TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS Notes to the Parent Company Financial Statements

Covenants The EIB Loan contains a single affirmative financial covenant which requires that the total gross debt be no more than 4.00 times Adjusted EBITDA on a trailing twelve-month basis (“Leverage covenant”) on June 30 and December 31 of each financial year. The RCF contains the same financial covenant but this covenant is only applicable if there is an outstanding drawing of more than 40% of the RCF amount on June 30 or December 31 of each financial year. The €35 million credit line agreement signed with Crédit Agricole d’Ile-de-France in July 2017 contains the same financial covenant but this covenant is only tested on December 31 of each financial year. The Term Loan Debt does not contain a financial affirmative covenant.

The total gross debt and Adjusted EBITDA are calculated on the basis of the entire Group perimeter. Therefore, the variance of €80 million between the Adjusted EBITDA determined in respect of the leverage covenant definition and the Adjusted EBITDA is equal to the Adjusted EBITDA in the discontinued activities. Likewise, the variance of €2 million between the gross debt determined in respect of the leverage covenant definition and the gross debt from continuing operations is equal to the debt in the discontinued activities. Leverage covenant Total gross debt of the Group at December 31, 2017 must be no more than 4.00 times the Adjusted EBITDA of the Group for the twelve months ending December 31, 2017.

Gross Debt

€1,099 million €371 million

Covenant Adjusted EBITDA*

Gross Debt/Covenant Adjusted EBITDA Ratio

2.96

Adjusted EBITDA in respect of the leverage covenant definition. *

Since 2.96 is less than the maximum allowed level of 4.00, the Group meets this financial covenant. Other Restrictions In addition to certain information provision covenants, the agreements governing the Debt Instruments include certain negative covenants that restrict the ability of Technicolor SA to undertake various actions regarding indebtedness, investments and material changes in the general nature of the business. These restrictions are subject in each case to certain exceptions and limitations. In particular, the Group is subject to restrictions on its ability to, among other things and subject to certain exceptions:

make restricted payments, if certain ratios are not met, in excess of ■ certain cumulative amounts, including payment of dividends, distributions, share purchases or redemptions, investments other than permitted investments, repayment of subordinated debt; incur additional financial debt in excess of certain cumulative ■ amounts and if certain ratios are not met and with certain carve outs; and make certain investments in joint ventures not controlled by the ■ Group and in which the Group has no veto right on material decisions, except to the extent the Group’s consolidated leverage ratio is under a threshold which decreases over time and subject to a certain cumulative amount and with certain carve-outs.

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TECHNICOLOR REGISTRATION DOCUMENT 2017