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GE Capital Technology & Business Services 1Q10 Industry Research Monitor To sign up to receive an electronic copy of this Industry Research Monitor, please visit: www.gelending.com/IRM

CONTENTS: Industry Headlines/Macro Environment 1 Other Industry News & Developments 2 Technology Industry Financing Activity 7 Transaction Capabilities & Conference Calendars 9

Technology Industry Headlines Macro Environment

• Following a decline of 4.5% in 2009, IDC says worldwide 2009 was no doubt one of the most volatile on record for the tech spending is on track to increase 3% in 2010. In the technology industry. The collapse in demand to finish 2008 United States, IT spending growth is forecast to under- followed through into 2009 until hitting bottom in the early perform emerging economies but outperform most other part of the year. Since that bottom about a year ago, demand developed regions. for technology infrastructure has shown a marked turnaround with accelerating improvement through the end of 2009. Year- • President Obama named Howard Schmidt as the new U.S. over-year growth is now commonplace albeit against weak cybersecurity czar. Most recently, Schmidt served as comparisons. The 3rd and 4th quarters of 2010 will offer a president of the Information Security Forum and arrives at more valid test of the durability of this IT spending recovery. the White House with 40 years of experience including Not surprisingly, the confidence of senior executives in the IT serving as the White House security advisor to George W. industry has also been on the upswing. Results of a survey Bush, as well as long-held positions at eBay and Microsoft. of industry executives conducted by GE Capital late last year showed that Tech CEOs were the most optimistic across all • After a 2% drop in 2009, global retail consumer electronics industries with 77% of the respondents expecting growth in

sales are expected to be flat in 2010, according to the 2010, forecasting on average revenue growth of 10%. )

Consumer Electronics Association. That follows growth of % (

14% in both 2007 and 2008, and 17% growth in 2006. ITR Spending in U.S. – Strong acceleration to finish 2009 A

A U.S. IT Equipment & Software Capex (1Q05 – 3Q09)

• Microsoft named Peter Klein as the company’s CFO S 20

following the departure of Chris Liddell at the end of 2009. e 15 g

n 10 a

• Rackspace confirmed that a server in one of its data h 5 9 C 0 centers was hit in a massive cyberattack that apparently 09 Q 9 Q 4 y 0 9 0 3 l 0 2Q

r 8 originated in China and targeted Google and at least 20 0 1Q 8 Q

e 0 -5 8 Q 4 t 0 3 other companies. The cyberattack aimed to steal 8 Q r 0 7 Q 2 -10 7 0 1 proprietary code and intellectual property. a 0 4Q 07 Q u 7 3 0 2Q -15 6 Q Q 6 0 1 0 4Q 06 Q • Worldwide PC shipments topped 90 million units in Q4, -20 6 Q 3 5 0 2 Source: Bure au0 o1f QEconomic Analysis 05 Q increasing 22.1% from a year ago, according to data from -25 5 Q 4 5 0 3 0 2Q Gartner. 1Q

Michael H. Zimm, CFA SVP, Senior Research Analyst 646-428-7015 • [email protected]

• IBM is also buying National Interest Security, a privately Software/IT Services held company intended to strengthen IBM’s position in the public sector IT market. Steady and reliable. Software and IT Services on average • Microsoft acquired Sentillion Inc., a privately held remain the most resilient technology sectors to macro company specializing in software for the healthcare headwinds. That being said, the growth in these sectors industry. Microsoft also acquired Opalis, a provider of during 2010 may not keep pace with the rebound expected in datacenter process automation software. the more severely depressed hardware sector. IDC’s most • Oracle acquired Silver Creek Systems, Inc. a provider of recent constant currency forecast for 2010 calls for overall product data quality solutions. global spending on software and IT services to be 2% and 3%, • Lawson Software acquired Healthvision Solutions, an respectively compared to 5% growth in hardware. This application and services provider to the healthcare subdued growth outlook for software and services spending industry for $160 million cash. reflects a relatively higher base compared to hardware • BMC Software acquired privately held Phurnace Software, coupled with the lower value of contracts signed in the past a developer of automation software. year and continued caution toward new project-based • CA acquired privately held Oblicore, a developer of service spending in mature economies. Nonetheless, within software level management software. and services, we continue to observe positive momentum • TIBCO Software acquired privately held Foresight around the recession-induced themes of improved efficiencies Corporation, a provider of transaction automation via transformative architectures such as Virtualization, XaaS solutions and EDI productivity tools. and Cloud Computing as well as solutions tied to security • VMware acquired Zimbra, a vendor of open-source email and increasingly stringent regulatory oversight. and collaboration software, from Yahoo! Inc. • Symantec acquired Gideon Technologies, a provider of security content automation technology. Strategic Updates • CACI International acquired SystemWare, Inc., a provider of physical and cybersecurity solutions. • Accenture suffered a legal defeat on all of the preliminary • SRA International, Inc. acquired privately held Perrin issues in a case it is defending against British Gas’ parent Quarles Associates (PQA), Inc., specializing in company, Centrica. Centrica is claiming approx. $300m in environmental program development and implementation relation to the alleged failure of a customer billing system. for air quality and climate change. • Computer Sciences entered into a 10-year master service • Informatica acquired Siperian for $130 million cash. agreement with Zurich Financial Services. Siperian provides Master Data Management (MDM) • Advent Software announced further expansion into the infrastructure technology. Asia-Pacific region with the opening of a new office in • Unisys sold its health information management business Beijing. to Molina Healthcare for $135 million cash. • HP Enterprise Services entered into a seven-year • Digital River and Softonic, a European software download infrastructure services agreement with Eli Lilly. site, announced a strategic partnership, which includes • TeleCommunication Systems and Sybase agreed to settle Digital River acquiring a less than 15 percent ownership two patent infringement lawsuits. stake in Softonic for $26m cash. • The U.S. State Department awarded CGI Federal a 10-year blanket purchase agreement with a ceiling of up to $395 million. Management Changes • McAfee Inc. and Facebook have announced a partnership to provide additional security protection to the more than • SAP’s CEO Leo Apotheker resigned after his contract was 350 million Facebook users. not renewed. SAP will now be run by two co-CEOs who • Microsoft will begin charging for its cloud services have been promoted internally: Bill McDermott, the development platform Azure. company’s head of field organization, and Jim Hagemann Snabe, head of product development. • IBM Lotus GM Bob Picciano has been promoted to GM Mergers & Acquisitions of all software sales at IBM. Alistair Rennie, previously vice president of Lotus development and support, has taken • IBM acquired privately held Guardium, a provider of real- over the IBM Lotus GM post. time enterprise database monitoring and protection • Mischel Kwon resigned as director of the Homeland technology. IBM also purchased privately held Lombardi, Security U.S. Computer Emergency Readiness Team and is which makes software for streamlining product planning, moving to EMC’s RSA security division. human resources, procurement and supply chain • CA has tapped board member William E. McCracken to be management. the company’s new CEO and chairman.

• The U.S. International Trade Commission ruled that Nvidia Semi/Capital Equipment is violating three patents owned by Rambus. • Samsung Electronics and Rambus announced an Above average seasonality. According to data from the agreement settling all legal claims between them. Semiconductor Industry Association (SIA), worldwide Samsung will also invest $200M in Rambus stock. semiconductor sales during 2009 were $226.3 billion, down • Applied Materials announced that several of its 9% from 2008. The three-month moving average of sales in employees, including the former head of Applied Materials December increased 29% from December 2008 but declined Korea, were arrested in South Korea. Applied said the 1.2% month-month from November. Sales in the final quarter arrests were related to a “criminal investigation into the of 2009 were supported by healthy demand in a variety of alleged improper receipt and use of a customer’s end markets including PCs, cell phones, and consumer confidential information.” electronics. Following a strong finish to 2009, a return to • The U.S. Attorney for the District of Columbia announced normal seasonal patterns suggests a modest slowdown in the that the owner of MVP Micro, Inc., has entered a guilty first quarter of 2010. For all of 2010, unit sales of personal plea to the charge of trafficking in counterfeit computers and cell phones, which account for approximately semiconductors. 60 percent of total semiconductor consumption, will grow in the low-to-mid teens. A rebound in enterprise spending on IT hardware will also add to the foundation of industry growth. Mergers & Acquisitions Overall, the SIA continues to expect global growth of semiconductor sales to increase 10.2% and 8.4% in 2010 and • Applied Materials acquired Semitool for $364 million in an 2011, respectively. all-cash transaction. • Semtech acquired Sierra Monolithics for $180m. Given severe reductions in capex spending over the past two • DDi Corp. acquired Coretec Inc. for approx. $23.5m. years, optimism for a strong rebound in demand for semi-cap • Broadcom acquired privately held Dune Networks for equipment continues to build. Industry bellwethers such as approximately $178 million cash. s

IntelB (+20%), TSMC (+77%) and Texas Instruments (+40%) have • ON Semiconductor acquired California Micro Devices for $ all announced large increases in their equipment capex an enterprise value of approx. $63 m. s e

spendingl plans for 2010. • Trident Microsystems acquired selected assets of the

e television and set-top box business lines of NXP. S

g Powerfuli V-shaped recovery in semiconductor sales… • Broadcom acquired Teknovus for $123 million cash. n m 24 a 30% • Microchip Technology acquired Silicon Storage e

h Source: SIA S

C Technology for $2.85 a share in cash. The deal trumps a l 22 20% a previous agreement for SSTI to be acquired by Technology % b 10% o 20 Y Resources Holdings for $2.10 a share. l / G Y 0%

18 y 9

l 0 c- -10% h e Management Changes t 8 D 16 -0 n Monthly Global ec -20%

o D Semiconductor Sales $B 14 7 M -0 -30% • Veeco Instruments Inc. named David Glass Chief Financial Y/Y % Change ec D Officer. Glass replaces John Rein, who announced his 12 6 -40% -0 retirement from Veeco last year. ec D 5 -0 ec N/A Semiconductor Capital Equipment Book-to-Bill D Strategic Updates Seasonality beginning to exert pressure 1.60 Source: SEMI

l l i 1.40 • IBM launched the latest version of its Power processors, B - o

which it claims will lay the foundation for companies’ green t - 1.20 k

IT efforts. The Power 7 chips, reportedly use a quarter o o

of the energy used by the Power 6, but offer double the B

1.00 Parity y performance. l h t 0.80 c • Intel cancelled its Larrabee graphics chip launch. n • The U.S. Federal Trade Commission filed suit against Intel o M 0.60 10 09 n- for allegedly using illegal tactics to shut out competitors 08 n- J a 07 n- J a 06 n- J a such as Advanced Micro Devices. 05 n- J a 0.40 04 n- J a 03 n- J a 02 n- J a • An antitrust probe of Rambus was dropped by the E.U. 01 n- J a 00 n- J a 99 n- J a after the company pledged to cap royalty fees for DRAM 0.20 98 n- J a 97 n- J a n- J a memory chip patents. J a

Systems/Storage Strategic Updates

Consumer ahead of the enterprise. Publically traded systems • Hewlett-Packard and Microsoft said they would invest and storage vendors generally reported typical seasonal $250M in a partnership to more tightly couple their strength quarter-over-quarter during the recently reported software and hardware products, as rivals Oracle, IBM and 4th quarter of 2009. However, the results generally seemed a others remake themselves as one-stop shops for bit lackluster on a year-over-year (constant currency) basis technology. HP and Microsoft said that the three-year despite relatively easy comparisons. While consumer related agreement would involve an array of initiatives; all aimed spending for PCs and related peripherals has been on the at helping businesses reduce some of the headaches of upswing, systems manufactures continue to fight the setting up and operating data centers. headwinds of constrained corporate capex budgets coupled • NetApp and Microsoft unveiled a formal technology with the deflationary pressures of virtualization and collaboration designed to ensure that NetApp’s storage commoditization in the data center. works well with Microsoft applications and its Hyper-V virtualization technology. While the hardware sector was hit the hardest during the • Oracle’s CEO Larry Ellison stated explicitly that Oracle will recent downturn, the segment is now well positioned for focus Sun server sales on “high-value, high-performance” growth from a low level as enterprises begin to reverse the applications such as private clouds and won’t compete trend of extended lifecycles from severe underinvestment directly with Dell and HP. over the past few years. The environment for leasing of • ioSafe has announced what it calls “the world’s first solid IT assets should also be favorable as companies continue to state external hard drive built to protect data from building look for ways to conserve cash outlays while maintaining collapse, fires, and floods. leading edge capabilities. • Cisco, VMware and NetApp have signed a technology pact to deliver new architectures for increasing data center Several fundamental indicators confirm the optimistic views efficiency, flexibility and security. The agreement follows a of OEM executives that the systems and peripherals sector is similar deal between EMC, Cisco and VMware to support well into a recovery. The IPC North American printed circuit Cisco’s UCS strategy of bringing server, storage and board book-to-bill ratio has been above parity (1.0) since May networking technologies into a single architecture on which and stands at 1.04 as of December, down from a recent data centers can be built. peak of 1.08 in September. While still comfortably positive, the • CommVault has added REST, a protocol that interfaces book-to-bill ratio typically peaks in the Sep-Dec timeframe with multiple cloud storage vendors’ offerings, as a way to and we would not be surprised to see it dip below parity for help its customers easily connect to public storage clouds. several months prior to the next seasonal cycle upswing • QLogic has sued Emulex accusing it of false advertising, expected in the middle of the year. The book-to-bill ratio leads unfair competition and trade libel. sales in the PCB industry by an average of three to six months and PCBs in turn lead sales of OEM equipment. Mergers & Acquisitions Printed Circuit Board Book-to-Bill Eight consecutive months above parity • EMC Corporation acquired Archer Technologies, which 1.4 will be incorporated into its RSA division. Source: IPC o

i • Dot Hill acquired Cloverleaf Communications Inc., a t

a privately held provider of advanced heterogeneous storage R

l l i virtualization and unified storage technologies for $12 B - million in cash and stock. o t -

k • Celestica acquired Invec Solutions, a provider of warranty o

o management, repair, and parts management services. B

B C P

. Management Changes A . N 10 9 b- 8 -0 Fe • Sun Microsystems chief executive officer Jonathan -0 eb -07 eb F -06 b F Schwartz resigned his position in a Twitter post phrased in 05 b Fe 04 b- Fe 3 b- e 2 -0 Fe F the form of a haiku poem. -0 eb -01 eb F 00 eb F 99 b- F • NetApp announced the appointment of Christine Heckart b- Fe Fe as its new Chief Marketing Officer.

• Increasing competition between Cisco and HP has led to Distribution Channels Cisco announcing that it will not renew its systems integrator contract with HP. As a result, HP will no longer be Riding a rising tide. Publically traded distributors generally a certified reseller or service partner of Cisco’s after reported much better than expected financial results for the April 30. December/January ending quarter and conveyed an ongoing • Ingram Micro has expanded its relationship with sense of optimism amid stronger than normal seasonal Transcend Information to include the U.S. trends, lean supply chain inventories and recovering IT • Blade Network Technologies announced that Bell Micro spending. Channel management commentaries on overall will distribute Blade’s 10 Gigabit Ethernet RackSwitch business conditions remain decidedly positive compared to product family in North America. several quarters ago and strategies continue to reflect a • IBM said it will pass nearly all new midmarket software transition from defense to offense. sales leads, valued up to $50,000, to its Authorized Software resellers. Overall revenue (excluding acquisitions) during the final • Avnet and Arrow will distribute Riverbed products in North quarter of 2009 exhibited above average seasonal quarter- America for the first time. over-quarter strength and more importantly showed year- • Oracle said it will rely on direct sales of Sun Microsystems over-year growth for the first time since 3Q08. The overall server and storage hardware systems to large accounts, stronger than expected revenue growth was magnified reversing Sun’s trend of selling more products through by recent restructuring actions resulting in margin expansion channel partners. Oracle will continue to rely heavily on and profit growth that outpaced top-line growth. Looking partners for sales to midmarket customers. But the ahead to the 1st calendar quarter of 2010, channel players emphasis will be on working with resellers that provide are expecting typical seasonal sequential declines in revenue integration services and other “specializations.” albeit with a continuation of meaningful year-over-year • Cisco Capital announced an extensive, no interest growth. financing promotion for Cisco products and services ($1,000 up to $250,000) sold through Cisco certified resellers to U.S. small and medium-sized business. Strategic Updates • Avnet Technology Solutions launched a suite of services under its SolutionsPath program, all designed to help VARs • Microsoft and Intuit are teaming up to make it easier for enhance their offering. developers to build SMB-focused software-as-a-service • Tech Data has entered into an agreement with TechTurn applications that integrate with QuickBooks. to offer hardware recycling and refurbishment to resellers. • HP Financial Services has re-introduced a zero-percent financing program for SMB customers. Qualifying transactions for the program are between $1,500 and Mergers and Acquisitions $150,000 for 12 months. • Avnet Technology Solutions has been selected to carry • Arrow Electronics acquired A.E. Petsche Company, a Cisco’s data center products in the United States and provider of interconnect products to the aerospace and Canada, including Cisco’s Unified Computing System blade defence markets. server. Avnet joins specialty distributor Westcon Group • Datalink acquired reseller Incentra for $8.8m cash. and broadline distributors Ingram Micro and Tech Data as • Presidio acquired Coleman Technologies. The combined distributors of Cisco’s Unified Computing System. companies will create a solution provider with more than • IBM Global Financing has signed a financing deal with $1.1 billion in revenue. Advanced Micro Devices and its distributor network in • Autonomy Corp. acquired MicroLink LLC for $55 million in China. In conjunction with this new factoring license, cash. MicroLink is an Autonomy reseller targeting U.S. state IBM Factoring (China) Company Limited, entered into an and federal government accounts. agreement with AMD to factor AMD sales receivables in China. • IBM said it would spend $130 million on marketing and Management Changes demand-generation programs this year to help channel partners expand their midmarket sales. As part of this • SAP named Kevin Gilroy head of the North America effort, IBM plans to develop “building block” systems, channel for SME (small and midsize enterprise). incorporating IBM hardware, software and storage • Insight Enterprises named Ken Lamneck as its new technology, which solution providers can customize and president and CEO. Lamneck served as president of the sell to midmarket customers. IBM also plans new channel Americas at Tech Data since 2004. cloud Architecture Certifications where partners can learn • Kaspersky Lab named Nancy Reynolds as senior vice to design public and private cloud computing solutions president of corporate sales. Previously, Reynolds was based on the IBM products they sell. Dell’s top global enterprise channel executive. • Websense channel chief David Roberts has resigned amid an overhaul of the company’s channel strategy.

• MoneyGram International and Bank of China entered into Business Services/ an agreement to bring MoneyGram money transfer services to Bank of China’s 10,000 domestic branches. Financial Technology • Affiliated Computer Services won a contract to process child support payments for the State of Ohio. The contract Consumer deleveraging continues. Recent operating has a potential term of nine years and is worth $163 statistics from both Visa and MasterCard continue to show a million if all option years are exercised. pattern of growth in debit coupled with a recession-induced contraction in credit. During 2009, Visa posted U.S. debit payment charge volume of $883 billion, up 7.9% from $818 Mergers and Acquisitions billion in 2008. Visa debit payment transaction volumes were 23.9 billion, up 13.8% from 21 billion in 2008. Conversely, Visa • Global Payments sold its DolEx- and Europhil-branded credit payment volume fell 7.3% to $764 billion from $824 money transfer businesses to an affiliate of Palladium billion, while the number of credit transactions declined 2.4% Equity Partners LLC. to 9.04 billion from 9.26 billion in 2008. For all of 2009, • Intuit agreed to sell Intuit Real Estate Solutions to Vista MasterCard reported that U.S. debit purchase volume rose Equity Partners for approx. $128 million cash. 5.8% to $327 billion from $309 billion while debit payment • SS&C Technologies acquired TheNextRound Inc., a transaction volume rose 11.7% from 7.46 billion to 8.34 billion provider of software services for the private equity and transactions in 2008. Similar to Visa, MasterCard credit alternative investment communities. card purchase volume declined to $477 billion, down 12.9% • ADP acquired DO2 Technologies, a provider of electronic- from $547 billion in 2008, on 5.91 billion transactions, invoicing services. down 5.8% from 6.27 billion. • Genpact, acquired Symphony Marketing Solutions, a provider of analytics and data management services specializing in the retail, pharmaceutical and consumer Strategic Updates packaged goods industries. • Manpower acquired Comsys IT Partners for approx. $430 • Convergys plans to recruit approximately 4,500 additional million including assumed debt, creating an information- agents through the end of February 2010 for its 12 contact technology staffing concern with total revenue of more centers in the Philippines. than $2.5 billion. • CSG Systems International entered into a new multiyear • Private equity firm Marlin Equity Partners acquired certain agreement with DISH Network. parts of Unisys’ payment systems business. • A federal court judge rejected Heartland Payment Systems’ request for a preliminary injunction that sought to prevent VeriFone Holdings from communicating with Management Changes Heartland merchants. • VeriFone has launched a major strategic initiative targeted • SunGard Data Systems appointed Robert Woods CFO. at leveraging the company’s current and future payment • Alliance Data Systems appointed Charles Horn CFO. assets into the payment-enabled media marketplace. • Hewitt Associates said that CFO John Park has decided to The company is also revamping its taxicab technology to leave the company in early 2010 to pursue “new career include IP-connected Flash 10 technology and dynamic challenges.” content generation capabilities, with plans to launch the • Investment Technology Group CFO Howard Naphtali technology in all its New York City taxicabs by June 2010. has retired. • LML Patent Corp. and RBS Citizens Bank NA have entered • Convergys Corp. said that David Whitwam resigned from into a settlement and license agreement that provides its board at the end of 2009. The company also named Jeff RBS Citizens with a license to LML’s patents for electronic Fox president and CEO. check conversion transactions. • Diebold named Charles Ducey Jr. executive vice president • Global Axcess signed a 16-month contract with a grocery of North America operations. Diebold also promoted James store chain based in the U.S. Southeast. The contract is Chen to executive vice president of international valued at $16,000 per month, covers 72 ATM locations and operations. upgrades the customer from an in-house processing • Infosys Technologies appointed D. Swaminathan CEO of system to a full-turnkey Global Axcess program. Infosys BPO Ltd., succeeding Amitabh Chaudhry, who • Heartland Payment Systems said it agreed to a resigned in November 2009. settlement under which issuers of Visa-branded credit and • Fiserv said Peter Kight plans to resign as vice chairman at debit cards will have an opportunity to obtain a recovery the end of the first quarter. from the company regarding losses they may have incurred from a 2008 criminal breach.

) Tech) & Electronics Global High Yield Issuance ($Billions) B M

Technology Financings $ $ Dominant source of external capital in 2009

D D 700

S 60 S U U “Safety” remains a balance sheet priority. Despite ( Total Deal Volume (USD $B) (

$52.1 600 e expectations for increasing M&A activity and sales during 50 Average Deal Size (USD $M) e z i m $42.6

$42.1 S 2010, the majority of technology company CFOs will probably u

Source: Capital IQ

l 500 l

o 40 not seek external financing this year. According to a new a V e

$33.6

l 400

survey by accounting firm BDO Seidman, approximately one- D a 30 e third (32%) of tech CFOs anticipate seeking additional capital e g

D 300

l in 2010, which is slightly fewer than in 2009 (34%) and slightly a r

a 20 t more than in 2008 (27%). While the availability of capital e 200 v o $13.8 T $10.5 $10.2 A continues to improve, some tech CFOs are still reluctant to 10 $10.0 100 assume more debt in an uncertain economy. Others may $4.4 need less capital as a result of cost-saving strategies 0 0 implemented in 2009. 2002 2003 2004 2005 2006 2007 2008 2009 YTD 2010

Of those who anticipate raising capital this year, 47 percent will focus primarily on private equity, down from 56 percent in

)

2009, but up from 33 percent in 2008. More than one third Tech & Electronics Global Equity Issuance) B M

(37%) will use debt, and the remaining 16 percent will focus Strong$ rebound in 2009

on public equity. Companies without international operations D 20 D 200 S

S Source: Capital IQ

are much more likely to use debt (53%), while international U ( U

$16.8 ( $16.3 firms will focus more on private equity (64%) than their e e z m domestic-only counterparts. 15 $14i .2 150 u S l

o $12.2 $12.3 a V

e Notable recent financings include the following: l $10.4 D a 10 $9.7 100 e e D g

• Xerox completed a $2 billion senior unsecured notes a r a t offering. Xerox intends to use the proceeds in connection e o 5 v 50 T Total Deal Volume (USD $B) with the acquisition of Affiliated Computer Services. A • Brocade sold $600 million of senior secured notes in a Average Deal Size (USD $M) $1.8 $0.2 private placement. 0 0 • Salesforce.com closed a private placement of $575 million 2002 2003 2004 2005 2006 2007 2008 2009 YTD 2010 unsecured, unsubordinated convertible senior notes due 2015. • Spansion completed a $450 million term loan related to ) )

the company’s attempted exit from bankruptcy. TechB & Electronics Global Loan Issuance M $ $

• PRGX Global Inc. entered into a four-year $30 million Private equity slowly re-emerging D D S

secured revolving credit and term loan agreement. 300 S 500

U Source: LPC U ( (

• Kemet Corp. plans to offer $275 million in aggregate Total Deal Volume (USD $B)

e principal amount of senior notes due 2018. 250 e Average Deal Size (USD $M) z

i 400 m

$S 220.7 u

l l

o 200 Technology Loan Pricing in Secondary Market a V $174.1 e 300 l

Almost back to “normal” D

a 150 e 110 e g D

Source: Thomas Reuters SMi Index as on Feb. 10, 2010 $109.3 $113.3 200 a

l $110.1

105 r a 100 $87.1 e t $79.7 v 100 o $61.9 T 50 A 100 95 $11.7 90 0 0 85 2002 2003 2004 2005 2006 2007 2008 2009 YTD 2010

65 2 3 4 5 6 7 8 9 9 9 8 8 7 7 6 6 5 5 4 4 3 3 60 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 / / / / / / / / / / / / / / / / / / / / / / / 0 0 0 0 0 0 0 0 2 6 2 6 2 6 2 6 2 6 2 6 2 6 6 1 1 1 1 1 1 1 1

© Copyright 2010 General Electric Capital Corporation. All Rights Reserved. 7 GE Capital – Industry Research Monitor: Technology & Business Services 1Q10 GE Capital – Industry Research Monitor: Technology & Business Services 1Q10

GE Capital Technology GE Capital Technology Lending Transactions Leasing Transactions

$450,000,000 $7,800,000 ABL & Securitization 36-month FMV lease Agent for revolving credit facility Laptop deployment for U.S. field sales representatives Business Process Services Global Pharmaceutical Company $428,500,000 $10,000,000 Cash Flow Credit Facility FMV lease Co-Agent for term loan and revolver IT equipment from multiple vendors for 8 data centers Transaction Technology Services Provider U.S. Telecommunications Company $316,000,000 $62,000,000 A/R Securitization Capital Lease Sole Lead Arranger IT equipment Leading Provider of Software and IT Services National Mortgage and Financial Services Company $250,000,000 $15,000,000 A/R Securitization Capital + FMV leases Agent for balance sheet recapitalization Store network deployment of point-of-sale equipment Leading Provider of IT Continuity Services North American Retailer $145,000,000 $43,000,000 Combined Senior and Second Lien Facility 60-month synthetic lease Agent for corporate restructuring facility Upgrade of point-of-sale equipment Digital Imaging and Document Solutions Large Regional Retailer

Industry Technology Conference Calendar Date Event Location March 23-25, 2010 DistribuTECH Tampa, FL (Convention Ctr) April 6-8, 2010 IPC APEX EXPO 2010 Las Vegas, NV (Mandalay Bay) April 21-22, 2010 Nepcon Boston, MA (Convention Ctr) May 3-6, 2010 Web 2.0 Expo San Francisco, CA (Moscone) May 18-21, 2010 Multicore Expo Santa Clara, CA (Convention Ctr) July 13-15, 2010 Semicon West San Francisco, CA (Moscone) Sept. 14-17, 2010 IMTS 2010 Industry & Technology Conference Chicago, IL (McCormick Place) Oct 5-8, 2010 CTIA-Wireless IT & Entertainment San Francisco, CA (Moscone)

Industry Investor Conference Calendar Date Event Location Mar 1-4, 2010 Morgan Stanley Technology, Media & Telecom Conference San Fran., CA (The Palace Hotel) Mar 8-10, 2010 Jefferies Global Technology Conference New York, NY (Mandarin Oriental) May 17-19, 2010 JPMorgan Global Technology, Media and Telecom Conf Boston, MA (Westin Waterfront) June 2-3, 2010 BofA Merrill Lynch U.S. Technology Conference New York, NY (Westin Times Sq.) June 8-10, 2010 UBS Global Technology & Services Conference New York, NY Aug 10-11, 2010 Oppenheimer Annual Technology, Media & Telecom Conf Boston, MA (Four Seasons Hotel) Sep 14-16, 2010 Deutsche Bank Securities 2010 Technology Conference San Francisco, CA (The Westin)

GE Capital Industry Team

RESEARCH ANALYSTS

Michael Zimm, CFA Technology & Business Services Aerospace & Defense Construction 646-428-7015

Richard Aldrich, CFA Chemicals & Plastics Metals & Mining Auto & Auto Parts 646-428-7365

Henry Fang Media, Communications & Entertainment General Manufacturing Transportation 203-229-1437

Garrick Go Franchise 408-563-6227

Richard James General Manufacturing 203-229-1984

Lauren Milikin Franchise 480-563-6246

Loren Trotta Food, Beverage & Agribusiness Financial Services 203-229-1877

Disclaimer: Although General Electric Capital Corporation (“GE”) believes that the information contained in this newsletter has been obtained from and is based upon sources GE believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. GE makes no representation or warranties of any kind whatsoever in respect of such information. GE accepts no liability of any kind for loss arising from the use of the material presented in this newsletter. This newsletter is not to be relied upon in substitution for the exercise of your independent judgment or legal advice.