated Interest Expense (to be defined in a manner consistent with the Documentation Principles) for such period, (b) scheduled amortization payments made during such period on account of

B-25


		principal of Indebtedness of the Borrower or any of its subsidiaries (including scheduled amortization principal payments in respect of the Term Loans but excluding the Revolving Loans), (c) income taxes paid in cash during such period, (d) Capital Expenditures (to be defined in a manner consistent with the Documentation Principles) paid in cash during such period (excluding the principal amount of Indebtedness incurred during such period to finance such expenditures, but including any repayments of any Indebtedness incurred during such period or any prior period to finance such expenditures), and (e) restricted payments pursuant to clauses (3) and (5) under the caption “Restricted Payments” paid in cash during such period.

		*“Consolidated Funded Debt”* shall be defined in a manner consistent with the Documentation Principles.

		*“Consolidated Net Leverage Ratio”* means at any date, the ratio of (a) the total of (i) Consolidated Funded Debt as of such date minus (ii) unrestricted cash and cash equivalents of the Borrower and its subsidiaries as of such date up to $300 million to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of any fiscal quarter, the most recently completed fiscal quarter for which financial statements are required to have been delivered to the Administrative Agent).

		*“Indebtedness”* shall be defined in a manner consistent with the Documentation Principles.

		*“Material Acquisition”* means the Acquisition and any other acquisition of property or series of related acquisitions of property that (1) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the equity interests of a person and (2) involves the payment of consideration by the Borrower and its subsidiaries in excess of $20,000,000.

		*“Material Disposition”* means any disposition of property or series of related dispositions of property that yields gross proceeds to the Borrower or any of its subsidiaries in excess of $20,000,000.

		*“pro forma basis”* or *“pro forma effect”* means, with respect to compliance with any test or covenant, compliance with such test or covenant after giving effect to (i) any Material Acquisition, (ii) any incurrence or repayment of Indebtedness or (iii) any Material Disposition (including (a) pro forma adjustments arising out of events which are directly attributable to any proposed Material Acquisition, any incurrence or repayment of Indebtedness or any Material Disposition, are factually supportable and are expected to

B-26


		have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the staff of the Securities and Exchange Commission, (b) pro forma adjustments determined in good faith by the Borrower that are consented to by the Administrative Agent (such consent not to be unreasonably withheld) arising out of operating and other expense reductions attributable to such transaction being given pro forma effect that (1) have been realized or (2) will be implemented within 18 months following such transaction and are supportable and quantifiable and, in each case, including (A) reduction in personnel expenses, (B) reduction of costs related to administrative functions, (C) reduction of costs related to leased or owned properties and (D) reductions from the consolidation of operations and streamlining of corporate overhead, and (c) such other adjustments as determined in good faith by the Borrower that are consented to by the Administrative Agent (such consent not to be unreasonably withheld), in each case as certified by an officer of the Borrower) using, for purposes of determining such compliance, the historical financial statements of all entities or assets so acquired and the consolidated financial statements of the Borrower and its subsidiaries and assuming that all Material Acquisitions that have been consummated during the period, any Material Disposition and any Indebtedness or other liabilities repaid in connection therewith had been consummated and incurred or repaid at the beginning of such period (and assuming that such Indebtedness to be incurred bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the interest rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination).

Events of Default:		Limited to the following (except as otherwise expressly indicated, to be applicable to the Loan Parties): failure to pay any principal when due; non-payment of interest, fees or other amounts after a five business day grace period; default under any covenant or agreement in the Facilities Documentation (subject (i) in the case of certain affirmative covenants, to a 30 day grace period or, in the case of certain other affirmative covenants, a shorter grace period and (ii) with respect to the Financial Covenants, a breach shall only result in an event of default with respect to the Term Loan B Facility when the Revolving Lenders and Lenders under the Term Loan A Facility have terminated the commitments under the Revolving Credit Facility and accelerated any Revolving Loans and Term A Loans then outstanding); actual or asserted invalidity of a material Guarantor’s guaranty or material security interest; inaccuracy of representations or warranties

B-27


		in any material respect; cross-default and cross-acceleration to other Indebtedness in excess of $75 million, insolvency or bankruptcy of the Borrower or its material subsidiaries (with a 60 day grace period for involuntary events); ERISA events with respect to the Borrower and its subsidiaries that could reasonably be expected to result in a Material Adverse Effect; change of control (to be defined in a mutually satisfactory manner which shall be no less favorable to the Borrower than the definition in the Existing Credit Agreement); and monetary judgments in respect of the Borrower and its subsidiaries (not vacated, discharged, stayed or bonded pending appeal within 30 days) in an amount in excess of $75 million (to the extent not covered by insurance).

Voting:		Amendments and waivers of the Facilities Documentation will require the approval of Lenders holding more than 50% of the aggregate amount of the loans and commitments under the Credit Facilities (the *“Required Lenders”); provided that (a) the consent of each Lender directly and adversely affected thereby shall be required with respect to (i) increases in or extensions of the commitment of such Lender, (ii) reductions of principal, interest (other than a waiver of default interest) or fees (it being understood that an amendment to the Financial Covenants or defined terms used in the Financial Covenants shall not constitute a reduction in the rate of interest or fees), (iii) extensions of any scheduled amortization payments, the date for payment of any interest or fees or the final maturity and (iv) changes to the pro rata* sharing provisions (with exceptions for certain transactions to be agreed, including amend and extend transactions)); provided that no amendment or waiver of a required mandatory prepayment or the mandatory prepayment provisions or related definitions shall constitute an amendment or waiver to which this clause (a) is applicable, (b) the consent of 100% of the Lenders will be required with respect to (i) modifications to any of the voting percentages and (ii) releases of all or substantially all Guarantors or releases of all or substantially all of the Collateral (other than in connection with any sale of Collateral or of the relevant Guarantor permitted by the Facilities Documentation), (c) the consent of the Administrative Agent shall be required for any amendment that modifies agency specific provisions, (d) the consent of the Issuing Banks shall be required for any amendment that modifies letter of credit specific provisions, (e) the consent of the Swing Line Lenders shall be required for any amendment that modifies swingline specific provisions, and (f) any amendment or waiver that by its terms affects the rights or duties of Lenders holding loans or commitments of a particular class (but not the Lenders holding loans or commitments of any other class) will require only the requisite percentage in interest of the affected class of Lenders that would be required to consent thereto if such class of Lenders were the only class of Lenders.

B-28



		Notwithstanding the foregoing, amendments and waivers of the Financial Covenants only require the approval of Lenders holding more than 50% of the sum of the aggregate amount of the commitments under the Revolving Facility (other than any Defaulting Lender) and the aggregate amount of the Term Loan A Facility.

		Defaulting Lenders shall not be included in the calculation of Required Lenders or other requisite Lenders; provided that, subject to the Borrower’s right to replace Defaulting Lenders described under the caption “Replacement of Lenders” below, Defaulting Lenders shall be included therein with respect to (x) any amendment that would disproportionately affect the obligation of the Borrower to make payment of the loans or commitments under the Credit Facilities of such Defaulting Lender as compared to other Lenders holding the same class of loans or commitments and (y) any amendment relating to (a) increases in the commitment of such Defaulting Lender, (b) reductions of principal, interest, fees or premium applicable to the loans or commitments of such Defaulting Lender, (c) extensions of final maturity or the due date of any amortization, interest, fee or premium payment applicable to the loans or commitments of such Defaulting Lender, and (d) the definition of Required Lenders.

		The Facilities Documentation will permit amendments thereof without the approval or consent of the Lenders to effect a permitted “repricing transaction” (i.e., a transaction in which any tranche of Term Loans is refinanced with a replacement tranche of term loans, or is modified with the effect of, bearing a lower rate of interest) other than any Lender holding Term Loans subject to such “repricing transaction” that will continue as a Lender in respect of the repriced tranche of Term Loans or modified Term Loans.

		The Facilities Documentation will contain customary “amend and extend” provisions (on terms to be mutually agreed by the Administrative Agent and the Borrower) pursuant to which the Borrower may extend commitments and/or outstandings pursuant to one or more tranches with only the consent of the respective extending Lenders; provided that it is understood that no existing Lender will have any obligation to commit to any such extension.

		In addition, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error, omission or inconsistency of a technical nature in the Facilities Documentation, then the Administrative Agent and the Borrower shall be permitted to amend such provision without any further action or consent of any other party.

B-29


Cost and Yield Protection:		The Facilities Documentation will contain customary provisions protecting the Lenders in the event of prepayment or failure to borrow (funding indemnity), unavailability of funding, capital adequacy requirements and increased costs due to changes in law or regulation after the date of the Credit Facilities or, if later, the date on which the applicable Lender becomes a Lender; provided that a Lender shall not be entitled to submit a claim for compensation based upon a change in law or regulation unless it shall have determined that the making of such claim is consistent with its general practices under similar circumstances in respect of similarly situated borrowers with credit facilities entitling it to make such claims (it being agreed that no Lender shall be required to disclose any confidential or proprietary information in connection with such determination or the making of such claim). The obligation of the Borrower and the Guarantors to gross up for and/or to indemnify Lenders for taxes imposed on payments will be subject to customary mitigation requirements and other exceptions, including the requirement to provide applicable tax-related documentation, it being understood that the gross-up obligations shall not apply to withholding taxes imposed by Sections 1471 through 1474 of the Internal Revenue Code (and any amended or successor provisions to the extent substantially comparable thereto) and any regulations promulgated thereunder or guidance issued pursuant thereto.

		Customary protections for increased costs imposed as a result of the Dodd-Frank Act or Basel III shall be included subject to the limitation in the proviso of the first sentence of the immediately preceding paragraph.

Assignments and Participations:		After the Closing Date, the Lenders will be permitted to assign loans and/or commitments under the Term Facilities with the consent of the Borrower and the Administrative Agent (in each case, not to be unreasonably withheld, delayed or conditioned) and loans and commitments under the Revolving Credit Facility with the consent of the Borrower, the Swingline Lender, the Issuing Banks and the Administrative Agent (in each case not to be unreasonably withheld or delayed); provided that (i) no consent of the Borrower shall be required (A) with respect to the Term Facilities, if such assignment is made to another Lender or an affiliate or approved fund of such Lender, (B) with respect to the Revolving Credit Facility, if such assignment is made to another Revolving Lender or an affiliate or approved fund of such Revolving Lender or (C) after the occurrence and during the continuance of an event of default, (ii) the Borrower’s consent shall be deemed to have been given if the Borrower

B-30


		has not responded within ten business days of an assignment request made in writing and (iii) no consent of the Administrative Agent shall be required with respect to any assignment if such assignment is an assignment to another Lender, an affiliate of a Lender or an approved fund of a Lender; provided, further, that no assignments shall be made to any Disqualified Institutions.

		Each assignment (other than to another Lender, an affiliate of a Lender or an approved fund) will be in an amount of an integral multiple of $1,000,000 in the case of the Term Facilities and a minimum amount of $5,000,000 in the case of the Revolving Credit Facility (or lesser amounts, if agreed between the Borrower and the Administrative Agent) or, if less, all of such Lender’s remaining loans and commitments of the applicable class. Assignments will be by novation and will not be required to be pro rata among the Credit Facilities.

		The Lenders will be permitted to sell participations in loans without restriction in accordance with applicable law and consistent with the Documentation Principles. Voting rights of participants shall be limited to matters set forth under the caption “Voting” with respect to which the unanimous vote of all Lenders (or all directly and adversely affected Lenders, if the participant is directly and adversely affected) would be required.

		Subject to the provisions below, non-pro rata distributions will be permitted in connection with loan buy-back programs on terms to be mutually agreed.

		Assignments of Term Loans (and loans under any Incremental Term Facilities) to, and purchases by, the Borrower and its subsidiaries will be permitted without any consent solely through Dutch auctions open to all applicable Lenders on a pro rata basis in accordance with customary procedures to be mutually agreed upon, so long as (i) no event of default has occurred and is continuing, (ii) the loans purchased are immediately cancelled and (iii) no proceeds from any Revolving Loan are used to fund such assignments.

Expenses and Indemnification:		If the Closing Date occurs, the Borrower shall pay all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent and, in the case of clause (x) below, Morgan Stanley and, in the case of clause (y) below, the Commitment Parties (in each case, without duplication and promptly after a written demand therefor, together with backup documentation supporting such reimbursement request, except with respect to reimbursements payable on the Closing Date) associated with (x) the preparation, execution and delivery, amendment, modification, waiver and/or (y) enforcement of the Facilities Documentation (including, in

B-31


		any case, the reasonable and documented legal fees of a single firm of counsel (which shall be the counsel identified herein until the Closing Date) (and in the case of any actual or perceived conflict of interests, one additional counsel for the affected Lender(s) taken as a whole), and, if necessary, a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions)).

		The Borrower will indemnify the Administrative Agent, the Commitment Parties, the Lenders and their affiliates (without duplication) and the officers, directors, employees, advisors, agents, controlling persons, equityholders, partners, members and other representatives and their respective successors and permitted assigns of each of the foregoing, from and against any and all losses, claims, damages, liabilities and reasonable and documented out-of-pocket fees and expenses (limited to reasonable and documented legal fees of a single firm of counsel for all indemnified parties, taken as a whole, and, if necessary, one firm of local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all indemnified parties taken as a whole (and, in the case of an actual or perceived conflict of interest, where the indemnified person affected by such conflict informs the Borrower of such conflict and thereafter retains its own counsel, of another firm of counsel for each group of affected indemnified persons similarly situated, taken as a whole)) of any such indemnified person arising out of or relating to any claim or any litigation or other proceeding (regardless of whether such indemnified person is a party thereto and whether or not such proceedings are brought by the Borrower, its equityholders, its affiliates, creditors or any other third person) that relates to the Transactions, including the financing contemplated hereby; provided that no indemnified person will be indemnified for any loss, claim, damage, liability, cost or expense to the extent (a) it has been determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from (i) the gross negligence, bad faith or willful misconduct of such indemnified person or any of its affiliates or controlling persons or any of the equityholders, officers, directors, employees, partners, members, agents, advisors or other representatives of any of the foregoing or (ii) a material breach of the obligations of such indemnified person or any of its affiliates under the Facilities Documentation or (b) any proceeding between and among indemnified persons that do not involve an act or omission by the Borrower or its subsidiaries (other than claims against any Commitment Party in its capacity or in fulfilling its role as the agent or arranger or any other similar role under the Credit Facilities (excluding its role as a Lender)).

B-32


Replacement of Lenders:		The Borrower or the Administrative Agent shall, subject to usual and customary conditions, have the right to replace a Lender or, so long as no event of default has occurred and is continuing, prepay such Lender’s outstanding Term Loans in full on a non-pro rata basis without premium or penalty (a) in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby so long as the consent of a majority of the Lenders or of the Lenders affected thereby has been obtained, (b) if such Lender asserts a claim for any funding protection, whether for increased costs, taxes, required indemnity payments or otherwise, and (c) if such Lender becomes a Defaulting Lender.

Governing Law and Forum:		New York.

Counsel to the Administrative Agent:		Shearman & Sterling LLP

B-33

ANNEX I to

EXHIBIT B


Interest Rates:		At the option of the Borrower, Adjusted LIBOR plus the Applicable Margin or U.S. ABR plus the Applicable Margin.

		*“Applicable Margin”* shall mean (x) in respect of the Revolving Credit Facility and the Term Loan A Facility (i) if the Consolidated Net Leverage Ratio is greater than, or equal to, 4.00:1.00, 125 bps in the case of ABR loans and 225 bps in the case of LIBOR loans, (ii) if the Consolidated Net Leverage Ratio is less than 4.00:1.00 but greater than, or equal to, 2.00:1.00, 100 bps in the case of ABR loans and 200 bps in the case of LIBOR loans and (iii) if the Consolidated Net Leverage Ratio is less than 2.00:1.00, 75 bps in the case of ABR loans and 175 bps in the case of LIBOR loans (provided that clause (x)(i) shall apply until delivery by the Borrower to the Administrative Agent of financial statements for the first full fiscal quarter completed after the Closing Date) and (y) in respect of the Term Loan B Facility, 275 bps in the case of ABR loans and 375 bps in the case of LIBOR loans.

		All Swingline Loans will be ABR loans.

		With respect to the Term Loan B Facility, there shall be a minimum Adjusted LIBOR (i.e. Adjusted LIBOR prior to adding any applicable interest rate margins thereto) requirement of 0.75% per annum. With respect to the Revolving Credit Facility and the Term Loan A Facility, there shall be a minimum Adjusted LIBOR requirement (i.e. Adjusted LIBOR prior to adding any applicable interest rate margins thereto) of 0.00% per annum.

		The Borrower may elect interest periods of one, two, three or six months (or, if made available by all relevant Lenders, 12 months or a shorter period) for Adjusted LIBOR borrowings.

		Interest on any Term Loan and all fees will be payable in arrears on the basis of a 360-day year (calculated on the basis of the actual number of days elapsed); provided that interest on ABR loans, when based on the prime rate, will be payable in arrears on the basis of a 365-day year (or a 366-day year in a leap year), in each case calculated on the basis of the actual number of days elapsed. Interest will be payable on Adjusted LIBOR loans on the last day of the applicable interest period (and at the end of each three months, in the case of interest periods longer than three months) and upon prepayment, and on ABR loans quarterly and upon prepayment.

Adjusted LIBOR:		*“Adjusted LIBOR”* shall mean the London interbank offered rates for dollars, adjusted for statutory reserve requirements.

Annex I-B-1



ABR:		*“ABR”* shall mean the Alternate Base Rate, which shall be the highest of (i) the prime commercial lending rate published by the Wall Street Journal as the “prime rate”, (ii) the Federal Funds Effective Rate plus 1/2 of 1.0% and (iii) the one-month Adjusted LIBOR plus 1.0% per annum.

Letter of Credit Fee:		A per annum fee equal to the spread over Adjusted LIBOR under the Revolving Credit Facility will accrue on the aggregate face amount of outstanding letters of credit under the Revolving Credit Facility, payable in arrears at the end of each quarter and upon the termination of the respective letter of credit, in each case for the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Revolving Lenders pro rata in accordance with the amount of each such Revolving Lender’s Revolving Credit Facility commitment, with exceptions for Defaulting Lenders. In addition, the Borrower shall pay to each Issuing Bank, for its own account, (a) a fronting fee equal to 0.125% upon the aggregate face amount of outstanding letters of credit, payable in arrears at the end of each quarter and upon the termination of the Revolving Credit Facility, calculated based upon the actual number of days elapsed over a 360-day year and (b) customary issuance and administration fees.

Commitment Fees:		The Borrower shall pay a commitment fee of (i) if the Consolidated Net Leverage Ratio is greater than, or equal to, 4.00:1.00, 35 bps per annum, (ii) if the Consolidated Net Leverage Ratio is less than 4.00:1.00 but greater than, or equal to, 2.00:1.00, 30 bps per annum and (iii) if the Consolidated Net Leverage Ratio is less than 2.00:1.00, 25 bps per annum, in each case, calculated on the average daily unused portion of the Revolving Credit Facility (provided that clause (i) shall apply until delivery by the Borrower to the Administrative Agent of financial statements for the first full fiscal quarter completed after the Closing Date), payable quarterly in arrears commencing with the last business day of the first full fiscal quarter ending after Closing Date, calculated based upon the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Revolving Lenders (other than the Swingline Lender in its capacity as such) pro rata in accordance with the amount of each such Revolving Lender’s Revolving Credit Facility commitment, with exceptions for Defaulting Lenders.

Annex I-B-2

EXHIBIT C

Project Forest

Summary of Additional Conditions²

The initial borrowings under the Credit Facilities shall be subject to the following conditions (subject in all respects to the Certain Funds Provisions):

All capitalized terms used but not defined herein shall have the meanings given to them in the Commitment Letter to which this Term Sheet is attached, including the Exhibits thereto. In the event any such capitalized term is subject to multiple or differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used.

C-1

understood that the Acquisition Agreement executed by the Borrower on October 30, 2015 that we received is satisfactory and (e) any amendment, waiver or other modification to the definition of “Company Material Adverse Effect” set forth in the Acquisition Agreement or to the “Xerox” provisions in the Acquisition Agreement without the prior written consent of the Lead Arranger (not to be unreasonably withheld or delayed) shall be deemed to be materially adverse to the interests of the Lenders and the Lead Arranger.

3.	The Refinancing shall have been consummated substantially concurrently with the funding of the Credit Facilities.

5.	In the case of a Negotiated Transaction, since the date of the Acquisition Agreement, there shall not have occurred a “Company Material Adverse Effect” (as defined in the Acquisition Agreement).

C-2

organizational documents, customary evidence of authorization and good standing certificates in jurisdictions of formation/organization, in each case of the Borrower and the Guarantors (to the extent applicable) and a solvency certificate in the form set forth in Annex I to this Exhibit C, signed by the Chief Financial Officer (or similar officer) of the Borrower as of the Closing Date and after giving effect to the Transactions with respect to the Borrower and its subsidiaries, on a consolidated basis.

10.

11.

12.

C-3

ANNEX I to

EXHIBIT C

Form of Solvency Certificate

SOLVENCY CERTIFICATE

THE BORROWER

AND ITS SUBSIDIARIES

The fair value of the assets of the Borrower and its subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their debts and liabilities, subordinated, contingent or otherwise;

The Borrower and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured; and

The Borrower and its subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which they have unreasonably small capital.

[Signature Page Follows]

Annex I-C-1


MICROSEMI CORPORATION

By:
Name: Title:

Annex I-C-2

Exhibit (e)(5)

Execution Version

MORGAN STANLEY SENIOR FUNDING, INC.

1585 Broadway

New York, NY 10036

CONFIDENTIAL

November 17, 2015

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”)

1251 Avenue of the Americas

New York, New York 10020

Deutsche Bank Securities Inc. (“DBSI”)

Deutsche Bank AG New York Branch (“DBNY”)

60 Wall Street

New York, NY 10005

Acknowledgment and Consent Letter

Ladies and Gentlemen:

Reference is hereby made to (i) the Joinder Agreement to Commitment Letter dated as of November 5, 2015 from Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”) addressed to Microsemi Corporation, a Delaware corporation (“Microsemi”), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”), Deutsche Bank Securities Inc. (“DBSI”) and Deutsche Bank AG New York Branch (together with BTMU and DBSI, “you”) (the “Joinder Agreement”) and (ii) the Second Amended and Restated Commitment Letter (the “Second Amended and Restated Commitment Letter”) and the Second Amended and Restated Fee Letter (the “Second Amended and Restated Fee Letter”), each dated as of November 17, 2015 from Morgan Stanley Senior Funding, Inc. (“Morgan Stanley”) addressed to Microsemi. Capitalized terms used in this letter but not defined herein shall have the meanings assigned to such terms in the Second Amended and Restated Commitment Letter.

You hereby (i) acknowledge that you have received a copy of the Second Amended and Restated Commitment Letter and the Second Amended and Restated Fee Letter and (ii) reaffirm your commitments and agreements as set forth in the Joinder Agreement and (iii) confirm that, unless the context otherwise requires, each reference to the “Commitment Letter” or the “Fee Letter” in the Joinder Agreement shall be deemed to be a reference to the Second Amended and Restated Commitment Letter or the Second Amended and Restated Fee Letter, as applicable.

This letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this letter by facsimile transmission or other electronic transmission (i.e., a “pdf” or “tiff”) shall be effective as delivery of a manually executed counterpart hereof.

SECTION 10 OF THE SECOND AMENDED AND RESTATED COMMITMENT LETTER IS HEREBY INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS, AND SHALL APPLY HEREUNDER AS IF FULLY SET FORTH HEREIN.

Each party hereto agrees to maintain the confidentiality of this letter and the terms hereof, subject to the applicable confidentiality and disclosure provisions set forth in the Second Amended and Restated Commitment Letter.

If you are in agreement with the foregoing, please sign and return to Morgan Stanley the enclosed copy of this letter at your earliest convenience.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


Very truly yours,

MORGAN STANLEY SENIOR FUNDING, INC.

By:
		Name:
		Title:

[Acknowledgment and Consent Letter]

ACCEPTED AND AGREED:


THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Additional Arranger and Initial Lender

By:		/s/ Timothy P. Dilworth
Name:		Timothy P. Dilworth
Title:		Managing Director

[Acknowledgment and Consent Letter]

ACCEPTED AND AGREED:


DEUTSCHE BANK SECURITIES INC., as Additional Arranger

By:		/s/ Celine Catherin
Name:		Celine Catherin
Title:		Director


By:		/s/ Sandeep DesaI
Name:		Sandeep DesaI
Title:		Managing Director


DEUTSCHE BANK AG NEW YORK BRANCH, as Initial Lender

By:		/s/ Celine Catherin
Name:		Celine Catherin
Title:		Director


By:		/s/ Sandeep DesaI
Name:		Sandeep DesaI
Title:		Managing Director

[Acknowledgment and Consent Letter]

PMC Sierra (NASDAQ:PMCS)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024

Click aqui para mais gráficos PMC Sierra.

PMC Sierra (NASDAQ:PMCS)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024

Tendências Agora

Rankings

Dados

Notícias

Ferramentas

Mercados

Comunidade

Hot Features

Follow Feed

Fluxo de Opções

Monitor

PMCS (MM)

Notícias Pmc Sierra Inc

Seu Histórico Recente

Empresa

Negócios

Popular

Obter o aplicativo