Re: Commitment Letter for Acquisition of Skullcandy, Inc.Commitment Letter • September 1st, 2016 • MRSL Merger Co. • Household audio & video equipment • Delaware
Reference is made to the Agreement and Plan of Merger, dated as of the date hereof (including all schedules, exhibits and annexes thereto, the “Merger Agreement”), by and among MRSK Hold Co., a Delaware corporation (“Parent”), MRSL Merger Co., a Delaware corporation and wholly-owned subsidiary of Parent (“Acquisition Sub”), and Skullcandy, Inc., a Delaware corporation (the “Company”), pursuant to which Acquisition Sub will commence a tender offer for the Company’s capital stock (the “Offer”), followed promptly by a merger of Acquisition Sub with and into the Company pursuant to Section 251(h) of the Delaware General Corporation Law (the “Merger”). This commitment letter is being delivered to Parent to induce the Company to enter into the Merger Agreement. Capitalized terms used but not defined herein have the meanings ascribed to them in the Merger Agreement.
SPONSOR GUARANTEE AUGUST 23, 2016Sponsor Guarantee • September 1st, 2016 • MRSL Merger Co. • Household audio & video equipment • Delaware
This Sponsor Guarantee (this “Guarantee”) is made and entered into as of the date set forth above by Mill Road Capital II, L.P., a Delaware limited partnership (the “Guarantor”), in favor and for the benefit of Skullcandy, Inc., a Delaware corporation (the “Company”). Capitalized terms used in this Guarantee but not otherwise defined herein have the respective meanings given to such terms in that certain Agreement and Plan of Merger, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Company, MRSK Hold Co., a Delaware corporation (“Parent”), and MRSL Merger Co., a Delaware corporation (“Acquisition Sub”).
Re: First Amendment to Nondisclosure AgreementNondisclosure Agreement • September 1st, 2016 • MRSL Merger Co. • Household audio & video equipment
Reference is made to (i) that certain Confidentiality Agreement, by and between Mill Road Capital Management LLC (“you”) and Skullcandy, Inc. (the “Company”), dated June 29, 2016 (the “Nondisclosure Agreement”), (ii) that certain Destruction of Evaluation Material Letter, from the Company to you, dated July 24, 2016 (the “Destruction Letter”) and (iii) that certain Agreement and Plan of Merger, by and between Incipio, LLC, Powder Merger Sub, Inc. and the Company (the “Incipio Merger Agreement”). Unless otherwise stated, capitalized terms used herein and not defined shall have the meanings given to them in the Nondisclosure Agreement.
Clean Team Agreement June 30, 2016Clean Team Agreement • September 1st, 2016 • MRSL Merger Co. • Household audio & video equipment • New York
In connection with the evaluation of a possible business combination between Mill Road Capital Management LLC (“Buyer”) and Skullcandy, Inc. (the “Company”), Buyer and the Company entered into a Confidentiality Agreement, dated as of June 29, 2016 (the “Confidentiality Agreement”). Capitalized terms used in this letter that are not otherwise defined shall have the meanings set forth in that Confidentiality Agreement.
June 29, 2016 PRIVATE & CONFIDENTIAL Greenwich, CT 06830 Attention: Thomas E. Lynch Re: Confidentiality Agreement Ladies and Gentlemen:Confidentiality Agreement • September 1st, 2016 • MRSL Merger Co. • Household audio & video equipment • New York
In connection with the consideration by Mill Road Capital Management LLC (“you”) of a possible negotiated transaction with (a “Possible Transaction”) Skullcandy, Inc. and/or its subsidiaries, affiliates or divisions (collectively, with such subsidiaries, affiliates and divisions, the “Company” and, together with you, the “Parties”), the Company is prepared to make available to you and your Representatives (as hereinafter defined) certain information concerning the business, financial condition, operations, assets and liabilities of the Company. As a condition to such information being furnished to you and your Representatives, you agree that you will, and will cause your Representatives to, treat the Evaluation Material (as hereinafter defined) in accordance with the provisions of this letter agreement and take or abstain from taking certain other actions as set forth herein. The term “affiliates” has the meaning given to it under the Securities Exchange Act of 1934, as amended (the “1
