ADVISORY AGREEMENT
This Advisory Agreement (this Agreement) is made and entered into as of December 1, 2005 (the Effective Date), by and among Avago Technologies Limited, a Singapore public limited company (the Company), Avago Technologies International Sales Pte. Limited, a Singapore private limited company (HQCO), Kohlberg Kravis Roberts & Co., L.P., a Delaware limited partnership (KKR), and Silver Lake Management Company, L.L.C., a Delaware limited liability company (SilverLake and together with KKR, the Advisors). Certain defined terms are defined in Section 19.
WHEREAS, the Company and HQCO desire to retain the Advisors with respect to the services described herein.
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. Term. This Agreement shall be in effect for an initial term commencing on the Effective Date and ending on the twelfth anniversary of the Effective Date (including any extensions thereof, the Term), which Term shall automatically be extended thereafter on a year to year basis unless the Company or both Advisors provides written notice of its desire to terminate this Agreement to each of the Advisors and the Company at least 90 days prior to the expiration of the Term or any extension thereof. In addition, in connection with the consummation of a Change in Control or the Initial Public Offering, the Company may terminate this Agreement by delivery of written notice of termination to the Advisors. In the event of a termination of this Agreement, the Company and HQCO shall pay in cash to each of the Advisors (a) all unpaid Advisory Fees (as defined in Section 3(a)), all unpaid Subsequent Transaction Fees (as defined in Section 4(b)) and expenses due under this Agreement with respect to periods prior to the termination date, plus (b) the net present value (using a discount rate equal to the yield as of such termination date on U.S. Treasury securities of like maturity based on the times such payments would have been due) of the Advisory Fees that would have been payable with respect to the period from the termination date through the twelfth anniversary of the Effective Date or, in the case of any extension thereof, through the end of such extension period. The provisions of Sections 1, 4(b), 6, 7, 9, and 15 through 19 shall survive any termination of this Agreement.
2. Services. The Advisors shall perform or cause to be performed such services for the Company and/or its subsidiaries as mutually agreed by the Advisors and the Company, which services may include, without limitation, the following:
(a) general executive and management services;
(b) identification, support, negotiation and analysis of acquisitions and dispositions by the Company and/or its subsidiaries;
(c) support, negotiation and analysis of financing alternatives, including, without limitation, in connection with acquisitions, capital expenditures and refinancing of existing indebtedness;
(d) finance functions, including assistance in the preparation of financial projections and monitoring of compliance with financing agreements;
(e) human resources functions, including searching and hiring of executives; and
(f) other services for the Company and its subsidiaries upon which the Company and the Advisors agree.
3. Advisory Fees and Expenses.
(a) During the Term of this Agreement, the Company and HQCO will pay each Advisor an advisory fee (such Advisors Advisory Fee) for each fiscal quarter of the Company equal to the product of (x) the Quarterly Fee Amount for such fiscal quarter times (y) 50%. Each Advisors Advisory Fee will be payable in advance to such Advisor or its designee by wire transfer of immediately available funds on the first business day of the first month of each fiscal quarter. The pro-rated amount of each Advisors Advisory Fee for the period commencing on the Effective Date and ending on the last day of the Companys fiscal quarter ending on or about January 31, 2006 will be payable by wire transfer of immediately available funds on the Effective Date.
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