Commitment Letter by and between Teligent, Inc. and Ares Management LLC

Second Lien Initial Term Loan Facility: To be fully drawn on the Closing Date. Amounts repaid or prepaid cannot be reborrowed.

Second Lien DDTL Facility A: To be drawn in no less than $10,000,000 increments, provided that the Company is in compliance with certain covenants to be mutually agreed upon under the Definitive Documentation, and subject to the conditions precedent set forth herein. The Company may only draw under the Second Lien DDTL Facility A on or prior to June 30, 2019 (the “Second Lien DDTL Facility A Expiration Date”). Amounts repaid or prepaid cannot be reborrowed.

Second Lien DDTL Facility B: To be drawn in no less than $2,500,000 increments, provided that the Company is in compliance with certain covenants to be mutually agreed upon under the Definitive Documentation, and subject to the conditions precedent set forth herein. The Company may only draw under the Second Lien DDTL Facility B until one year after the Closing Date (the “Second Lien DDTL Facility B Expiration Date”). Amounts repaid or prepaid cannot be reborrowed.

Second Lien Initial Term Loan Facility: The earlier to occur of (a) three (3) months prior to the maturity of the Company’s outstanding 2023 Convertible Notes and (b) five and a half years from the Closing Date.

Second Lien DDTL Facility A: Undrawn amounts of the Second Lien DDTL Facility A will terminate on the Second Lien DDTL Facility A Expiration Date. Drawn amounts of the Second Lien DDTL Facility A will mature at the same time as the Second Lien Initial Term Loan Facility.

Second Lien DDTL Facility B: Undrawn amounts of the Second Lien DDTL Facility B will terminate on the Second Lien DDTL Facility B Expiration Date. Drawn amounts of the Second Lien DDTL Facility B will mature at the same time as the Second Lien Initial Term Loan Facility.

Second Lien Initial Term Loan Facility: None prior to maturity.

Second Lien DDTL Facility A: None prior to maturity.

Second Lien DDTL Facility B: None prior to maturity.

First Lien Revolving Credit Facility: The First Lien Revolving Credit Facility will be used (a) on the Closing Date to refinance existing debt (other than the 2023 Convertible Notes (as hereinafter defined)), and to pay fees and expenses incurred in connection with the Transactions or the refinancing of such debt and paid on the Closing Date or as otherwise set forth in the Definitive Documentation and (b) thereafter for working capital and general corporate purposes of the Company and its subsidiaries.

Second Lien Initial Term Loan Facility: The Second Lien Initial Term Loan Facility will be used to refinance any existing debt (other than the 2023 Convertible Notes) of the Company, including the repurchase of a portion of the 2019 Convertible Notes (to be defined in the Definitive Documentation), and to pay fees and expenses incurred in connection with the Transactions, the refinancing of any existing debt or the repurchase of a portion of the 2019 Convertible Notes and paid on the Closing Date or as otherwise set forth in the Definitive Documentation.

Second Lien DDTL Facility A: The Second Lien DDTL Facility A will be used solely to finance the repurchase of the 2019 Convertible Notes and to pay fees and expenses incurred in connection with the Transactions or the repurchase of a portion of the 2019 Convertible Notes and paid on the date of funding thereof or as otherwise set forth in the Definitive Documentation.

Second Lien DDTL Facility B: The Second Lien DDTL Facility B will be used solely to finance the construction of the high speed injectable line at the Company’s Buena, New Jersey facility (the “Project”).

Base Rate and LIBOR Options: At the Company’s option, each loan under the Credit Facility will bear interest at a rate per annum equal to the Applicable Margin (as defined below), plus one of the following indexes: (a) LIBOR and (b) the Base Rate.

“LIBOR” shall be defined as the higher of (i) (A) the rate of interest which is identified and normally published by Bloomberg Professional Service Page BBAM 1 as the offered rate for loans in United States dollars for the applicable interest period under the caption British Bankers Association Eurodollar Rates as of 11:00 a.m. (London time), on the second full business day next preceding the first day of such interest period multiplied by (B) the Statutory Reserve Rate, and (ii) 1.00% per annum.

The “Statutory Reserve Rate” shall be defined as a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages that are in effect on that day (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, as prescribed by the Board of Governors of the Federal Reserve System of the United States (or any successor) and to which the Agents are subject, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D).

The “Base Rate” shall be defined as the highest of (i) the prime rate (as determined by reference to the Wall Street Journal), (ii) the federal funds rate plus 0.50%, (iii) the sum of LIBOR for an interest period of one month plus the excess of the LIBOR Applicable Margin over the Base Rate Applicable Margin and (iv) 2.00%

Applicable Margins: The “Applicable Margins” for the Credit Facility shall be as set forth below:

First Lien Revolving Credit Facility: LIBOR + 3.75%
Base Rate + 2.75%

Second Lien Initial Term Loan Facility: LIBOR + 8.75%
Base Rate + 7.75%

Second Lien DDTL Facility A: LIBOR + 8.75%
Base Rate + 7.75%

Second Lien DDTL Facility B: LIBOR + 8.75%
Base Rate + 7.75%

Interest periods for LIBOR loans shall be for one, two, three or six months, as selected by the Company. Subject to the terms below regarding PIK interest, interest on all LIBOR loans will be paid at the end of each interest period or, in the case of any interest period in excess of three months, on each date occurring at three-month intervals after the first day of such interest period and interest on all Base Rate loans will be paid quarterly on the last day of each calendar quarter.

Interest accruing in respect of the First Lien Revolving Credit Facility shall be payable in cash.

Until the PIK Termination Date (as defined below), interest accruing in respect of the Second Lien Credit Facilities shall, at the option of the Company, either be payable in cash or shall be payable in kind by being added to the principal balance of the term loans under the Second Lien Credit Facilities on each applicable interest payment date. The “PIK Termination Date” means the earliest to occur of (a) the second anniversary of the Closing Date and (b) the date upon which the Company has provided financial statements to the Lenders demonstrating twelve months of revenues of at least $125,000,000. After the PIK Termination Date, all interest accruing in respect of the Second Lien Credit Facilities shall be payable in cash.

If any event of default shall have occurred and be continuing, all loans and other obligations under the Credit Facility shall bear interest at a rate per annum equal to 2.00% in excess of the otherwise highest applicable interest rate (including the Applicable Margin) at the election of the First Lien Agent (with respect to the First Lien Revolving Credit Facility) or the Second Lien Agent (with respect to the Second Lien Credit Facilities) (or automatically while any payment or insolvency event of default exists).

In addition to the fees described in a separate fee letter between Agents and the Company:

A fee of 1.00% per annum of the daily balance of the unused portion of each Second Lien DDTL Facility will be payable to Second Lien Agent, for the account of the Lenders under the Second Lien DDTL Facilities, quarterly in arrears, on the last day of each calendar quarter.

Loans outstanding under the First Lien Revolving Credit Facility may be prepaid at the option of the Company without premium or penalty subject to minimum notice periods and minimum amounts to be agreed; provided, that, in connection with the acceleration of the First Lien Revolving Credit Facility or termination of the Revolving Credit Commitments shall be subject to the following call protection:

(a)      After Closing Date but on or before the first anniversary of the Closing Date, at a price equal to 100% of the principal amount prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date plus a premium equal to 2.0% of the Revolving Credit Commitment;

(b)      After the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, at a price equal to 100% of the principal amount prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date plus a premium equal to 1.0% of the Revolving Credit Commitment; and

(c)      Thereafter, at a price equal to 100% of the principal amount prepaid plus all interest on the principal amount being prepaid that has accrued through the prepayment date.

The principal amount of loans under the Second Lien Credit Facilities may be prepaid, at the option of the Company, in whole or in part, with minimum notice periods and in minimum amounts to be agreed.

Optional prepayments shall be applied to the Second Lien Credit Facilities at the direction of the Company.

All optional prepayments of the Second Lien Credit Facilities shall be subject to satisfaction of payment conditions to be agreed in the Definitive Documentation.

Subject to intercreditor arrangements between the First Lien Agent and the Second Lien Agent, the Second Lien Credit Facilities shall be subject to prepayment, by an amount equal to:

(a)      100% of net cash proceeds of all asset sales and other asset dispositions by any Obligor or any subsidiary of any Obligor (including sales of stock of subsidiaries) other than certain asset sales in the ordinary course of business, with customary exceptions (including the limited option to reinvest certain proceeds) to be agreed;

(b)      100% of insurance proceeds received by any Obligor or any subsidiary of any Obligor, with customary exceptions (including the limited option to reinvest certain proceeds) to be agreed;

(c)      100% of the net proceeds from the issuance by any Obligor or any subsidiary of any Obligor of any public or private indebtedness, except for specified permitted indebtedness to be agreed; and

(d)     100% of all outstanding obligations under the Second Lien Credit Facilities upon the occurrence of a Change of Control (definition to be agreed).

Any Lender may elect not to accept its pro rata portion of any mandatory prepayment (each, a “Declining Lender”). Any prepayment amount declined by a Declining Lender may be retained by the Company.

Mandatory prepayments shall be applied ratably to the Second Lien Initial Term Loan Facility, the Second Lien DDTL Facility A and the Second Lien DDTL Facility B, and shall be applied against such term loan facilities in the inverse order of maturity as applicable.

Each optional and mandatory prepayment (including any prepayments after acceleration) of any portion of the Second Lien Credit Facilities shall be subject to the following prepayment premiums:

(a) After the Closing Date but on or before the second anniversary of the Closing Date, at 100% of the principal amount prepaid plus the Make-Whole Premium (as defined below) plus all interest on the principal amount being prepaid that has accrued through the prepayment date; and

(b) After the second anniversary of the Closing Date, at the prepayment price (expressed as a percentage of the principal amount of such loans to be prepaid) set forth below plus all interest on the principal amount being prepaid that has accrued through the prepayment date:

(i)       After the second anniversary of the Closing Date but on or before the third anniversary of the Closing Date, 102%;

(ii)       After the third anniversary of the Closing Date but on or before the fourth anniversary of the Closing Date, 101%; and

(iii)       Thereafter, 100%.

“Make-Whole Premium” shall mean with respect to any prepayment of loans under the Second Lien Credit Facilities, the excess of (a) the “present value” as of the date of such prepayment of (i) the prepayment price of the loans being prepaid at the second anniversary of the Closing Date (i.e. 102% of the principal amount of the loans being prepaid), plus (ii) all required interest payments due on the loans being prepaid at the applicable rate under the credit agreement through the second anniversary of the Closing Date (excluding interest accrued prior to such prepayment date), over (b) the principal amount of the loans being prepaid; provided that the make-whole premium may in no event be less than zero. For purposes of this definition, “present value” with respect to each of clauses (a)(i) and (a)(ii) hereof shall be computed using a discount rate applied quarterly equal to the Treasury Rate (definition to be agreed) as of such prepayment date plus 50 basis points.

The initial funding of the Credit Facility will be subject to satisfaction of customary conditions precedent for credit facilities of this size, type and purpose and others deemed appropriate by the Agents including, but not limited to, the following:

(a)      The negotiation, execution and delivery of the Definitive Documentation for the Credit Facility and other customary closing documentation, including a satisfactory intercreditor agreement, satisfactory to the Agents, including receipt of satisfactory evidence that the First Lien Agent shall have a valid and perfected first priority lien and security interest in the Collateral, and the Second Lien Agent shall have a valid and perfected second priority lien and security interest in the Collateral.

(b)      There shall not have occurred a material adverse change (i) in the business, assets, properties, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole, since December 31, 2017, (ii) in the facts and information regarding such entities as represented to date, or (iii) resulting from the timing of filing with the Securities Exchange Commission of the Company’s (x) 10-Q/A for fiscal quarter ending June 30, 2018 or (y) 10-Q for the fiscal quarter ending September 30, 2018, including that no lender has exercised any material remedies (with the sweeping of any cash from the Company being a material remedy) against the Company (each, a “Material Adverse Effect”), satisfactory to the Agents.

(c)     Confirmation of the absence of any material action, suit, investigation or proceeding pending or threatened, that could reasonably be expected to have a Material Adverse Effect or could materially affect (i) the ability of the Company or any other Obligor to perform its obligations under the Definitive Documentation or (ii) the rights and remedies of the Lenders under the Definitive Documentation.

(d)     Agents shall have received satisfactory evidence that the Company has formed a new bank account that shall be subject to a control agreement granting sole dominion and control to the Agents.

(e)     The Company shall have filed (i) a 10-Q/A with the Securities Exchange Commission for the fiscal quarter ending June 30, 2018 and (ii) a 10-Q with the Securities Exchange Commission for the fiscal quarter ending September 30, 2018, both in form and substance reasonably acceptable to Agents.

(f)      First Lien Agent shall have received a satisfactory executed borrowing base certificate and shall have completed a satisfactory review of the Company’s liquidity forecast.

(g)     Agents shall have received, at least five days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.

(h)      Payment of all fees and out-of-pocket expenses required to be paid on the Closing Date.

The funding of the Second Lien DDTL Facility A will be subject to the following conditions precedent:

(a)      The proceeds will be used solely to finance the repayment of the 2019 Convertible Notes; and

(b)      The funding takes place prior to the Second Lien DDTL Facility A Expiration Date.

The funding of the Second Lien DDTL Facility B will be subject to the following conditions precedent:

(a)      The Second Lien Agent shall have received the budget for the Project in form and substance satisfactory to it, together with other customary project documentation related to the Project requested by Second Lien Agent;

(b)     The trailing twelve-month revenue of the Company is at least $65,000,000, as certified in the most recent financial statements delivered to the Second Lien Agent; and

(c)      The Second Lien Agent shall have received a copy of any applicable approval from the Company’s board of directors relating to the Project (together with documentation submitted in connection with such approval) as well as a satisfactory detailed sources and uses and certification that applicable proceeds of the Second Lien DDTL Facility B shall be used solely in accordance with the approved budget, subject to any agreed variance, for the Project.

Representations and warranties will include those that are customary for credit facilities of this size, type and purpose and deemed reasonably appropriate by the Agents, including: corporate existence and status; corporate (or other) power and authority, enforceability; due organization; no violation of law, contracts or organizational documents or imposition of liens; no material litigation or labor controversies; no contractual restrictions on payment of dividends to shareholders of the Company and investments in the Company or any of its subsidiaries, or their ability to perform their obligations under the Definitive Documentation; accuracy and completeness of specified financial statements; projections prepared in good faith upon assumptions believed by the Obligors to be reasonable at the time made; no material adverse change; no required governmental or third party approvals or consents; no judgment, order or injunction with respect to the Transactions; use of proceeds; not engaging in business of purchasing/carrying margin stock; status under Investment Company Act; ERISA matters; FDA and regulatory matters; environmental matters; tax matters; ownership and location of properties (including leased properties); collective bargaining; insurance matters; intellectual property; material contracts; accuracy and completeness of disclosure; compliance with laws; subsidiaries and joint ventures; no default or event of default; perfected liens, security interests and charges; solvency; evidence of other indebtedness, deposit accounts and securities accounts; absence of undisclosed liabilities; and other customary and industry-specific representations and warranties for transactions of this type mutually acceptable to the parties.

The representations and warranties shall be substantially similar in the Definitive Documentation in respect of the First Lien Revolving Credit Facility and the Definitive Documentation in respect of the Second Lien Credit Facilities.

Covenants will apply to the Company and its subsidiaries, will be subject to materiality levels and/or exceptions to be agreed and reflected in the Definitive Documentation and will include those that are customary for credit facilities of this size, type and purpose and deemed reasonably appropriate by the Agents, including: delivery of monthly, quarterly and annual financial statements, budgets, compliance and borrowing base certificates and customary borrowing base reporting, insurance reports and notices of default under, or material amendments of, the documents relating to any of the Transactions, notices of any material litigation, governmental proceedings or investigations, ERISA, environmental proceedings and labor controversies, bankruptcy or similar events, management letters from the Company’s independent accountants, changes in accounting or financial reporting practices, fiscal years or fiscal quarters, or changes in corporate information; compliance with laws and contractual obligations; compliance with PATRIOT ACT; payment of taxes and other obligations; preservation of existence; maintenance of books and records and inspection rights (including customary appraisal rights for inventory, machinery and equipment, real property (including environmental reports) and receivables); use of proceeds; maintenance of properties (including intellectual property); additional guarantees and related security interests from new direct or indirect subsidiaries of the Obligors; control agreements with respect to deposit accounts, securities accounts and other similar accounts (which shall provide for cash dominion upon the occurrence of agreed-upon trigger events); ERISA matters; FDA and regulatory matters; environmental compliance; further assurances; maintenance of insurance; limitation on indebtedness, liens, granting of negative pledges, mergers, consolidations, sales of assets, change of names, dividends, stock redemptions and other restricted payments, cash payments on any earn-out obligations and the modification, redemption and/or prepayment of other debt or the Second Lien Credit Facilities to be agreed; limitation on investments (including loans and advances) and acquisitions; limitation on sale-leasebacks; limitation on transactions with affiliates; limitations on modifications of certain agreements; changes in line of business; limitation on hedging agreements; limitations on the repurchase of capital stock; and other customary and industry-specific covenants for transactions of this type mutually acceptable to the parties.

The affirmative and negative covenants shall be substantially similar in the Definitive Documentation in respect of the First Lien Revolving Credit Facility and the Definitive Documentation in respect of the Second Lien Credit Facilities, except that (i) the “baskets” for the negative covenants in the Definitive Documentation in respect of the Second Lien Credit Facilities shall be sized with a cushion to be agreed above the basket levels for the negative covenants in the Definitive Documentation in respect of the First Lien Revolving Credit Facility, (ii) the Definitive Documentation in respect of the Second Lien Credit Facilities will not include borrowing-base specific reporting requirements and (iii) the Definitive Documentation in respect of the Second Lien Credit Facilities will contain a customary anti-layering covenant.

Each Lender may assign all or a portion of its loans and commitments under the Credit Facility or sell participations therein to another person or persons subject to limitations, if any, established by the Agents. So long as no Event of Default in respect of payments, bankruptcy, financial reporting, borrowing base reporting and financial covenants exists, the Company shall have the right to approve (which approval shall not be unreasonably withheld or delayed) any assignee; provided, that (a) no such approval shall be required for an assignment to (i) a Lender, (ii) an affiliate of a Lender, or (iii) an Approved Fund (definition to be agreed) and (b) the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agents within five (5) business days after having received notice thereof.

For the avoidance of doubt, each Lender shall be permitted to grant a security interest in all or any portion of its rights under the Definitive Documentation (including, but not limited to, the Credit Facility) (without the consent of, or notice to, or any other action by, any other party hereto) to secure the obligations of such Lender or any of its affiliates to any person or entity providing any loan, letter of credit or other extension of credit to or for the account of such Lender or any of its affiliates and any agent, trustee or representative of such person or entity.