EXPLANATORY NOTE REGARDING THE REASON FOR
THE FILING OF THIS PRELIMINARY PROXY STATEMENT
Greenway Medical Technologies, Inc., a Delaware
corporation (“Greenway” or the “Company”), entered into an Agreement and Plan of Merger with Crestview
Acquisition Corp., a Delaware corporation (“Merger Sub”), and a wholly owned direct subsidiary of VCG Holdings, LLC,
a Delaware limited liability company (“Parent”) on September 23, 2013 (the “Merger Agreement”). Pursuant
to the Merger Agreement, on October 4, 2013, Merger Sub commenced a cash tender offer (the “Offer”) to purchase all
of the issued and outstanding shares of common stock of Greenway, par value $0.0001 per share (the “Shares” or “shares
of Greenway common stock”), at a price of $20.35 per Share, net to the seller thereof in cash, without interest thereon and
less any required withholding taxes, upon the terms and conditions set forth in the Offer to Purchase, dated October 4, 2013, filed
as an exhibit to the Tender Offer Statement on Schedule TO (together with any amendments and supplements thereto, the “Schedule
TO”) by (i) Parent, (ii) Merger Sub, (iii) Vitera Healthcare Solutions, LLC, a Delaware limited liability company that is
wholly-owned by Vista (“Vitera”) and (iv) Vista Equity Partners Fund IV, L.P., an affiliate of each of Parent, Merger
Sub and Vitera (“Vista”). The sole member of Parent is VEPF IV AIV I, L.P., a Delaware partnership (“AIV”).
The general partner of AIV and Vista is Vista Equity Partners Fund IV GP, LLC (“VEP IV GP LLC”). The Senior Managing
Member of VEP IV GP LLC is VEFIIGP, LLC (“VEFIIGP”). Robert F. Smith is the Managing Member of VEFIIGP, and VEFIIGP
has no other managers or executive officers. Merger Sub, Parent, Vitera, AIV, Vista, VEP IV GP LLC and VEFIIGP are collectively
referred to as the “Offeror Group.” In this preliminary proxy statement, “we,” “us,” “our,”
“Company” and “Greenway” refer to Greenway Medical Technologies, Inc.
As of the date of this preliminary proxy statement,
the Offer is still pending and is scheduled to expire at midnight (New York time) on November 1, 2013, unless the Offer is extended
or terminated in accordance with the terms of the Merger Agreement. If the Offer is consummated, Parent intends to have Merger
Sub immediately consummate the merger of Merger Sub with and into Greenway (the “Merger”) without a stockholder meeting
and without any further action by the stockholders of the Company as a “short-form” merger under Delaware law.
This preliminary proxy statement (as it may
hereafter be amended from time to time) will only be mailed to our stockholders in definitive form if the Offer has terminated,
the adoption of the Merger by the Company’s stockholders is required by applicable law to consummate the Merger, and after
the Company receives clearance from the U.S. Securities and Exchange Commission (the “SEC”) to do so. In such event,
the Company will take the necessary steps to establish a record date for, give notice of, call, convene and hold a special meeting
of the holders of Shares (the “Special Meeting”) to vote upon the adoption of the Merger Agreement.
Depending on the outcome of the Offer, certain
information which appears in this preliminary proxy statement may no longer be relevant or material to the holders of Shares when
considering whether and how to vote with respect to the proposal to adopt the Merger Agreement or the decision whether to exercise
the right to demand appraisal of Shares held by them in accordance with Section 262 of the Delaware General Corporation Law. Accordingly,
if, under the circumstances described in this explanatory note and in accordance with applicable law and the terms of the Merger
Agreement, it becomes necessary to mail a proxy statement in definitive form to holders of Shares, we will update the disclosures
in this preliminary proxy statement to reflect the outcome of the Offer and as otherwise may be necessary.
The Offer is being made pursuant to the terms
and subject to the conditions set forth in the Offer to Purchase, dated October 4, 2013, and in the related Letter of Transmittal
(each as may be amended or supplemented from time to time) filed as exhibits to the Schedule TO. This preliminary proxy statement
has no effect on the Offer, and you should refer to the Schedule TO and our recommendation of the tender offer on Schedule 14D-9
filed with the SEC for further information regarding the Offer.
On behalf of the board of directors of Greenway
Medical Technologies, Inc. (“Greenway,” the “Company,” “we,” “our” or “us”),
I cordially invite you to attend a special meeting of stockholders of Greenway, to be held on [—] at [—] Eastern Time,
at [—].
On September 23, 2013, Greenway entered into
a definitive merger agreement to be acquired by an affiliate of Vista Equity Partners. The special meeting is being held in connection
with the transactions contemplated by the merger agreement. If the transactions contemplated by the merger agreement are completed,
you will be entitled to receive $20.35 in cash, without interest, less any required withholding taxes, for each share of our common
stock, par value $0.0001 per share (“Common Stock”), that you own (unless you have properly exercised your appraisal
rights with respect to such shares). At the special meeting, you will be asked to consider and vote upon the following proposals:
After due and careful discussion and consideration,
the Company’s board of directors has unanimously (i) determined that the Merger Agreement, the Support Agreements (as defined
below) and the transactions contemplated thereby are advisable and in the best interests of the Company and its stockholders, (ii)
approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions
contemplated thereby, and (iii) recommended that the Company’s stockholders vote in favor of the adoption and approval of
the Merger Agreement and the Merger.
Accordingly, the Company’s board of directors unanimously recommends that you vote
“FOR” the proposal to adopt the Merger Agreement, “FOR” the proposal to adjourn the special meeting to
solicit additional proxies, if necessary or appropriate, and “FOR” the advisory (non-binding) proposal to approve specified
compensation that may become payable to our named executive officers in connection with the Merger.
Approval of the proposal to adopt the Merger
Agreement requires the affirmative vote of holders of a majority of the outstanding shares of our common stock entitled to vote
thereon. The proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies and the advisory
(non-binding) proposal to approve the specified compensation that may become payable to our named executive officers in connection
with the Merger will each be approved if a majority in voting power of the shares represented in person or by proxy at the special
meeting and entitled to vote on the subject matter vote in favor of these proposals.
All of our directors, and certain of our executive
officers and significant stockholders, have agreed to vote at the special meeting and vote in favor of the proposal to adopt the
Merger Agreement pursuant to tender and support agreements entered into with Parent and Merger Sub (each a “Support Agreement”
and, collectively, the “Support Agreements”).These stockholders hold approximately 50.9% of our outstanding common
stock. As a result of the commitments of these stockholders to participate in the Special Meeting, we expect that holders of a
majority of the outstanding shares of our common stock entitled to vote at the Special Meeting will vote in favor of the proposal
to adopt the Merger Agreement, and that the proposal will be approved.
If your shares of our common stock are held
in “street name” by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be
unable to vote your shares of our common stock without instructions from you. You should instruct your bank, brokerage firm or
other nominee to vote your shares of our common stock in accordance with the procedures provided by your bank, brokerage firm or
other nominee. The failure to instruct your bank, brokerage firm or other nominee to vote your shares of our common stock “
FOR
”
approval of the proposal to adopt the Merger Agreement will have the same effect as voting “
AGAINST
” the proposal
to adopt the Merger Agreement.
The accompanying proxy statement provides you
with detailed information about the special meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached
as
Annex A
to the proxy statement. We encourage you to read the entire proxy statement and its annexes, including the Merger
Agreement, carefully. You may also obtain additional information about the Company from documents we have filed with the Securities
and Exchange Commission.
The proxy statement is dated [—], and
is first being mailed to our stockholders on or about [—].
PROPOSAL 1
ADOPTION OF THE MERGER AGREEMENT
THE MERGER
This discussion of the Merger is
qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as
Annex A
. You
should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.
The Merger Agreement provides that Merger
Sub will merge with and into the Company. The Company will be the Surviving Corporation and will continue to do business following
the Merger. As a result of the Merger, the Company will cease to be a publicly traded company. You will not own any shares of the
capital stock of the Surviving Corporation.
All of our directors, and certain of our
executive officers and significant stockholders, have agreed to vote at the Special Meeting and vote in favor of the proposal to
adopt the Merger Agreement. These stockholders hold approximately 50.9% of our outstanding common stock. As a result of the commitments
of these stockholders to participate in the Special Meeting, we expect that holders of a majority of the outstanding shares of
our common stock entitled to vote at the Special Meeting will vote in favor of the proposal to adopt the Merger Agreement, and
that the proposal will be approved.
Parties to the Merger
Greenway Medical Technologies, Inc.
100 Greenway Boulevard
Carrollton, Georgia 30117
(770) 836-3100
Greenway Medical Technologies, Inc., a
Delaware corporation, which we refer to in this proxy statement as “Greenway,” the “Company,” “we,”
“our,” or “us,” is a leading provider of integrated information technology solutions and managed business
services to healthcare providers throughout the United States. At the core of the Company’s suite of solutions and services
is PrimeSUITE, the Company’s award-winning, fully-integrated EHR, PM and interoperability solution. PrimeSUITE integrates
clinical, financial and administrative data into, what is substantially, one database to enable comprehensive views of patient
records and efficient workflow throughout each patient encounter, reduce clinical and administrative errors, and allow for the
seamless exchange of data between our customers and the broader healthcare community. The Company augments its solutions by offering
managed business services such as clinically driven revenue cycle and EHR-enabled research services. The Company became a public
company on February 1, 2012. Its principal offices are located at 100 Greenway Boulevard, Carrollton, GA 30117 and its telephone
number is (770) 836-3100.Greenway is a leading provider of integrated information technology solutions and managed business services
to physician and mid-level healthcare providers, many of whom are organized in group practices that are independent, part of healthcare
enterprises, or owned by hospitals, as well as retail and other ambulatory clinics, and alternative care venues.
For additional information about the Company
and our business, please visit our website at www.greenwaymedical.com. Our website address is provided as an inactive textual reference
only. The information contained on our website is not incorporated into, and does not form a part of this proxy statement or any
other report or document on file with or furnished to the SEC. See also “Where You Can Find More Information” on page
[—]. Company common stock is publicly traded on the NYSE under the symbol “GWAY.”
Crestview Acquisition Corp
.
c/o Vista Equity Partners Fund IV, L.P.
401 Congress Avenue
Suite 3100
Austin, Texas 78701
(512) 730-2400
Crestview Acquisition Corp., a Delaware
corporation (which we refer to in this proxy statement as “Merger Sub”) and wholly owned direct subsidiary of VCG Holdings,
LLC, was formed on September 12, 2013 solely for the purpose of engaging in the transactions contemplated by the Merger Agreement
(including the Offer and the Merger) and has not engaged in any business activities other than in connection with the transactions
contemplated by the Merger Agreement and arranging of the equity financing and debt financing in connection with the Offer and
the Merger.
VCG Holdings, LLC
c/o Vista Equity Partners Fund IV, L.P.
401 Congress Avenue
Suite 3100
Austin, Texas 78701
(512) 730-2400
VCG Holdings, LLC, a Delaware limited liability
company (which we refer to in this proxy statement as “Parent”), was formed on September 12, 2013 solely for the purpose
of engaging in the transactions contemplated by the Merger Agreement (including the Offer and the Merger) and has not engaged in
any business activities other than in connection with the transactions contemplated by the Merger Agreement and arranging of the
equity financing and debt financing in connection with the Offer and the Merger.
Merger Sub and Parent are affiliates of
Vista Equity Partners Fund IV, L.P. (“Vista”). Vista has provided to Parent an equity commitment up to $650 million
(subject to adjustments as described in the Equity Commitment Letter). After giving effect to the Offer and the Merger, the Company,
as the surviving corporation, will be affiliated with Vista.
Merger Consideration
In the Merger, each outstanding share of
Company common stock (excluding shares held (i) by the Company (including treasury shares), Parent or Merger Sub and (ii) by stockholders
who have perfected and not withdrawn a demand for appraisal rights or otherwise lost appraisal rights under Delaware law with respect
to such shares) will be converted into the right to receive the per share Merger Consideration of $20.35 in cash, without interest
and less any required withholding taxes.
Background of the Merger Agreement
Greenway is a leading provider of integrated
information technology solutions and managed business services to physician and mid-level healthcare providers, many of whom are
organized in group practices that are independent, part of healthcare enterprises, or owned by hospitals, as well as retail and
other ambulatory clinics, and alternative care venues.
Prior to and following the time of Greenway’s
initial public offering in February 2012, Greenway’s management and Board have focused on implementing a business strategy
that is designed to guide Greenway to becoming the most trusted and effective provider of technology solutions and managed business
services to medical providers. Greenway’s strategic plan has not historically included a sale of the company. However, the
decision of the Board on September 23, 2013 to, among other things, unanimously determine that the Merger Agreement and the Transactions,
including the Offer and the Merger, are advisable to, and in the best interests of, Greenway and its stockholders, ultimately resulted
from the following series of events.
On March 1, 2013, representatives of Vista
contacted representatives of J.P. Morgan (due to J.P. Morgan’s involvement in Greenway’s initial public offering) to
indicate Vista’s interest in potentially combining Greenway with one of Vista’s portfolio companies, Vitera Healthcare
Solutions, LLC (“Vitera”), and to ask J.P. Morgan about the possibility of arranging a call or a meeting with Greenway.
Neither Greenway nor J.P. Morgan solicited this indication of interest.
On or about March 5, 2013, representatives
of J.P. Morgan contacted Wyche T. Green, III (Greenway’s President Chief Executive Officer). After some discussion, Mr. Green
asked J.P. Morgan to arrange a potential meeting with Vista. Mr. Green subsequently informed the Board of his conversation with
J.P. Morgan, Vista’s potential interest in Greenway, and the potential meeting with Vista.
On May 17, 2013, Mr. Green, James Cochran
(Greenway’s Chief Financial Officer) and D. Neal Morrison (a member of Greenway’s Board) met with members of the Vista
team, as well as a member of Vitera’s management team, at Greenway’s headquarters in Carrollton, Georgia. At the meeting,
representatives of Greenway, Vista and Vitera each discussed their perspective on the ambulatory healthcare market, presented an
overview of their respective businesses and discussed potential strategic benefits and synergies of combining Greenway with Vitera.
After the May 17, 2013 meeting, Vista reiterated
to J.P. Morgan its interest in pursuing further discussions relating to the possibility of combining Greenway with Vitera, and
requested that Greenway provide limited and targeted data to help inform Vista’s interest in Greenway.
Between May 18, 2013 and June 4, 2013,
representatives from Greenway and J.P. Morgan had several discussions relating to the status and possibility of a business combination,
as well as other topics related to a possible transaction.
On May 22, 2013, Mr. Green and a representative
of Vista spoke telephonically about the possible combination transaction and the information Vista would need from Greenway at
that stage. A representative of Vista sent a follow up email on May 24, 2013, with targeted questions and data requests meant to
assist Vista in preparing a more informed sense of valuation.
On May 31, 2013, a representative of Vista
followed up with Mr. Green to ask when Vista would receive the information that they had requested. Shortly after this call, representatives
from J.P. Morgan advised Vista that in order for Greenway to provide the requested information, Vista would first need to execute
a confidentiality agreement.
On June 5, 2013, J.P. Morgan sent Vista
a draft confidentiality agreement, which was prepared by Paul Hastings LLP (“Paul Hastings”), Greenway’s outside
corporate counsel. Greenway and Vista negotiated the terms of the confidentiality agreement, including customary “standstill”
provisions, over the next several days.
On June 10, 2013, J.P. Morgan met telephonically
with members of Greenway’s management team. J.P. Morgan recommended that Greenway’s management begin reviewing and
collecting the requested information for Vista, and J.P. Morgan indicated that it would form a preliminary view on Greenway’s
valuation and a potential pro forma combination between Greenway and Vitera, as well as prepare a list of potential next steps
and guidance relating to the process going forward for the Board. After informal consultation with the Board, Greenway’s
management team began collecting the relevant information.
On June 13, 2013, the Board met telephonically
to discuss a potential business combination with Vitera. J.P. Morgan led a discussion relating to an overview of a potential transaction,
and provided a draft preliminary valuation analysis. J.P. Morgan also presented background information on both Vista and Vitera,
reviewed recent transactions in the healthcare information technology sector, and provided an overview of Vista’s due diligence
request. After a discussion, the Board concluded that, while the Board was satisfied with Greenway’s performance and strategy
as a stand-alone company, it should continue to review and consider Vista’s interest in Greenway as it could potentially
be advantageous for its stockholders. The Board directed management to continue limited discussions with Vista, to provide information
on a limited basis to Vista, to finalize, with the assistance of Paul Hastings, a confidentiality agreement between Greenway and
Vista, which should take into consideration that Vitera is in the same industry as Greenway and should address the Board’s
concern that Greenway should not share proprietary or sensitive information with certain people at Vitera. The Board also instructed
management that any discussion with Vista about going forward with a potential transaction would be premature at this point. The
Board also discussed the appropriateness of formally engaging J.P. Morgan to assist with the process and any resulting transaction
as well as the need for confidentiality, as rumors of a possible transaction could create customer concerns and disruptions, and
impact Greenway’s business.
On June 14, 2013, Greenway and Vista signed
the confidentiality agreement, which included customary “standstill” provisions prohibiting Vista and its representatives
from taking certain actions involving or with respect to Greenway (except that Vista was permitted to submit a private proposal
to Greenway) for a period of one year, and a prohibition against Vista disclosing any confidential information to Vitera without
Greenway’s prior written consent (the “Confidentiality Agreement”).
Beginning on or around June 18, 2013 and
through the signing of the Merger Agreement, the management of Greenway provided representatives of Vista and Vitera responses
to various due diligence requests, participated in due diligence calls with representatives of Vista and Vitera and provided product
demonstrations to representatives of Vista.
On June 24, 2013, the Board met telephonically
to discuss engaging J.P. Morgan to act as Greenway’s financial advisor, and considered J.P. Morgan’s previous relationships
with Vista and its portfolio companies, as well as the terms of such an engagement. William G. Esslinger, Jr. (Greenway’s
Vice President, General Counsel and Secretary) and a representative from Paul Hastings led the discussion with the Board and answered
the Board’s questions.
On June 25, 2013, Greenway’s management
met telephonically with Vista’s management to review the information provided during the week of June 17, 2013, and to answer
initial due diligence questions.
On June 28, 2013, subsequent to Vista’s
review of the initial and limited information provided to by Greenway’s management, representatives of Vista called representatives
of J.P. Morgan to express Vista’s continued interest in Greenway and to indicate that Vista was interested in combining Vitera
with Greenway in a transaction at a cash price of $18.50 per share. Representatives of Vista indicated that Vista thought $18.50
per share was extremely compelling, and was deliberately high in order to demonstrate Vista’s seriousness as its initial
offer was well above the closing price of $12.14 on that date. Representatives of Vista also indicated that, while Vista was willing
to structure the deal in such a manner as to provide a high degree of deal certainty, including its willingness to explore a nontraditional
commitment to consummate the transaction even if Vista’s debt financing was not available, Vista would expect certain key
deal terms in exchange for such transaction certainty and approach.
On June 30, 2013, the Board met telephonically
and representatives of J.P. Morgan updated the Board on their discussion with Vista on June 28, 2013. Representatives of J.P. Morgan
then led the Board through another presentation on Greenway’s preliminary valuation. Representatives of Paul Hastings and
J.P. Morgan also discussed issues related to deal structure, financing, closing certainty and risks related to the offer and a
deal with Vista. The Board agreed that Vista’s offer was serious and worth pursuing further, but that the offer was not at
a point that could be accepted without further consideration of all issues and negotiation of a possibly higher price. The Board
then authorized Greenway’s management to continue discussions with Vista and to provide Vista with additional information,
including certain unaudited forecasts (the “Company Case 1 Projections”), to attempt to increase Vista’s offer.
On July 2, 2013, the Board met telephonically
to discuss the draft engagement letter with J.P. Morgan, and the Board instructed Greenway’s management to negotiate and
finalize J.P. Morgan’s engagement.
On July 7, 2013, representatives from Greenway’s
management sent the Company Case 1 Projections to J.P. Morgan for review, and subsequently met telephonically with J.P. Morgan
to discuss these projections.”
On July 9, 2013, J.P. Morgan provided the
Company Case 1 Projections to Vista. In addition, on July 9, 2013, Greenway’s management held a call with representatives
of J.P. Morgan to finalize the engagement. The engagement letter between Greenway and J.P. Morgan was executed on July 10, 2013,
and was effective as of June 6, 2013.
On July 11, 2013, representatives of Vista
participated on a call with representatives of Greenway’s management team and representatives of J.P. Morgan to discuss the
Company Case 1 Projections.
On July 16, 2013, the Board met telephonically,
and Mr. Green provided a summary of events to date, and representatives of Paul Hastings gave a detailed presentation regarding
the Board’s fiduciary duties in the context of the potential combination of Greenway with Vitera. Representatives of Paul
Hastings discussed the Board’s duties in general and specifically with respect to how they applied to the potential strategic
combination transaction with Vitera, including discussion related to deal certainty coupled with Vista’s desire for certain
deal terms, and Delaware cases regarding pre-agreement and post-agreement market checks.
On July 24, 2013, the Board met telephonically,
and representatives of J.P. Morgan gave a presentation on Greenway’s preliminary valuation, and noted that a price within
the range of $20.00 to $22.00 would be attractive to Greenway and its stockholders. In addition, representatives of J.P. Morgan
provided a summary of events to date and led a detailed discussion on, among other things, Vista’s ability to finance the
possible transaction. The Board considered that, while Vista’s profile as a private equity firm was traditionally that of
a financial buyer, the potential strategic combination of Greenway with Vitera could generate strategic benefits unique to Vitera
which would allow it to offer a higher price than other potential buyers. The Board also reviewed the Company Case 1 Projections
that were provided to Vista and determined that, while they were within the range of possible outcomes, the projections could be
viewed as being too aggressive, and Vista could question Greenway’s ability to achieve them.
On July 26, 2013, representatives of Vista
contacted representatives of J.P. Morgan and, among other things, indicated that Vista was willing to raise its offer for an all-cash
transaction from $18.50 to $19.25 per share based on the additional information and Company Case 1 Projections that Greenway had
provided to Vista. Representatives of Vista further indicated that the new offer was at Vista’s high end of supportability
in light of the fact that Vista believed that the Company’s budget and projections were very aggressive and were in large
part based on large increases in the number of providers and assumed adoption rates for the new clinically driven revenue cycle
management product recently released by Greenway that were significantly above any historical achievements.
On July 27, 2013, the Board met telephonically,
and representatives of J.P. Morgan provided a summary of their conversation with a representative of Vista the night before. In
addition, J.P. Morgan offered a preliminary financial analysis of the new offer, and concluded that Vista’s new offer was
at the high end of what the public equity research forecasts would support. J.P. Morgan observed that Vista’s willingness
to pay such a high price for Greenway was potentially driven by the unique strategic benefits obtainable from a combination with
Vitera, rather than a purely financial perspective, but that, nonetheless, Vista’s willingness to raise its price further
may be limited. Following discussions and considering the advice and information they received, the Board authorized J.P. Morgan
to “test the waters” and inform Vista that the merger price had to be at or near $22.00 per share for the Board to
favorably consider the offer.
On July 30, 2013, the Board met telephonically,
and Mr. Green provided an update on J.P. Morgan’s conversations with Vista. Mr. Green indicated that J.P. Morgan had a call
with Vista on July 29, 2013 and that J.P. Morgan had informed Vista of the Board’s views on the merger price and also informed
Vista that the Board was unwilling to accept any offer that contained a financing condition or provided for Vista to terminate
the transaction (even if a reverse termination fee were to be paid) in the event that Vista’s debt financing was not funded.
Mr. Green said that J.P. Morgan reported that Vista indicated it would be very difficult to offer a price that high, and that
going any higher than $19.25 per share would necessarily be conditioned on certain key deal terms, including Greenway agreeing
to a period of pre-signing exclusivity with Vista and customary “no shop” provisions in any definitive merger agreement.
Mr. Green also reported that, subsequent to the call between J.P. Morgan and Vista on July 29, 2013, Vista had reached out to Mr.
Green directly and indicated that they wanted to have a one-on-one conversation with Mr. Green about the deal to reiterate the
message that Vista delivered to J.P. Morgan on the July 29, 2013 call. Representatives of Paul Hastings then reviewed with the
Board considerations relating to key deal terms, including market checks and fiduciary outs for the Board. The Board also discussed
who the alternative bidders might be that could be interested and able to finance a transaction similar to Vista’s proposal,
and deferred further consideration of those issues until a revised offer and terms were received from Vista.
On July 31, 2013, Mr. Green met with a
representative of Vista for dinner, at which, among other things, the representative of Vista indicated that Vista would seek to
form a senior leadership team for the combined company comprised of key executives of both Greenway and Vitera. While not a condition
of Vista’s willingness to proceed, it was very important to Vista that Mr. Green was committed to remaining actively involved
in the leadership of the combined company. As instructed by the Board on July 30, 2013, Mr. Green did not inquire about any details
or any other terms relating to his future employment. The representative of Vista and Mr. Green also discussed the status
of negotiations, and the representative of Vista communicated to Mr. Green that, at that time, Vista had no basis to increase their
offer from $19.25 a share, and certainly could not contemplate increasing its offer price based on the limited information provided
by Greenway to Vista in response to Vista’s diligence requests to date.
On August 2, 2013, representatives of Vista
called representatives of J.P. Morgan, to indicate that, if Vista was granted further access to Greenway in order to conduct a
more detailed diligence process, Vista might be able to make an offer for an all-cash transaction at a range between $20.00 and
$21.00 per share, but that, regardless of any additional due diligence, Vista would not be willing to go higher than $21.00 per
share. Representatives of Vista also indicated that, in order to even contemplate making an offer in this price range, Greenway
would need to agree to a 30-day exclusivity period with Vista during which Vista would conduct in-depth due diligence on Greenway.
On August 3, 2013, the Board met telephonically,
and Mr. Green provided an update to the Board about his dinner with the representative of Vista. Representatives from J.P. Morgan
also provided an update on the increased offer from Vista and once again summarized the preliminary valuation of Greenway, noting
that the offer was attractive and well within the full value range for the Company. After a discussion, the Board agreed that the
price range provided by Vista was within the full value range for the Company, eliminated operating and market risks and provided
an excellent liquidity opportunity for all stockholders. The Board then authorized J.P. Morgan to obtain a written indication
of interest from Vista, which would include a specific price, rather than a range, and would specify other key deal terms, including
those key deal terms that Vista had indicated would be necessary for its current proposed range.
Between August 3, 2013 and August 8, 2013,
representatives from J.P. Morgan had a series of conversations with representatives from Vista about the offer price and the terms
of a potential deal.
On August 8, 2013, after a call from Vista,
J.P. Morgan received via email from Vista a preliminary non-binding letter of interest relating to the proposed transaction. The
letter indicated that the acquisition would be by way of an all-cash tender offer for all of the Company Common Stock at $20.35
per share. In addition, the letter indicated that Vista would obtain a commitment for all sources of financing before the signing
of a definitive agreement and, that while any definitive agreement would have a customary “no-shop” with a fiduciary
termination right for superior proposals, matching rights, break-up fees and remedies consistent with precedent leveraged transactions,
closing of the transaction would not be contingent on financing. Also, Vista indicated that, in light of the significant amount
of time and resources Vista was prepared to commit to this opportunity, Vista’s willingness to proceed with the proposal
was conditioned on Vista being given a 30-day period of exclusivity, with extensions if necessary and mutually agreed to by both
parties.
On August 9, 2013, the Board met telephonically
to review and discuss Vista’s preliminary non-binding letter of interest. Representatives from J.P. Morgan gave a presentation
on Greenway’s preliminary valuation, and indicated that Vista’s new offer price placed a very strong value on the Company.
In addition, representatives from J.P. Morgan noted that it would be difficult for any other likely financial buyers to be able
to match Vista’s new offer price or to commit sufficient equity to cover the entire offer price without the availability
of benefits common to strategic buyers, and that the multiples that were implied by Vista’s offer were extremely high for
likely strategic buyers. Representatives from J.P. Morgan then reviewed Vista’s letter, including the fact that the offer
would not be contingent on financing. Representatives from J.P. Morgan also noted that it was clear from their conversation with
representatives of Vista that this was Vista’s best and final offer and that the increased per share price was a package
deal, with the $20.35 price per share being contingent upon Greenway’s acceptance of Vista’s proposed key deal terms
that Vista had included in its offer. The Board was of the opinion that the offered price represented the most Vista would pay,
and instructed Mr. Green, J.P. Morgan and Paul Hastings to seek clarity on some of the terms set forth in Vista’s letter
and to discuss and, if possible, negotiate with Vista certain requests for key deal terms in exchange for enhanced deal certainty,
including Greenway’s desire to obtain Vista’s commitment to consummate the transaction even if Vista’s debt financing
was not available and ability to seek full specific performance as a remedy.
On August 14, 2013, Mr. Green and a representative
of Vista discussed the terms of Vista’s letter, and Vista agreed to deliver an equity commitment letter that would be sufficient
to consummate the transaction even if Vista’s debt financing was not available and to grant Greenway full specific performance
to enforce this commitment (as opposed to being limited to a reverse termination fee in such circumstances). Pursuant to the Board’s
instructions, Mr. Green and the representative of Vista also preliminarily agreed to a customary “no-shop” provision,
which would permit Greenway to respond to unsolicited proposals and ultimately terminate the Vista deal to accept a superior proposal,
and a termination fee of 3.75% of the equity value of the deal payable on certain circumstances.
On August 14, 2013, J.P. Morgan received
a revised preliminary non-binding letter of interest from Vista that reflected Mr. Green’s discussion with the representative
of Vista earlier in the day.
On August 15, 2013, the Board met in person
in Carrollton, Georgia. Mr. Green updated the Board on his conversation with the representative of Vista, and the Board reviewed
the negotiated deal terms and the revised letter from Vista with representatives of Paul Hastings and J.P. Morgan. Following a
discussion, the Board unanimously agreed to move forward to pursue the Vista offer and authorized Mr. Green to sign a 30-day exclusivity
agreement with Vista. The exclusivity agreement was executed on August 17, 2013, and Vista confirmed by email that certain members
of Vitera and Vista’s potential lenders would be considered “associates” under the Confidentiality Agreement.
Between August 17, 2013 and August 28,
2013, Greenway received many due diligence requests from Vista and its advisors, and Greenway responded to these requests. Greenway
provided Vista and its representatives with access to a virtual data room on August 23, 2013.
On August 28 and August 29, 2013, Greenway’s
senior management team met with representatives of Vista and with members from Vitera’s senior management team, along with
Vista’s potential lenders, at Paul Hastings’ offices in Atlanta, Georgia. Greenway delivered several presentations
on its business, operations and market trends, and both Vista and Vitera delivered presentations providing a general overview of
their respective businesses. Representatives of Paul Hastings and J.P. Morgan were also in attendance at these meetings.
On August 30, 2013, Kirkland & Ellis
LLP (“Kirkland”), outside corporate counsel to Vista, sent an initial draft of the Merger Agreement to Paul Hastings.
Among other things, this draft provided for a “dual track” structure with the tender offer to start within six business
days of signing the agreement, matching rights in the event of a potential superior offer, and a cap on Vista’s total monetary
damage set at 7.5% of the equity value of the deal.
Between August 30, 2013 and September 10,
2013, Greenway continued to respond to Vista’s due diligence requests, and representatives of Paul Hastings and J.P. Morgan
continued to discuss the terms of the transaction with Vista and its representatives.
On September 6, 2013, Greenway and Vista
agreed to amend the Confidentiality Agreement (the “First Amendment to the Confidentiality Agreement”) to further document
the scope of Vista’s “associates” to include Vitera and Vista’s potential lenders, which had been previously
confirmed by email on August 17, 2013, and to provide for certain additional protections of confidential Greenway information obtained
during the due diligence process.
On September 10, 2013, the Board met telephonically,
and representatives from J.P. Morgan provided an update on the ongoing negotiations with Vista. They also reiterated that in their
opinion it would be difficult for financial buyers to be able to match Vista’s offer price or to commit sufficient equity
to cover the entire offer price without the availability of the strategic benefits obtainable from a combination with Vitera, and
the multiples that were implied by Vista’s offer were extremely high for likely strategic buyers. The Board also discussed
the draft Merger Agreement and considered its terms, including Vista’s position on key deal terms. With this in mind, the
Board directed Paul Hastings, among other things, to seek a longer period between announcement and commencement of the tender offer
to allow additional time for a third party to consider making an unsolicited acquisition proposal while locking in Vista’s
offer which presented an attractive transaction at a premium price, to limit the number of Vista’s matching rights and to
remove the cap on Vista’s monetary damages. On September 10, 2013, Paul Hastings sent a revised version of the Merger Agreement
to Kirkland that was consistent with the Board’s authorization.
On September 15, 2013, representatives
of Paul Hastings, J.P. Morgan, Vista and Kirkland met telephonically to discuss the draft Merger Agreement, during which, among
other things, Vista indicated that many of the changes to the Merger Agreement were unacceptable given that Vista latest offer
was a package deal and in light of the nontraditional deal certainty terms that Vista had agreed to provide to the Board in exchange
for other deal terms. In addition, on September 15, 2013, Mr. Green and representatives of Vista spoke telephonically, and representatives
of Vista reiterated Vista’s position that the current offer was a package deal that included both the terms of the Merger
Agreement and the per share offer price of $20.35. Mr. Green also had several conversations with representatives of Paul Hastings
and J.P. Morgan relating to key deal terms and deal certainty. Late on September 15, 2013, Kirkland sent a revised version of the
Merger Agreement to Paul Hastings.
On September 17, 2013, the Board met telephonically,
and Mr. Green provided an update to the Board on the ongoing negotiations with Vista and the recent discussions with Vista and
its representatives. The Board discussed the revised Merger Agreement, as well as Vista’s negotiating posture and Greenway’s
negotiating strategy, with representatives of Paul Hastings and J.P. Morgan. The Board concluded that the most important remaining
issue in the latest draft of the Merger Agreement was the length of the period between announcement and commencement of the tender
offer, and directed Paul Hastings and J.P. Morgan to, among other things, continue to seek a longer period, as well as to seek
a termination fee in an amount equal to Vista’s proposed cap on monetary damages payable by Vista in certain circumstances
instead of removing such cap.
On September 18, 2013, Paul Hastings sent
a revised version of the Merger Agreement to Kirkland that was consistent with the Board’s direction, and indicated to Kirkland
that the Board was scheduled to meet during the early evening on September 19, 2013 and asked that they raise any significant objections
before that time so that they could be discussed with the Board.
During the afternoon of September 19, 2013,
representatives of Vista called Mr. Green and representatives of J.P. Morgan, and representatives of Kirkland called Paul Hastings,
to indicate that, with very few exceptions, none of the proposed changes in the September 18 draft of the Merger Agreement would
be accepted. During the early evening of September 19, 2013, the Board met telephonically, and Mr. Green, along with representatives
of Paul Hastings and J.P. Morgan, provided an update to the Board and their discussions with Vista and its representatives
earlier in the day. The Board reviewed with J.P. Morgan how much time it could take for a potential third party, if any were interested,
to emerge with a superior offer and sign a definitive agreement with Greenway after the announcement of the transaction with Vista.
After its review, J.P. Morgan stated that, given that any third party would likely be a large and experienced strategic buyer with
cash on hand or pre-existing financing that would enable it to make a credible superior offer, the existing timeframe in the draft
Merger Agreement was likely sufficient, but that adding several days would obviously be preferable. After discussing Greenway’s
ongoing negotiating strategy, the Board instructed Mr. Green and J.P. Morgan to inform Vista that, notwithstanding Vista’s
position, the Board could not proceed without there being at least nine business days between the announcement and commencement
of the tender offer, so that there would be at least approximately 40 total calendar days between the announcement and the initial
expiration of the tender offer.
During the evening of September 19, 2013,
Mr. Green and representatives of J.P. Morgan spoke to Vista, and the parties agreed to the increase in the number of days between
announcement and the commencement of the tender offer. Kirkland provided a revised draft of the Merger Agreement, which also included,
among other things, a termination fee in the amount of $48,273,000 payable by Vista in certain circumstances and a cap on monetary
damages in an equal amount, and Paul Hastings and Kirkland continued to finalize the Merger Agreement over the next three days.
On September 20, 2013, Mr. Green met with
representatives of Vista in Boulder, Colorado. At this meeting, the parties discussed how Vista manages its businesses and what
a combined Greenway-Vitera company might look like, including reiterating Vista’s intent, should the deal proceed, to form
a senior leadership team for the combined company comprised of key executives of both Greenway and Vitera. Representatives of Vista
and Mr. Green did not discuss any employment arrangements or terms and, as instructed by the Board, Mr. Green did not inquire about
any details or other terms relating to his potential future employment.
On September 23, 2013, the Board met in
person in Atlanta, Georgia to review the final terms of the Merger Agreement. Representatives of J.P. Morgan reviewed with the
Board its financial analyses of the consideration of $20.35 in cash per share of Company Common Stock and delivered to the Board
its oral opinion, which was confirmed by delivery of a written opinion dated September 23, 2013, to the effect that, as of such
date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review
undertaken by J.P. Morgan in preparing the opinion, the consideration to be paid to the holders of the Company’s common stock
in the proposed transaction was fair, from a financial point of view, to such holders. Following further discussion, and after
consultation with its advisors, the board of directors unanimously, among other things, (i) determined that the Merger Agreement,
the Support Agreements and the Transactions, including the Offer, the Merger and the transactions contemplated in the Support Agreements,
are advisable to, and in the best interest of, Greenway and its stockholders, (ii) approved the execution, delivery and performance
by Greenway of the Merger Agreement and the consummation of the Transactions, including the Offer and the Merger, (iii) authorized
and approved the Top-Up Option and the issuance of the Top-Up Shares (as defined below), and (iv) resolved to recommend that the
stockholders of Greenway tender their Shares to Parent pursuant to the Offer, and, if applicable, approve the adoption of the Merger
Agreement and the Merger.
During the evening of September 23, 2013,
Vista executed the Equity Commitment Letter and Greenway and Vista executed the Merger Agreement and the Limited Guaranty and issued
a joint press release announcing the execution of the Merger Agreement.
Recommendation of Our Board of Directors; Reasons for the
Transactions
On September 23, 2013, our Board unanimously
(i) determined that the Merger Agreement, Support Agreements and the Transactions, including the Offer and the Merger,
are advisable to, and in the best interest of, Greenway and its stockholders, (ii) approved the execution, delivery and performance
by Greenway of the Merger Agreement and the consummation of the Transactions, including the Offer and the Merger, (iii) authorized
and approved the Top-Up Option and the issuance of the Top-Up Option Shares, and (iv) resolved to recommend that our stockholders
tender their Shares to Parent pursuant to the Offer, and, if applicable, approve the adoption of the Merger Agreement and the
Merger.
In evaluating the Merger Agreement and
the Transactions, our Board consulted with our senior management regarding the business and financial condition of Greenway, trends
in our industry, future prospects and the terms and conditions of the Transactions. In addition, our Board consulted with our outside
legal advisor, Paul Hastings, regarding the proposed terms and conditions of the Transactions and the obligations of the members
of the Board in their consideration of the Transactions, and our financial advisor, J.P. Morgan, regarding the fairness, from a
financial point of view, of the consideration to be paid to the holders of Shares in the proposed Transactions. In the course of
reaching its determination to approve the Merger Agreement and the Transactions and to recommend that our stockholders accept the
Offer and tender their Shares pursuant to the Offer and, if required, adopt the Merger Agreement and approve the Merger, our board
carefully considered numerous factors, including the following factors (which are not listed in any relative order of importance):
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the fact that the Merger Consideration of $20.35 per share will be paid in cash, providing certainty, immediate value and liquidity
to our stockholders;
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the transaction consideration represents a 62% premium to Greenway’s 90-day volume weighted average stock price, and
a 20% premium to Greenway’s closing share price the day before the merger agreement was signed;
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the possibility that it could take a considerable period of time before the trading price of our common stock would reach and
sustain trading at or above the per share Merger Consideration of $20.35, as adjusted for present value;
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the fact that the Offer cannot start any earlier than nine (9) business days after the date of the Merger Agreement, which
provides additional time for a potential third-party to make a Superior Offer;
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the belief of our Board, after a thorough review of our business, market trends and financial condition, and discussions with
our management and advisors, that the value offered to stockholders pursuant to the Transactions is more favorable to our stockholders
than the potential value that might have resulted from remaining an independent public company, considering:
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the
changing nature of our client base and related risks;
·
the
shift to subscription-based pricing models;
·
the
risks inherent in the introduction of new products and services;
·
the
size of the Company relative to its competitors in the industry;
·
the
substantial growth rates that are required to meet our financial projections; and
·
the
execution and other risks and uncertainties relating to future execution of our strategic plan;
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our Board’s familiarity with our current and historical financial condition, results of operations, prospects, business
strategy, competitive position, properties, assets and prospects;
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the belief of our Board based upon arm’s length negotiations with Vista that the price to be paid by Merger Sub is the
highest price per share that Vista was willing to pay for Greenway and that the terms of the Merger Agreement include the most
favorable terms to us to which Vista was willing to agree;
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the fact that the Merger Agreement was unanimously approved by our Board, which is comprised of a majority of independent directors
who are not affiliated with Parent or Merger Sub or any of their affiliates and are not employees of Greenway or any of its subsidiaries,
and which retained and received advice from our financial advisor and legal advisor in evaluating, negotiating and recommending
the terms of the Merger Agreement;
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the oral opinion of J.P. Morgan delivered to the Board on September 23, 2013, which was confirmed by delivery of a written
opinion dated September 23, 2013, to the effect that, as of such date and based upon and subject to the assumptions made, procedures
followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, the consideration
to be paid to the holders of the Shares in the proposed Transaction was fair, from a financial point of view, to such holders,
as more fully described below under the caption “— Opinion of J.P. Morgan Securities LLC”. The full
text of the written opinion of J.P. Morgan, dated September 23, 2013, which sets forth, among other things, the assumptions made,
procedures followed, matters considered and limitations on the review undertaken in rendering the opinion, is attached as
Annex
B
to this proxy statement;
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the fact that Parent has received an equity commitment letter that will be sufficient for Parent to consummate the transactions
contemplated by the Merger Agreement even if Parent’s debt financing is not available, and the reputation of the financing
sources, each of which, in the reasonable judgment of our Board, increases the likelihood of such financings being completed;
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the fact that the Merger Sub must extend the Offer if requested by us for successive periods of ten business days until the
earliest to occur of (i) the valid termination of the Merger Agreement, (ii) three business days after the date on which the SEC
has, orally or in writing, confirmed that it has no further comments on the proxy statement to be filed by the Company in connection
with the adoption of the Merger Agreement, including by informing the Company that it does not intend to review the proxy statement
or (iii) March 22, 2014 (the “End Date”), if, on any scheduled expiration date, any of the conditions to the consummation
of the Offer is not satisfied and has not been waived;
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the terms and conditions of the Merger Agreement, including the following related factors:
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the
transaction is structured as a tender offer, which can be completed, and the cash Merger Consideration can be delivered to our
stockholders, on a prompt basis, following satisfaction or, in certain cases, waiver of the conditions to the Offer, reducing the
period of uncertainty during the pendency of the Transactions to stockholders, with a second-step merger in which stockholders
who do not tender their Shares in the Offer will receive cash consideration equal to the Merger Consideration;
·
our
ability to convert the structure into a one-step merger in the event the conditions to the Offer are not met;
·
the
nature of the conditions to Merger Sub’s obligations to consummate the Offer, the Merger and other Transactions and the risks
of non-satisfaction of such conditions;
·
the
ability of our Board under the Merger Agreement to withdraw or modify its recommendation that our stockholders accept the Offer
and tender their Shares or vote in favor of adoption of the Merger Agreement in certain circumstances, including, most importantly,
in connection with a Superior Offer, and our right to terminate the Merger Agreement in order to accept a Superior Offer and enter
into a definitive agreement with respect to such Superior Offer, in both cases subject to payment of a termination fee;
·
the
conclusion of our Board that the termination fee and the circumstances when such termination fee may be payable, are reasonable
in light of the benefit of the Offer, Merger and the other Transactions, and would not be a significant impediment to third parties
interested in making a Superior Offer;
·
the
fact that pursuant to the Merger Agreement we are entitled to specific performance and other equitable remedies to prevent breaches
of the Merger Agreement, and can cause Parent to enforce the obligations of Vista under the Equity Commitment Letter in order to
cause the Equity Financing to be timely completed;
·
the
fact that the Merger Agreement provides that, in the event of a failure of the Transactions to be consummated under certain circumstances,
and as an alternative to specific performance under the Merger Agreement, Parent will pay us a $48,273,000 termination fee, without
our having to establish any damages, and the Guaranty of such payment obligation by an entity affiliated with Vista pursuant to
the Limited Guaranty;
·
the
likelihood that the Offer or Merger will be consummated on a timely basis, including the likelihood that the Transactions will
receive all necessary regulatory approvals;
·
the
availability of statutory appraisal rights to our stockholders who do not tender their Shares in the Offer or vote in favor of
the adoption of the Merger Agreement and otherwise comply with all required procedures under the General Corporation Law of the
State of Delaware (“DGCL”); and
·
the
fact that the End Date under the Merger Agreement on which either party, subject to certain exceptions, can terminate the Merger
Agreement allows for sufficient time to consummate the Transaction.
Our Board also considered a variety of
risks and other potentially negative factors of the Merger Agreement and the Transactions, including the following:
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the fact that our stockholders will not participate in any potential future earnings or growth of Greenway and will not benefit
from any appreciation in the value of the Company as a private company;
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that, under certain circumstances, we will be required to pay Parent a termination fee and reimburse Parent’s reasonable
and documented out-of-pocket fees and expenses (up to $4,505,000), in connection with the termination of the Merger Agreement;
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the fact that, if the Offer and the other Transactions are not consummated in a timely manner or at all:
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the trading price of Shares could be adversely affected;
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we will have incurred significant transaction and opportunity costs attempting to consummate the Transactions;
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we may lose employees after announcement of the Merger Agreement;
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our business may be subject to significant disruption; and
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our directors, officers and other employees will have expended considerable time and effort to consummate the Transactions;
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the restrictions in the Merger Agreement on our actively soliciting competing bids to acquire Greenway;
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the fact that
Parent and Merger
Sub are newly formed
entities with essentially
no assets other than
equity and debt commitments,
and that, notwithstanding
our specific performance
remedy under the
Merger Agreement,
our remedy in the
event of breach of
the Merger Agreement
by Parent or Merger
Sub may be limited
to receipt of the
termination fee provided
under the Merger
Agreement, which
is guaranteed
by an entity
affiliated with Vista
and that under certain
circumstances we
may not be entitled
to a termination
fee at all;
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the $24,136,000 termination fee payable by Greenway to Merger Sub upon the occurrence of certain events, including the potential
effect of such termination fee to deter other potential acquirors from making a competing offer for Greenway that might be more
advantageous to our stockholders, and the impact of the termination fee on our ability to engage in another transaction for twelve
months if the Merger Agreement is terminated in certain circumstances;
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the fact that the gain realized by our stockholders as a result of the Offer and the Merger generally will be taxable to the
stockholders for U.S. federal income tax purposes;
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the restrictions in the Merger Agreement on the conduct of our business prior to the consummation of the Merger, which may
delay or prevent us from undertaking business or other opportunities that may arise prior to the consummation of the Offer or the
Merger; and
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the fact that our executive officers and directors may have interests in the Transactions, including the Offer and the Merger,
that are different from, or in addition to, those of our stockholders. See “Interests of Certain Persons in the Merger.”
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Our Board concluded that the risks, uncertainties,
restrictions and potentially negative factors associated with the Offer and Merger were outweighed by the potential benefits of
the Offer and Merger.
The foregoing discussion of the reasons
of our Board for its recommendation to adopt the Merger Agreement is not meant to be exhaustive, but addresses the material information
and factors considered by our Board in consideration of its recommendation. In view of the wide variety of factors considered by
our Board in connection with the evaluation of the Merger and the complexity of these matters, our Board did not find it practicable
to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination
and recommendation. Rather, the directors made their determinations and recommendations based on the totality of the information
presented to them, and the judgments of individual members of our Board may have been influenced to a greater or lesser degree
by different factors.
Opinion of the Company’s Financial Advisor
Pursuant to an engagement letter dated
July 10, 2013, which was effective as of June 6, 2013, the Company retained J.P. Morgan as its financial advisor in connection
with the proposed transaction.
At the meeting of the Board on September
23, 2013, J.P. Morgan rendered its oral opinion to the Board that, as of such date and based upon and subject to the factors and
assumptions set forth in its opinion, the consideration to be paid to the holders of Shares in the proposed transaction was fair,
from a financial point of view, to such holders. J.P. Morgan confirmed its September 23, 2013 oral opinion by delivering its written
opinion to the Board, dated September 23, 2013, that, as of such date, the consideration to be paid to the holders of Shares in
the proposed transaction was fair, from a financial point of view, to such holders. No limitations were imposed by the Board upon
J.P. Morgan with respect to the investigations made or procedures followed by it in rendering its opinion.
The full text of the written opinion
of J.P. Morgan dated September 23, 2013, which sets forth the assumptions made, procedures followed, matters considered and limitations
on the review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated herein by
reference. The Company’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion
is addressed to the Board of Directors of the Company, is directed only to the consideration to be paid to the holders of Shares
in the transaction and does not constitute a recommendation to any stockholder as to whether such stockholder should tender its
Shares into the Offer or how such stockholder should vote with respect to the transaction or any other matter. The summary of the
opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion
.
In arriving at its opinion, J.P. Morgan,
among other things:
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reviewed the Merger Agreement;
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reviewed the Support Agreements;
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reviewed certain publicly available business and financial information concerning the Company and the industries in which it
operates;
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compared the proposed financial terms of the transaction with the publicly available financial terms of certain transactions
involving companies J.P. Morgan deemed relevant and the consideration paid for such companies;
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compared the financial and operating performance of the Company with publicly available information concerning certain other
companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of the Shares and certain publicly
traded securities of such other companies;
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reviewed certain internal financial analyses and forecasts prepared by the management of the Company relating to its business;
and
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performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate
for the purposes of its opinion.
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J.P. Morgan also held discussions with certain
members of the management of the Company with respect to certain aspects of the transaction, the past and current business operations
of the Company, the financial condition and future prospects and operations of the Company and certain other matters J.P. Morgan
believed necessary or appropriate to its inquiry.
J.P. Morgan relied upon and assumed the
accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by the
Company or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (nor did J.P. Morgan assume responsibility
or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan did not conduct and
was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of the
Company or Parent under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial
analyses and forecasts provided to it, or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based
on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results
of operations and financial condition of the Company to which such analyses or forecasts relate. J.P. Morgan expressed no view
as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the transaction and
the other transactions contemplated by the Merger Agreement will be consummated as described in the Merger Agreement. J.P. Morgan
also assumed that the representations and warranties made by the Company and Parent in the Merger Agreement and the related agreements
were and will be true and correct in all respects material to J.P. Morgan’s analysis. J.P. Morgan is not a legal, regulatory
or tax expert and relied on the assessments made by advisors to the Company with respect to such issues. J.P. Morgan further assumed
that all material governmental, regulatory or other consents and approvals necessary for the consummation of the transaction will
be obtained without any adverse effect on the Company or on the contemplated benefits of the transaction.
The projections furnished to J.P. Morgan
for the Company were prepared by the Company’s management. The Company does not publicly disclose internal management projections
of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the transaction, and such projections were
not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are
inherently uncertain and may be beyond the control of the Company’s management, including, without limitation, factors related
to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly
from those set forth in such projections.
J.P. Morgan’s opinion is based on
economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of the
opinion. Subsequent developments may affect J.P. Morgan’s opinion, and J.P. Morgan does not have any obligation to update,
revise, or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the
consideration to be paid to the holders of Shares in the proposed transaction, and J.P. Morgan has expressed no opinion as to the
fairness of the transaction, or any consideration paid in connection with the transaction, to the holders of any other class of
securities, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the transaction.
Furthermore, J.P. Morgan has expressed no opinion with respect to the amount or nature of any compensation to any officers, directors,
or employees of any party to the transaction, or any class of such persons relative to the consideration to be paid to the holders
of Shares in the transaction or with respect to the fairness of any such compensation.
J.P. Morgan was not authorized to and did
not solicit any expressions of interest from any other parties with respect to the sale of all or any part of the Company or any
other alternative transaction.
In accordance with customary investment
banking practice, J.P. Morgan employed generally accepted valuation methods in reaching its opinion. The following is a summary
of the material financial analyses utilized by J.P. Morgan in connection with providing its opinion. The financial analyses summarized
below include information presented in tabular format. The tables are not intended to stand alone and, in order to more fully understand
the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the
data set forth herein without considering the full narrative description of the financial analyses, including the methodologies
underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s financial analyses.
Public Trading Multiples
.
Using publicly available information, J.P. Morgan compared selected financial data of the Company with similar data for selected
publicly traded companies which J.P. Morgan judged to be relevant. The companies selected by J.P. Morgan were:
Healthcare IT
Cerner Corporation
HMS Holdings Corp.
The Advisory Board Company
Computer Programs & Systems, Inc.
Vocera Communications, Inc.
athenahealth, Inc.
Medidata Solutions, Inc.
Allscripts Healthcare Solutions, Inc.
WebMD Health Corp.
MedAssets, Inc.
Quality Systems, Inc.
Merge Healthcare Incorporated
Software
Salesforce.com, Inc.
Fleetmatics Group PLC
Demandware, Inc.
Jive Software, Inc.
Concur Technologies, Inc.
RealPage, Inc.
E2open, Inc.
Guidewire Software, Inc.
Model N, Inc.
These companies were selected, among other
reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis,
may be considered similar to those of the Company.
Using publicly available information, J.P.
Morgan calculated, for each selected company, the ratio of the company’s firm value (calculated as the market value of the
company’s common stock on a fully diluted basis, plus any debt, plus any non-controlling interest, less cash and cash equivalents)
to the consensus equity research analyst estimate for the company’s calendar year 2014 revenue (the “Firm Value/2014E
Revenue”); and the ratio of the company’s firm value to the consensus equity research analyst estimate for the company’s
calendar year 2014 EBITDA (defined as earnings before interest, taxes, depreciation, and amortization) (the “Firm Value/2014E
EBITDA”).
The following table represents the results
of this analysis:
|
Firm Value /
2014E
Revenue
|
|
Firm Value /
2014E
EBITDA
|
Healthcare IT: Mean
|
3.83x
|
|
18.4x
|
Healthcare IT: Median
|
3.29x
|
|
12.0x
|
Software: Mean
|
6.45x
|
|
36.7x
|
Software: Median
|
6.29x
|
|
33.1x
|
Based on this analysis and other factors
J.P. Morgan deemed relevant, J.P. Morgan applied a valuation range of 3.0x to 4.0x to the Company’s calendar year 2014 revenue
estimate under the Company Case 1 Projections and a valuation range of 15.0x to 20.0x to the Company’s calendar year 2014
EBITDA estimate under the Company Case 1 Projections, and derived implied per share price ranges for the Shares. The analysis indicated
the following implied per share price ranges for the Shares:
Valuation Basis (Applied Range)
|
|
Implied Per Share
Price Range
|
Firm Value/2014E Revenue (3.0x – 4.0x)
|
|
$18.75 –
$24.50
|
Firm Value/2014E EBITDA (15.0x – 20.0x)
|
|
$16.50
– $21.50
|
Precedent Acquisitions Analysis
J.P. Morgan examined selected transactions
with respect to companies J.P. Morgan judged to be relevant. The transactions selected by J.P. Morgan were:
Healthcare IT
Acquiror
|
|
Target
|
AthenaHealth, Inc.
|
|
Epocrates, Inc.
|
Piramal Healthcare Limited
|
|
Decision Resources Group
|
Veritas Capital
|
|
Thomson Reuters—Healthcare
|
Nuance Communications, Inc.
|
|
Transcend Information, Inc.
|
Vista Equity Partners
|
|
Sage Healthcare Division
|
The Blackstone Group L.P.
|
|
Emdeon Company
|
Experian plc
|
|
Medical Present Value, Inc.
|
Aetna Inc.
|
|
Medicity, Inc.
|
Vestar Capital Partners
|
|
Healthgrades Inc.
|
Allscripts Healthcare Solutions, Inc.
|
|
Eclipsys Corp
|
Oracle Corporation
|
|
Phase Forward, Inc.
|
TPG Capital
|
|
IMS Health Group Limited
|
Apax Partners LLP
|
|
TriZetto Corp.
|
Vestar Capital Partners
|
|
Press Ganey Associates, Inc.
|
Koninklijke Philips N.V.
|
|
Visicu, Inc.
|
McKesson Corporation
|
|
Per-Se Technologies, Inc.
|
General Electric Company
|
|
IDX Systems, Inc.
|
Per-Se Technologies, Inc. / Wolters Kluwer N.V.
|
|
NDCHealth Corp.
|
Software
Acquiror
|
|
Target
|
Vista Equity Partners
|
|
Websense, Inc.
|
McAfee, Inc.
|
|
Stonesoft Corporation
|
Goldman Sachs PIA
|
|
EBIX, Inc.
|
NCR Corporation
|
|
Retalix Ltd.
|
Siemens AG
|
|
LMS International
|
RedPrairie Corp.
|
|
JDA Software Group, Inc.
|
Riverbed Technology Inc.
|
|
Opnet Technologies, Inc.
|
International Business Machines Corporation
|
|
Kenexa Corporation
|
Thoma Bravo, LLC
|
|
Deltek, Inc.
|
Dell, Inc.
|
|
Quest Software, Inc.
|
SAP AG
|
|
Ariba, Inc.
|
Blackbaud, Inc.
|
|
Convio, Inc.
|
Providence Equity Partners
|
|
Blackboard, Inc.
|
Epicor Software Corporation
|
|
NSB Retail Systems plc
|
The Carlyle Group
|
|
SS&C Technologies Holdings, Inc.
|
These transactions were selected, among
other reasons, because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be considered
similar to the transaction.
Using publicly available information, J.P.
Morgan calculated, for each selected transaction, the ratio of the target company’s enterprise value (calculated as the equity
purchase price, plus any debt, plus any non-controlling interest, less cash and cash equivalents) to the consensus equity research
analyst estimate for the target company’s one year forward estimate of revenue (“Enterprise Value/Forward Revenue”)
at the time of the transaction; and the ratio of the target company’s enterprise value to the consensus equity research analyst
estimate for the target company’s one year forward estimate of EBITDA (“Enterprise Value/Forward EBITDA”) at
the time of the transaction.
The following table represents the results
of this analysis:
Enterprise Value / Forward Revenue
|
|
Enterprise Value /
Forward EBITDA
|
|
|
|
|
Healthcare IT: Mean
|
|
3.5x
|
14.2x
|
Healthcare IT: Median
|
|
2.6x
|
10.9x
|
Software: Mean
|
|
3.9x
|
20.8x
|
Software: Median
|
|
3.0x
|
19.7x
|
Based on this analysis and other factors
J.P. Morgan deemed relevant, J.P. Morgan applied a valuation range of 3.5x to 4.5x to the Company’s fiscal year 2014 revenue
estimate under the Company Case 1 Projections and 20.0x to 25.0x to the Company’s fiscal year 2014 EBITDA estimate under
the Company Case 1 Projections, and derived an implied per share price range for the Shares. The analysis indicated the following
implied per share price ranges for the Shares:
Valuation Basis (Applied Range)
|
|
Implied Per Share Price
Range
|
Enterprise Value/FY 2014E Revenue (3.5x – 4.5x)
|
|
$17.25 –
$22.00
|
Enterprise Value/FY 2014E EBITDA (20.0x – 25.0x)
|
|
$12.50 –$15.50
|
Discounted Cash Flow Analysis
.
J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the fully diluted equity value per Share.
J.P. Morgan calculated the unlevered free cash flows that the Company is expected to generate during the period beginning on October
1, 2013 and ending on December 31, 2023 based upon (i) from October 1, 2013 through December 31, 2015, the Company Case 1 Projections
as provided by the Company and (ii) from January 1, 2016 through December 31, 2023, extrapolations from Company Case 1 Projections
that were reviewed and approved by the Company’s management for J.P. Morgan’s use in connection with its financial
analyses and rendering its fairness opinion. J.P. Morgan also calculated a range of terminal firm values for the Company by applying
a terminal growth rate ranging from 3.00% to 4.00% to the Company’s unlevered free cash flow in 2023. The unlevered free
cash flows and the terminal firm values were then discounted to present values using a range of discount rates from 9.0% to 10.0%.
This discount rate range was based upon J.P. Morgan’s analysis of the Company’s weighted average cost of capital.
Based on the foregoing, this analysis indicated
an implied per share price range for the Shares of approximately $19.00 to $25.25.
The foregoing summary of certain material
financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation
of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P.
Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing
summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes
underlying the analyses and its opinion. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any
analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative),
considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors
and analyses performed in determining its opinion. Analyses based upon forecasts of future results are inherently uncertain, as
they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and
analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or
less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals
or otherwise reflective of the prices at which businesses actually could be bought or sold. None of the selected companies reviewed
as described in the above summary is identical to the Company, and none of the selected transactions reviewed was identical to
the transaction. However, the companies selected were chosen because they are publicly traded companies with operations and businesses
that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of the Company. The transactions selected
were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be
considered similar to the transaction. The analyses necessarily involve complex considerations and judgments concerning differences
in financial and operational characteristics of the companies involved and other factors that could affect the companies compared
to the Company and the transactions compared to the transaction.
As part of its investment banking business,
J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers
and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and other purposes. J.P. Morgan was selected to advise
the Company with respect to the transaction on the basis of such experience and its familiarity with the Company.
For services rendered in connection with
the transaction, the Company has agreed to pay J.P. Morgan a fee of approximately $7.7 million, $1 million of which was payable
upon the delivery by J.P. Morgan of its opinion and the remainder of which is contingent upon the consummation of the transaction.
In addition, the Company has agreed to reimburse J.P. Morgan for its expenses incurred in connection with its services, including
the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities, including liabilities arising
under the federal securities laws.
During the two years preceding the date
of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with the
Company and with certain other portfolio companies of Vista Equity Partners, for which J.P. Morgan and such affiliates have received
approximately $1.0 million of fees from the Company and approximately $6.4 million of fees from Vista Equity Partners and its affiliates.
Such services during such period have included acting as lead left bookrunner on the Company’s initial public offering in
February 2012 and acting as an arranger of certain credit facilities for certain of Vista Equity Partners’ other portfolio
companies. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit
facilities of certain of Vista Equity Partners’ other portfolio companies, for which it receives customary compensation or
other financial benefits. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt
and equity securities of the Company for their own accounts or for the accounts of customers and, accordingly, they may at any
time hold long or short positions in such securities.
Certain Company Projections
The Company does not, as a matter of course,
publicly disclose long-term forecasts or projections as to future performance, earnings or other results. The Company’s management
provided the Company Case 1 Projections regarding the Company’s future operations to the Board for its evaluation in connection
with the Offer and the Merger. The Company Case 1 Projections were also provided to Vista in connection with its review of the
Company and also to J.P. Morgan for use in connection with its opinion to the Board.
The Company Case 1 Projections were not
prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with published guidelines of
the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation
of financial forecasts, or U.S. generally accepted accounting principles (“GAAP”). Neither the Company’s independent
auditors, nor any other independent public accounting firm has compiled, examined, or performed any procedures with respect to
the prospective financial information contained in the Company Case 1 Projections nor has expressed any opinion or given any form
of assurance with respect to such information or their reasonableness, achievability or accuracy. The inclusion of the Company
Case 1 Projections herein should not be deemed an admission or representation by the Company that they are viewed by the Company
as material information of the Company. The Company Case 1 Projections should not be regarded as an indication that any of the
Company, Parent or any of their respective affiliates, advisors or other representatives, considered, or now considers, them to
be necessarily predictive of actual future results, and the Company Case 1 Projections should not be relied upon as such. None
of the Company, Vista or any of their respective affiliates, advisors or other representatives makes any representation or warranty
regarding the ultimate performance of the Company relative to the Company Case 1 Projections.
The Company Case 1 Projections were largely
prepared beginning in mid-2013 based on information available at that time using various assumptions and estimates. The assumptions
and estimates may not be realized and are inherently subject to significant business, economic and competitive uncertainties, risks
and contingencies, all of which are difficult to predict and many of which are beyond the Company’s control. The assumptions
and estimates underlying the information contained in the Company Case 1 Projections involve judgments made with respect to, among
other things, general business, economic, regulatory, market and financial conditions, as well as factors specific to the Company,
including but not limited to, the number of provider adds per year and the rate at which existing customers would transition to
the Company’s clinically driven revenue cycle management services, all of which are difficult to predict. The Company Case
1 Projections also reflect assumptions as to certain business decisions that do not reflect the effects of the Offer or the Merger,
or any other changes that may in the future affect the Company or its assets, business, operations, properties, policies, corporate
structure, capitalization and management. Accordingly, the Company Case 1 Projections constitutes forward-looking information,
and there can be no assurance that the assumptions and estimates used to prepare the information contained in the Company Case
1 Projections will be achieved, and actual results may materially differ. The Company Case 1 Projections cover multiple years and
such information by its nature becomes less certain with each successive year.
The following is a summary of the Company
Case 1 Projections:
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
($ in millions)
|
|
Revenue
|
|
$
|
152
|
|
|
$
|
225
|
|
|
$
|
317
|
|
Adjusted EBITDA
(1)
|
|
$
|
19
|
|
|
$
|
46
|
|
|
$
|
78
|
|
Free cash flow
(2)
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
52
|
|
(1) Adjusted EBITDA is defined as income before interest, taxes,
stock-based compensation, depreciation and amortization. Set forth below is reconciliation of Adjusted EBITDA to net (loss) income,
as of the date the information included in the financial projections was prepared (dollars in millions; totals may not add due
to rounding):
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
($ in millions)
|
|
Net (loss) income
|
|
$
|
(4
|
)
|
|
$
|
10
|
|
|
$
|
27
|
|
Interest income, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(Benefit) provision for income taxes
|
|
|
1
|
|
|
|
10
|
|
|
|
20
|
|
Stock-based compensation
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
Depreciation and amortization
|
|
|
16
|
|
|
|
20
|
|
|
|
23
|
|
Adjusted EBITDA
|
|
$
|
19
|
|
|
$
|
46
|
|
|
$
|
78
|
|
(2) Free cash flow is defined as Adjusted EBITDA less capital
expenditures, less capitalized software development and less changes in net working capital. Set forth below is reconciliation
of estimated free cash flow to Adjusted EBITDA, as of the date the information included in the financial projections was prepared
(dollars in millions; totals may not add due to rounding).
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
($ in millions)
|
|
Adjusted EBITDA
|
|
$
|
19
|
|
|
$
|
46
|
|
|
$
|
78
|
|
Capital expenditures
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(10
|
)
|
Capitalized software development
|
|
|
(10
|
)
|
|
|
(11
|
)
|
|
|
(12
|
)
|
Net working capital
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
Free cash flow
|
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
52
|
|
In addition, J.P. Morgan conducted a discounted
cash flow analysis for the purpose of determining the fully diluted equity value per Share, as more fully described below under
the caption “— Opinion of J.P. Morgan Securities LLC”. J.P. Morgan calculated the unlevered free cash flows that
the Company is expected to generate during the period beginning on October 1, 2013 and ending on December 31, 2023 based upon (i)
from October 1, 2013 through December 31, 2015, the Company Case 1 Projections as provided by the Company and (ii) from January
1, 2016 through December 31, 2023, extrapolations from Company Case 1 Projections that were reviewed and approved by the Company’s
management for J.P. Morgan’s use in connection with its financial analyses and rendering of its fairness opinion.
The following is a summary of the calculations
and extrapolations from Company Case 1 Projections:
|
|
2013E
|
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
2017E
|
|
|
2018E
|
|
|
2019E
|
|
|
2020E
|
|
|
2021E
|
|
|
2022E
|
|
|
2023E
|
|
Calculations and Extrapolations from Company Case 1 Projections
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
139
|
|
|
$
|
193
|
|
|
$
|
271
|
|
|
$
|
311
|
|
|
$
|
353
|
|
|
$
|
394
|
|
|
$
|
434
|
|
|
$
|
470
|
|
|
$
|
502
|
|
|
$
|
528
|
|
|
$
|
546
|
|
EBITDA
|
|
$
|
12
|
|
|
$
|
33
|
|
|
$
|
62
|
|
|
$
|
75
|
|
|
$
|
88
|
|
|
$
|
99
|
|
|
$
|
108
|
|
|
$
|
118
|
|
|
$
|
126
|
|
|
$
|
132
|
|
|
$
|
137
|
|
Free cash flow
|
|
$
|
(12
|
)
|
|
$
|
7
|
|
|
$
|
22
|
|
|
$
|
26
|
|
|
$
|
37
|
|
|
$
|
43
|
|
|
$
|
47
|
|
|
$
|
52
|
|
|
$
|
56
|
|
|
$
|
59
|
|
|
$
|
62
|
|
(1) All financial data calendarized to a December 31 fiscal
year end.
Beginning in mid-2013, the Company’s
management also prepared two cases in connection with the Company’s fiscal 2014 outlook and guidance, which we refer to herein
as the “Company Case 2 Projections” and the “Company Case 3 Projections”. In preparing these projections,
the Company’s management considered the Company’s current financial condition, global economic conditions generally
and in the industries and markets in which the Company competes, and a variety of other factors relating to the Company’s
current and potential future operations. These two projections included more conservative assumptions relative to the Company Case
1 Projections, in particular relating to the number of provider adds per year and the rate at which existing customers would transition
to the Company’s clinically driven revenue cycle management services.
In connection with its evaluation of the
Offer, the Board also considered the Company Case 2 Projections and the Company Case 3 Projections and provided these projections
to J.P. Morgan. At the direction of the Company, these projections were used for reference purposes only and were not used as a
basis for the opinion delivered by J.P. Morgan.
The following is a summary of the Company
Case 2 Projections and the Company Case 3 Projections:
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
Company Case 2 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
143
|
|
|
$
|
189
|
|
|
$
|
243
|
|
Adjusted EBITDA
(1)
|
|
$
|
17
|
|
|
$
|
33
|
|
|
$
|
52
|
|
Free cash flow
(2)
|
|
$
|
(0
|
)
|
|
$
|
10
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Case 3 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
149
|
|
|
$
|
200
|
|
|
$
|
259
|
|
Adjusted EBITDA
(1)
|
|
$
|
19
|
|
|
$
|
37
|
|
|
$
|
59
|
|
Free cash flow
(2)
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
33
|
|
(1) Adjusted EBITDA is defined as income before interest, taxes,
stock-based compensation, depreciation and amortization. Set forth below is reconciliation of Adjusted EBITDA to net (loss) income,
as of the date the information included in the financial projections was prepared (dollars in millions; totals may not add due
to rounding):
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
Company Case 2 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
$
|
11
|
|
Interest income, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(Benefit) provision for income taxes
|
|
|
0.3
|
|
|
|
5
|
|
|
|
11
|
|
Stock-based compensation
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
Depreciation and amortization
|
|
|
16
|
|
|
|
20
|
|
|
|
23
|
|
Adjusted EBITDA
|
|
$
|
17
|
|
|
$
|
33
|
|
|
$
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Case 3 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
15
|
|
Interest income, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(Benefit) provision for income taxes
|
|
|
0.9
|
|
|
|
7
|
|
|
|
13
|
|
Stock-based compensation
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
Depreciation and amortization
|
|
|
16
|
|
|
|
20
|
|
|
|
23
|
|
Adjusted EBITDA
|
|
$
|
19
|
|
|
$
|
37
|
|
|
$
|
59
|
|
(2) Free cash flow is defined as Adjusted EBITDA less capital
expenditures and less capitalized software development. Set forth below is reconciliation of estimated free cash flow to Adjusted
EBITDA, as of the date the information included in the financial projections was prepared (dollars in millions; totals may not
add due to rounding).
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
Company Case 2 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
17
|
|
|
$
|
33
|
|
|
$
|
52
|
|
Capital expenditures
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(10
|
)
|
Capitalized software development
|
|
|
(10
|
)
|
|
|
(12
|
)
|
|
|
(12
|
)
|
Net working capital
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
Free cash flow
|
|
$
|
(0
|
)
|
|
$
|
10
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Case 3 Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
19
|
|
|
$
|
37
|
|
|
$
|
59
|
|
Capital expenditures
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(10
|
)
|
Capitalized software development
|
|
|
(10
|
)
|
|
|
(12
|
)
|
|
|
(12
|
)
|
Net working capital
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(4
|
)
|
Free cash flow
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
33
|
|
Financing of the Merger
Debt Financing
Vitera and Parent have received a debt
commitment letter from Jefferies Finance LLC (which we refer to as “Jefferies”), and Bank of Montreal (which we refer
to as “BMO”; and, together with Jefferies, the “Debt Commitment Parties”) (which we refer to as the “Debt
Commitment Letter”) to provide, subject to the conditions set forth in the Debt Commitment Letter, credit facilities, of
which a $360 million senior secured first lien term loan facility and $180 million of the senior secured second lien term loan
facility (together, the “Credit Facilities”) is expected to be drawn at the closing of the Credit Facilities for the
purpose of financing the Offer and the Merger and paying related fees and expenses, and a portion of the senior secured first lien
revolving credit facility is expected to be drawn at the closing of the Credit Facilities to pay certain amounts set forth in the
debt financing commitment fee letter and to back-stop, replace or cash-collateralize certain existing letters of credit of Vitera
and its subsidiaries and, after the closing of the Merger, to provide funding for working capital and other general corporate purposes
of Vitera and its subsidiaries.
The commitment of the Debt Commitment Parties
with respect to the Credit Facilities expires upon the earliest to occur of (i) 5:00 p.m. New York City time on the date that is
180 days after the date of the Merger Agreement, (ii) the date of the funding of the Credit Facilities and the consummation of
the Merger, (iii) the closing of the Merger without the use of the Credit Facilities and (iv) the date on which the Merger Agreement
shall be terminated prior to the closing of the Merger. The documentation governing the debt financings has not been finalized
and, accordingly, the actual terms of the debt financing may differ from those described in this document. Each of Parent and Vitera
has agreed to use its reasonable best efforts to arrange the debt financing on the terms and conditions described in the Debt Commitment
Letter. If any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the Debt Commitment
Letter, each of Parent and Vitera must use its reasonable best efforts to promptly arrange and obtain alternative financing from
alternative sources in an amount sufficient to consummate the Merger with terms and conditions not materially less favorable (taken
as a whole) from the standpoint of Parent and Vitera than the terms and conditions set forth in the Debt Commitment Letter (giving
effect to any rights of the financing sources to adjust certain terms contained therein).
Although the debt financing described in
this document is not subject to a due diligence or “market out,” such financing may not be considered assured. As of
the date hereof, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing
described herein is not available. In addition, Vista has committed to capitalize Merger Sub, at or immediately prior to the time
of the Merger, with an aggregate equity contribution in an amount up to $650 million, which will be sufficient for Merger Sub to
consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement even if Parent’s Debt Financing
is not available, subject to the terms and conditions set forth in the Equity Commitment Letter.
Credit Facilities
The availability of the Credit Facilities
is subject to, among other things, the purchase of Shares in the Offer and the consummation of the Merger in accordance with the
Merger Agreement (including the satisfaction (or waiver with the consent of the Administrative Agent (as defined below) and the
Senior Lead Arrangers (as defined below)) of all conditions precedent to the consummation of the Merger, and without any amendment
or modification to the provisions thereof that, in any such case, are materially adverse to the interests of the Senior Lead Arrangers
or the lenders without the consent of the Senior Lead Arrangers), the absence of a “Material Adverse Effect” (as defined
in the Merger Agreement and as described below in “Merger Agreement”), solvency of Vitera, its subsidiaries and certain
of its affiliates on a consolidated basis after giving effect to the funding of the Credit Facilities, payment of required fees
and expenses, the funding of the equity financing, the absence of certain types of other debt, delivery of certain historical and
pro forma financial information, delivery of documentation and other information required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, affording the Senior Lead Arrangers a period
of time to syndicate the Credit Facilities, the execution of certain Guarantys and the creation and perfection of certain security
interests, the truthfulness and correctness of specified Merger Agreement representations and specified representations in all
material respects, and the negotiation, execution and delivery of definitive documentation.
Term and Revolving Credit Facilities
.
The Credit Facilities will consist of a (i) $360 million senior secured first lien term loan facility with a term of seven (7)
years (which we refer to as the “First Lien Term Loan Facility”), (ii) a $180 million senior secured second lien term
loan facility with a term of eight (8) years (which we refer to as the “Second Lien Term Loan Facility”) and (iii)
a $30 million first lien senior secured revolving credit facility with a term of five (5) years (which we refer to as the “Revolving
Credit Facility” and together with the First Lien Term Loan Facility, the “First Lien Credit Facility”).
Roles
. Jefferies and BMO
Capital Markets Corp. (“BMO Capital Markets”) have been appointed as joint lead arrangers and joint book-running managers
for the Credit Facilities (which we refer to collectively as the “Senior Lead Arrangers”). Jefferies has been appointed
as administrative agent (the “Administrative Agent”) for the First Lien Credit Facility and for the Second Lien Credit
Facility.
Interest Rate
. Loans under
the Credit Facilities are expected to bear interest, at Vitera’s option, at a rate equal to the adjusted Eurodollar rate
or an alternate base rate, in each case, plus a spread.
Prepayments and Amortization
.
Vitera will be permitted to make voluntary prepayments with respect to the Revolving Credit Facility at any time, without premium
or penalty (other than LIBOR breakage costs, if applicable). Vitera will be permitted to make voluntary prepayments with respect
to the First Lien Term Loan Facility and Second Lien Credit Facility at any time, subject to the following prepayment premiums,
and, if applicable, any LIBOR breakage costs: (i) with respect to the First Lien Term Loan Facility, in an amount equal to 1.00%
of the amount prepaid prior to the date that is six (6) months from the closing date of the Credit Facilities solely to the extent
such prepayment is in connection with a refinancing that reduces the effective yield of the debt which refinancing is not in connection
with an acquisition-related financing, an initial public offering, or a change of control, and (ii) with respect to the Second
Lien Term Loan Facility, in an amount equal to (a) 2.00% of the amount repaid prior to the date that is one (1) year from the closing
date of the Credit Facilities and (b) 1.00% of the amount repaid after the date that is one (1) year from the closing date of the
Credit Facilities but prior to the date that is two (2) years from the closing date of the Credit Facilities. The first lien term
loans under the Credit Facilities will amortize 1% per annum in equal quarterly installments until the final maturity date. The
remaining aggregate principal amount of the term loans under the Credit Facilities will be due on their respective maturity dates.
Guarantors
. All obligations
under the Credit Facilities will be guaranteed by Vitera, each existing and future direct and indirect, domestic subsidiary
of Vitera and certain of its affiliates, subject to certain limitations.
Security
. The obligations
of Vitera and the guarantors under the Credit Facilities and under any interest rate protection or other hedging arrangements entered
into with any Debt Commitment Parties (or any affiliates of the foregoing), will be secured, subject to permitted liens and other
agreed upon exceptions on a first priority basis by a perfected security interest in all of Vitera’s and each guarantor’s
existing or after-acquired personal property, including all of the capital stock of Vitera and all of the capital stock in first-tier,
wholly-owned restricted subsidiaries directly held by Vitera or any guarantor (limited, in the case of first-tier foreign subsidiaries,
to 100% of the non-voting equity interests (if any) and 65% of the voting equity interests of such subsidiaries). If certain security
is not provided at closing despite the use of commercially reasonable efforts to do so, the delivery of such security will not
be a condition precedent to the availability of the Credit Facilities on the closing date, but instead will be required to be delivered
following the closing date pursuant to arrangements to be mutually agreed.
Other Terms
. The Credit Facilities
will contain customary representations and warranties and customary affirmative and negative covenants, including, among other
things, restrictions on indebtedness, investments, sales of assets, mergers and consolidations, prepayments of subordinated indebtedness,
liens, transactions with affiliates, and dividends and other distributions. The Credit Facilities will also include customary events
of defaults including a change of control to be defined.
Equity Financing
Parent has received an equity commitment
letter from Vista (which we refer to as the “Equity Commitment Letter”), pursuant to which Vista has committed to contribute
to Parent an amount equal to $650 million (subject to adjustment as set forth in the Equity Commitment Letter) in cash in immediately
available funds, which will be sufficient for Parent to consummate the transactions contemplated by the Merger Agreement even if
Parent’s debt financing is not available, including the aggregate Per Share Amount and/or Merger Consideration, as applicable,
pursuant to and in accordance with the Merger Agreement, and certain other amounts required to be paid pursuant to the Merger Agreement,
including fees and expenses directly related to the debt financing required to be paid by Parent, Merger Sub and the Surviving
Corporation. We refer to the financing contemplated by the Equity Commitment Letter, as may be amended, restated, supplemented
or otherwise modified from time to time, as the “Equity Financing.” The funding of the Equity Financing is subject
to (i) the satisfaction, or waiver by Parent and Merger Sub (with the prior written approval of Vista IV), of all conditions of
the Offer or the Merger, as applicable and (ii) the contemporaneous consummation of the acquisition of the Shares tendered in the
Offer at the closing of the Offer, if the closing of the Offer shall occur, or the Merger (regardless of whether the closing of
the Offer occurs). The Company is a third party beneficiary of the Equity Commitment Letter for the limited purposes provided in
the Equity Commitment Letter, which include the right of the Company to seek and obtain specific performance to cause Parent and
Merger Sub to cause, or to directly cause, Vista to fund the Equity Financing in accordance with the terms of the Equity Commitment
Letter and the Merger Agreement. Concurrently with the execution and delivery of the Equity Commitment Letter, Vista executed and
delivered to the Company a limited guaranty in favor of the Company in respect of certain of Parent’s and Merger Sub’s
liabilities and obligations under the Merger Agreement (which we refer to as the “Limited Guaranty”), provided that
in no event will Vista incur obligations totaling more than $48,273,000 in the aggregate (plus the amount of any reimbursement
or indemnification obligations payable pursuant to the Merger Agreement) under the Limited Guaranty.
Vista’s obligation to fund its equity
commitment will expire upon the earliest to occur of (i) immediately following the effective time of the Merger and deposit of
the payment fund, (ii) the valid termination of the Merger Agreement in accordance with its terms, (iii) the date on which any
claim is brought by the Company under, or any legal proceeding is brought by the Company with respect to, the Limited Guaranty,
Vista or certain affiliates of Vista (other than in respect of certain obligations guaranteed as set forth in the Limited
Guaranty or a claim for specific performance under and in accordance with the terms of the Equity Commitment Letter) or (iv) the
date on which any other claim is brought under, or legal proceeding is initiated against Vista or any affiliate thereof in connection
with the Equity Commitment Letter, the Limited Guaranty, the Merger Agreement or any transaction contemplated thereby or otherwise
relating thereto (with the exception of certain claims related to the merger or the equity funding or under the Limited Guaranty,
all as specified in the Limited Guaranty).
Closing and Effective Time of Merger
If the Merger is approved at the stockholders
meeting then, assuming timely satisfaction of the other necessary closing conditions, we anticipate that the Merger will be completed
promptly thereafter. The effective time of the Merger will occur as soon as practicable following the closing of the Merger upon
the filing of a certificate of Merger with the Secretary of State of the State of Delaware (or at such later date as we and Parent
may agree and specify in the certificate of Merger).
Payment of Merger Consideration and Surrender of Stock
Certificates
At the Effective Time, each Share issued
and outstanding immediately prior to the Effective Time (excluding Shares owned (i) by the Company (including treasury shares),
Parent or Merger Sub and (ii) by stockholders who have perfected and not withdrawn a demand for appraisal rights or otherwise lost
appraisal rights under Delaware law) will be converted into and become the right to receive the Merger Consideration.
Prior to the Merger Closing Date, Parent
shall deposit, or cause to be deposited with the paying agent, an amount in cash sufficient to pay the aggregate Merger Consideration
pursuant to the Merger Agreement. As soon as reasonably practicable after the Effective Time and in any event not later than the
third Business Day thereafter, Parent shall instruct the paying agent to mail to each registered holder of a certificate (“Certificate”)
or book-entry shares (“Book-Entry Shares”) which, immediately prior to the Effective Time, represented Company common
stock (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the
Certificates or Book-Entry Shares, as applicable, shall pass, only upon delivery of the Certificates (or affidavits in lieu thereof)
or Book-Entry Shares to the paying agent, and which shall be in such form and have such other customary provisions (including customary
provisions with respect to delivery of an “agent’s message” with respect to Book-Entry Shares) as the Company
and Parent may reasonably agree prior to the Merger Closing Date) and (ii) instructions for use in effecting the surrender of such
Certificates or Book-Entry Shares, as applicable, in exchange for payment of the Merger Consideration into which the number of
Shares previously represented by such Certificates or Book-Entry Shares, as applicable, shall have been converted pursuant to the
Merger Agreement.
You should not return your stock certificates
with the enclosed proxy card, and you should not forward your stock certificates to the paying agent without a letter of transmittal.
You will not be entitled to receive the
per share Merger Consideration until you deliver a duly completed and executed letter of transmittal to the paying agent. If your
shares are certificated, you must also surrender your stock certificate or certificates to the paying agent. If ownership of your
shares is not registered in the transfer records of the Company, a check for any cash to be delivered will only be issued if the
applicable letter of transmittal is accompanied by all documents reasonably required by the Company to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been paid or are not applicable.
Interests of Certain Persons in the Merger
Our executive officers and members of our
board of directors (the “Board”) may be deemed to have interests in the execution and delivery of the Merger Agreement
and all of the Transactions, including the Offer and the Merger, that may be different from or in addition to those of our stockholders,
generally. These interests may create potential conflicts of interest. Our Board was aware of these interests and considered them,
among other things, in reaching its decision to approve the Merger Agreement and the Transactions. As described in more detail
below, these interests include:
|
·
|
the cancelation of vested and unvested Company stock options (the “Stock Options”) outstanding immediately prior
to the earlier to occur of the consummation of the Offer and the Effective Time (such earlier time, the “Acceleration Time”)
and the conversion of such Stock Options into the right to receive a cash payment equal to (i) the excess, if any, of the Offer
Price over the exercise price per share of such Stock Option, multiplied by (ii) the total number of Shares then issuable upon
exercise in full of such Stock Option, without interest and less any required withholding taxes; and
|
|
·
|
the entitlement to the indemnification and exculpation benefits in favor of directors and officers of Greenway.
|
Outstanding Shares held by Directors
and Executive Officers
If the executive officers and directors
of Greenway who own Shares tender their Shares for purchase pursuant to the Offer, they will receive the same cash consideration
on the same terms and conditions as the other stockholders of Greenway. As of October 2, 2013, the executive officers and directors
of Greenway beneficially owned, in the aggregate, 2,862,661 Shares, excluding Shares issuable upon the exercise of Stock Options.
The following table sets forth the number
of Shares beneficially owned as of October 2, 2013 by each of our executive officers and directors, excluding Shares issuable upon
the exercise of Stock Options, and the aggregate Merger Consideration that would be payable for such Shares.
Name
|
|
Number of
Shares
Owned
|
|
|
Cash Value of
Shares Owned
|
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
W. Thomas Green, Jr., Chairman of the Board
(1)
|
|
|
2,077,072
|
|
|
$
|
42,268,415
|
|
Wyche T. Green, III, President, Chief Executive Officer and Director
(2)
|
|
|
279,850
|
|
|
$
|
5,694,948
|
|
Thomas T. Richards, Director
(3)
|
|
|
306,538
|
|
|
$
|
6,238,048
|
|
Walter Turek, Director
|
|
|
41,000
|
|
|
$
|
834,350
|
|
Robert Z. Hensley, Director
|
|
|
9,000
|
|
|
$
|
183,150
|
|
D. Neal Morrison, Director
|
|
|
—
|
|
|
$
|
—
|
|
Noah Walley, Director
|
|
|
—
|
|
|
$
|
—
|
|
Gregory H. Schulenburg, Executive Vice President and Chief Operating Officer
(4)
|
|
|
36,780
|
|
|
$
|
748,473
|
|
James A. “Al” Cochran, Chief Financial Officer
|
|
|
75,000
|
|
|
$
|
1,526,250
|
|
William G. Esslinger, Jr., Vice President, General Counsel and Secretary
(5)
|
|
|
37,421
|
|
|
$
|
761,517
|
|
All of our current directors and executive officers as a group (10 persons)
|
|
|
2,862,661
|
|
|
$
|
58,255,151
|
|
Notes:
(1) Shares beneficially owned by Mr. Green include (i) 849,231
shares held by Mr. Green, (ii) 244,818 shares held by Elizabeth J. Green, Mr. Green’s spouse, (iii) 967,473 shares held by
the W. T. Green, Jr. Family Limited Partnership, (iv) 400 shares held in trust for which Mr. Green serves as trustee, (v) 10,500
shares held in Mr. Green’s IRA and (vi) 4,650 shares held in Ms. Green’s IRA.
(2) Shares beneficially owned by Mr. Green include (i) 62,236
shares held by Mr. Green, (ii) 9,600 shares held by Jennifer Green, Mr. Green’s spouse, (iii) 198,764 shares held by the
T&J Green Family Partnership LP, and (iv) 9,250 shares held in Mr. Green’s IRA.
(3) Shares beneficially owned by Mr. Richards include (i) 273,037
shares held by Mr. Richards, (ii) 21,000 shares held by Cornelia S. Richards, the spouse of Mr. Richards, (iii) 4,167 shares held
by the Margaret Richards Bass Family Trust (the “Bass Trust”), of which Ms. Richards is trustee and (iv) 8,334 shares
held by the Cornelia Lucas Richards Family Trust (the “Richards Trust”), of which Ms. Richards is trustee. Mr. Richards
disclaims beneficial ownership of the shares held by the Bass Trust and the Richards Trust.
(4) Shares beneficially owned by Mr. Schulenburg include (i)
24,280 shares held by Mr. Schulenburg and (ii) 12,500 shares held in an IRA.
(5) Shares beneficially owned by Mr. Esslinger include (i) 35,057
shares held by Mr. Esslinger, (ii) 616 shares held in Mr. Esslinger’s IRA and (iv) 1,748 shares held in the IRA of Deborah
Esslinger, his spouse.
Mr. Walley is a limited partner of Investor
Group L.P. (“IGLP”) and is head of North American technology investing for an affiliate company of IGLP and Investor
Growth Capital Limited (“IGCL”). As of October 2, 2013, IGLP beneficially held 2,109,431 Shares and IGCL beneficially
held 4,922,009 Shares. The aggregate Merger Consideration that would be payable for such Shares would be $42,926,921 and $100,162,883,
respectively.
Mr. Morrison is a member of Pamlico Capital
GP II, LLC (“Pamlico”). As of October 2, 2013, Pamlico beneficially held 5,284,679 shares of common stock, and the
aggregate Merger Consideration that would be payable for such Shares would be $107,543,218.
Treatment of Stock Options
Pursuant to the Merger Agreement, each
Stock Option outstanding immediately prior to the Acceleration Time, whether vested or unvested, will be cancelled as of immediately
prior to the Acceleration Time and converted into the right to receive a cash payment equal to (i) the excess, if any, of the Merger
Consideration over the exercise price per Share of such Stock Option, multiplied by (ii) the total number of Shares then issuable
upon exercise in full of such Stock Option, without interest and less any required withholding taxes. The cash payments with respect
to Stock Options will be delivered promptly after the Acceleration Time (but in no event later than the seventh calendar day after
the Acceleration Time).
The table below sets forth, for each of
our executive officers and directors holding Stock Options as of October 2, 2013, (a) the aggregate number of Shares subject to
such Stock Options and (b) the value of amounts payable in respect of such Stock Options on a pre-tax basis at the Acceleration
Time, calculated by multiplying (i) the excess of the Merger Consideration over the respective per share exercise prices of the
Stock Options by (ii) the number of Shares subject to those Stock Options. All of the Stock Options held by our executive officers
and directors had an exercise price below the Merger Consideration.
|
|
Number of
Shares
Underlying
Stock
Options
|
|
|
Weighted
Average
Exercise
Price Per
Share
|
|
|
Total
Option
Cash
Spread
Value
|
|
W. Thomas Green, Jr.
|
|
|
300,083
|
|
|
$
|
9.00
|
|
|
$
|
3,404,986
|
|
Wyche T. Green, III
|
|
|
553,585
|
|
|
$
|
9.98
|
|
|
$
|
5,741,366
|
|
Thomas T. Richards
|
|
|
33,425
|
|
|
$
|
9.99
|
|
|
$
|
346,318
|
|
Walter Turek
|
|
|
112,300
|
|
|
$
|
6.60
|
|
|
$
|
1,544,162
|
|
Robert Z. Hensley
|
|
|
16,050
|
|
|
$
|
15.50
|
|
|
$
|
77,800
|
|
D. Neal Morrison
|
|
|
22,300
|
|
|
$
|
11.82
|
|
|
$
|
190,162
|
|
Noah Walley
|
|
|
22,300
|
|
|
$
|
11.82
|
|
|
$
|
190,162
|
|
Gregory H. Schulenburg
|
|
|
207,366
|
|
|
$
|
11.10
|
|
|
$
|
1,918,578
|
|
James A. “Al” Cochran
|
|
|
112,669
|
|
|
$
|
13.34
|
|
|
$
|
789,682
|
|
William G. Esslinger, Jr.
(1)
|
|
|
162,030
|
|
|
$
|
10.60
|
|
|
$
|
1,580,385
|
|
All of our current directors and executive officers as a group (10 persons)
|
|
|
1,542,108
|
|
|
|
|
|
|
$
|
15,783,601
|
|
Notes:
(1) Stock Options beneficially owned by Mr. Esslinger include
43,330 Stock Options held jointly by Mr. Esslinger and Deborah Esslinger, his spouse
Employment Arrangements
We have no employment agreements with any
of our executive officers.
Golden Parachute Compensation
We do not have any employment or severance
agreements with any of our executive officers. Except with respect to the potential vesting of options in connection with a merger
or consolidation, none of the executive officers are entitled to receive any payments upon termination of employment or change
in control, regardless of the reason thereof. Pursuant to the Greenway Medical Technologies, Inc. 1999 Stock Option Plan, the Greenway
Medical Technologies, Inc. 2004 Stock Plan and the Greenway Medical Technologies, Inc. 2011 Stock Plan (collectively, the “Option
Plans”), in the event that we are a party to a merger or consolidation, all outstanding options, including those held by
the executive officers, shall be subject to the agreement of merger or consolidation. Such agreement will provide for one or more
of the following to occur: (a) outstanding options will continue to exist (if we are the surviving company); (b) outstanding options
will be assumed or substituted for an equivalent award by the surviving company or its parent; (c) outstanding options will vest
and become fully exercisable; or (d) outstanding options will be cancelled, and option recipients will receive a payment equal
to the excess of the fair market value of the shares subject to the options over the options’ exercise price.
The table below contains estimates of the
payments that each of the Company’s named executive officers would receive in connection with or otherwise related to the
transaction, assuming the Effective Time occurred on October 2, 2013, the latest practicable date prior to the filing of this proxy
statement. The table includes the information required by Item 402(t) of Regulation S-K under the Exchange Act.
Name and principal position
|
|
Equity
(1)
($)
|
|
|
Total ($)
|
|
Wyche T. Green, III
|
|
|
5,741,366
|
|
|
|
5,741,366
|
|
James A. Cochran
|
|
|
789,682
|
|
|
|
789,682
|
|
W. Thomas Green, Jr.
|
|
|
3,404,986
|
|
|
|
3,404,986
|
|
Gregory H. Schulenburg
|
|
|
1,918,578
|
|
|
|
1,918,578
|
|
William G. Esslinger, Jr.
|
|
|
1,580,385
|
|
|
|
1,580,385
|
|
(1) The aggregate dollar values in this column represent payments
with respect to cancelled stock options for each named executive officer and includes the following aggregate dollar amounts with
respect to in-the-money options for which vesting will be accelerated: Mr. Green, III: $1,465,708; Mr. Cochran: $299,968; Mr. Green
Jr.: $461,472; Mr. Schulenburg: $519,459; and Mr. Esslinger: $341,986.
Employee Benefits
For a period of one year following the
Effective Time, with respect to employees of Greenway or its subsidiaries immediately before the Effective Time who remain employed
during such one year period, Parent will provide, or will cause to be provided, base salary and base wages, short-term cash incentive
compensation opportunities and benefits (excluding equity based compensation) that are substantially comparable in the aggregate
to such base salary and base wages, short-term cash incentive compensation opportunities and benefits (excluding equity based
compensation) provided to such employees immediately prior to the execution of the Merger Agreement.
Potential for Future Arrangements
To our knowledge, no employment, equity
contribution or other agreement, arrangement or understanding between any executive officer or director of Greenway, on the one
hand, and Parent, Merger Sub, any of their affiliates or Greenway, on the other hand, existed as of the date of this proxy statement,
and neither the Offer nor the Merger is conditioned upon any executive officer or director of Greenway entering into any such agreement,
arrangement or understanding.
It is possible that certain members of
our current management team will enter into employment arrangements with the Surviving Corporation after the completion of the
Offer and the Merger. Such arrangements may include the right to purchase or participate in the equity of the Surviving Corporation
or its affiliates. Any such arrangements with the existing management team are currently expected to be entered into after the
completion of the Offer and will not become effective until after the Merger is completed, if at all. There can be no assurance
that any parties will reach an agreement on any terms, or at all.
Inclusion of Proposals in the Company’s Proxy Statement
and Proxy Card under the SEC Rules; Advance Notice Requirements
Inclusion of Proposals in the Company’s
Proxy Statement and Proxy Card under the SEC Rules
Stockholders who, in accordance with SEC Rule
14a-8, wish to present proposals for inclusion in the Company’s proxy materials to be distributed in connection with the
2013 Annual Meeting of Stockholders must submit their proposals so that they are received at the Company’s principal
executive offices no later than the close of business on May 28, 2013. As the rules of the SEC make clear, simply submitting
a proposal does not guarantee that it will be included.
In accordance with the Bylaws, in order to
be properly brought before the 2013 Annual Meeting, a stockholder’s notice of the matter the stockholder wishes to
present, or the person or persons the stockholder wishes to nominate as a director, must be delivered to, or mailed and received
by the Company’s General Counsel and Secretary, William G. Esslinger, Jr., at the Company’s principal executive offices
no less than 60 days, and no more than 90 days, before the one year anniversary of the date of the prior year’s annual meeting;
provided, however, that if the date of the 2013 Annual Meeting is more than 30 days before or more than 60 days after such anniversary
date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the 60th day prior to
such annual meeting, or, if later, the tenth day following the day on which public disclosure of the date of such annual meeting
was first made. As a result, any notice given by a stockholder pursuant to these provisions of the Bylaws (and not pursuant to
the SEC’s Rule 14a-8) must be received no earlier than August 9, 2013, and no later than September 9, 2013,
unless the Company’s annual meeting date in 2013 is more than 30 days before or more than 60 days after November 7, 2013.
To be in proper form, a stockholder’s
notice must include the specified information concerning the proposal or nominee as described in the Bylaws. A stockholder who
wishes to submit a proposal or nomination is encouraged to seek independent counsel about the requirements imposed by the Bylaws
and SEC regulations. The Company will not consider any proposal or nomination that does not meet the Bylaws’ requirements
and the SEC’s requirements for submitting a proposal or nomination.
Advance Notice Requirements Under Our Bylaws
According to our bylaws, a stockholder presenting
a proposal must ensure that business is properly brought before the annual meeting of the stockholders. To be properly brought,
business (i) brought before the meeting by the Company and specified in the notice of meeting given by or at the direction of the
Board, (ii) brought before the meeting by or at the direction of the Board, or (iii) otherwise properly brought before the meeting
by a stockholder who (A) was a stockholder of record of the Company (and, with respect to any beneficial owner, if different, on
whose behalf such business is proposed, only if such beneficial owner was the beneficial owner of shares of the Company) both at
the time of giving the notice and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with
Section 2 of the bylaws as to such business. Except for proposals properly made in accordance with Rule 14a-8 (or any successor
thereto) under the Exchange Act, and included in the notice of meeting given by or at the direction of the Board, the foregoing
clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders.
Stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders, and the only
matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction
of the Board.
Without qualification, for business to be properly
brought before an annual meeting by a stockholder, the stockholder must (i) provide Timely Notice (as defined below) thereof in
writing and in proper form to the Secretary of the Company and (ii) provide any updates or supplements to such notice at the times
and in the forms required by Section 2 of the bylaws. To be timely, a stockholder’s notice must be delivered to, or mailed
and received at, the principal executive offices of the Company not less than sixty (60) days nor more than ninety (90) days prior
to the one (1)-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual
meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder
to be timely must be so delivered, or mailed and received, not later than the sixtieth (60th) day prior to such annual meeting
or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made
(such notice within such time periods, “Timely Notice”). In no event shall any adjournment or postponement of an annual
meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.
To be in proper form, a stockholder’s
notice to the Secretary of the Company shall set forth the following.
As to each Proposing Person (as defined below),
the notice must set forth (A) the name and address of such Proposing Person (including, if applicable, the name and address that
appear on the Company’s books and records); and (B) the class or series and number of shares of the Company that are, directly
or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing
Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of
the Company as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures
to be made pursuant to the foregoing clauses (A) and (B) are referred to as “Stockholder Information”).
As to each Proposing Person, the notice must
also set forth (A) any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such
Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares
of any class or series of the Company, including due to the fact that the value of such derivative, swap or other transactions
are determined by reference to the price, value or volatility of any shares of any class or series of the Company, or which derivative,
swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of
shares of any class or series of the Company (“Synthetic Equity Interests”), which Synthetic Equity Interests shall
be disclosed without regard to whether (x) the derivative, swap or other transactions convey any voting rights in such shares to
such Proposing Person, (y) the derivative, swap or other transactions are required to be, or are capable of being, settled through
delivery of such shares or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic
effect of such derivative, swap or other transactions, (B) any proxy (other than a revocable proxy or consent given in response
to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement
filed on Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares
a right to vote any shares of any class or series of the Company, (C) any agreement, arrangement, understanding or relationship,
including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly,
by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise)
of shares of any class or series of the Company by, manage the risk of share price changes for, or increase or decrease the voting
power of, such Proposing Person with respect to the shares of any class or series of the Company, or which provides, directly or
indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Company
(“Short Interests”), (D) any rights to dividends on the shares of any class or series of the Company owned beneficially
by such Proposing Person that are separated or separable from the underlying shares of the Company, (E) any performance related
fees (other than an asset based fee) that such Proposing Person is entitled to base on any increase or decrease in the price or
value of shares of any class or series of the Company, or any Synthetic Equity Interests or Short Interests, if any, and (F) any
other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing
required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business
proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to
the foregoing clauses (A) through (F) are referred to as “Disclosable Interests”); provided, however, that Disclosable
Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer,
commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed
to prepare and submit the notice required by the bylaws on behalf of a beneficial owner.
As to each item of business that the stockholder
proposes to bring before the annual meeting, the notice must contain (A) a reasonably brief description of the business desired
to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest
in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed
for consideration and in the event that such business includes a proposal to amend the bylaws, the language of the proposed amendment),
and (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing
Persons or (y) between or among any Proposing Person and any other person or entity (including their names) in connection with
the proposal of such business by such stockholder.
The term “Proposing Person” shall
mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial
owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting
is made, (iii) any affiliate or associate (each within the meaning of Rule 12b-2 under the Exchange Act for purposes of the bylaws)
of such stockholder or beneficial owner, and (iv) any other person with whom such stockholder or beneficial owner (or any of their
respective affiliates or associates) is Acting in Concert (as defined below).
A person shall be deemed to be “Acting
in Concert” with another person for purposes of the bylaws if such person knowingly acts (whether or not pursuant to an express
agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control
of the Company in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent
and this awareness is an element in their decision-making processes and (B) at least one (1) additional factor suggests that such
persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information
(whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert
or in parallel; provided, that a person shall not be deemed to be Acting in Concert with any other person solely as a result of
the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant
to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule
14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting
in Concert with such other person.
A stockholder providing notice of business proposed
to be brought before an annual meeting shall further update and supplement such notice, if necessary, so that the information provided
or required to be provided in such notice shall be true and correct as of the record date for the meeting and as of the date that
is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall
be delivered to, or mailed and received by, the Secretary of the Company at the principal executive offices of the Company not
later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be
made as of the record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any
adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting
has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior
to the meeting or any adjournment or postponement thereof).
Notwithstanding anything in the bylaws to the
contrary, no business shall be conducted at an annual meeting except in accordance with the instructions in Section 2 of the bylaws.
The chairperson of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting
in accordance with Section 2, and if he or she should so determine, he or she shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted.
Section 2 is expressly intended to apply to
any business proposed to be brought before an annual meeting of stockholders other than any proposal made pursuant to Rule 14a-8
under the Exchange Act (or any successor thereto). In addition to the requirements of Section 2 with respect to any business proposed
to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act
with respect to any such business; provided, however, that references in the bylaws to the Exchange Act, or the rules and regulations
promulgated thereunder are not intended to and shall not limit the requirements of the bylaws applicable to nominations or proposals
or any other business to be considered pursuant to the bylaws regardless of the stockholder’s intent to utilize Rule 14a-8
under the Exchange Act (or any successor thereto). Nothing in Section 2 shall be deemed to affect the rights of stockholders to
request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor
thereto).
For purposes of the bylaws, “public disclosure”
shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Company with
the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy any document we file at the SEC public reference room
located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public at the SEC website at
www.sec.gov
. You also may obtain
free copies of the documents we file with the SEC, including this proxy statement, by going to the Investor Relations page of
our corporate website at
www.greenwaymedical.com
. Our website address is provided as an inactive textual reference only.
The information provided on our website, other than copies of the documents listed below that have been filed with the SEC, is
not part of this proxy statement, and therefore is not incorporated herein by reference.
Statements contained in this proxy statement,
or in any document incorporated by reference in this proxy statement regarding the contents of any contract or other document,
are not necessarily complete and each such statement is qualified in its entirety by reference to that contract or other document
filed as an exhibit with the SEC. The SEC allows us to “incorporate by reference” into this proxy statement documents
we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this proxy statement, and later information that we file with the SEC will
update and supersede that information. We incorporate by reference the documents listed below and any documents filed by us pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and before the date of the special
meeting.
|
·
|
Annual Report
on Form 10-K for
the fiscal year ended
June 30, 2013;
|
|
·
|
Current Reports
on Form 8-K filed
with the SEC on October
4, 2013, September
23, 2013 and
August 19, 2013; and
|
|
·
|
Our proxy statement on Schedule 14A for our 2012 Annual Meeting filed with the SEC on September 25, 2012.
|
Notwithstanding the foregoing, information
furnished under Items 2.02 and 7.01 of any Current Report on Form 8-K, including the related exhibits, is not incorporated by reference
into this proxy statement.
Any person, including any beneficial owner,
to whom this proxy statement is delivered may request copies of proxy statements and any of the documents incorporated by reference
in this document or other information concerning us, without charge, by written or telephonic request directed to Greenway’s
Investor Relations Department at 1.866.242.3805 or by email through Greenway’s investor relations page at http://ir.greenwaymedical.com/.or
from the SEC through the SEC website at the address provided above. Documents incorporated by reference are available without charge,
excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents.
THIS PROXY STATEMENT DOES NOT CONSTITUTE
THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION
IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO
VOTE YOUR SHARES OF COMPANY COMMON STOCK AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED [—]. YOU SHOULD NOT ASSUME
THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS
PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
STOCKHOLDERS SHARING THE SAME LAST NAME
AND ADDRESS
To reduce the expense of delivering duplicate
proxy materials to stockholders who may have more than one account holding Company stock, but sharing the same address, we have
adopted a procedure approved by the SEC called “householding.” Under this procedure, certain stockholders of record
who have the same address and last name will receive only one copy of its annual report and proxy statement and, as applicable,
any additional proxy materials that are delivered pursuant to a request by such stockholders until such time as one or more of
these stockholders notifies us that they want to receive separate copies. This procedure reduces duplicate mailings and saves printing
costs and postage fees, as well as natural resources. Stockholders who participate in householding will continue to have access
to and utilize separate proxy voting instructions.
If you received a householded mailing this
year and you would like to have additional copies of the annual report and/or proxy statement mailed to you, please submit your
request to Greenway’s Investor Relations Department at 1.866.242.3805 or by email through Greenway’s investor relations
page at http://ir.greenwaymedical.com/. The Company will promptly send additional copies of the proxy statement and related materials,
as applicable, upon receipt of such request. You may also contact the Company if you received multiple copies of the proxy statement
and related materials and would prefer to receive a single copy in the future.
ANNEX A
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
among:
Greenway
Medical Technologies
, Inc.,
a Delaware corporation;
VCG
Holdings,
LLC,
a Delaware limited liability company; and
Crestview
Acquisition Corp.
,
a Delaware corporation
Dated as of September 23, 2013
The Merger Agreement has been provided solely
to inform investors of its terms. The Merger Agreement contains customary representations, warranties and covenants, which were
made for the purposes of such agreement and as of specific dates, were made solely for the benefit of the parties to the Merger
Agreement and may be intended not as statements of fact, but rather as a way of allocating risk to one of the parties if those
statements prove to be inaccurate. In addition, such representations, warranties and covenants may be subject to important qualifications
and limitations agreed to by the Company, Parent and Merger Sub in connection with the negotiated terms or with certain disclosures
not reflected in the text of the Merger Agreement, may not be accurate or complete as of any specified date or may be subject to
a contractual standard of materiality different from those generally applicable to stockholders or other investors in the Company.
The Company’s stockholders and other investors are not third-party beneficiaries under the Merger Agreement and should not
rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts
or conditions of the Company, Parent, Merger Sub or any of their respective subsidiaries or affiliates.
Table of Contents
Table of Contents
(continued)
Table of Contents
(continued)
Exhibits
AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger
(“
Agreement
”) is made and entered into as of September 23, 2013,
by and among:
VCG Holdings,
LLC
, a Delaware limited liability company (“
Parent
”);
Crestview
Acquisition Corp
,
a Delaware corporation and a wholly owned direct
subsidiary of Parent (“
Merger Sub
”); and
Greenway Medical Technologies,
Inc.
, a Delaware corporation (the “
Company
”). Certain capitalized terms used in this Agreement
are defined in
Exhibit A
.
Recitals
A
.
Parent
has agreed to cause Merger Sub to commence a cash tender offer (as it may be amended from time to time as permitted under this
Agreement, the “
Offer
”) to acquire all of the outstanding shares of Company Common Stock (the “
Shares
”)
for $20.35 per share (such amount, or any other amount per share paid pursuant to the Offer, being the “
Offer Price
”),
net to the seller in cash, without interest, upon the terms and subject to the conditions of this Agreement.
B. Regardless
of whether the Offer is consummated, Merger Sub will merge with and into the Company (the “
Merger
”),
with the Company continuing as the surviving corporation in the Merger (the “
Surviving Corporation
”),
on the terms and subject to the conditions set forth in this Agreement, whereby, except as expressly provided in Section 2.5, (i)
each issued and outstanding Share not owned by Parent, Merger Sub or the Company as of the Effective Time shall be converted into
the right to receive the Offer Price, in cash, without interest, and (ii) the Company shall become a wholly owned Subsidiary of
Parent as a result of the Merger.
C. The
Board of Directors of the Company has (i) determined that this Agreement and the Transactions, including the Offer and the Merger,
are advisable to, and in the best interest of, the Company and its stockholders, (ii) approved the execution, delivery and performance
by the Company of this Agreement and the consummation of the Transactions, including the Offer and the Merger, (iii) authorized
and approved the Top-Up Option and the issuance of the Top-Up Option Shares, and (iv) resolved to recommend that the stockholders
of the Company tender their Shares to Parent pursuant to the Offer, and, if applicable, approve the adoption of this Agreement
and the Merger (the “
Company Board Recommendation
”).
D. The
Board of Directors of each of Parent and Merger Sub have approved this Agreement and declared it advisable for Parent and Merger
Sub, respectively, to enter into this Agreement.
E
.
Immediately
prior to the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent and Merger
Sub to enter into this Agreement, certain stockholders of the Company have delivered to Parent and Merger Sub tender and support
agreements (the “
Support Agreements
”), dated as of the date hereof, providing that such stockholders
of the Company have, among other things, agreed to (i) tender the Shares beneficially owned by them, including the Shares underlying
Company Options that such stockholder may acquire at any time in the future during the term of the Support
Agreements, including pursuant
to any exercise of any Company Options, in the Offer, and (ii) support the Merger and the other transactions contemplated hereby,
each on the terms and subject to the conditions set forth in the Support Agreements.
F. Concurrently
with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement,
Parent has delivered to the Company the Equity Funding Letter (as defined below), pursuant to which Vista Equity Partners Fund
IV, L.P. (the “
Equity Investor
”) has, subject to the terms and conditions set forth therein, committed
to provide all of the funds to Parent that are necessary to finance all of the transactions contemplated hereby.
G. Concurrently
with the execution of this Agreement, and as a condition and inducement to the Company’s willingness to enter into this Agreement,
the Equity Investor is entering into a limited guaranty in favor of the Company (the “
Guaranty
”) with
respect to certain obligations of Parent and Merger Sub under this Agreement.
Agreement
The Parties to this Agreement,
intending to be legally bound, agree as follows:
SECTION 1. The
Offer
1.1 The
Offer.
(a)
Commencement
of the Offer
. Provided that this Agreement shall not have been terminated in accordance with Section 8, on a date that is nine
(9) business days after the date of this Agreement, or as promptly as practicable thereafter, Merger Sub shall (and Parent shall
cause Merger Sub to) commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer.
(b)
Terms
and Conditions of the Offer
. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment, and
pay for, any Shares tendered pursuant to the Offer are subject to the terms and conditions set forth in Annex I (the “
Offer
Conditions
”). The Offer shall be made by means of an offer to purchase (the “
Offer to Purchase
”)
that contains the terms set forth in this Agreement, the Minimum Condition and the other Offer Conditions. Merger Sub expressly
reserves the right to (i) increase the Offer Price, (ii) waive any Offer Condition and (iii) make any other changes in the terms
and conditions of the Offer not inconsistent with the terms of this Agreement;
provided, however
, that unless otherwise
provided by this Agreement, without the prior written consent of the Company, Merger Sub shall not (A) decrease the Offer Price,
(B) change the form of consideration payable in the Offer, (C) decrease the maximum number of Shares sought to be purchased in
the Offer, (D) impose conditions or requirements to the Offer in addition to the Offer Conditions, (E) amend or modify any of the
Offer Conditions in a manner that adversely affects, or reasonably could adversely affect, any holder of Shares, (F) change or
waive the Minimum Condition, (G) extend or otherwise change the Expiration Date in a manner other than as required or permitted
by this Agreement, or (H) provide any “subsequent offering period” within the meaning of Rule 14d-11 promulgated under
the Exchange Act.
(c)
Expiration
and Extension of the Offer
. The Offer shall initially be scheduled to expire at 12:00 midnight Eastern Time on the date that
is twenty (20) business days following the Offer Commencement Date (determined as set forth in Rule 14d-1(g)(3) and Rule 14e-1(a)
under the Exchange Act) (the “
Initial Expiration Date
,” such date or such subsequent date to which the
expiration of the Offer is extended in accordance with the terms of this Agreement, the “
Expiration Date
”).
Notwithstanding anything to the contrary contained in this Agreement, but subject to the Parties’ respective termination
rights under Section 8: (i) if, as of the scheduled Expiration Date, any Offer Condition is not satisfied and has not been
waived, Merger Sub may, in its discretion (and without the consent of the Company or any other Person), extend the Offer on one
or more occasions, for an additional period of up to ten (10) business days per extension, to permit such Offer Condition to be
satisfied; (ii) Merger Sub shall extend the Offer from time to time for any period required by any Legal Requirement, any
interpretation or position of the SEC, the staff thereof or NYSE applicable to the Offer; (iii) Merger Sub shall have the right
in its sole discretion to extend the Offer beyond any then-scheduled expiration of the Offer for one or more consecutive increments
of up to five (5) business days each, the length of each such period to be determined by Parent in its sole discretion (or such
longer period as Parent and the Company may mutually agree) to the extent the Marketing Period shall not have been completed as
of any such then-scheduled Expiration Date; and (iv) if, as of the scheduled Expiration Date, any Offer Condition is not satisfied
and has not been waived, at the request of the Company, Merger Sub shall (and Parent shall cause Merger Sub to) extend the Offer
on one or more occasions for an additional period of up to ten (10) business days per extension, to permit such Offer Condition
to be satisfied or waived. Notwithstanding anything to the contrary in this Section 1.1(c), in no event shall Merger Sub: (1) be
required to accept for payment, and pay for, Shares validly tendered (and not withdrawn) pursuant to the Offer until the Marketing
Period shall have been completed; (2) be required to extend the Offer beyond the earliest to occur of (the “
Extension
Deadline
”) (x) the valid termination of this Agreement in compliance with Section 8, (y) three (3) business days
after the Proxy Statement Clearance Date and (z) the End Date; or (3) be permitted to extend the Offer beyond the Extension
Deadline without the prior written consent of the Company. Merger Sub shall not terminate the Offer prior to any scheduled Expiration
Date without the prior written consent of the Company except in the event that this Agreement is terminated pursuant to Section
8.
(d)
Termination
of Offer; Continuing Pursuit of Merger
. If at any then-scheduled Expiration Date (i) any Offer Condition shall not have
been satisfied or, to the extent waivable by Parent or Merger Sub, waived and (ii) three (3) business days have elapsed
since the Proxy Statement Clearance Date, then (x) Merger Sub may irrevocably and unconditionally terminate the Offer or (y) from
and after the close of business on November 20, 2013, the Company shall have the right, exercisable by delivering written notice
to Parent and Merger Sub to cause Merger Sub to, and upon receipt of such notice, Merger Sub shall (and Parent shall cause Merger
Sub to), irrevocably and unconditionally terminate the Offer at the then-scheduled Expiration Date following the receipt of such
notice from the Company (delivered no less than two (2) business days prior to the then-scheduled Expiration Date of the Offer).
If the Offer is terminated pursuant to this Section 1.1(d), the Company shall proceed with and take all actions necessary
to hold the Company Stockholders’ Meeting in accordance with the terms of this Agreement. The termination of the Offer pursuant
to this Section 1.1(d) is referred to in this Agreement as the “
Offer Termination
”. Notwithstanding
anything to the contrary in this Section 1.1(d), if this Agreement is terminated pursuant to Section 8, then Merger Sub shall
promptly (and, in any event,
within one (1) business day of such termination), irrevocably and unconditionally terminate the Offer and shall not acquire any
Shares pursuant to the Offer. If the Offer is terminated or withdrawn by Merger Sub in accordance with the terms of this Agreement,
including Section 1.1(d), or this Agreement is terminated in accordance with Section 8, Merger Sub shall promptly return, and shall
cause any depository acting on behalf of Merger Sub to return, all tendered Shares to the registered holders thereof to the extent
required by the terms of the Offer. The Parties hereto acknowledge and agree that the Offer Termination shall not give rise to
a right of termination of this Agreement unless to the extent expressly provided for in Section 8 and that, absent such termination
of this Agreement, the obligations of the Parties hereunder other than those related to the Offer shall continue to remain in effect,
including those obligations with respect to the Merger.
(e)
Offer
Documents
. On the date of commencement of the Offer (within the meaning of Rule 14d-2 under the Exchange Act), Parent and Merger
Sub shall (i) file with the SEC a tender offer statement on Schedule TO with respect to the Offer (together with all amendments
and supplements thereto and including exhibits thereto, the “
Schedule TO
”) that will contain or incorporate
by reference the Offer to Purchase and form of the related letter of transmittal and (ii) cause the Offer to Purchase and related
documents to be disseminated to holders of Shares. Parent and Merger Sub agree that they shall cause the Schedule TO and all
exhibits, amendments or supplements thereto (which together constitute the “
Offer Documents
”) filed by
either Parent or Merger Sub with the SEC to comply in all material respects with the Exchange Act and the rules and regulations
thereunder and other applicable Legal Requirements. Each of Parent, Merger Sub and the Company agrees to promptly correct any information
provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading
in any material respect, and Parent and Merger Sub further agree to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company shall promptly furnish or otherwise make available to Parent and Merger Sub or Parent’s
legal counsel all information concerning the Acquired Corporations and the Company’s stockholders that may be required in
connection with any action contemplated by this Section 1.1(e). The Company and its counsel shall be given reasonable opportunity
to review and comment on the Offer Documents prior to the filing thereof with the SEC. Parent and Merger Sub agree to provide the
Company and its counsel with any comments Parent, Merger Sub or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly after receipt of such comments. Each of Parent and Merger Sub shall respond promptly to any comments
of the SEC or its staff with respect to the Offer Documents or the Offer. Parent and Merger Sub shall use reasonable best efforts
to respond as promptly as reasonably practicable to any comments of the SEC or the staff of the SEC with respect to the Offer Documents,
and Parent and Merger Sub shall provide the Company and its counsel a reasonable opportunity to participate in the formulation
of any written response to any such written comments of the SEC or its staff. Prior to the filing of the Offer Documents (or any
amendment or supplement thereto) or the dissemination thereof to the holders of Company Common Stock, or responding to any comments
of the SEC or the staff of the SEC with respect thereto, Parent and Merger Sub shall provide the Company a reasonable opportunity
to review and to propose comments on such document or response.
(f)
Funds
. Subject to the terms and conditions set forth in this Agreement and to the satisfaction,
or waiver by Merger Sub, of the Offer Conditions, Merger Sub shall, and Parent shall cause Merger Sub to, accept for payment and
pay for, as promptly as practicable (which shall, in any event, be no more than three (3) business days) after the Expiration Date,
all Shares validly tendered and not validly withdrawn pursuant to the Offer that Merger Sub becomes obligated to purchase pursuant
to the Offer (such acceptance, the “
Offer Closing
”, the time on which the Offer Closing occurs, the “
Acceptance
Time
”). Without limiting the generality of Section 9.10, Parent shall cause to be provided to Merger Sub all of the
funds necessary to purchase any Shares that Merger Sub becomes obligated to purchase pursuant to the Offer, and shall cause Merger
Sub to perform, on a timely basis, all of Merger Sub’s obligations under this Agreement. Parent and Merger Sub shall, and
each of Parent and Merger Sub shall ensure that all of their respective affiliates shall, tender any Shares held by them into the
Offer.
1.2 Company
Actions.
(a)
Schedule
14D-9
. As promptly as practicable following the filing of the Schedule TO but in no event later than one (1) business day after
the date of the filing of the Schedule TO (or such other date as mutually agreed upon by the Parties), the Company shall file with
the SEC and disseminate to holders of Shares, in each case as and to the extent required by applicable federal securities laws,
a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any exhibits, amendments or supplements thereto,
the “
Schedule 14D-9
”) that, subject to Section 6.1(b), shall reflect the Company Board Recommendation.
The Company agrees that it will cause the Schedule 14D-9 to comply in all material respects with the Exchange Act and other applicable
Legal Requirements. Each of Parent, Merger Sub and the Company agrees to respond promptly to any comments of the SEC or its staff
and to promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Parent and Merger Sub shall promptly furnish or otherwise make available
to the Company or the Company’s legal counsel all information concerning Parent and Merger Sub that may be required in connection
with any action contemplated by this Section 1.2(a). Parent and its counsel shall be given reasonable opportunity to review and
comment on the Schedule 14D-9 and any amendment thereto prior to the filing thereof with the SEC. The Company agrees to provide
Parent and its counsel with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after receipt of such comments. The Company shall respond promptly to any comments of the SEC or its staff with
respect to the Schedule 14D-9. Company shall use reasonable best efforts to respond as promptly as reasonably practicable to any
comments of the SEC or the staff of the SEC with respect to the Schedule 14D-9, and Company shall provide Parent, Merger Sub and
their counsel a reasonable opportunity to participate in the formulation of any written response to any such written comments of
the SEC or its staff. Prior to the filing of the Schedule 14D-9 (or any amendment or supplement thereto) or the dissemination thereof
to the holders of Shares, or responding to any comments of the SEC or the staff of the SEC with respect thereto, the Company shall
provide Parent and Merger Sub a reasonable opportunity to review and to propose comments on such document or response.
(b)
Stockholder
Lists
. The Company shall promptly furnish Parent with a list of its stockholders, mailing labels and any available listing
or computer file containing the names and addresses of all record holders of Shares and lists of securities positions of Shares
held in stock depositories, in each case true and correct as of the most recent practicable date, and shall provide to Parent such
additional information (including updated lists of stockholders, mailing labels and lists of securities positions) and such other
assistance as Parent may reasonably request in connection with the Offer. Parent and Merger Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files, shall use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated, shall deliver, and shall use their reasonable efforts to cause
their agents to deliver, to the Company (or destroy) all copies and any extracts or summaries from such information then in their
possession or control.
1.3 Directors.
(a)
Merger
Sub Designees
. Upon the Acceptance Time and all times thereafter, subject to compliance with applicable Legal Requirements,
including the applicable rules and regulations of NYSE, Merger Sub shall be entitled to elect or designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as is equal to the product of (i) the total number
of directors on the Board of Directors of the Company (after giving effect to the directors elected or designated by Merger Sub
pursuant to this sentence) multiplied by (ii) the percentage that the aggregate number of Shares beneficially owned by Parent,
Merger Sub and any of their Affiliates bears to the total number of Shares then outstanding. The Company shall, upon Merger Sub’s
request at any time following the purchase of and payment for Shares pursuant to the Offer, take all such actions necessary to
(A) appoint to the Board of Directors of the Company the individuals designated by Merger Sub and permitted to be so designated
by the first sentence of this Section 1.3(a), including, but not limited to, promptly filling vacancies or newly created directorships
on the Board of Directors of the Company, promptly increasing the size of the Board of Directors of the Company (including by amending
the bylaws of the Company if necessary so as to increase the size of the Board of Directors of the Company) and/or promptly securing
the resignations of such number of its incumbent directors as are necessary or desirable to enable Merger Sub’s designees
to be so elected or designated to the Board of Directors of the Company, and (B) cause Merger Sub’s designees to be so appointed
at such time. The Company shall, upon Merger Sub’s request following the Acceptance Time, also cause Persons elected or designated
by Merger Sub to constitute the same percentage (rounded up to the next whole number) as is on the Board of Directors of the Company
of each committee of the Board of Directors of the Company to the extent permitted by applicable Legal Requirements, including
the applicable rules and regulations of NYSE. From and after the Acceptance Time, the Company shall take all action necessary to
elect to be treated as a “controlled company” as defined by NYSE Listing Rule 303A.00 and make all necessary filings
and disclosures associated with such status. The Company’s obligations under this Section 1.3(a) shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly upon execution of this Agreement take
all actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 1.3(a), including
mailing to stockholders (together with the Schedule 14D-9) the information required by Section 14(f) and Rule 14f-1 as is necessary
to enable Merger Sub’s designees to be elected or designated to the Board of
Directors of the Company.
Merger Sub shall supply the Company with, and be solely responsible for, information with respect to Merger Sub’s designees
and Parent’s and Merger Sub’s respective officers, directors and Affiliates to the extent required by Section 14(f)
and Rule 14f-1. The provisions of this Section 1.3(a) are in addition to and shall not limit any rights that any of Merger Sub,
Parent or any of their respective Affiliates may have as a record holder or beneficial owner of Shares as a matter of applicable
Legal Requirements with respect to the election of directors or otherwise.
(b)
Independent
Directors
. In the event that Merger Sub’s designees are elected or designated to the Board of Directors of the Company
pursuant to Section 1.3(a), then, until the Effective Time, the Company shall cause the Board of Directors of the Company to maintain
three (3) directors who are members of the Board of Directors of the Company on or prior to the date hereof and who are not officers,
directors or employees of Parent, Merger Sub, or any of their Affiliates, each of whom shall be an “independent director”
as defined by NYSE Listing Rule 303A.02 and eligible to serve on the Company’s audit committee under the Exchange Act and
rules and regulations of NYSE, and at least one of whom shall be an “audit committee financial expert” as defined in
Items 407(d)(5)(ii) and (iii) of Regulation S-K (the “
Continuing Directors
”);
provided, however,
that
if any Continuing Director is unable to serve due to death, disability or resignation, the Company shall take all necessary action
(including creating a committee of the Board of Directors of the Company) so that the Continuing Director(s) shall be entitled
to elect or designate another Person (or Persons) to fill such vacancy, and such Person (or Persons) shall be deemed to be a Continuing
Director for purposes of this Agreement. If no Continuing Director then remains, the other directors shall designate three Persons
who are not officers, directors or employees of Parent, Merger Sub, or any of their Affiliates to fill such vacancies and such
Persons shall be deemed Continuing Directors for all purposes of this Agreement. Notwithstanding anything in this Agreement to
the contrary, if Merger Sub’s designees constitute a majority of the Board of Directors of the Company after the Acceptance
Time and prior to the Effective Time, then the affirmative vote of a majority of the Continuing Directors shall (in addition to
the approval rights of the Board of Directors of the Company or the stockholders of the Company as may be required by the Company
Charter Documents or applicable Legal Requirements) be required (i) for the Company to amend or terminate this Agreement, (ii)
to exercise or waive any of the Company’s rights, benefits or remedies hereunder, if such action would adversely affect,
or would reasonably be expected to adversely affect, the holders of Shares (other than Parent or Merger Sub), (iii) to amend the
Company Charter Documents if such action would adversely affect the holders of Shares (other than Parent or Merger Sub), or (iv)
to take any other action of the Board of Directors of the Company under or in connection with this Agreement if such action would
adversely affect, or would reasonably be expected to adversely affect, the holders of Shares (other than Parent or Merger Sub).
The Continuing Directors shall have, and Parent shall cause the Continuing Directors to have, the authority to retain such counsel
(which may include current counsel to the Company or the Board of Directors of the Company) and other advisors at the expense of
the Company as determined by the Continuing Directors, and the authority to institute any action on behalf of the Company to enforce
performance of this Agreement.
1.4 Top-Up
Option.
(a)
Top-Up
.
The Company grants to Parent and Merger Sub an option (the “
Top-Up Option
”) to purchase from the Company
the number of newly-issued Shares (such newly-issued shares, the “
Top-Up Option Shares
”) equal to the
lesser of (i) the number of Shares that, when added to the number of Shares owned by Parent and Merger Sub at the time of exercise
of the Top-Up Option, constitutes one share more than 90% of the number of Shares that would be outstanding immediately after the
issuance of all Shares subject to the Top-Up Option on a fully diluted basis (determined in accordance with
Annex I
) or
(ii) the aggregate number of Shares that the Company is authorized to issue under its certificate of incorporation but that are
not issued and outstanding (and are not subscribed for or otherwise committed to be issued) at the time of exercise of the Top-Up
Option. The Top-Up Option shall terminate upon the earlier to occur of (A) the Effective Time and (B) the termination of this Agreement
in accordance with its terms.
(b)
Exercise
of Top-Up
. If there shall have not been validly tendered and not validly withdrawn that number of Shares which, when added
to the Shares owned by Parent and its affiliates, would represent at least one share more than ninety percent (90%) of the number
of Shares that would be outstanding immediately after the issuance of all Shares subject to the Top-Up Option on a fully diluted
basis (determined in accordance with
Annex I
) at the Acceptance Time, Acquisition Sub shall be deemed to have exercised
the Top-Up Option on such date;
provided, however,
that the obligation of the Company to deliver Top-Up Option Shares upon
the exercise of the Top-Up Option is subject to the conditions, unless waived by the Company, that (i) immediately following the
exercise of the Top-Up Option, the number of Shares owned in the aggregate by Parent and Merger Sub constitutes at least one share
more than 90% of the number of Shares that would be outstanding immediately after the issuance of all Top-Up Option Shares on a
fully diluted basis (determined in accordance with
Annex I
) and (ii) the Minimum Condition shall have been satisfied. The
parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with applicable Legal
Requirements (other than any Legal Requirements that require shareholder approval for the issuance of the Top-Up Option Shares).
(c)
Top-Up
Closing
. The aggregate purchase price payable for the Top-Up Option Shares shall be determined by multiplying the number of
Top-Up Option Shares by the Offer Price. Such purchase price may be paid by Parent or Merger Sub, at its election, either (i) entirely
in cash, (ii) by payment in cash of the aggregate par value of the Top-Up Option Shares and payment of the balance by executing
and delivering to the Company a promissory note (with full recourse to Parent) having a principal amount equal to such purchase
price or (iii) any combination thereof. Any such promissory note shall bear simple interest at the rate of 6% per annum, shall
mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid without premium
or penalty;
provided
,
however
, upon any default under the promissory note, all principal and accrued interest thereunder
shall immediately become due and payable. The promissory note shall have no other material terms.
(d)
Top-Up
Notice
. In the event Parent or Merger Sub wishes to exercise or is deemed to exercise the Top-Up Option, Parent or Merger Sub
shall deliver to the Company a notice setting forth (i) the number of Top-Up Option Shares that Parent or Merger Sub intends to
purchase pursuant to the
Top-Up Option, (ii) the manner in which Parent or Merger Sub intends to pay the applicable exercise price and (iii) the place and
time at which the closing of the purchase of the Top-Up Option Shares is to take place. At the closing of the purchase of the Top-Up
Option Shares, Parent or Merger Sub shall cause to be delivered to the Company the consideration required to be delivered in exchange
for the Top-Up Option Shares, and the Company shall cause to be issued and delivered to Parent or Merger Sub (as the case may be)
a certificate or certificates representing the Top-Up Option Shares or, at Parent’s or Merger Sub’s request or otherwise
if the Company does not then have certificated Shares, the applicable number of Book-Entry Shares. Such certificates or Book-Entry
Shares may include any legends required by applicable Legal Requirements.
(e)
Exemption
from Registration
. Parent and Merger Sub acknowledge that the Top-Up Option Shares that Merger Sub may acquire upon exercise
of the Top-Up Option will not be registered under the Securities Act and will be issued in reliance upon an exemption thereunder
for transactions not involving a public offering. Parent and Merger Sub represent and warrant to the Company that Merger Sub is,
and will be upon the purchase of the Top-Up Option Shares, an “Accredited Investor,” as defined in Rule 501 of Regulation
D under the Securities Act. Merger Sub agrees that the Top-Up Option and the Top-Up Option Shares to be acquired upon exercise
of the Top-Up Option, if any, are being and will be acquired by Merger Sub for the purpose of investment and not with a view to,
or for resale in connection with, any distribution thereof in violation of the Securities Act.
(f)
No
Effect on Appraisal Rights
. The Parties agree that any dilutive impact on the value of the Shares as a result of the issuance
of the Top-Up Option Shares will not be taken into account in any determination of the fair value of any Dissenting Shares pursuant
to Section 262 of the DGCL as contemplated by Section 2.7 and that none of the Parties shall take any position to the
contrary in any appraisal proceeding.
SECTION 2. Merger
Transaction
2.1 Merger
of Merger Sub into the Company.
Upon the terms and subject to the conditions set forth in this Agreement and in accordance
with the DGCL, at the Effective Time, the Company and Parent shall consummate the Merger, whereby Merger Sub shall be merged with
and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the Surviving Corporation.
2.2 Effect
of the Merger.
The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.
2.3 Closing;
Effective Time.
(a) Unless
this Agreement shall have been terminated pursuant to Section 8, and unless otherwise mutually agreed in writing between the Company,
Parent and Merger Sub, the consummation of the Merger (the
“Closing”
) shall take place at the offices
of Paul Hastings LLP, 1170 Peachtree Street, N.E., Atlanta, GA 30309, (i) if the Acceptance Time shall have occurred at or prior
to the Closing, at 10:00 a.m. local time on a date specified by the Company and Parent, which shall be no later than the second
(2
nd
) business day after the satisfaction or
waiver of the last to be
satisfied or waived of the conditions set forth in Section 7 (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the satisfaction or waiver of such conditions); or (ii) if the Acceptance Time shall not have occurred
at or prior to the Closing, at 10:00 a.m. local time on a date specified by the Company and Parent, which shall be no later than
the third (3rd) business day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth
in Section 7 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction
or waiver of such conditions);
provided
, that notwithstanding the satisfaction or waiver of the conditions set forth in
Section 7 hereof, if an Offer Termination has occurred and the Marketing Period has not ended at the time of the satisfaction or
waiver of such conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to
the satisfaction or waiver of those conditions at such time), the Closing shall occur instead on (x) the date following the satisfaction
or waiver of such conditions that is the earliest to occur of (A) any business day during the Marketing Period specified by Parent
to the Company on no less than two (2) business days’ written notice to the Company and (B) the third (3rd) business day
after the final day of the Marketing Period, but subject, in each case, to the satisfaction or waiver of the conditions set forth
in Section 7 at such time (other than those conditions that by their nature are to be satisfied at the Closing, but subject to
the satisfaction or waiver of such conditions at such time) or (y) such other date, time, or place as agreed to in writing by the
Company and Parent. The date on which the Closing occurs is referred to in this Agreement as the “
Closing Date
.”
(b) Subject
to the provisions of this Agreement, as soon as practicable on the Closing Date, the Company and Merger Sub shall file or cause
to be filed a certificate of merger with the Secretary of State of the State of Delaware with respect to the Merger, in such form
as required by, and executed and acknowledged in accordance with, the relevant provisions of the DGCL. The Merger shall become
effective upon the date and time of the filing of such certificate of merger with the Secretary of State of the State of Delaware
or such later date and time as is agreed upon in writing by the parties hereto and specified in the certificate of merger (such
date and time, the “
Effective Time
”).
2.4 Certificate
of Incorporation and Bylaws; Directors and Officers.
Unless otherwise determined by Parent prior to the Effective Time:
(a) the
Certificate of Incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to
Exhibit B;
(b) the
Bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the Bylaws of Merger Sub
as in effect immediately prior to the Effective Time; and
(c) the
directors and officers of the Surviving Corporation immediately after the Effective Time shall be the directors and officers of
Merger Sub immediately prior to the Effective Time.
2.5 Conversion
of Shares.
(a) At
the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company:
(i) any
Shares then held by the Company or any wholly owned Subsidiary of the Company (or held in the Company’s treasury) shall be
canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;
(ii) any
Shares then held by Parent, Merger Sub or any other wholly owned Subsidiary of Parent shall be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor;
(iii) except
as provided in clauses “(i)” and “(ii)” above and subject to Section 2.5(b), each Share then outstanding
(other than any Dissenting Shares, as defined below) shall be converted into the right to receive the Offer Price in cash, without
interest (the “
Merger Consideration
”), subject to any withholding of Taxes required by applicable Legal
Requirements in accordance with Section 2.6(e); and
(iv) each
share of the common stock, $.0001 par value per share, of Merger Sub then outstanding shall be converted into one share of common
stock of the Surviving Corporation.
(b) If,
between the date of this Agreement and the Effective Time, the outstanding Shares are changed into a different number or class
of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of
shares, reclassification, recapitalization or other similar transaction, then the Offer Price and Merger Consideration, as applicable,
shall be appropriately adjusted.
2.6 Surrender
of Certificates; Stock Transfer Books.
(a) Prior
to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent (the
“Paying Agent”
) for the holders of Shares to receive the funds to which holders of such shares shall
become entitled pursuant to Section 2.5. At the Effective Time (subject to Section 2.8(b)), Parent shall deposit, or shall cause
to be deposited, with the Paying Agent cash sufficient to make payment of the cash consideration payable pursuant to Section 2.5
(the “
Payment Fund
”). The Payment Fund shall not be used for any other purpose. The Payment Fund shall
be invested by the Paying Agent as directed by the Surviving Corporation;
provided
, that such investments shall be in obligations
of or guaranteed by the United States of America in commercial paper obligations rated A-1 or P-1 or better by Moody's Investors
Service, Inc. or Standard & Poor's Corporation, respectively, in certificates of deposit, bank repurchase agreements or banker's
acceptances of commercial banks with capital exceeding $1 billion, or in money market funds having a rating in the highest investment
category granted by a recognized credit rating agency at the time of acquisition or a combination of the foregoing and, in any
such case, no such instrument shall have a maturity exceeding three (3) months.
(b) Promptly
after the Effective Time (but in no event later than five (5) business days thereafter), the Surviving Corporation shall cause
to be mailed to each Person who was, at the Effective Time, a holder of record of the Shares entitled to receive the Merger Consideration
pursuant to Section 2.5 a form of letter of transmittal (which shall be in reasonable and customary form and shall specify that
delivery shall be effected, and risk of loss and title to the certificates evidencing such shares (the
“Certificates”
)
shall pass, only upon proper delivery of the Certificates (or effective affidavits of loss in lieu thereof) to the Paying Agent)
and instructions for use in effecting the surrender of the Certificates or Book-Entry Shares pursuant to such letter of transmittal.
Upon surrender to the Paying Agent of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares, together
with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such Certificates or Book-Entry Shares shall be entitled
to receive in exchange therefor the Merger Consideration for each share of Company Common Stock formerly evidenced by such Certificates
or Book-Entry Shares, and such Certificates and Book-Entry Shares shall then be canceled. No interest shall accrue or be paid on
the Merger Consideration payable upon the surrender of any Certificates or Book-Entry Shares for the benefit of the holder thereof.
If the payment of any Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificates
formerly evidencing the shares of Company Common Stock is registered on the stock transfer books of the Company, it shall be a
condition of payment that the Certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer
and that the Person requesting such payment shall have paid all transfer and other similar Taxes required by reason of the payment
of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered, or shall have established
to the satisfaction of the Surviving Corporation that such Taxes either have been paid or are not applicable. Payment of the applicable
Merger Consideration with respect to Book-Entry Shares shall only be made to the Person in whose name such Book-Entry Shares are
registered.
(c) At
any time following twelve (12) months after the Effective Time, the Surviving Corporation shall be entitled to require the Paying
Agent to deliver to it any funds which had been made available to the Paying Agent and not disbursed to holders of Certificates
or Book-Entry Shares (including, without limitation, all interest and other income received by the Paying Agent in respect of all
funds made available to it), and, thereafter, such holders shall be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat and other similar Legal Requirements) only as general creditors thereof with respect to the Merger Consideration
that may be payable upon due surrender of the Certificates or Book-Entry Shares held by them. Notwithstanding the foregoing, neither
the Surviving Corporation nor the Paying Agent shall be liable to any holder of Certificates or Book-Entry Shares for the Merger
Consideration delivered in respect of such share to a public official pursuant to any abandoned property, escheat or other similar
Legal Requirements. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat
to or become property of any Governmental Body shall become, to the extent permitted by applicable Legal Requirements, the property
of the Surviving Corporation or its designee, free and clear of all claims or interest of any Person previously entitled thereto.
(d) At
the close of business on the day of the Effective Time, the stock transfer books of the Company with respect to the shares of Company
Common Stock shall be
closed and thereafter there
shall be no further registration of transfers of Shares on the records of the Company. From and after the Effective Time, the holders
of the Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except
as otherwise provided herein or by applicable Legal Requirements.
(e) Each
of the Surviving Corporation and Parent shall be entitled to deduct and withhold (or cause the Paying Agent to deduct and withhold)
from the Merger Consideration payable to any holder of the Shares or any other consideration otherwise payable pursuant to this
Agreement such amounts as it is required by any Legal Requirement to deduct and withhold with respect to Taxes. Each such payor
shall take all action that may be necessary to ensure that any such amounts so withheld are promptly and properly remitted to the
appropriate Governmental Body. If any withholding obligation may be avoided by a payee providing information or documentation to
the applicable payor, such payor shall request such information from such payee and use commercially reasonable efforts to avoid
such withholding obligation. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the Shares or other recipient of consideration hereunder in respect of which
such deduction and withholding was made.
(f) If
any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a
bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to
such Certificate (which shall not exceed the Merger Consideration payable with respect to such Certificate), the Paying Agent will
pay (less any amounts entitled to be deducted or withheld pursuant to Section 2.6(e)), in exchange for such lost, stolen or destroyed
Certificate, the applicable Merger Consideration to be paid in respect of the Shares formerly represented by such Certificate,
as contemplated by this Section 2.
2.7 Dissenters’
Rights.
Notwithstanding anything in this Agreement to the contrary, Shares outstanding immediately prior to the Effective Time,
and held by holders who are entitled to appraisal rights under Section 262 of the DGCL and have properly exercised and perfected
their respective demands for appraisal of such shares in the time and manner provided in Section 262 of the DGCL and, as of the
Effective Time, have neither effectively withdrawn nor lost their rights to such appraisal and payment under the DGCL (the
“
Dissenting
Shares
”
), shall not be converted into the right to receive Merger Consideration, but shall, by virtue of the Merger,
be entitled to only such consideration as shall be determined pursuant to Section 262 of the DGCL;
provided, that
if any
such holder shall have failed to perfect or shall have effectively withdrawn or lost such holder’s right to appraisal and
payment under the DGCL, such holder’s Shares shall be deemed to have been converted as of the Effective Time into the right
to receive the Merger Consideration (less any amounts entitled to be deducted or withheld pursuant to Section 2.6(e)), and such
shares shall not be deemed to be Dissenting Shares. The Company shall give Parent prompt notice of any written demands received
by the Company for appraisal of any Shares and any withdrawals of such demands, and Parent shall have the right to participate
in all negotiations and proceedings with respect to such demands. The Company shall not, without the prior written consent of Parent
or as required by applicable Legal Requirements, make any payment with respect to, or settle or offer to settle, any such demands.
2.8 Treatment
of Company Options.
(a) As
of the Acceleration Time, each Company Option that is then outstanding and unexercised, whether or not vested, shall be cancelled
and converted into the right to receive cash in an amount equal to (i) the total number of Shares subject to such Company Option
immediately prior to the Acceleration Time (without regard to vesting) multiplied by (ii) the excess, if any, of (x) the Offer
Price or the Merger Consideration (as the case may be) over (y) the exercise price payable per Share under such Company Option,
which amount shall be paid in accordance with Section 2.8(b). No holder of a Company Option that has an exercise price per Share
that is equal to or greater than the Offer Price or the Merger Consideration (as the case may be) shall be entitled to any payment
with respect to such cancelled Company Option before or after the Acceleration Time.
(b) As
soon as reasonably practicable after the Acceleration Time (but no later than seven (7) days after the Acceleration Time), the
Merger Sub or the Surviving Corporation (as the case may be) shall pay the aggregate Offer Price or Merger Consideration (as the
case may be), net of any applicable withholding Taxes, payable with respect to Company Options through, to the extent applicable
and as the case may be, the Company’s or Surviving Corporation’s payroll (subject to any required tax withholdings)
to the holders of Company Options.
2.9 Further
Action.
If, at any time after the Effective Time, any further action is reasonably determined by Parent to be necessary or
desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession
of and to all rights and property of Merger Sub and the Company, the officers and directors of the Surviving Corporation and Parent
shall be fully authorized (in the name of Merger Sub, in the name of the Company and otherwise) to take such action.
SECTION 3. Representations
and Warranties of the Company
The Company hereby represents
and warrants to Parent and Merger Sub as follows (it being understood that each representation and warranty contained in Section
3 is subject to (a) exceptions and disclosures set forth in the part or subpart of the Company Disclosure Schedule corresponding
to the particular Section or subsection in this Section 3; (b) any exception or disclosure set forth in any other part or subpart
of the Company Disclosure Schedule to the extent it is reasonably apparent from the wording of such exception or disclosure that
such exception or disclosure is applicable to qualify such representation and warranty; and (c) disclosure in the Company SEC Documents
filed on or after February 1, 2012 and prior to the date of this Agreement other than any information in the “Risk Factors”
or “Forward-Looking Statements” sections of such Company SEC Documents or other forward-looking statements in such
Company SEC Documents):
3.1 Due
Organization; Subsidiaries Etc.
(a) The
Company is an Entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.
The Company has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently
being conducted; (ii) to
own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under
all Contracts by which it is bound, except, in each case, where any such failure would not reasonably be expected to have a Company
Material Adverse Effect. The Company is qualified or licensed to do business as a foreign Entity, and is in good standing, in each
jurisdiction where the nature of its business requires such qualification or licensing, except where the failure to be so qualified,
licensed or in good standing does not have, and would not reasonably be expected to have, a Material Adverse Effect.
(b) Part
3.1(b) of the Company Disclosure Schedule identifies each Subsidiary of the Company and indicates its jurisdiction of organization.
Neither the Company nor any of its Subsidiaries owns any capital stock of, or any equity interest of, or any equity interest of
any nature in, any other Entity, other than the Entities identified in Part 3.1(b) of the Company Disclosure Schedule. None of
the Acquired Corporations has agreed or is obligated to make, or is bound by any Contract under which it may become obligated to
make, any future investment in or capital contribution to any other Entity.
(c) Each
Subsidiary of the Company is an Entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization, except where the failure to be in good standing does not have, and would not reasonably be expected to have,
a Material Adverse Effect.
3.2 Certificate
of Incorporation and Bylaws.
The Company has delivered or made available to Parent or Parent’s Representatives accurate
and complete copies of the Certificate of Incorporation, bylaws and other charter and organizational documents of each of the Acquired
Corporations, including all amendments thereto, as in effect on the date hereof.
3.3 Capitalization,
Etc.
(a) The
authorized capital stock of the Company consists of: (i) 80,000,000 Shares, of which 29,828,204 shares have been issued and are
outstanding as of the close of business on September 19, 2013; and (ii) 20,000,000 shares of Company Preferred Stock, of which
no shares have been issued or are outstanding. All of the outstanding Shares have been duly authorized and validly issued, and
are fully paid and nonassessable.
(b) Except
as set forth in Part 3.3(b) of the Company Disclosure Schedule: (i) none of the outstanding Shares are entitled or subject to any
preemptive right, right of repurchase or forfeiture, right of participation, right of maintenance or any similar right; (ii) none
of the outstanding Shares are subject to any right of first refusal in favor of the Company; (iii) there are no outstanding bonds,
debentures, notes or other indebtedness of the Acquired Corporations having a right to vote on any matters on which the stockholders
of the Company have a right to vote; and (iv) there is no Company Contract relating to the voting or registration of, or restricting
any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect
to), any Shares. None of the Acquired Corporations is under any obligation, or is bound by any Contract pursuant to which it may
become obligated, to repurchase, redeem or otherwise acquire any outstanding Shares or other securities. The
Company
Common Stock constitutes the only outstanding class of securities of the Company or its Subsidiaries registered under the Securities
Act.
(c) As
of the close of business on the business day immediately preceding this Agreement: (i) 1,419,025 Shares are subject to issuance
pursuant to Company Options granted and outstanding under the 2011 Plan; (ii) 2,270,174 Shares are subject to issuance pursuant
to Company Options granted and outstanding under the 2004 Plan; (iii) 40,689
Shares are subject to issuance pursuant to
Company Options granted and outstanding under the 1999 Plan; and (iv) 1,641,554 Shares are reserved for future issuance under Company
Equity Plans. As of the close of business on the business day immediately preceding this Agreement, the weighted average exercise
price of the Company Options outstanding as of that date was $10.53. The Company has delivered or otherwise made available to Parent
or Parent’s Representatives copies of all Company Equity Plans covering the Company Options outstanding as of the date of
this Agreement and the forms of all stock option agreements evidencing such Company Options. Other than as set forth in this Section
3.3(c), there is no issued, reserved for issuance, outstanding or authorized stock option, stock appreciation, phantom stock, profit
participation or similar rights or equity-based awards with respect to any of the Acquired Corporations.
(d) All
of the outstanding capital stock or other voting securities of, or ownership interests in, each Subsidiary of the Company is owned
by the Company, directly or indirectly, beneficially and of record, by the Company free and clear of all Encumbrances and transfer
restrictions, except for such Encumbrances and transfer restrictions of general applicability as may be provided under the Securities
Act or other applicable securities laws. Except as set forth in this Section 3.3 or in Part 3.3(d) of the Company Disclosure Schedule,
there is no: (i) outstanding shares of capital stock, or other equity interest in, the Company; (ii) outstanding subscription,
option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock, restricted stock
unit, stock-based performance unit or any other right that is linked to, or the value of which is in any way based on or derived
from the value of any shares of capital stock or other securities of any of the Acquired Corporations; (iii) outstanding security,
instrument, bond, debenture, note or obligation that is or may become convertible into or exchangeable for any shares of the capital
stock or other securities of any of the Acquired Corporations; or (iv) stockholder rights plan (or similar plan commonly referred
to as a “poison pill”) or Contract under which any of the Acquired Corporations is or may become obligated to sell
or otherwise issue any shares of its capital stock or any other securities.
(e) Part
3.3(e) of the Company Disclosure Schedule sets forth, as of the close of business on September 19, 2013, a list of each Company
Option and in the case of a Company Option unexercised as of such date, which list specifies (i) the name of the holder, (ii) the
number of Shares subject to such Company Option and (iii) the exercise price of any such Company Option.
(f) Each
outstanding share of capital stock of each Subsidiary of the Company is duly authorized, validly issued, fully paid, nonassessable
and free of preemptive rights, and there are no subscriptions, options, warrants, rights, calls, contracts or other commitments,
understandings, restrictions or arrangements relating to the issuance, acquisition, redemption, repurchase or sale of any shares
of capital stock or other equity or voting interests of any Subsidiary of the Company, including any right of conversion or exchange
under any
outstanding security, instrument
or agreement, any agreements granting any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal
or similar rights with respect to any securities of any Subsidiary. None of the Acquired Corporations has any outstanding equity
compensation plans or policies relating to the capital stock of, or other equity or voting interests in, any Subsidiary of the
Company.
3.4 SEC
Filings; Financial Statements.
(a) Since
February 1, 2012, the Company has filed or furnished on a timely basis all reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) required to be filed or furnished by the Company with the SEC
(the “
Company SEC Documents
”). As of their respective dates, the Company SEC Documents complied in all
material respects with the requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents and, except to the extent
that information contained in such Company SEC Document has been revised, amended, modified or superseded (prior to the date of
this Agreement) by a later filed Company SEC Document, none of the Company SEC Documents when filed or furnished contained any
untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) The
consolidated financial statements (including any related notes and schedules) contained or incorporated by reference in the Company
SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable
thereto; (ii) were prepared in accordance with United States generally accepted accounting principles (“
GAAP
”
)
applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements
or as permitted by Regulation S-X, or, in the case of unaudited financial statements, as permitted by Form 10-Q, Form 8-K or any
successor form under the Exchange Act); and (iii) fairly present, in all material respects, the consolidated financial position
of the Company and its consolidated Subsidiaries as of the respective dates thereof and the consolidated results of operations
and cash flows of the Company and its consolidated Subsidiaries for the periods covered thereby (subject, in the case of the unaudited
financial statements, to normal and recurring year-end adjustments that are not, individually or in the aggregate, material). No
financial statements of any Person other than the Acquired Corporations are required by GAAP to be included in the consolidated
financial statements of the Company.
(c) The
Company maintains, and at all times since February 1, 2012 has maintained, a system of internal controls over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) which is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP,
and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the Acquired Corporations; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and that receipts
and expenditures are being made only in
accordance with authorizations
of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the assets of the Acquired Corporations that could have a material effect on the
financial statements. The Company’s management has completed an assessment of the effectiveness of the Company’s system
of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for
the fiscal year ended June 30, 2013, and, except as set forth in the Company SEC Documents filed prior to the date of this Agreement,
such assessment concluded that such controls were effective. To the knowledge of the Company, except as set forth in the Company
SEC Documents filed prior to the date of this Agreement, since February 1, 2012, none of the Acquired Corporations nor the Company’s
independent registered accountant has identified or been made aware of: (1) any significant deficiency or material weakness in
the design or operation of internal control over financial reporting utilized by the Acquired Corporations; (2) any illegal act
or fraud, whether or not material, that involves the management or other employees of any Acquired Corporation; or (3) any claim
or allegation regarding any of the foregoing.
(d) The
Company maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act that are reasonably
designed to ensure that all information required to be disclosed in the Company’s reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the
SEC and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure and to enable each of the principal executive officer of the Company and the principal
financial officer of the Company to make the certifications required under the Exchange Act with respect to such reports. The Company
is in compliance in all material respects with all current listing and corporate governance requirements of NYSE.
(e) None
of the Acquired Corporations is a party to or has any obligation or other commitment to become a party to any securitization transaction,
off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between
or among the Acquired Corporations, on the one hand, and any unconsolidated Affiliate, including any structured finance, special
purpose or limited purpose Entity, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a)
of Regulation S-K under the Exchange Act)) where the result, purpose or intended effect of such Contract is to avoid disclosure
of any material transaction involving, or material liabilities of, any Acquired Corporation in any Acquired Corporation’s
published financial statements or other Company SEC Documents.
(f) As
of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect
to the Company SEC Documents. To the knowledge of the Company, none of the Company SEC Documents is the subject of ongoing SEC
review and there are no inquiries or investigations by the SEC or any internal investigations pending or threatened, in each case
regarding any accounting practices of the Acquired Corporations.
(g) (i)
Each document required to be filed by the Company with the SEC in connection with the Offer (the “
Company Disclosure
Documents
”) (including the Schedule
14D-9 but excluding for purposes
of this representation, for the avoidance of doubt, the Proxy Statement (if applicable)), and any amendments or supplements thereto,
when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements
of the Exchange Act. The Company Disclosure Documents, at the time of the filing of such Company Disclosure Documents or any supplement
or amendment thereto and at the time of any distribution or dissemination thereof and at the time of the consummation of the Offer,
will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not misleading.
(ii) The
information with respect to any of the Acquired Corporations that the Company furnishes to Parent or Merger Sub in writing specifically
for use in the Schedule TO and the Offer Documents, at the time of the filing of the Schedule TO, at the time of any distribution
or dissemination of the Offer Documents and at the time of the consummation of the Offer, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(iii) The
Proxy Statement that may be sent to the stockholders of the Company in connection with the Company Stockholders’ Meeting
(including any amendment or supplement thereto or document incorporated by reference therein) shall not, on the date the Proxy
Statement (including any amendment or supplement thereto) is first mailed to stockholders of the Company or at the time of the
Company Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made,
not misleading. The Proxy Statement will, on the date the Proxy Statement (including any amendment or supplement thereto) is first
mailed to stockholders of the Company and at the time of the Company Stockholders’ Meeting, comply as to form in all material
respects with the requirements of the Exchange Act.
(iv) Notwithstanding
the foregoing, the Company makes no representation with respect to statements made or incorporated by reference therein based on
information supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Company Disclosure
Documents or the Proxy Statement.
3.5 Absence
of Changes.
Except as expressly contemplated by this Agreement, since July 1, 2013 through the date of this Agreement, (a)
except for discussions, negotiations and transactions related to this Agreement, the Company has operated in all material respects
in the ordinary course of business consistent with past practice and (b) there has not occurred any event, change, action, failure
to act or transaction that, individually or in the aggregate, has had or would be reasonably expected to have, a Material Adverse
Effect. Except as expressly contemplated by this Agreement since July 1, 2013 through the date of this Agreement, the Company has
not taken any actions which, had such actions been taken after the date of this Agreement, would have required the written consent
of Parent pursuant to Section 5.2.
3.6 Title
to Assets.
The Acquired Corporations have good and valid title to all material assets owned by them as of the date of this
Agreement, including all material assets
(other than capitalized or
operating leases) reflected on the audited balance sheet in the last Annual Report on Form 10-K (the “
Balance Sheet
”)
filed by the Company with the SEC (except for assets sold or otherwise disposed of in the ordinary course of business since the
date of such Balance Sheet). All of said material assets are owned by the Acquired Corporations free and clear of any Encumbrances
(other than Permitted Encumbrances).
3.7 Real
Property.
(a) Part
3.7(a) of the Company Disclosure Schedule sets forth the address and description of each parcel of real property owned by and of
the Company or one of its Subsidiaries (the “
Owned Real Property
”)
. With respect to each Owned
Real Property: (A) either the Company or one of its Subsidiaries has good and marketable indefeasible fee simple title to such
Owned Real Property, free and clear of all liens and encumbrances, except Permitted Encumbrances, (B) neither the Company nor any
of its Subsidiaries has leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion
thereof; (C) there are no outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property
or any portion thereof or interest therein. Neither the Company nor any Subsidiary is a party to any agreement or option to purchase
any real property or interest therein.
(b) Except
as would not reasonably be expected to have a Material Adverse Effect, the Company or one of its Subsidiaries, as applicable, holds
a valid and existing leasehold interest in the material real property that is leased or subleased by any of the Acquired Corporations
from another Person (the “
Leased Real Property
”), free and clear of all Encumbrances other than Permitted
Encumbrances. No Acquired Corporation has received any written notice regarding any violation or breach or default under any Company
Lease that has not since been cured, except for violations or breaches that are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect.
3.8 Intellectual
Property.
(a) Part
3.8(a) of the Company Disclosure Schedule identifies (i) the name of applicant/registrant and current owner, (ii) the jurisdiction
of application/registration and (iii) the application or registration number for each item of Registered IP owned by or exclusively
licensed to any of the Acquired Corporations. Except as set forth on Part 3.8(a) of the Company Disclosure Schedule, the Acquired
Corporations own and possess all right, title and interest in and to or have the right to use, pursuant to a valid and enforceable
agreement, all material Company IP, free and clear of all Encumbrances other than Permitted Encumbrances. To the knowledge of the
Company, no loss or expiration of any of the material Registered IP owned by the Company is pending or reasonably foreseeable other
than expiration of patents and trademarks in accordance with applicable Legal Requirements. As of the date of this Agreement, no
interference, opposition, reissue, reexamination or other proceeding of any nature (other than initial examination proceedings)
is pending or, to the knowledge of Company, threatened, in which the scope, validity, enforceability or ownership of any Registered
IP listed on Part 3.8(a) of the Company Disclosure Schedule is being or has been contested or challenged. No Company Associate
owns or has any claim, right (whether or not currently exercisable) or interest to or in any Company IP owned or purported to be
owned by an Acquired Corporation and each
Company Associate who is
or was involved in the creation or development of any Company IP owned or purported to be owned by an Acquired Corporation has
signed an agreement containing an assignment of Intellectual Property Rights to the Acquired Corporations and confidentiality provisions
protecting the Company IP.
(b) Each
Acquired Corporation has taken commercially reasonable steps to maintain the confidentiality of and otherwise protect and enforce
its rights in all material proprietary information held by any of the Acquired Corporations, or purported to be held by any of
the Acquired Corporations, as a material trade secret.
(c) To
the knowledge of the Company: (i) the operation of the business of the Acquired Corporations as currently conducted does not infringe,
misappropriate, dilute or otherwise violate any Intellectual Property Rights owned by any other Person; and (ii) no other Person
is materially infringing, misappropriating, diluting or otherwise violating any Company IP owned by the Acquired Corporations.
Except as set forth on Part 3.8(c) of the Company Disclosure Schedule, as of the date of this Agreement, no Legal Proceeding is
pending and served (or, to the knowledge of the Company, is being threatened or is pending and has not been served) against the
Acquired Corporations or by the Acquired Corporations relating to any actual, alleged or suspected infringement, misappropriation,
dilution or other violation of any Intellectual Property Rights of another Person or to the Acquired Corporations’ Registered
IP or any of the Acquired Corporations’ Intellectual Property Rights. Except as set forth in Part 3.8(c) of the Company Disclosure
Schedule, since January 1, 2010, none of the Acquired Corporations has received any written notice or other written communication
relating to any actual, alleged or suspected infringement, misappropriation, dilution or other violation of any Intellectual Property
Right of another Person by any of the Acquired Corporations.
(d) Except
as set forth on Part 3.8(d) of the Company Disclosure Schedule, none of the Acquired Corporations is now or has ever been a member
or promoter of, or a contributor to, any industry standards body or any similar organization that would reasonably be expected
to require or obligate any of the Acquired Corporations to grant or offer to any other Person any license or right to any Company
IP. Except as set forth on Part 3.8(d) of the Company Disclosure Schedule, and to the knowledge of the Company, no Acquired Corporation
Product is distributed with any software that is licensed pursuant to an “open source” or other third party license
agreement, and no Acquired Corporation is otherwise a party to such agreement that requires the disclosure or licensing of any
source code for any Acquired Corporation Product or requires any Acquired Corporation Products to be made available at no charge.
The Acquired Corporations have not disclosed, delivered, licensed or otherwise made available, and the Acquired Corporations do
not have a duty or obligation (whether present, contingent, or otherwise) to disclose, deliver, license, or otherwise make available,
any source code for any Acquired Corporation Product to any third party who is not, as of the date of this Agreement, a Company
Associate.
(e) To
the knowledge of the Company: (i) there are no defects in any of the Acquired Corporation Products that would prevent the same
from performing materially in accordance with its user specifications and (ii) there are no viruses, worms, Trojan horses or similar
disabling codes or programs in any of the Acquired Corporations Products. As of the
date
hereof, the Acquired Corporations possess all source code and other materials necessary for or used in the development and maintenance
of the Acquired Corporation Products.
(f) The
Acquired Corporations are in compliance in all material respects with all policies and Information Privacy and Security Laws. To
the knowledge of the Company, since January 1, 2010, there have been (i) no material losses or thefts of data or security breaches
relating to data used in the businesses of the Acquired Corporations; (ii) violations of any privacy or security policy regarding
any such data; (iii) no unauthorized access or unauthorized use of any data; and (iv) no unintended or improper disclosure of any
personally identifiable information in the possession, custody or control of any Acquired Corporation or a contractor or agent
acting on behalf of the Acquired Corporation.
(g) All
computer hardware and software systems used or relied upon by the Acquired Corporations in the conduct of the business of the Acquired
Corporations (the “
Business Systems
”) are materially sufficient for the current needs of such business
subject to ongoing maintenance and planned hardware and software system upgrades reflected in the capital budget, and are subject
to commercially reasonable disaster recovery and business continuity procedures. In the last twelve (12) months, there has not
been any material failure with respect to any of the Business Systems that has not been remedied or replaced in all material respects.
The Acquired Corporations have purchased and paid in full for a sufficient number of licenses for the operation of such Business
Systems as operated on the date hereof except for any discrepancies that are not expected to result in a material liability to
the Acquired Corporations, taken as a whole.
3.9 Contracts.
(a) Part
3.9(a) of the Company Disclosure Schedule identifies each Company Contract that constitutes a Material Contract as of the date
of this Agreement. For purposes of this Agreement, each of the following Company Contracts shall be deemed to constitute a “
Material
Contract
”:
(i) any
Company Contract constituting a Company Employee Agreement pursuant to which any of the Acquired Corporations is or may become
obligated to (A) make any severance, termination, tax gross-up or similar payment to any Company Associate or any spouse or heir
of any Company Associate except for severance, termination or similar payments required by applicable Legal Requirements that does
not exceed $200,000 per beneficiary or (B) make any bonus deferred compensation or similar payment (other than payments constituting
base salary or commissions paid in the ordinary course of business) in excess of $200,000 to any Company Associate;
(ii) any
Company Contract that is a settlement, conciliation or similar agreement with or before any Governmental Body or pursuant to which
the Acquired Corporations will be required after the date of this Agreement to pay consideration in excess of $200,000;
(iii) any
Company Contract (A) limiting the freedom or right of any Acquired Corporation to engage in any line of business, to make use of
any Company IP or to
compete with any other Person
in any location or line of business, or (B) containing any “most favored nations” terms and conditions (including with
respect to pricing) granted by any of the Acquired Corporations or exclusivity obligations or restrictions or otherwise limiting
the freedom or right of any Acquired Corporation to sell, distribute or manufacture any products or service or any technology or
other assets to or for any other Person;
(iv) any
Company Contract that requires by its terms or is reasonably likely to require the payment or delivery of cash or other consideration
(i) by the Acquired Corporations in an amount having an expected value in excess of $745,000 or (ii) to the Acquired Corporations
in an amount having an expected value in excess of $245,000, in each case in the fiscal year ending June 30, 2014 or in any fiscal
year thereafter, and which cannot be cancelled by the Company or such Subsidiary without penalty or further payment without more
than ninety (90) days’ notice (other than payments for services rendered to the date) excluding non-exclusive distribution,
reseller and end user customer agreements entered into in the ordinary course of business;
(v) any
Company Contract relating to Indebtedness in excess of $200,000 (whether incurred, assumed, guaranteed or secured by any asset)
of the Company or an Acquired Corporation, other than any Indebtedness between or among the Company and any of its Subsidiaries;
(vi) any
Company Contract or arrangement with any Person constituting a joint venture, partnership, collaboration or limited liability company
agreement;
(vii) any
Company Contract that requires or permits an Acquired Corporation, or any successor, to, or acquirer of an Acquired Corporation,
to make any payment to another person as a result of a change of control of such Acquired Corporation (a “
Change of
Control Payment
”) or gives another Person a right to receive or elect to receive a Change of Control Payment;
(viii) any
Company Contract that prohibits the payment of dividends or distributions in respect of the capital stock of the Company or any
of its Subsidiaries, prohibits the pledging of the capital stock or other equity interests of the Company or any of its Subsidiaries
or prohibits the issuance of any guaranty by the Company or any of its Subsidiaries;
(ix) any
license agreements pursuant to which the Company or any of its Subsidiaries licenses in any material Intellectual Property Right
or licenses out any material Intellectual Property Right owned by the Company or its Subsidiaries (other than, in the first case,
license agreements for commercially available off-the-shelf software on standard terms with an annual license fee of less than
$50,000 that are not integrated or embedded into any Acquired Corporation Product, and, in the second case, non-exclusive distribution,
reseller and end-user customer agreements entered into in the ordinary course of business);
(x) any
agreement with a third party that provides co-location or data hosting services to any Acquired Corporation to fulfill obligations
to provide software and data hosting services to end user customers;
(xi) any
other Company Contract that is currently in effect and has been filed (or is required to be filed) by the Company as an exhibit
pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act or that would be required to be disclosed under Item 404
of Regulation S-K under the Securities Act;
(xii) any
Company Contract with any Affiliate, director, executive officer (as such term is defined in the Exchange Act), holder of 5% or
more of Company Common Stock or any of their affiliates (other than any of the Acquired Corporations) or immediate family members;
and
(xiii) any
Company Contract for the lease or sublease of any material real property.
(b) As
of the date of this Agreement, the Company has either delivered or otherwise made available to Parent or Parent’s Representatives
an accurate and complete copy of each Material Contract or has publicly made available such Material Contract in the Electronic
Data Gathering, Analysis and Retrieval (EDGAR) database of the SEC. Except as set forth on Part 3.9(b) of the Company Disclosure
Schedule, neither the Acquired Corporations nor, to the knowledge of the Company, the other party is in material breach of or material
default under any Material Contract and, neither the Acquired Corporations, or to the knowledge of the Company, the other party
has taken or failed to take any action that with or without notice, lapse of time or both would constitute a material breach of
or material default under any Material Contract. Each Material Contract is, with respect to the Acquired Corporations and, to the
knowledge of the Company, the other party, a valid agreement, binding, and in full force and effect. To the knowledge of the Company,
each Material Contract is enforceable by the applicable Acquired Corporation in accordance with its terms, subject to (i) laws
of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. Except as set forth on Part 3.9(b) of the Company Disclosure Schedule, no Acquired
Corporation has received any written notice regarding any violation or breach or default under any Material Contract that has not
since been cured, except for violations or breaches that are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect. The Acquired Corporations have not waived in writing any rights under any Material Contract, the waiver
of which would have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of the Company, since
January 1, 2012, the Company has not received, on or prior to the date of this Agreement, any notice in writing from any Person
that such Person intends to terminate, or not renew, any Material Contract.
(c) Except
as set forth on Part 3.9(c) of the Company Disclosure Schedule, none of the Acquired Corporations are nor have never been a party
to any material agreement with any entity of the United States government or other state, local or foreign government or any subcontract
thereunder, nor has any Acquired Corporation been subject to or in violation in any material respect of any requirement imposed
by any such agreement or any law, regulation or requirement pertaining to such agreements.
3.10 Liabilities.
None of the Acquired Corporations has any liabilities of any nature (whether accrued, absolute, contingent or otherwise), except
for: (i) liabilities disclosed on the
Balance Sheet contained in
the Company SEC Documents filed prior to the date of this Agreement; (ii) liabilities or obligations incurred pursuant to the terms
of this Agreement; (iii) liabilities for performance of obligations of the Acquired Corporations under Contracts binding upon the
Acquired Corporations (other than resulting from any breach or acceleration thereof) either provided or made available to Parent
prior to the date of this Agreement or entered into in the ordinary course of business, including non-exclusive distribution, reseller
and end-user customer and other non-exclusive agreements entered into in the ordinary course of business; (iv) liabilities incurred
in the ordinary course of business since July 1, 2013; and (v) liabilities that individually or in the aggregate have not and would
not reasonably be expected to have a Material Adverse Effect.
3.11 Compliance
with Legal Requirements.
Each of the Acquired Corporations is, and, with respect solely to the FDA Requirements, to the knowledge
of the Company, each Company Manufacturer is, and since January 1, 2010 has been, in compliance with all applicable Legal Requirements,
including all Information Privacy and Security Laws and FDA Requirements, except where the failure to be in compliance has not
had and would not reasonably be expected to have a Material Adverse Effect and, since January 1, 2010, neither the Company nor
any of its Subsidiaries has been given written notice of, or been charged with, any violation of, any Legal Requirement or FDA
Requirement, except, in each case, for any such violation that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. None of the Acquired Corporations is, and since January 1, 2010 has not, engaged in any Prohibited
Healthcare Actions.
3.12 Certain
Business Practices.
To the knowledge of the Company, none of the Acquired Corporations or any of their respective employees,
representatives or agents (in each case, acting in the capacity of an employee or representative of an Acquired Corporation) has
(i) used any material funds (whether of the Company, any Subsidiary or otherwise) for unlawful contributions, gifts, entertainment
or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns or (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended and any rules or regulations promulgated thereunder, anti-money laundering laws and any rules or regulations
promulgated thereunder or any applicable Legal Requirement of similar effect. Since January 1, 2010, none of the Acquired Corporations
has received any communication that alleges any of the foregoing. The Company utilizes effective controls, procedures and an internal
accounting controls system that is sufficient to provide reasonable assurances that violations of the aforementioned laws, rules
or regulations will be prevented, detected and deterred.
3.13 Governmental
Authorizations.
The Acquired Corporations hold all Governmental Authorizations, including all FDA Permits, necessary to enable
the Acquired Corporations to conduct their businesses in the manner in which their businesses are currently being conducted, except
where failure to hold such Governmental Authorizations would not have a Material Adverse Effect. The Governmental Authorizations,
including all FDA Permits, held by the Acquired Corporations are, in all material respects, valid and in full force and effect.
The Acquired Corporations are in compliance with the terms and requirements of such Governmental Authorizations, including all
FDA Permits, except where failure to be in compliance would not have a Material Adverse Effect.
3.14 Tax
Matters.
(a) Except
as disclosed on Part 3.14(a) of the Company Disclosure Schedule, (i) each of the material Tax Returns required to be filed by or
on behalf of the respective Acquired Corporations with any Governmental Body on or before the Closing Date (the “
Acquired
Corporation Returns
”) have been or will be filed on or before the applicable due date (including any extensions of
such due date), and have been, or will be when filed, prepared in compliance with all applicable Legal Requirements and are true
and correct in all material respects, and (ii) all material Taxes payable by the Acquired Corporations (whether or not shown on
the Acquired Corporation Returns to be due) or required to be withheld on or before the Closing Date have been or will be paid
or withheld on or before the Closing Date.
(b) The
Company’s Balance Sheet has accrued all actual and estimated liabilities for unpaid Taxes with respect to all periods through
the date thereof in accordance with GAAP, other than any Taxes the non-payment of which would not have a Material Adverse Effect.
The Company shall establish, in the ordinary course of business and consistent with its past practices, reserves adequate for the
payment of all material unpaid Taxes by the Acquired Corporations for the period from the date of the Balance Sheet
through
the Closing Date.
(c) Except
as set forth in Part 3.14(c) of the Company Disclosure Schedule, to the Company’s knowledge, as of the date of this Agreement,
(i) there are no current examinations or audits of any Acquired Corporation Return in progress involving material Taxes and (ii)
since January 1, 2011, no written claim has been received by any of the Acquired Corporations from any Governmental Body in any
jurisdiction where the Acquired Corporations do not file Tax Returns that the Acquired Corporations are or may be subject to Taxes
in that jurisdiction. The Company has delivered or made available to Parent or Parent’s Representatives accurate and complete
copies of all audit reports and similar documents (to which the Company has access) relating to Acquired Corporation Returns which
have been requested by Parent. As of the date of this Agreement, no extension or waiver of the limitation period applicable to
any of the Acquired Corporation Returns has been granted and is currently in effect.
(d) As
of the date of this Agreement, except as set forth in Part 3.14(d) of the Company Disclosure Schedule, to the knowledge of the
Company, no Legal Proceeding involving the IRS or any other Governmental Body is pending or threatened against or with respect
to the Acquired Corporations in respect of any material Tax. Except as set forth in Part 3.14(d) of the Company Disclosure Schedule
,
no deficiency of material Taxes has been asserted in writing as a result of any audit or examination by any Governmental Body
that has not been paid, accrued for or been contested in good faith and in accordance with applicable Legal Requirements.
(e) Except
as set forth in Part 3.14(e) of the Company Disclosure Schedule, there is no agreement, plan, arrangement or other Contract covering
any employee or independent contractor or former employee or independent contractor of the Acquired Corporations that, considered
individually or considered collectively with any other such Contracts, will give rise to the payment of any amount in connection
with the Merger that would not be deductible pursuant to Section 280G of the Code. Except as set forth in Part 3.14(e) of the Company
Disclosure Schedule, the Acquired Corporations are not a party to any Contract that
would require, nor do the
Acquired Corporations have any obligation (current or contingent), to compensate or otherwise “gross-up” any individual
for excise taxes paid pursuant to Section 4999 of the Code.
(f) None
of the Acquired Corporations (i) have ever been a member of an affiliated group (within the meaning of Section 1504(a) of the Code)
filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company), or (ii) have incurred,
or have the potential to incur, any material liability for the Taxes of any Person (other than the Company or any of the other
Acquired Corporations) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign
law), as a transferee or successor, pursuant to a Contract, or otherwise (other than pursuant to customary provisions included
in credit agreements, leases, and agreements entered with employees and non-exclusive distribution, reseller and end-user customer
and other non-exclusive agreements, in each case, not primarily related to Taxes and entered into in the ordinary course of business).
(g) None
of the Acquired Corporations have been either a “distributing corporation” or a “controlled corporation”
in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.
(h) None
of the Acquired Corporations has entered into any “listed transaction” within the meaning of Treasury Regulations Section
1.6011-4(b)(2).
(i) None
of the Acquired Corporations will be required to include any item of income in, or exclude any item of deduction from, the computation
of taxable income for any taxable period (or portion thereof) ending after the Closing Date, except as would not, individually
or in the aggregate, have a Material Adverse Effect, as a result of any (i) change in method of accounting for a taxable period
ending on or prior to the Closing Date, (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding
or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date, (iii) installment sale
or open transaction disposition made on or prior to the Closing Date, (iv) prepaid amount received on or prior to the Closing Date,
(v) deferred intercompany gain or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or
any corresponding or similar provision of state, local or foreign Tax law) or (vi) election under Section 108(i) of the Code.
(j) The
Acquired Corporations are not, and have not at any time since January 1, 2009 been, United States real property holding corporations
within the meaning of Section 897(c)(2) of the Code.
(k) None
of the Acquired Corporations is a party to or bound by any Tax allocation or Tax sharing agreement with any Person other than the
Company and its Subsidiaries, and none has any current or potential contractual obligation to indemnify any other Person with respect
to material Taxes.
3.15 Employee
Matters; Benefit Plans.
(a) Except
as set forth in Part 3.15(b) of the Company Disclosure Schedule, none of the Acquired Corporations is a party to or is currently
negotiating in connection with
entering into, any collective
bargaining agreement or other Contract with a labor organization or works council representing any of its employees and there are
no labor organizations or works councils representing, purporting to represent or, to the knowledge of the Company, seeking to
represent any employees of any of the Acquired Corporations. Since January 1, 2011, there has not been any strike, slowdown, work
stoppage, lockout, job action, picketing, material labor dispute, question concerning representation, union organizing activity,
or to the knowledge of the Company any threat thereof, or any similar labor activity or dispute, affecting any of the Acquired
Corporations. There is not now pending, and, to the knowledge of the Company, no Person has threatened to commence, any such strike,
slowdown, work stoppage, lockout, job action, picketing, material labor dispute, question concerning representation or union organizing
activity or any similar labor activity or dispute. Except as set forth in Part 3.15(b) of the Company Disclosure Schedule, since
January 1, 2011, there has been no material Legal Proceeding or grievance pending or, to the knowledge of the Company, threatened
relating to employment, including relating to any Company Employee Agreement, wages and hours, leave of absence, plant closing
notification, employment statute or regulation, privacy right, labor dispute, workers’ compensation policy or long-term disability
policy, safety, retaliation, immigration or discrimination matters involving any Company Associate, including charges of unfair
labor practices or harassment complaints. Since January 1, 2011 and except for such non-compliance that would not reasonably be
expected to have a Material Adverse Effect, the Company has complied in all respects with all applicable Legal Requirements related
to employment, including employment practices, wages, hours and other terms and conditions of employment (including the classification
and compensation of employees and independent contractors for purposes of the Fair Labor Standards Act and cognate state laws)
and other Legal Requirements in respect of any reductions in force, including notice, information and consultation requirements
(b) Part
3.15(c) of the Company Disclosure Schedule sets forth a true and complete list of the material Employee Plans (other than any employment,
termination or severance agreement for non-officer employees of the Company and its Subsidiaries and equity grant notices, and
related documentation, with respect to employees of the Company and its Subsidiaries). The Company has made available to Parent
or Parent’s Representatives prior to the execution of this Agreement with respect to each material Employee Plan true and
complete copies of, to the extent applicable: (i) the most recent plan documents and all material amendments thereto, and all related
trust or other funding documents, and in the case of unwritten material Employee Plans, written descriptions thereof, (ii) the
most recent IRS determination or opinion letter for each Employee Plan intended to be qualified under Code Section 401(a), (iii)
the most recent annual actuarial valuation, if any, and the most recent annual report (Form Series 5500 and all schedules and financial
statements attached thereto), (iv) the most recent summary plan descriptions and any material modifications thereto and (v) all
material correspondence to or from the IRS, the United States Department of Labor, or any other Governmental Body since January
1, 2011.
(c) None
of the Acquired Corporations nor any other Person that would have been considered a single employer with an Acquired Corporation
under the Code or ERISA has within the last six years maintained, contributed to, or been required to contribute to a plan subject
to Title IV of ERISA or Code Section 412, including any “single employer” defined benefit plan or any “multiemployer
plan” each as defined in Section 4001 of ERISA.
(d)
Each of the Employee Plans that is intended to be qualified under Section 401(a) of the Code has obtained a favorable determination
letter (or opinion letter, if applicable) as to its qualified status under the Code, each such Employee Plan has timely adopted
all currently effective amendments to the Code, and, to the knowledge of the Company, there are no existing circumstances or any
events that have occurred that would reasonably be expected to affect materially and adversely the qualified status of any such
Employee Plan. Each of the Employee Plans is now and has been operated in compliance in all respects with its terms and all applicable
Legal Requirements, including but not limited to ERISA and the Code, except for noncompliance that would not reasonably be expected
to constitute a Material Adverse Effect. There do not exist any pending and served or, to the knowledge of the Company, pending
and not served or threatened claims (other than routine undisputed claims for benefits), Legal Proceeding with respect to any Employee
Plan other than Legal Proceeding that would not reasonably be expected to have a Material Adverse Effect.
(e)
Except to the extent required under Section 601 et seq. of ERISA or 4980B of the Code (or any other similar state or
local Legal Requirement), neither the Acquired Corporations nor any Employee Plan has any present or future obligation to provide
post-employment welfare benefits.
(f) Except
as set forth in Part 3.15(f) of the Company Disclosure Schedule, the consummation of the transactions contemplated by this Agreement
(including in combination with other events or circumstances) will not (i) entitle any current or former employee, director, officer,
independent contractor or other service provider of the Acquired Corporations to severance pay, unemployment compensation or any
other payment, (ii) accelerate the time of payment or vesting, or increase the amount of, compensation or benefits due to any such
employee, director, officer, independent contractor, (iii) directly or indirectly cause the Acquired Corporations to transfer or
set aside any material assets to fund any benefits under any Employee Plan or (iv) limit or restrict the right to amend, terminate
or transfer any material assets of any Employee Plan on or following the Effective Time.
(g) Except
as set forth in Part 3.15(g) of the Company Disclosure Schedule, no material Employee Plan is maintained primarily for the benefit
of employees or other service providers who are primarily located outside of the United States (other than any employment, termination
or severance agreement for non-officer employees of the Company or the Acquired Corporations, government mandated benefits, including
consultation rights or notices, and equity grant notices, and related documentation, with respect to employees of the Company and
the Acquired Corporations).
(h) Each
Employee Plan or other Contract that is subject to Section 409A of the Code has been administered in compliance with its terms
and the operational and documentary requirements of Section 409A of the Code and the regulations thereunder, except for any instances
of noncompliance that would not reasonably be expected to result in a material liability to the Acquired Corporations. The Acquired
Corporations do not have an obligation to gross-up, indemnify or otherwise reimburse any current or former service provider to
the Acquired Corporations for any tax incurred by such service provider pursuant to Section 409A of the Code.
3.16 Environmental
Matters.
Except for those matters that would not reasonably be expected to have a Material Adverse Effect, (a) each Acquired
Corporation is, and since January 1, 2010 has been, in compliance in all material respects with all applicable Environmental
Laws, which compliance includes obtaining, maintaining or complying with all Governmental Authorizations required under Environmental
Laws for the operation of their respective businesses, (b) as of the date hereof, there is no investigation, suit, claim, action
or Legal Proceeding relating to or arising under any Environmental Law that is pending or, to the knowledge of the Company, threatened
against any of the Acquired Corporations or the Owned Real Property or Leased Real Property, (c) as of the date hereof, neither
the Company nor any of its Subsidiaries has received any written notice, report or other information of or entered into any legally-binding
agreement, order, settlement, judgment, injunction or decree involving uncompleted, outstanding or unresolved violations, liabilities
or requirements on the part of the Company or its Subsidiaries relating to or arising under Environmental Laws, (d) to the knowledge
of the Company, (1) no Person has been exposed to any Hazardous Materials and (2) there are and have been no Hazardous Materials
present or Released on, at, under or from any property or facility, including the Owned Real Property or Leased Real Property,
in both cases in a manner and concentration that would reasonably be expected to result in any claim against or liability of any
of the Acquired Corporations under any Environmental Law, and (e) none of the Acquired Corporations has assumed, undertaken, or
otherwise become subject to any liability of another Person relating to Environmental Laws other than any indemnities in Material
Contracts or leases for real property.
3.17 Insurance.
The Company has delivered or otherwise made available to Parent or Parent’s Representatives a copy of all material insurance
policies and all material self insurance programs and arrangements relating to the business, assets and operations of the Acquired
Corporations. Except as would not reasonably be expected to have a Material Adverse Effect, (a) all such insurance policies are
in amounts providing reasonably adequate coverage against all risks customarily insured against by companies in similar lines of
business as the Company and its Subsidiaries and (b) all such insurance policies are in full force and effect, no notice of cancellation
or modification has been received, and there is no existing default or event which, with the giving of notice or lapse of time
or both, would constitute a default, by any insured thereunder.
3.18 Legal
Proceedings; Orders.
(a) Except
as set forth in Part 3.18(a) of the Company Disclosure Schedule, there is no Legal Proceeding, Healthcare Proceeding or FDA Proceeding
pending and served (or, to the knowledge of the Company, threatened, or pending and not served) against the Acquired Corporations
or to the knowledge of the Company, against any present or former officer, director or employee of the Acquired Corporations in
such individual’s capacity as such, other than any Legal Proceedings, Healthcare Proceedings or FDA Proceedings that would
not reasonably be expected to have a Material Adverse Effect;
(b) to
the Company’s knowledge, there is no order, writ, injunction or judgment to which the Acquired Corporations are subject,
including any suspension or debarment from contracting with the federal government, that is reasonably likely to have a Material
Adverse Effect; and
(c) to
the Company’s knowledge, no investigation, review, Healthcare Proceeding or FDA Proceeding by any Governmental Body with
respect to the Acquired Corporations or their present or former officers, directors or employees is pending or is being threatened,
other than any investigations, reviews, Healthcare Proceeding or FDA Proceeding that would not reasonably be expected to have a
Material Adverse Effect.
3.19 Authority;
Binding Nature of Agreement.
The Company has the corporate power and authority to enter into and deliver and, subject to obtaining
the Required Company Stockholder Vote, to perform its obligations under this Agreement and to consummate the Transactions. The
Board of Directors of the Company (at a meeting duly called and held) has (a) determined that this Agreement, the Support Agreements
and the Transactions, including the Offer, the Merger and the other transactions contemplated by this Agreement and the Support
Agreements are advisable to, and in the best interest of, the Company and its stockholders, (b) approved the execution, delivery
and performance by the Company of this Agreement and the consummation of the Transactions, including the Offer and the Merger,
(c) resolved to recommend that the stockholders of the Company tender their shares to Parent pursuant to the Offer, and, if applicable,
approve the adoption of this Agreement and the Merger, and (d) authorized and approved the Top-Up Option and the issuance of the
Top-Up Option Shares, which resolutions, subject to Section 6.1, have not been subsequently withdrawn or modified in a manner adverse
to Parent. This Agreement have been duly executed and delivered by the Company, and assuming due authorization, execution and delivery
by Parent and Merger Sub, this Agreement constitute the legal, valid and binding obligations of the Company and are enforceable
against the Company in accordance with their terms, subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.
3.20 Section
203 of the DGCL Not Applicable.
As of the date hereof and at all times on or prior to the Effective Time, the Board of Directors
of the Company has and will take all actions so that the restrictions applicable to business combinations contained in Section
203 of the DGCL and any other Takeover Law are, and will be, inapplicable to the execution, delivery and performance of this Agreement,
the Support Agreements and to the consummation of the Offer, the Top-Up Option, the Merger and the other transactions contemplated
by this Agreement and the Support Agreements.
3.21 Vote
Required.
The Required Company Stockholder Vote is the only vote, if any, of the holders of any class or series of the Company’s
capital stock necessary to approve this Agreement and the Merger.
3.22 Non-Contravention;
Consents.
Except as set forth in Part 3.22 of the Company Disclosure Schedule and assuming compliance with the applicable provisions
of the DGCL, the HSR Act, the rules and regulations of NYSE and, in the case of the Merger, if required by applicable Legal Requirements,
the receipt of the Required Company Stockholder Vote, the execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated by this Agreement will not: (a) cause a violation of any of the provisions of the
Certificate of Incorporation or bylaws (or similar organizational documents) of any Acquired Corporation; or (b) cause a violation
by any Acquired Corporation of any Legal Requirement or order applicable to any Acquired Corporation, or to which any
Acquired Corporation is subject;
or (c) conflict with, result in breach of, or constitute a default under, any Material Contract, except, in the case of clauses
“(b)” and “(c)”, for such conflicts, violations, breaches or defaults as would not reasonably be expected
to have a material and adverse effect on the business or operations of the Company and its Subsidiaries, taken as a whole. Except
as set forth in Part 3.22 of the Company Disclosure Schedule and as may be required by the Exchange Act (including, without limitation,
the requirement under the Exchange Act for the Company’s stockholders to approve or disapprove, on an advisory basis, the
Merger-related compensation of the Company’s named executive officers and the filing with the SEC of the Schedule 14D-9,
the Proxy Statement, any information statement required in connection with the Offer under Rule 14f-1 under the Exchange Act (together
with any amendments or supplements thereto, the “
Information Statement
”) and such reports under the Exchange
Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement), the DGCL, the HSR
Act and any filing, notification or approval in any foreign jurisdiction required by Antitrust Laws and the rules and regulations
of NYSE, none of the Acquired Corporations is required to give notice to, make any filing with, or obtain any Consent from any
Person at any time prior to the Closing in connection with the execution and delivery of this Agreement, or the consummation by
the Company of the Merger, except those that the failure to make or obtain are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect.
3.23 Fairness
Opinion.
The Company’s Board of Directors has received the opinion of J.P. Morgan Securities Inc. as financial advisor
to the Company to the effect that, as of the date of such opinion, and subject to the various assumptions and limitations set forth
therein, the Offer Price is fair, from a financial point of view, to the Company stockholders (other than Parent, Merger Sub, any
of their respective wholly owned subsidiaries and holders of Dissenting Shares). The Company will make available to Parent solely
for informational purposes a written copy of the fairness opinion as promptly as practicable following the date of this Agreement.
3.24 Financial
Advisor.
Except for J.P. Morgan Securities Inc., no broker, finder, investment banker, financial advisor or other Person is
entitled to any brokerage, finder’s or other similar fee or commission, or the reimbursement of expenses in connection therewith,
in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company
or any other Acquired Corporation.
3.25 Economic
Sanctions.
Except as may be set forth in Part 3.25 of the Company Disclosure Schedule:
(a) The
Acquired Corporations have been in compliance in all material respects with all applicable economic sanctions and export control
laws, regulations and orders, including those administered by the U.S. Department of the Treasury, Office of Foreign Assets Control
(“
OFAC
”) (collectively, “
Sanctions Laws
”) and have not received any written
notice of any governmental Legal Proceeding relating to Sanctions Laws.
(b) None
of any Acquired Corporation nor, to the knowledge of the Company any officer or director of the Company, nor any agent acting on
behalf of the Company (i) is designated on any economic sanctions or export controls list of any Governmental Body, including OFAC’s
Specially Designated Nationals and Blocked Persons List, or (ii) has been
involved in any export, reexport
or other transaction by any Acquired Corporation involving any Person on such list or any country in violation of any export controls
or Sanctions Laws.
3.26 FDA
Regulatory Matters.
(a) Except
as would not reasonably be expected to have a Material Adverse Effect, no seizure, denial, withdrawal, recall, detention, field
notification, field correction, termination or suspension of manufacturing or marketing, import alert, or safety alert relating
to any of the Company products or services has been initiated, or to the knowledge of the Company, proposed or requested. The Company
has not received any information regarding, nor, to the knowledge of the Company, has any facts or circumstances reasonably likely
to cause any such action.
(b) Part
3.26(b) of the Company Disclosure Schedule sets forth all inspections of the Company or any Subsidiary by the FDA or any comparable
foreign Governmental Body having equivalent authority over medical devices.
(c) The
Company or a Subsidiary, as applicable, is the sole and exclusive owner of the devices relating to the pending, cleared, and approved
510(k) premarket notifications, premarket approval applications, and investigational device exemption applications set forth on
Part 3.26(c) of the Company Disclosure Schedule, each of which is valid and existing in full force and effect, and may be assigned
to, transferred to, or assumed by Parent in accordance with this Agreement. To the knowledge of the Company, neither the FDA nor
any other comparable Governmental Body is considering limiting, suspending or revoking any such FDA Permit or changing the regulatory
classification or labeling of any of the Company products or services.
3.27 Compliance
with Privacy Laws.
(a) The
Acquired Corporations and any of the Employee Plans that meet the definition of a “group health plan” under HIPAA (each,
a “
Group Health Plan
”) has entered into a business associate agreement, in each case in which that entity
(i) acts as a business associate (as defined in 45 C.F.R. § 160.103) or (ii) provides protected health information (as defined
in 45 C.F.R. § 160.103) to a subcontractor or vendor, in each case as required by, and in conformity with, HIPAA, except where
the failure to enter into such business associate agreement has not had and would not reasonably be expected to have a Material
Adverse Effect.
3.28 Healthcare
Regulations.
Except as would not reasonably
be expected to have a Material Adverse Effect, and except to the extent serving as a clearinghouse for the submission of bills
prepared solely by customers, none of the Acquired Corporations submit any claims to any commercial insurance plan or any health
care program administered or funded, in whole or in part, by the government of the United States of America, including Medicare,
Medicaid and TRICARE programs (described in Title XVIII of the SSA, Title XIX of the SSA, and Title 10, Chapter 55 of the U.S.C.,
respectively).
SECTION 4. Representations
and Warranties of Parent and Merger Sub
Parent and Merger Sub represent and warrant
to the Company as follows:
4.1 Due
Organization.
Each of Parent and Merger Sub is an Entity duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and has all necessary power and authority: (a) to conduct its business in the manner in which
its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned
and used; and (c) to perform its obligations under all Contracts by which it is bound, except where any such failure would not
reasonably be expected to have a Parent Material Adverse Effect. Parent has delivered or made available to Company or Company’s
Representatives accurate and complete copies of the certificate of incorporation, bylaws and other charter and organizational documents
of Parent and Merger Sub, including all amendments thereto.
4.2 Merger
Sub.
Merger Sub was formed solely for the purpose of engaging in the transactions contemplated hereby and activities incidental
thereto and has not engaged in any business activities or conducted any operations other than in connection with the transactions
contemplated hereby and those incident to its formation. Either Parent or a wholly owned subsidiary of Parent owns beneficially
and of record all of the outstanding capital stock of Merger Sub.
4.3 Authority;
Binding Nature of Agreement.
Parent and Merger Sub have the limited liability company or corporate power and authority, as
the case may be, to execute and deliver and perform their obligations under this Agreement; and the execution, delivery and performance
by Parent and Merger Sub of this Agreement have been duly authorized by all necessary action on the part of Parent and Merger Sub
and their respective boards of directors. This Agreement constitutes the legal, valid and binding obligation of Parent and Merger
Sub, and assuming due authorization, execution and delivery by the Company, is enforceable against them in accordance with its
terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (b) rules of
law governing specific performance, injunctive relief and other equitable remedies.
4.4 Non-Contravention;
Consents.
Assuming compliance with the applicable provisions of the HSR Act, if applicable, and any applicable filing, notification
or approval in any foreign jurisdiction required by Antitrust Laws, the execution and delivery of this Agreement by Parent and
Merger Sub, and the consummation of the transactions contemplated by this Agreement, will not: (a) cause a violation of any of
the provisions of the certificate of incorporation or bylaws or other organizational documents of Parent or Merger Sub; (b) cause
a violation by Parent or Merger Sub of any Legal Requirement or order applicable to Parent or Merger Sub, or to which they are
subject; or (c) conflict with, result in a breach of, or constitute a default on the part of Parent or Merger Sub under any Contract,
except, in the case of clauses “(b)” and “(c)”, for such conflicts, violations, breaches or defaults as
would not reasonably be expected to have a Parent Material Adverse Effect. Except as may be required by the Exchange Act (including
the filing with the SEC of the Offer Documents), state takeover laws, the DGCL or the HSR Act and any filing, notification or approval
in any foreign jurisdiction required by
Antitrust Laws, neither Parent
nor Merger Sub, nor any of Parent’s other Affiliates, is required to make any filing with or give any notice to, or to obtain
any Consent from, any Person at or prior to the Closing in connection with the execution and delivery of this Agreement by Parent
or Merger Sub or the consummation by Parent or Merger Sub of the Offer, the Merger and the other transactions contemplated hereby,
other than such filings, notifications, approvals, notices or Consents that, if not obtained, made or given, would not reasonably
be expected to have a Parent Material Adverse Effect. No vote of Parent’s equityholders is necessary to approve this Agreement
or any of the transactions contemplated by this Agreement, other than those which have been previously obtained.
4.5 Disclosure.
None of the Offer Documents will contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information with respect to Parent or Merger Sub supplied or to be supplied by or on behalf of
Parent or Merger Sub or any of its Subsidiaries expressly for inclusion or incorporation by reference in (a) the Schedule 14D-9
or the Information Statement will, at the time such document is filed with the SEC, at any time such document is amended or supplemented
or at the time such document is first published, sent or given to the Company’s stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, or (b) the Proxy Statement will, at the time
the Proxy Statement is first mailed to the stockholders of the Company or at the time of the Company Stockholders’ Meeting
(or any adjournment or postponement thereof), contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
4.6 Absence
of Litigation.
As of the date hereof, there is no Legal Proceeding pending and served or, to the knowledge of Parent, pending
and not served or overtly threatened against Parent or Merger Sub, except as would not and would not reasonably be expected to
materially and adversely affect Parent’s or Merger Sub’s ability to consummate the Transactions contemplated hereby.
To the knowledge of Parent or Merger Sub, as of the date of this Agreement, neither Parent nor Merger Sub is subject to any continuing
order of, consent decree, settlement agreement or similar written agreement with, or continuing investigation by, any Governmental
Body, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Body, except as would not and
would not reasonably be expected to materially and adversely affect Parent’s or Merger Sub’s ability to consummate
the Transactions contemplated hereby.
4.7 Ownership
of Company Common Stock.
Neither Parent nor any of Parent’s Affiliates directly or indirectly owns, and at all times
for the past three years, neither Parent nor any of Parent’s controlled Affiliates has owned, beneficially or otherwise,
any shares of the Company’s capital stock or any securities, contracts or obligations convertible into or exercisable or
exchangeable for shares of the Company’s capital stock. Neither Parent nor Merger Sub has enacted or will enact a plan that
complies with Rule 10b5-1 under the Exchange Act covering the purchase of any of the shares of the Company’s capital stock.
4.8 Acknowledgement
by Parent and Merger Sub.
(a) Neither
Parent nor Merger Sub is relying and neither Parent nor Merger Sub has relied on any representations or warranties whatsoever regarding
the subject matter of this Agreement, express or implied, except for the representations and warranties in Section 3, including
the Company Disclosure Schedule. Such representations and warranties by the Company constitute the sole and exclusive representations
and warranties of the Company in connection with the Transactions and each of Parent and Merger Sub understands, acknowledges and
agrees that all other representations and warranties of any kind or nature whether express, implied or statutory are specifically
disclaimed by the Company.
(b) In
connection with the due diligence investigation of the Acquired Corporations by Parent and Merger Sub and their respective Affiliates,
stockholders, directors, officers, employees, agents, representatives or advisors, Parent and Merger Sub and their respective Affiliates,
stockholders, directors, officers, employees, agents, representatives and advisors have received and may continue to receive after
the date hereof from the Company and its Affiliates, stockholders, directors, officers, employees, consultants, agents, representatives
and advisors certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan
information, regarding the Acquired Corporations and their businesses and operations. Parent and Merger Sub hereby acknowledge
that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements,
as well as in such business plans, and that Parent and Merger Sub will have no claim against any of the Acquired Corporations,
or any of their respective Affiliates, stockholders, directors, officers, employees, consultants, agents, representatives or advisors,
or any other person with respect thereto unless any such information is expressly addressed or included in a representation or
warranty contained in this Agreement. Accordingly, Parent and Merger Sub hereby acknowledge and agree that none of the Acquired
Corporations, nor any of their respective Affiliates, stockholders, directors, officers, employees, consultants, agents, representatives
or advisors, nor any other person, has made or is making any express or implied representation or warranty with respect to such
estimates, projections, forecasts, forward-looking statements or business plans unless any such information is expressly addressed
or included in a representation or warranty contained in this Agreement.
4.9 Financing.
(a) Parent
has delivered to the Company true, correct and complete copies, as of the date of this Agreement, of (i) an executed commitment
letter dated as of the date of this Agreement (the “
Equity Funding Letter
”) from the Equity Investor
to invest, subject to the terms and conditions therein, cash in the aggregate amount set forth therein to Parent (the “
Equity
Financing
”) and (ii) an executed commitment letter and Redacted Fee Letters from Jefferies Finance LLC and Bank of
Montreal (collectively, the “
Lenders
”), each dated as of the date of this Agreement (collectively, the
“
Debt Commitment Letter
” and, together with the Equity Funding Letter, the “
Financing Letters
”)
to provide, subject to the terms and conditions therein, debt financing in the amounts set forth therein (being collectively referred
to as the “
Debt Financing
”, and together with the Equity Financing collectively referred to as the “
Financing
”)
for the purpose of consummating the transactions contemplated by this Agreement. As of the date hereof, none of the Equity Funding
Letter or the Debt Commitment
Letter has been amended or
modified, no such amendment or modification is contemplated, and the respective loan obligations and commitments contained in such
Financing Letters have not been withdrawn or rescinded in any respect. As of the date hereof, Parent or Co-Borrower has fully paid
any and all commitment fees or other fees in connection with the Equity Funding Letter and the Debt Commitment Letter that are
due and payable. The net proceeds of the Financing, when funded in accordance with the Financing Letters (including after giving
effect to all applicable fees, expenses, original issue discount and similar premiums and charges and after giving effect to the
maximum amount of “flex” (including original issue discount and “flex”)) will, in the aggregate, be sufficient
for Merger Sub and the Surviving Corporation to pay the Offer Price in respect of each Share validly tendered and accepted for
payment in the Offer, the aggregate Merger Consideration, all amounts required to be paid pursuant to Section 2.8 (and any repayment
or refinancing of debt contemplated by this Agreement or required as a result of the consummation of the transactions hereunder,
the Equity Funding Letter or the Debt Commitment Letter) and any other amounts required to be paid in connection with the consummation
of the Transactions and to pay all related fees and expenses. The Financing Letters, in the form delivered to the Company, are
in full force and effect as of the date hereof and constitute a legal, valid and binding obligation of Parent and Co-Borrower,
as applicable, enforceable in accordance with their terms and, to the knowledge of each of Parent and Co-Borrower, as applicable,
of the other parties thereto. As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time
or both, would or would reasonably be expected to constitute a default or breach on the part of Parent or Co-Borrower or, to the
knowledge of Parent, any other parties thereto, under the Equity Funding Letter or the Debt Commitment Letter; provided that Parent
and Merger Sub are not making any representation or warranty regarding the effect of any inaccuracy of the representations and
warranties set forth in Section 3, or the Company’s compliance hereunder; provided, further that neither Parent nor Merger
Sub is aware of any fact, occurrence or condition that would reasonably be expected to make any of the assumptions, statements,
representations or warranties in the Financing Letters inaccurate in any material respect or that would reasonably be expected
to cause the commitments provided in the Financing Letters to be terminated or ineffective or any of the conditions contained in
the Financing Letters not to be met. As of the date of this Agreement, Parent does not have any reason to believe that any of the
conditions precedent of Parent to the Financing will not be satisfied on a timely basis or that the Financing will not be available
to Parent or Merger Sub at the Acceptance Time or on the date of the Closing if an Offer Termination occurs;
provided that
Parent is not making any representation regarding the accuracy of the representations and warranties set forth in Section 3, or
compliance by the Company with its obligations hereunder; provided, further that neither Parent nor Merger Sub is aware of any
fact, occurrence or condition that would reasonably be expected to make any of the assumptions, statements, representations or
warranties in the Financing Letters inaccurate in any material respect or that would reasonably be expected to cause the commitments
provided in the Financing Letters to be terminated or ineffective or any of the conditions contained in the Financing Letters not
to be met. The Financing Letters contain all of the conditions precedent of Parent and Merger Sub to the obligations of the Equity
Provider and the Financing Sources thereunder to make Financing available to Parent or the Merger Sub on the terms therein. There
are no contingencies that would permit the Equity Investor or the Lenders either to reduce the total amount of the Financing contemplated
by the Financing Letters or to impose any additional conditions precedent or contingency to the availability of the Financing contemplated
by the
Financing Letters. As of
the date hereof, there are no side letters or other agreements, Contracts or arrangements related to the funding or investing,
as applicable, of the full amount of the Financing other than any customary engagement letters and non-disclosure agreements that
do not impact the conditionality for the Financing to occur or amount of the Financing. The Equity Funding Letter provides, and
will continue to provide, that the Company is a third party beneficiary thereof in accordance with the terms and conditions of
the Equity Funding Letter as of the date hereof.
(b) Notwithstanding
anything to the contrary contained in this Agreement, the net proceeds of the Equity Financing, when funded in accordance with
the Equity Funding Letter, will be sufficient for Merger Sub and the Surviving Corporation to pay the Offer Price in respect of
each Share validly tendered and accepted for payment in the Offer, the aggregate Merger Consideration, all amounts required to
be paid pursuant to Section 2.8 (and any repayment or refinancing of debt contemplated by this Agreement or required as a result
of the consummation of the transactions hereunder or the Equity Funding Letter) and any other amounts required to be paid in connection
with the consummation of the Transactions and to pay all related fees and expenses.
4.10 Solvency.
Assuming (a) satisfaction of the conditions to Parent’s obligation to consummate the Offer and/or the Merger (as applicable),
and after giving effect to the Transactions, including the Financing (as some or all of such Financing may be amended or replaced
in compliance with Section 6.11 hereof), (b) any repayment or refinancing of debt contemplated in this Agreement or the Financing
Letters, (c) the accuracy of the representations and warranties of the Company set forth in Section 3 hereof and Company’s
compliance with this Agreement, (d) payments of all amounts required to be paid by Parent, Merger Sub and the Surviving Corporation
in connection with the consummation of the Offer, the Merger, the Financing and the other transactions contemplated hereby and
thereby, and (e) payment of all related fees and expenses, each of Parent and the Acquired Corporations (taken as a whole) will
be Solvent as of the Effective Time and immediately after the consummation of the Transactions. For the purposes of this Agreement,
the term “
Solvent
” when used with respect to any Person and its Subsidiaries, means that, as of any date
of determination (x) the amount of the “fair saleable value” of the assets of such Person and its Subsidiaries (taken
as a whole) will, as of such date, exceed (i) the value of all liabilities of such Person and its Subsidiaries (taken as a whole),
including contingent and other liabilities, as of such date, as such quoted terms are generally determined in accordance with applicable
Legal Requirements governing determinations of the insolvency of debtors, and (ii) the amount that will be required to pay the
probable liabilities of such Person and its Subsidiaries (taken as a whole) on their existing debts (including contingent and other
liabilities) as such debts become absolute and mature, (y) such Person and its Subsidiaries (taken as a whole) will not have, as
of such date, an “unreasonably small amount of capital” for the operation of the businesses in which it is engaged
or proposed to be engaged following such date, and (z) such Person and its Subsidiaries (taken as a whole) will be able to pay
its liabilities, including contingent and other liabilities, as they mature.
4.11 Certain
Arrangements.
As of the date of this Agreement, Parent has disclosed to the Company all Contracts or other agreements, arrangements
or understandings (whether oral or written) or commitments to enter into agreements, arrangements or understandings (whether oral
or written) (a) between Parent, Merger Sub, the Equity Investor, the Co-Borrower or any of
their respective Affiliates,
on the one hand, and any member of the Company’s management or directors, on the other hand, as of the date hereof that relate
in any way to the Company or any of its Subsidiaries or the Transactions or (b) pursuant to which any stockholder of the Company
would be entitled to receive consideration of a different amount or nature than the Merger Consideration or pursuant to which any
stockholder of the Company agrees to vote to approve this Agreement or the Merger or agrees to vote against any Superior Offer.
4.12 Brokers
and Other Advisors.
No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by
or on behalf of Parent or any of its Subsidiaries except for Persons, if any, whose fees and expenses will be paid by Parent.
SECTION 5. Certain
Covenants of the Company
5.1 Access
and Investigation.
During the period from the date of this Agreement until the earlier of the Effective Time and the termination
of this Agreement pursuant to Section 8.1 (the “
Pre-Closing Period
”), upon reasonable advance notice
to the Company, the Company shall, and shall cause the respective Representatives of the Acquired Corporations to: (a) provide
Parent and Parent’s Representatives with reasonable access during normal business hours of the Company to the Acquired Corporations’
Representatives, personnel and assets, supervised conversations with customers and suppliers and to all existing books, records,
Tax Returns, work papers and other documents and information relating to the Acquired Corporations; and (b) promptly provide Parent
and Parent’s Representatives with all reasonably requested information regarding the business of the Acquired Corporations,
including copies of the existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired
Corporations, and with such additional financial, operating and other data and information regarding the Acquired Corporations,
as Parent may reasonably request;
provided, however,
that any such access shall be conducted at Parent’s expense,
at a reasonable time, under the supervision of appropriate personnel of the Company and in such a manner as not to unreasonably
interfere with the normal operation of the business of the Company. Nothing herein shall require the Company to disclose any information
to Parent if such disclosure would, in its reasonable discretion (i) jeopardize any attorney-client or other legal privilege (so
long as the Company has reasonably cooperated with Parent to permit such inspection of or to disclose such information on a basis
that does not waive such privilege with respect thereto), (ii) contravene any applicable Legal Requirement, fiduciary duty or binding
agreement entered into prior to the date of this Agreement (including any confidentiality agreement to which the Company or its
Affiliates is a party),
provided
that the Company shall use commercially reasonable efforts to obtain any Consents of third
parties that are necessary to allow such information to be disclosed to Parent and its Representatives and shall otherwise use
commercially reasonable efforts to allow for such access or disclosure in a manner that does not result in a breach of this clause
(ii) or (iii) result in the disclosure of any trade secrets of third parties;
provided, further
, that information shall
be disclosed subject to execution of a joint defense agreement in customary form, to external counsel for Parent to the extent
reasonably required for the purpose of complying with applicable Antitrust Laws. With respect to the information disclosed pursuant
to this Section 5.1, Parent shall comply with, and shall instruct Parent’s Representatives to comply with, all of its obligations
under the Confidentiality
Agreement
dated June 14, 2013, between the Company and Vista Equity Partners III, LLC (the “
Confidentiality Agreement
”).
5.2 Operation
of the Company’s Business.
(a)
During the Pre-Closing Period: (i) except (x) as required or otherwise contemplated under this Agreement or as required by applicable
Legal Requirements, (y) with the written consent of Parent, or (z) as set forth in Part 5.2 of the Company Disclosure Schedule,
the Company shall ensure that each of the Acquired Corporations conducts in all material respects its business and operations in
the ordinary course; and (ii) the Company shall promptly notify Parent of (A) any knowledge of any notice from any Person alleging
that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement,
and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving any of the Acquired Corporations
that relates to the consummation of the transactions contemplated by this Agreement. The Company shall, and shall cause each of
the other Acquired Corporations to, use commercially reasonable efforts to preserve intact the material components of their current
business organization, including keeping available the services of current officers and key employees, and use commercially reasonable
efforts to maintain their respective relations and good will with all material suppliers, material customers, Governmental Bodies
and other material business relations;
provided, however,
that the Acquired Corporations shall be under no obligation to
put in place any new retention programs or include additional personnel in existing retention programs.
(b) During
the Pre-Closing Period, except (x) as required or otherwise contemplated under this Agreement or as required by applicable Legal
Requirements, (y) with the written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned),
or (z) as set forth in Part 5.2 of the Company Disclosure Schedule, the Company shall not, and shall not permit any of the other
Acquired Corporations to:
(i) (1)
establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares
of its capital stock (including the Company Common Stock), or (2) repurchase, redeem or otherwise reacquire any of its shares of
capital stock (including any Company Common Stock), or any rights, warrants or options to acquire any shares of its capital stock,
other than: (A) dividends or distributions between or among any of the wholly owned Acquired Corporations to the extent consistent
with past practices (but not from the Company to its stockholders); (B) repurchases of other Shares outstanding as of the date
hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof) to purchase Shares held
by a Company Associate only upon termination of such associate’s employment or engagement by the Acquired Corporations; (C)
repurchases of Company Options (or shares of capital stock issued upon the exercise or vesting thereof) outstanding on the date
hereof (in cancellation thereof) pursuant to the terms of any such Company Option (in effect as of the date hereof) between the
Company and an employee, consultant or member of the Board of Directors of the Company only upon termination of such Person’s
employment or engagement by the Acquired Corporations; or (D) in connection with withholding to satisfy the Tax obligations with
respect to Company Options;
(ii) split,
combine, subdivide or reclassify any shares of its capital stock (including the Company Common Stock) or other equity interests;
(iii) sell,
issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant
of (A) any capital stock, equity interest or other security, (B) any option, call, warrant, restricted securities or right to acquire
any capital stock, equity interest or other security, or (C) any instrument convertible into or exchangeable for any capital stock,
equity interest or other security (except that the Company may issue shares of the Company Common Stock as required to be issued
upon the valid exercise of Company Options );
(iv) except
as contemplated by Section 6.3, as required pursuant to an existing employment agreement or Employee Plan as of the date hereof
or as otherwise required by applicable Legal Requirements, establish, adopt, terminate or amend any Employee Plan (or any plan,
program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof), or amend
or waive any of its rights under, or accelerate the vesting under, any provision of any of the Employee Plans (or any plan, program,
arrangement, practice or agreement that would be a Employee Plan if it were in existence on the date hereof) or grant any employee
or director any increase in compensation, bonuses or other benefits (except that the Acquired Corporations: (A) may provide increases
in salary, wages or benefits to non-executive officer employees in the ordinary course of business and consistent with past practice;;
and (B) may make usual and customary annual, semi-annual or quarterly bonus payments, commission payments and profit sharing payments
in the ordinary course of business consistent with past practice in accordance with the bonus, commission and profit sharing plans
existing on the date of this Agreement and disclosed on the Company Disclosure Schedule);
(v) (A)
enter into (x) any change-in-control agreement with any executive officer, employee, director or independent contractor or (y)
any retention agreement with any executive officer or director, (B) enter into (aa) any employment, severance or other material
agreement with any executive officer or director or (bb) any employment or severance agreement with any non-executive officer employee
with an annual compensation opportunity greater than $200,000 or any consulting agreement with an independent contractors with
an annual compensation opportunity greater than $200,000, (C) hire any employee with an annual compensation opportunity in excess
of $200,000or (D) enter into any agreement with respect to the voting of its capital stock;
(vi) amend
or permit the adoption of any amendment to its Certificate of Incorporation or bylaws or other charter or organizational documents;
(vii) form
any Subsidiary, acquire any equity interest or other interest in any other Entity or enter into any joint venture, partnership,
limited liability corporation or similar arrangement;
(viii) make
or authorize any capital expenditure (except that the Acquired Corporations may make any capital expenditure that: (A) is provided
for in the Company’s capital expense budget delivered or made available to Parent or Parent’s Representatives prior
to the date of this Agreement, which expenditures shall be in accordance
with the categories set forth
in such budget; or (B) when added to all other capital expenditures made on behalf of all of the Acquired Corporations since the
date of this Agreement but not provided for in the Company’s capital expense budget delivered or made available to Parent
or Parent’s Representatives prior to the date of this Agreement, does not exceed $185,000 individually and $250,000 in the
aggregate during any fiscal quarter);
(ix) acquire,
lease, license, pledge, sell, abandon (or permit to lapse, other than any patent expiring at the end of its statutory term), transfer,
assign guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization)
or subject to any material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property
or sell or otherwise dispose of, or lease or license, any material right or other material asset or property to any other Person
(other in the ordinary course of business), or sell or otherwise dispose of, divest or spin-off, or lease, license or sublicense,
any material right or other material asset or property to any other Person (other than sales of appliances and subscriptions to
products in the ordinary course of business consistent with past practice or pursuant to dispositions of obsolete, surplus or worn
out assets that are no longer useful in the conduct of the business of the Company, or waive or relinquish, abandon, allow to lapse
or encumber (except for any Permitted Encumbrance) any material right or material asset or property (except, in the case of any
of the foregoing (A) as provided for in the Company’s capital expense budget delivered or made available to Parent or Parent’s
Representatives prior to the date of this Agreement and (B) the Acquired Corporations may enter into license agreements for commercially
available software on standard terms in the ordinary course of business);
(x) lend
money or make capital contributions or advances to or make investments in, any Person, or incur or guarantee any Indebtedness (except
for short-term borrowings, of not more than $200,000 in the aggregate, incurred in the ordinary course of business consistent with
past practice, advances to employees for travel and other business related expenses in the ordinary course of business consistent
with past practices and in compliance in all material respects with the Company’s policies related thereto and intercompany
loans, advances, capital contributions or investments between or among the Company and any direct or indirect wholly owned Subsidiary
of the Company);
(xi) amend
or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim
or liability or obligation under, any Material Contract or enter into any Contract which if entered into prior to the date hereof
would have been a Material Contract, excluding any non-exclusive distribution, reseller or end user customer agreements;
(xii) except
as required by applicable Legal Requirement, (a) make any material change to any accounting method or accounting period (or request
such a change) in any material respect unless required by GAAP; (b) make any material Tax election (other a Tax election that is
consistent with a Tax election made in a previous period); (c) rescind or change any material Tax election; (d) file an amended
Tax Return that could materially increase the Taxes payable by the Acquired Corporations; (e) enter into a closing agreement with
any Governmental Body regarding any material Tax; (f) settle, compromise or consent to any Tax claim or assessment or surrender
a right to a material Tax refund; or (g) waive or extend the
statute of limitations with
respect to any material Tax other than (1) pursuant to extensions of time to file a Tax Return obtained in the ordinary course
of business or (2) pursuant to an extension granted in the ordinary course of business in connection with an audit of federal,
state or local Taxes to prevent the assessment or collection of a Tax;
(xiii) commence
any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business; (B) in such cases where the
Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable
aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect
to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements
contemplated hereby;
(xiv) settle,
release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than any
Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement
that does not relate to any of the Transactions contemplated hereby and: (A) that results solely in a monetary obligation involving
only the payment of monies by the Acquired Corporations of not more than $250,000 in the aggregate; or (B) that results solely
in a monetary obligation that is funded by an indemnity obligation to or, an insurance policy of, the Acquired Corporations and
the payment of monies by the Acquired Corporations that together with any settlement made under subsection “(A)” are
not more than $250,000 in the aggregate (not funded by an indemnity obligation or through insurance policies);
(xv) enter
into any collective bargaining agreement or agreement to form a work council or other agreement with any labor organization or
works council (except to the extent required by applicable Legal Requirements);
(xvi) adopt
or implement any stockholder rights plan or similar arrangement;
(xvii) fail
to make any material filing, pay any fee, or take another action necessary to maintain in full force and effect any trademark or
trade name that is material to the conduct of the business of the Acquired Corporations, as a whole, as currently conducted;
(xviii) except
as required by existing written agreements or Company Benefit Plans in effect prior to the date of this Agreement, or as otherwise
required by applicable Law, waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options
or restricted stock, or reprice options granted under any Company Benefit Plan or authorize cash payments in exchange for any options
granted under any Company Benefit Plan, except as otherwise provided in this Agreement;
(xix) knowingly
disclose any material trade secrets of the Acquired Corporations other than pursuant to agreements entered into in the ordinary
course of business consistent with past practice that contain confidentiality undertakings with respect to such confidential information
and trade secrets;
(xx) adopt
a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of the other Acquired Corporations; or
(xxi) authorize
any of, or agree or commit to take, any of the actions described in clauses “(i)” through “(xx)” of this
Section 5.2(b).
During the Pre-Closing
Period, without the written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned),
Parent and Merger Sub shall not, and shall cause the Equity Investor, the Co-Borrower and their respective Affiliates to not, (i)
enter into discussions or negotiations of any Contracts or other agreements, arrangements or understandings (whether oral or written)
or commitments to enter into agreements, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement
any agreements, arrangements or understandings (whether oral or written) in existence on the date of this Agreement, in the case
of clauses “(i)” and “(ii)” that are between Parent, Merger Sub, the Co-Borrower, the Equity Investor or
any of their respective Affiliates, on the one hand, and any officer or director of the Company, on the other hand, that relate
in any way to the Company or any of its Subsidiaries or the Transaction.
Notwithstanding the foregoing,
nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations
of the Acquired Corporations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company,
directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective
Time, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision
of its and its Subsidiaries’ respective operations.
5.3 No
Solicitation.
(a) For
the purposes of this Agreement, “
Acceptable Confidentiality Agreement
” means any customary confidentiality
and standstill agreement that contains provisions that are no less favorable in the aggregate to the Company than those contained
in the Confidentiality Agreement;
provided
that an Acceptable Confidentiality Agreement may permit the submission of Acquisition
Proposals to the Company’s Board of Directors on a private and confidential basis.
(b) Except
as permitted by this Section 5.3, during the Pre-Closing Period the Company shall not and shall cause each of its Subsidiaries
not to and shall direct its Representatives not to (i) continue any solicitation, knowing encouragement, discussions or negotiations
with any Persons that may be ongoing with respect to an Acquisition Proposal and (ii) directly or indirectly, (A) solicit, initiate
or knowingly facilitate or encourage (including by way of furnishing non-public information) any inquiries regarding, or the making
of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (B) engage in,
continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person any non-public information
in connection with or for the purpose of knowingly encouraging or facilitating, an Acquisition Proposal or any proposal or offer
that could reasonably be expected to lead to an Acquisition Proposal or (C) enter into any
letter of intent, acquisition
agreement, agreement in principle or similar agreement with respect to an Acquisition Proposal or any proposal or offer that could
reasonably be expected to lead to an Acquisition Proposal. The Company shall promptly deliver a written notice to each Person that
entered into a confidentiality agreement in anticipation of potentially making an Acquisition Proposal, to the effect that the
Company is ending all discussions and negotiations with such Person with respect to any Acquisition Proposal, effective on the
date hereof, and the notice shall also request such Person to promptly return or destroy all confidential information concerning
the Company and its Subsidiaries.
(c) If
at any time on or after the date of this Agreement and prior to the Acceptance Time (or, if the Offer Termination shall occur,
at any time prior to obtaining the Required Company Stockholder Vote), the Company or any of its Representatives receives an unsolicited
bona fide
written Acquisition Proposal from any Person or group of Persons, which Acquisition Proposal was made or renewed
on or after the date of this Agreement and did not result from any breach of this Section 5.3, (i) the Company and its Representatives
may contact such Person or group of Persons to clarify the terms and conditions thereof and (ii) if the Company’s Board of
Directors determines in good faith, after consultation with independent financial advisors and outside legal counsel, that such
Acquisition Proposal constitutes or could reasonably be expected to lead to a Superior Offer, then the Company and its Representatives
may (x) furnish, pursuant to (but only pursuant to) an Acceptable Confidentiality Agreement, information (including non-public
information) with respect to the Company and its Subsidiaries to the Person or group of Persons who has made such Acquisition Proposal;
provided that
the Company shall promptly (and in any event within 24 hours) provide to Parent any non-public information
concerning the Company or any of its Subsidiaries that is provided to any Person given such access which was not previously provided
to Parent or its Representatives and (y) engage in or otherwise participate in discussions or negotiations with the Person or group
of Persons making such Acquisition Proposal.
(d) Following
the date of this Agreement, the Company shall promptly (and in any event within 24 hours) notify Parent if any inquiries, proposals
or offers with respect to an Acquisition Proposal are received by the Company or any of its Representatives and provide to Parent
a summary of the material terms and conditions of any Acquisition Proposal and keep Parent reasonably informed of any material
developments, discussions or negotiations regarding any Acquisition Proposal on a prompt basis (and in any event within 24 hours)
and upon the request of Parent shall reasonably inform Parent of the status of such Acquisition Proposal. The Company agrees that
it and its Subsidiaries will not enter into any confidentiality agreement with any Person subsequent to the date hereof which prohibits
the Company from providing any information to Parent in accordance with this Section 5.3 or otherwise prohibit the Company from
complying with its obligations under this Section 5.3.
(e) Nothing
in this Section 5.3 or elsewhere in this Agreement shall prohibit the Company from (i) taking and disclosing to the stockholders
of the Company a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange
Act or (ii) making any disclosure to the stockholders of the Company that is required by applicable Legal Requirements;
provided
,
that making such disclosure under clause (i) or (ii) shall not in any way limit or modify the effect, if any, that any such action
has under Sections 5.3 or 6.1.
(f) The
Company agrees that in the event any Subsidiary or Representative of the Company takes any action which, if taken by the Company,
would constitute a breach of this Section 5.3, the Company shall be deemed to be in breach of this Section 5.3.
SECTION 6. Additional
Covenants of the Parties
6.1 Company
Board Recommendation; Proxy Statement; Stockholder Approval.
(a) The
Company hereby consents to the Offer and represents that its Board of Directors, at a meeting duly called and held, has made the
Company Board Recommendation. Subject to Section 6.1(b), the Company hereby consents to the inclusion of a description of the Company
Board Recommendation in the Offer Documents. During the Pre-Closing Period, neither the Board of Directors of the Company nor any
committee thereof shall (i)(A) withdraw (or modify in a manner adverse to Parent or Merger Sub), or publicly propose to withdraw
(or modify in a manner adverse to Parent or Merger Sub), the Company Board Recommendation or (B) approve, recommend or declare
advisable, or propose publicly to approve, recommend or declare advisable, any Acquisition Proposal (any action described in this
clause (i) being referred to as a “
Company Adverse Change Recommendation
”) or (ii) approve, recommend
or declare advisable, or propose to approve, recommend or declare advisable, or allow any Acquired Corporation to execute or enter
into any Contract with respect to any Acquisition Proposal, or requiring, or reasonably expected to cause, the Company to abandon,
terminate, delay or fail to consummate, or that would otherwise materially impede, interfere with or be inconsistent with, the
Transactions (other than an Acceptable Confidentiality Agreement).
(b) Notwithstanding
anything to the contrary contained in this Agreement, at any time prior to the Acceptance Time and, at any time prior to the receipt
of the Required Stockholder Vote:
(i) if
the Company has received a bona fide written Acquisition Proposal (which Acquisition Proposal did not arise out of a breach of
Section 5.3) from any Person that has not been withdrawn and after consultation with outside legal counsel, the Company’s
Board of Directors shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer, (x) the Company’s
Board of Directors may make a Company Adverse Change Recommendation, or (y) the Company may terminate this Agreement to enter into
a Specified Agreement with respect to such Superior Offer, if and only if: (A) the Company’s Board of Directors determines
in good faith, after consultation with the Company’s outside legal counsel, that the failure to do so would reasonably constitute
a breach of the fiduciary duties of the Board of Directors of the Company to the Company’s stockholders under applicable
Legal Requirements; (B) the Company shall have given Parent prior written notice of its intention to consider making a Company
Adverse Change Recommendation pursuant to this Section 6.1(b)(i) or terminate this Agreement pursuant to Section 8.1(f) at least
four (4) business days prior to making any such Company Adverse Change Recommendation or termination (a “
Determination
Notice
”) (which notice shall not constitute a Company Adverse Change Recommendation); and (C) (1) the Company shall
have provided to Parent the material terms and conditions of the Acquisition Proposal in accordance with Section 5.3(d), (2) the
Company shall have given Parent the four (4) business days after the Determination Notice to propose revisions to the terms of
this Agreement or make another proposal so that such Acquisition
Proposal would cease to constitute
a Superior Offer, and shall have negotiated in good faith with Parent with respect to such proposed revisions or other proposal,
if any, and (3) after considering the results of such negotiations and giving effect to the proposals (including the Financing
Letters and Guaranty) made by Parent, if any, after consultation with outside legal counsel, the Company’s Board of Directors
shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer and that the failure to make the Company
Adverse Change Recommendation or terminate this Agreement pursuant to Section 8.1(f) would reasonably constitute a breach of fiduciary
duties of the Board of Directors of the Company to the Company’s stockholders under applicable Legal Requirements. Issuance
of any “stop, look and listen” communication by or on behalf of the Company pursuant to Rule 14d-9(f) shall not be
considered a Company Adverse Change Recommendation and shall not require the giving of a Determination Notice or compliance with
the procedures set forth in this Section 6.1. For the avoidance of doubt, the provisions of this Section 6.1(b)(i) shall also apply
to any material amendment to any Acquisition Proposal and require a new Determination Notice, except that the references to four
(4) business days shall be deemed to be two (2) business days; and
(ii) other
than in connection with an Acquisition Proposal, the Company’s Board of Directors may make a Company Adverse Change Recommendation
in response to a Change in Circumstance, if and only if: (A) the Company’s Board of Directors determines in good faith, after
consultation with the Company’s outside legal counsel, that the failure to do so would reasonably constitute a breach of
the fiduciary duties of the Board of Directors of the Company to the Company’s stockholders under applicable Legal Requirements;
(B) the Company shall have given Parent a Determination Notice at least four (4) business days prior to making any such Company
Adverse Change Recommendation; and (C) (1) the Company shall have specified the Change in Circumstance in reasonable detail, (2)
the Company shall have given Parent the four (4) business days after the Determination Notice to propose revisions to the terms
of this Agreement or make another proposal so that such Change in Circumstance would no longer necessitate a Company Adverse Change
Recommendation, and shall have negotiated in good faith with Parent with respect to such proposed revisions or other proposal,
if any, and (3) after considering the results of such negotiations and giving effect to the proposals (including the Financing
Letters and Guaranty) made by Parent, if any, after consultation with outside legal counsel, the Company’s Board of Directors
shall have determined, in good faith, that the failure to make the Company Adverse Change Recommendation in response to such Change
in Circumstance would reasonably constitute a breach of fiduciary duties of the Board of Directors of the Company to the Company’s
stockholders under applicable Legal Requirements. For the avoidance of doubt, the provisions of this Section 6.1(b)(ii) shall also
apply to any material change to the facts and circumstances relating to such Change in Circumstance and require a new Determination
Notice, except that the references to four (4) business days shall be deemed to be two (2) business days.
(c) As
soon as practicable following the date hereof, the Company shall prepare the Proxy Statement in preliminary form and file it with
the SEC and the Company and Parent shall timely cooperate with and assist the Company in connection with the preparation of the
foregoing. Subject to Section 6.1(b), the Proxy Statement shall reflect the Company Board Recommendation. The Company shall use
commercially reasonable efforts to respond as promptly as reasonably practicable to any comments of the SEC or its staff concerning
the Proxy Statement. Parent and Merger Sub will provide to the Company upon request any information
with respect to Parent and
Merger Sub and their respective officers, directors, Affiliates and agents required to be provided in the Proxy Statement under
applicable Legal Requirements or as reasonably requested by the Company. The Company shall notify Parent promptly of the receipt
of any comments from the SEC or its staff or any other governmental officials and of any request by the SEC or its staff or any
other governmental officials for amendments or supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence between the Company or any of its Representatives, on the one hand, and the SEC or its
staff or any other governmental officials, on the other hand, with respect to the Proxy Statement. Notwithstanding anything to
the contrary stated above, prior to filing or mailing the Proxy Statement (or any amendment or supplement thereto) or responding
to any comments of the SEC with respect thereto, the Company shall give Parent a reasonable opportunity to review and comment on
such document or response and the Company shall give due consideration to all reasonable additions, deletions or changes suggested
thereto by Parent. The Company, on the one hand, and Parent and Merger Sub, on the other hand, agree to promptly correct any information
provided by it for use in the Proxy Statement if and to the extent that it shall have become false or misleading in any material
respect or as otherwise required by applicable Legal Requirements, and the Company further agrees to cause the Proxy Statement,
as so corrected, to be filed with the SEC and, if any such correction is made following the mailing of the Proxy Statement, mailed
to holders of Shares, in each case as and to the extent required by the Exchange Act or the SEC (or its staff). Notwithstanding
the foregoing, the Company assumes no responsibility with respect to information supplied in writing by or on behalf of Parent
or Merger Sub specifically for inclusion or incorporation by reference in the Proxy Statement.
(d) If
the adoption of this Agreement by the Company’s stockholders is required by applicable Legal Requirements, then the Company
shall have the right, at any time after the latest of (i) the Initial Expiration Date, (ii) three (3) business days after the Proxy
Statement Clearance Date and (iii) November 20, 2013, to (and Parent and Merger Sub shall have the right, at any time beginning
three (3) business days after the Proxy Statement Clearance Date, to request in writing that the Company, and upon receipt of such
written request, the Company shall), as promptly as reasonably practicable, take all action necessary under all applicable Legal
Requirements, the Company’s Certificate of Incorporation and bylaws and the rules of NYSE to establish a record date for
(and the Company shall not change such record date without the prior written consent of Parent), and as soon as practicable after
the Offer Termination, call, and give notice of a meeting of the holders of the Shares to vote on the adoption of this Agreement
and approval of the Merger (including any adjournment or postponement thereof, the “
Company Stockholders’ Meeting
”)
and mail to the holders of Company Common Stock as of the record date established for the Company Stockholders’ Meeting a
Proxy Statement. The Company shall ensure that all proxies solicited by the Company in connection with the Company Stockholders’
Meeting are solicited in compliance in all material respects with all applicable Legal Requirements. Subject to Sections 5.3 and
6.1, and the Offer Termination, the Company shall use its reasonable best efforts to obtain the Required Company Stockholder Vote.
The Company in its sole discretion may adjourn or postpone the Company Stockholders’ Meeting after consultation with Parent,
and with Parent’s consent (not to be unreasonably withheld, conditioned or delayed), (A) to the extent necessary to ensure
that any legally required supplement or amendment to the Proxy Statement is provided to the stockholders of the Company within
a reasonable amount of time in advance of the Company Stockholders’ Meeting or (B) if as of the time for which the Company
Stockholders’ Meeting is
originally scheduled (as
set forth in the Proxy Statement) there are insufficient Shares represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the Company Stockholders’ Meeting. Unless this Agreement is validly terminated in accordance
with Section 8.1, the Company shall submit this Agreement and the Merger to its stockholders at the Company Stockholders’
Meeting even if the Company’s Board of Directors shall have made a Company Adverse Change Recommendation.
(e) Parent
agrees to cause all Shares owned by Parent or any subsidiary of Parent to be voted in favor of the adoption of the Agreement at
the Company Stockholders’ Meeting.
(f) Notwithstanding
anything to the contrary contained in this Agreement, if, at any time after the purchase of Shares pursuant to the Offer by Merger
Sub, the number of actually outstanding Shares owned by Merger Sub, together with any outstanding Shares owned by Parent and Parent’s
other affiliates, shall collectively represent at least 90% of the actually outstanding Shares, then Parent shall take all actions
necessary and appropriate to cause the Merger to become effective as soon as practicable without a meeting of the holders of Shares
in accordance with Section 253 of the DGCL.
6.2 Filings,
Consents and Approvals.
(a) The
Parties agree to use their reasonable best efforts to take promptly any and all steps necessary to avoid or eliminate each and
every impediment under the Antitrust Laws, that may be asserted by any Governmental Body or other person, so as to enable the Closing
to occur expeditiously, but in no case later than the End Date, including (i) negotiating, committing to and effecting, by consent
decree, hold separate order or otherwise, the sale, lease, license, divestiture or disposition of any assets, rights, product lines,
or businesses of Parent or its Subsidiaries and/or those of the Acquired Corporations,
provided that
the Acquired Corporations
will only be required to take or commit to take any such action, or agree to any such condition or restriction, if such action,
commitment, agreement, condition or restriction is binding on the Acquired Corporations only in the event the Closing occurs; and
(ii) provide as promptly as reasonably practicable all information required by any Governmental Body pursuant to its evaluation
of the Transactions under the HSR Act (or other applicable Antitrust Laws). By way of illustration and not limitation, the Parties
agree to promptly take, and cause their affiliates to take, all actions and steps requested or required by any Governmental Body
as a condition to granting any consent, permit, authorization, waiver, clearance and approvals, and to cause the prompt expiration
or termination of any applicable waiting period and to resolve such objections, if any, as the FTC and the DOJ, or other Governmental
Bodies of any other jurisdiction for which consents, permits, authorizations, waivers, clearances, approvals and expirations or
terminations of waiting periods are sought with respect to the Transactions, so as to obtain termination of the waiting period
under the HSR Act or other Antitrust Laws, and to avoid the commencement of a lawsuit by the FTC, the DOJ or other Governmental
Bodies under Antitrust Laws, and to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining
order or other order in any suit or proceeding which would otherwise have the effect of preventing the Closing or materially delaying
the Closing. The Parties shall defend through litigation on the merits any claim asserted in court by any party under Antitrust
Laws in order to avoid entry of, or to have vacated or terminated, any decree, order or judgment (whether
temporary,
preliminary or permanent) that could restrain, delay, or prevent the Closing by the End Date.
(b) Subject
to the terms and conditions of this Agreement, each of the Parties hereto shall (and shall cause their respective Affiliates, if
applicable, to): (i) promptly, but in no event later than five (5) business days after the date hereof, make an appropriate filing
of all Notification and Report forms as required by the HSR Act with respect to the Transactions; and (ii) cooperate with each
other in determining whether, and promptly preparing and making, any other filings, notifications or other consents are required
to be made with, or obtained from, any other Governmental Bodies in connection with the Transactions.
(c) Without
limiting the generality of anything contained in this Section 6.2, during the Pre-Closing Period, each Party hereto shall use its
reasonable best efforts to (i) give the other Parties prompt notice of the making or commencement of any request, inquiry, investigation,
action or Legal Proceeding brought by a Governmental Body or brought by a third party before any Governmental Body, in each case,
with respect to the Transactions, (ii) keep the other Parties reasonably informed as to the status of any such request, inquiry,
investigation, action or Legal Proceeding, (iii) promptly inform the other Parties of any communication to or from the FTC, DOJ
or any other Governmental Body in connection with any such request, inquiry, investigation, action or Legal Proceeding, (iv) promptly
furnish to the other Party, subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants,
with copies of documents provided to or received from any Governmental Body in connection with any such request, inquiry, investigation,
action or Legal Proceeding (other than “4(c) documents” as that term is used in the rules and regulations under the
HSR Act), (v) subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants, and to
the extent reasonably practicable, consult and cooperate with the other Parties and will consider in good faith the views of the
other Parties in connection with any analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made
or submitted in connection with any such request, inquiry, investigation, action or Legal Proceeding, and (vi) except as may be
prohibited by any Governmental Body or by any Legal Requirement, in connection with any such request, inquiry, investigation, action
or Legal Proceeding in respect of the Transactions, each Party hereto will permit authorized Representatives of the other Party
to be present at each meeting or conference relating to such request, inquiry, investigation, action or Legal Proceeding and to
have access to and be consulted in connection with any argument, opinion or proposal made or submitted to any Governmental Body
in connection with such request, inquiry, investigation, action or Legal Proceeding.
6.3 Company
Options.
(a) Prior
to the Acceleration Time, the Company shall take all actions (including obtaining any necessary determinations and/or resolutions
of the Board of Directors of the Company or a committee thereof) that may be necessary (under the Company Equity Plans and award
agreements pursuant to which Company Options are outstanding or otherwise) to (i) accelerate the vesting and exercisability of
each unexpired and unexercised Company Option then outstanding as of immediately prior to the Acceleration Time so that each such
Company Option shall be fully vested and exercisable prior to the Acceleration Time, (ii) terminate each Company Equity Plan (except
as otherwise agreed by Parent and the Company) and (iii) cause,
as of the Acceleration Time,
each unexpired and unexercised Company Option then outstanding as of immediately prior to the Acceleration Time, whether vested
or unvested (and each plan, if any, under which any Company Option may be granted except, with respect to any such plan, as otherwise
agreed by Parent and the Company) to be cancelled, terminated and extinguished, subject, if applicable, to payment pursuant to
Section 2.8.
6.4 Employee
Benefits.
For a period of one year following the Effective Time, Parent shall provide, or cause
to be provided, to those employees of the Acquired Corporations who are employed by the Acquired Corporations as of immediately
prior to the Effective Time and who continue to be actively employed by the Surviving Corporation (or any Subsidiary thereof) during
such one year period (the “
Continuing Employees
”) base salary and base
wages, short-term cash incentive compensation opportunities and benefits (excluding equity based compensation) that are substantially
comparable in the aggregate to such base salary and base wages, short-term cash incentive compensation opportunities and benefits
(excluding equity based compensation) provided to such Continuing Employees immediately prior to the execution of this Agreement.
Without limiting the foregoing:
(a) With
respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the
personal, sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, Parent shall,
or shall cause the Surviving Corporation to and instruct its Subsidiaries to, as applicable (and without duplication of benefits),
assume the liability for such accrued personal, sick or vacation time and allow such Continuing Employee to use such accrued personal,
sick or vacation time in accordance with the practice and policies of the applicable Acquired Corporation.
(b) Parent
agrees that all Continuing Employees shall be eligible to continue to participate in the Surviving Corporation’s health and
welfare benefit plans (to the same extent such Continuing Employees were eligible to participate under the Acquired Corporations’
health and welfare benefit plans immediately prior to the Effective Time);
provided, however
, that (i) nothing in this Section
6.4 or elsewhere in this Agreement shall limit the right of Parent or the Surviving Corporation to amend or terminate any such
health or welfare benefit plan at any time, and (ii) if Parent or the Surviving Corporation terminates any such health or welfare
benefit plan, then (upon expiration of any appropriate transition period), the Continuing Employees shall be eligible to participate
in the Surviving Corporation’s health and welfare benefit plans to the extent that coverage under such plans is replacing
comparable coverage under an Employee Plan in which such Continuing Employee participated immediately before the Effective Time.
To the extent that service is relevant for eligibility or vesting purposes or for the purpose of determining future paid time off
accruals under any retirement, health or welfare benefit plan of Parent and/or the Surviving Corporation, then Parent shall use
its commercially reasonable efforts to ensure that such retirement, health or welfare benefit plan shall, for purposes of eligibility
or vesting purposes or for the purpose of determining future paid time off accruals but not for purposes of benefit accrual, credit
Continuing Employees for service prior to the Effective Time with the Acquired Corporations to the same extent that such service
was recognized prior to the Effective Time under the corresponding health or welfare benefit plan of the Company. Nothing in this
Section 6.4 or elsewhere in this Agreement shall be construed to create a right in any employee to employment with Parent, the
Surviving Corporation or any other Subsidiary of the Surviving Corporation and the employment of each Continuing Employee shall
be “at will” employment.
(c) The
provisions of this Section 6.4 are solely for the benefit of the Parties to this Agreement, and no provision of this Section 6.4
is intended to, or shall, constitute the establishment or adoption of or an amendment to any employee benefit plan for purposes
of ERISA or otherwise and no current or former employee or any other individual associated therewith shall be regarded for any
purpose as a third party beneficiary of the Agreement or have the right to enforce the provisions hereof.
6.5 Indemnification
of Officers and Directors.
(a) All
rights to indemnification by the Acquired Corporations existing in favor of those Persons who are directors and officers of any
Acquired Corporation as of the date of this Agreement (the “
Indemnified Persons
”) for their acts and
omissions occurring prior to the Effective Time, as provided in the Certificate of Incorporation and bylaws of the Acquired Corporations
(as in effect as of the date of this Agreement) and as provided in the indemnification agreements between the Acquired Corporations
and said Indemnified Persons (as set forth on Part 6.5(a) of the Company Disclosure Schedule and in effect as of the date of this
Agreement) in the forms made available by the Company to Parent or Parent’s Representatives prior to the date of this Agreement,
shall survive the Merger and shall be observed by the Surviving Corporation and its Subsidiaries to the fullest extent available
under Delaware law for a period of six years from the Effective Time, and any claim made requesting indemnification pursuant to
such indemnification rights within such six-year period shall continue to be subject to this Section 6.5(a) and the indemnification
rights provided under this Section 6.5(a) until disposition of such claim.
(b) From
the Effective Time until the sixth anniversary of the date on which the Effective Time occurs, Parent and the Surviving Corporation
(together with its successors and assigns, the “
Indemnifying Parties
”) shall, to the fullest extent permitted
under applicable Legal Requirements, indemnify and hold harmless each Indemnified Person in his or her capacity as an officer or
director of an Acquired Corporation against all losses, claims, damages, liabilities, fees, expenses, judgments or fines incurred
by such Indemnified Person as an officer or director of an Acquired Corporation in connection with any pending or threatened Legal
Proceeding based on or arising out of, in whole or in part, the fact that such Indemnified Person is or was a director or officer
of an Acquired Corporation at or prior to the Effective Time and pertaining to any and all matters pending, existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, including any such matter
arising under any claim with respect to the transactions contemplated herein. Without limiting the foregoing, from the Effective
Time until the sixth anniversary of the date on which the Effective Time occurs, the Indemnifying Parties shall also, to the fullest
extent permitted under applicable Legal Requirements, advance reasonable and documented out-of-pocket costs and expenses (including
reasonable and documented attorneys’ fees) incurred by the Indemnified Persons in connection with matters for which such
Indemnified Persons are eligible to be indemnified pursuant to this Section 6.5(b) within fifteen days after receipt by Parent
of a written request for such advance, subject to the execution by such Indemnified Persons of appropriate undertakings in favor
of the Indemnifying Parties to repay such advanced costs and expenses if it is ultimately determined in a final and non-appealable
judgment of a court of competent jurisdiction that such Indemnified Person is not entitled to be indemnified under this Section
6.5(b).
(c) From
the Effective Time until the sixth anniversary of the Effective Time, the Surviving Corporation shall maintain in effect, the existing
policy of directors’ and officers’ liability insurance maintained by the Company as of the date of this Agreement (a
true and correct copy of which has been made available by the Company to Parent or Parent’s Representatives prior to the
date of this Agreement) for the benefit of the Indemnified Persons who are currently covered by such existing policy with respect
to their acts and omissions occurring prior to the Effective Time in their capacities as directors and officers of the Acquired
Corporations (as applicable), on terms with respect to coverage, deductibles and amounts no less favorable than the existing policy
(or at or prior to the Effective Time Parent or the Company may (through a nationally recognized insurance broker approved by Parent
(such approval not to be unreasonably withheld, delayed or conditioned)) purchase a six-year “tail” policy for the
existing policy effective as of the Effective Time) and if such “tail policy” has been obtained, it shall be deemed
to satisfy all obligations to obtain and/or maintain insurance pursuant to this Section 6.5(c);
provided, however
, that
in no event shall the Surviving Corporation be required to expend in any one year an amount in excess of 250% of the annual premium
currently payable by the Company with respect to such current policy, it being understood that if the annual premiums payable for
such insurance coverage exceeds such amount, Parent shall be obligated to cause the Surviving Corporation to obtain a policy with
the greatest coverage available for a cost equal to such amount.
(d) In
the event Parent or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges
into any other Person and shall not be the continuing or surviving corporation or Entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any Person, then, and in each such case, Parent shall ensure
that the successors and assigns of Parent or the Surviving Corporation, as the case may be, or at Parent’s option, Parent,
shall assume the obligations set forth in this Section 6.5.
(e) The
provisions of this Section 6.5 shall survive the consummation of the Merger and are (i) intended to be for the benefit of, and
will be enforceable by, each of the Indemnified Persons and their heirs and (ii) in addition to, and not in substitution for, any
other rights to indemnification or contribution that any such Person may have by contract or otherwise. Unless required by applicable
Legal Requirement, this Section 6.5 may not be amended, altered or repealed after the Effective Time in such a manner as to adversely
affect the rights of any Indemnified Person or any of their heirs without the prior written consent of the affected Indemnified
Person.
6.6 Securityholder
Litigation.
The Company shall give Parent the right to review and comment on all material filings
or responses to be made by the Company in connection with any litigation against the Company and/or its directors relating to the
Transactions, and the right to consult on the settlement with respect to such litigation, and the Company will in good faith take
such comments into account, and, no such settlement shall be agreed to without Parent’s prior written consent (such consent
not to be unreasonably withheld, conditioned or delayed). The Company shall promptly notify Parent of any such litigation and shall
keep Parent reasonably and promptly informed with respect to the status thereof.
6.7 Additional
Agreements.
Subject to the terms and conditions of this Agreement (including Sections 5.3 and
6.1), Parent and the Company shall use commercially reasonable
efforts
to take, or cause to be taken, all actions necessary to consummate the Merger and make effective the other Transactions. Without
limiting the generality of the foregoing, subject to the terms and conditions of this Agreement, each Party to this Agreement (i)
shall make all filings (if any) and give all notices (if any) required to be made and given by such Party in connection with the
Merger and the other Transactions contemplated by this Agreement, (ii) shall use commercially reasonable efforts to obtain each
Consent (if any) required to be obtained pursuant to any applicable Legal Requirement or Material Contract by such Party in connection
with the Transactions, and (iii) shall use commercially reasonable efforts to lift any restraint, injunction or other legal bar
to the Merger brought by any third Person against such Party. The Company shall promptly deliver to Parent a copy of each such
filing made, each such notice given and each such Consent obtained by the Company during the Pre-Closing Period.
6.8 Disclosure.
The initial press release relating to this Agreement shall be a joint press release issued by
the Company and Parent and thereafter Parent and the Company shall consult with each other before issuing any further press release
or otherwise making any public statement or making any announcement to Company Associates (to the extent not previously issued
or made in accordance with this Agreement) with respect to the Merger, this Agreement or any of the other Transactions and shall
not issue any such press release, public statement or announcement to Company Associates without the other Party’s written
consent. Notwithstanding the foregoing: (a) each Party may, without such consultation or consent, make any public statement in
response to questions from the press, analysts, investors or those attending industry conferences, make internal announcements
to employees and make disclosures in Company SEC Documents, so long as such statements are consistent with previous press releases,
public disclosures or public statements made jointly by the parties (or individually, if approved by the other Party), (b) a Party
may, without the prior consent of the other Party hereto but subject to giving advance notice to the other Party, issue any such
press release or make any such public announcement or statement as may be required by Legal Requirement; and (c) the Company need
not consult with Parent in connection with such portion of any press release, public statement or filing to be issued or made pursuant
to Section 5.3(e) or with respect to any Acquisition Proposal or Company Adverse Change Recommendation.
6.9 Takeover
Laws; Advice of Changes.
(a) If
any Takeover Law may become, or may purport to be, applicable to the transactions contemplated in this Agreement or the Support
Agreements, each of Parent and the Company and the members of their respective Boards of Directors shall use their respective reasonable
best efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement
or the Support Agreements may be consummated as promptly as practicable on the terms and conditions contemplated hereby and otherwise
act to lawfully eliminate the effect of any Takeover Law on any of the transactions contemplated by this Agreement or the Support
Agreements.
(b) The
Company will give prompt notice to Parent (and will subsequently keep the other informed on a current basis of any developments
related to such notice) upon its becoming aware of the occurrence or existence of any fact, event or circumstance that (i) has
had or would reasonably be expected to result in any Material Adverse Effect with respect to it and (ii) is reasonably likely to
result in any of the conditions set forth in Sections 7.1 and/or 7.2 not
being able to be satisfied
prior to the End Date. Parent will give prompt notice to the Company (and will subsequently keep the other informed on a current
basis of any developments related to such notice) upon its becoming aware of the occurrence or existence of any fact, event or
circumstance that (i) has had or would reasonably be expected to have a Parent Material Adverse Effect or (ii) is reasonably likely
to result in any of the conditions set forth in Sections 7.1 and/or 7.3 not being able to be satisfied prior to the End Date.
6.10 Section
16 Matters.
The Company, and the Company’s Board of Directors, shall, to the extent
necessary, take appropriate action, prior to or as of the Effective Time, to approve, for purposes of Section 16(b) of the Exchange
Act, the deemed disposition and cancellation of Shares and Company Options in the Transactions contemplated hereby by applicable
individuals and to cause such dispositions and/or cancellations to be exempt under Rule 16b-3 promulgated under the Exchange Act.
6.11 Financing.
(a) (i)
Each of Parent and Co-Borrower shall use its reasonable best efforts to obtain the Financing on the terms and conditions (including
the flex provisions) described in the Financing Letters, and shall not permit any amendment or modification to be made to, or any
waiver of any provision under, the Financing Letters if such amendment, modification or waiver (A) with respect to the Financing
Letters, reduces (or would reasonably be expected to have the effect of reducing) the aggregate amount of the Financing (including
by increasing the amount of fees to be paid or original issue discount unless (x) the Debt Financing or the Equity Financing is
increased by a corresponding amount or the Debt Financing is otherwise made available to fund such fees or original issue discount
and (y) after giving effect to any of the transactions referred to in clause “(x)” above, the representation and warranty
set forth in Section 4.10 shall be true and correct) or (B) imposes new or additional conditions precedent or otherwise expands,
amends or modifies any of the conditions precedent to the receipt of the Financing or otherwise expands, amends or modifies any
other provision of the Financing Letters, in a manner that would reasonably be expected to (x) delay or prevent or make less likely
the funding of the Financing (or satisfaction of the conditions precedent to the Financing) at the Acceptance Time or the Effective
Time, as applicable, or (y) adversely impacts the ability of Parent or Co-Borrower or the Company, as applicable, to enforce its
rights against other parties to the Financing Letters or the definitive agreements with respect thereto (provided that, subject
to compliance with the other provisions of this Section 6.11(a), Parent and Co-Borrower may amend the Debt Commitment Letter to
add additional lenders, arrangers, bookrunners and agents). Parent shall deliver to the Company, at least three (3) business days
prior to the proposed execution thereof, copies of any such amendment, modification or replacement. For purposes of this Section
6.11, references to “Financing” shall include the financing contemplated by the Financing Letters as permitted to be
amended or modified by this Section 6.11(a) and references to “Debt Commitment Letter” shall include such documents
as permitted to be amended or modified by this Section 6.11(a).
(ii) Each
of Parent and Co-Borrower shall use its reasonable best efforts (A) to maintain in effect the Financing Letters, (B) to negotiate
and enter into definitive agreements with respect to the Debt Commitment Letter on the terms and conditions (including the flex
provisions) contained in the Debt Commitment Letter (or on terms no less favorable
(taken as a whole) to Parent
or Co-Borrower than the terms and conditions (including flex provisions) in the Debt Commitment Letter), (C) to satisfy on a timely
basis all conditions precedent to funding in the Debt Commitment Letter and such definitive agreements thereto and in the Equity
Funding Letter and to consummate the Financing at or prior to the earlier to occur of the Acceptance Time and the Closing, and
to instruct and otherwise cause the lenders and the other persons committing to fund the Financing at the Closing to provide such
Financing, (D) to satisfy the conditions precedent required to be satisfied by Parent or Co-Borrower under the Financing Letters
to cause the funding of the Financing and (E) if appropriate and practical under the circumstances and available sources of cash
are not otherwise available to consummate the transactions contemplated herein, enforce its rights under the Financing Letters
(including, if appropriate, through litigation pursued in good faith). Parent shall keep the Company reasonably informed on a current
basis and in reasonable detail of the status of its efforts to arrange the Debt Financing and provide to the Company copies of
the material definitive agreements (including drafts when reasonably available) for the Debt Financing (provided that any fee letter
may be redacted). Parent and Merger Sub will pay when due all fees due and payable under the Financing Letters. Without limiting
the generality of the foregoing, Parent and Co-Borrower shall give the Company prompt (but in any event within two (2) business
days) written notice (x) of any breach or default by any party to any of the Financing Letters or definitive agreements related
to the Financing of which Parent or Co-Borrower become aware, (y) of the receipt of (A) any written notice or (B) other written
communication, in each case from any Financing Source with respect to any (1) actual or potential breach, default, termination
or repudiation by any party to any of the Financing Letters or definitive agreements related to the Financing of any provisions
of the Financing Letters or definitive agreements related to the Financing or (2) material dispute or disagreement between or among
any parties to any of the Financing Letters or definitive agreements related to the Financing with respect to the obligation to
fund the Financing or the amount of the Financing to be funded at Closing, and (z) if at any time for any reason Parent or Co-Borrower
believes in good faith that it will not be able to obtain all or any portion of the Financing on the terms and conditions, in the
manner or from the sources contemplated by any of the Financing Letters or definitive agreements related to the Financing. As soon
as reasonably practicable, but in any event within two (2) business days of the date the Company delivers to Parent or Co-Borrower
a written request, Parent and Co-Borrower shall provide any information reasonably requested by the Company relating to any circumstance
referred to in clause “(x)”, “(y)” or “(z)” of the immediately preceding sentence;
provided
,
that they need not provide any information believed to be privileged or that is requested for purposes of litigation. Subject to
the terms and conditions of this Agreement, upon the occurrence of any circumstance referred to in clause “(x)”, “(y)”
or “(z)” of the second preceding sentence or if any portion of the Debt Financing otherwise becomes unavailable, and
such portion is reasonably required to pay the Offer Price in respect of each Share validly tendered and accepted for payment in
the Offer, the aggregate Merger Consideration, and all fees, expenses and other amounts contemplated to be paid by Parent, Merger
Sub or the Surviving Corporation or Co-Borrower, as applicable, pursuant to this Agreement, Parent and Co-Borrower shall (x) promptly
notify the Company of such unavailability and the reason therefor and (y) use their reasonable best efforts to arrange and obtain
in replacement thereof alternative debt financing from alternative sources in an amount sufficient to consummate the Transactions
with terms and conditions not materially less favorable (taken as a whole) to Parent and Co-Borrower than the terms and conditions
(taken as a whole) set forth in the Debt Commitment Letter and which
would not reasonably be expected
to prevent, impede or materially delay the consummation of the Financing or the transactions contemplated by this Agreement (“
Available
Financing
”), as promptly as reasonably practicable following the occurrence of such event (with any commitment letter
and/or fee letters evidencing such Available Financing (collectively, the “
Available Financing Letters
”)
also being referred to herein as a Financing Letter and any debt financing contemplated thereby being referred to herein as Debt
Financing); provided that such Available Financing Letters shall be subject to the same restrictions set forth in Section 6.11(a)
hereof as if the entering into of such Available Financing Letters were an amendment, modification or waiver to the existing Debt
Financing Letters. Parent shall deliver to the Company true and complete copies of all Available Financing Letters (including Redacted
Fee Letters) pursuant to which any such alternative source shall have committed to provide any portion of the Debt Financing at
least three (3) business days prior to execution thereof, with executed copies being delivered upon execution thereof.
(iii) Without
the prior written consent of the Company, other than with respect to the Merger, the Financing, and the other Transactions contemplated
hereby, Parent shall not, nor shall it permit any of its controlled Affiliates to, enter into any merger, acquisition, joint venture,
disposition or debt or equity financing that would reasonably be expected to impair, delay or prevent consummation of all or any
portion of the Debt Financing.
(iv) Notwithstanding
anything herein to the contrary, Parent and Merger Sub acknowledge and agree that obtaining the Financing or any alternative financing
is not a condition to their obligations to close the Offer and the Merger, and reaffirm their obligation to consummate the Offer
and the Merger and their other obligations under this Agreement irrespective and independently of the availability of the Financing,
subject to (i) the Company’s compliance in all material respects with its obligations pursuant to this Section 6.11, (ii)
the Marketing Period shall have been completed in accordance with the terms of this Agreement, and (iii) the fulfillment or waiver
of the conditions set forth in Annex I and Sections 7.1 and 7.2, as applicable.
(b) Prior
to the earlier to occur of the Acceptance Time and the Closing, the Company shall use its commercially reasonable efforts, and
shall cause each of its Subsidiaries to use its commercially reasonable efforts to provide and or cause its and its Subsidiaries’
Representatives to provide to Parent and Co-Borrower, in each case at Parent’s sole expense, all cooperation reasonably requested
by Parent or Co-Borrower that is customary in connection with the arrangement of the type of Debt Financing contemplated by the
Debt Commitment Letter (provided in all cases that such requested cooperation does not unreasonably interfere with the ongoing
operations of the Company and its Subsidiaries), including (i) (A) furnishing Parent and Co-Borrower and their Financing Source,
as promptly as reasonably practicable following Parent’s or Co-Borrower’s reasonable request, with such pertinent and
customary information, to the extent reasonably available to the Company or its Subsidiaries, regarding the Company and its Subsidiaries,
and any supplements thereto, as may be reasonably requested by Parent or Co-Borrower to consummate the Debt Financing and (B) furnishing
Parent and Co-Borrower and their Financing Sources, as promptly as reasonably practicable following Parent’s or Co-Borrower’s
reasonable request, with information regarding the Company and its Subsidiaries (including information to be used in the preparation
of one or more information packages regarding the business, operations, financial projections and prospects of the Company and
its
Subsidiaries) customary for
the arrangement of loans contemplated by the Debt Financing, to the extent reasonably available to the Company, its Subsidiaries
or its Representatives and reasonably requested in writing by Parent or Co-Borrower to assist in preparation of customary rating
agency or lender presentations relating to such arrangement of loans, (ii) furnishing all pertinent and reasonably available
consolidated financial statements, business and other financial data (other than pro forma financial statements but including,
for the avoidance of doubt, any financial information of the Company and its Subsidiaries reasonably necessary to permit the Parent
to prepare pro forma financial statements required under the Debt Commitment Letter), and audit reports of the Company and its
Subsidiaries, and any supplements thereto required under the Debt Financing Letter and written financial information reasonably
necessary and reasonably available for the Parent and the Financing Sources to prepare the “Confidential Information Memorandum”
referred to in the Debt Financing Letter (the information referred to in clauses “(i)” and “(ii)” being
referred to in this Agreement as the “
Required Information
”),
provided
that Required Information
shall not include, and the Buyer shall be responsible for, any pro forma financial statements, including any post-Closing pro forma
adjustments, cost savings, synergies, capitalization, ownership or other post-Closing pro forma adjustments desired to be incorporated
into any information used in connection with the Debt Financing, (iii) participating and having senior management and its
Representatives participate in a reasonable number of meetings, presentations, confidential information memorandum presentations
and meetings, due diligence sessions, drafting sessions and sessions with rating agencies in connection with the Debt Financing
(including customary one-on-one meetings with the Financing Sources), (iv) assisting with the preparation of materials for rating
agency presentations, bank information memoranda, and similar documents required in connection with the Debt Financing;
provided
that any rating agency presentations, bank information memoranda, and similar documents required in connection with the Debt
Financing shall contain disclosure reflecting the Surviving Corporation and/or its Subsidiaries as the obligor, (v) taking all
reasonably necessary corporate actions, subject to and only effective upon the occurrence of the Effective Time, reasonably requested
by Parent to permit the consummation of the Debt Financing and to permit the proceeds thereof to be made available to the Surviving
Corporation immediately after the Effective Time, (vi) executing and delivering any customary pledge and security documents, credit
agreements, ancillary loan documents and customary closing certificates and documents (in each case, subject to and only effective
upon occurrence of the Effective Time and reflecting the Surviving Corporation and/or its Subsidiaries as the obligor) and assisting
in preparing schedules thereto as may be reasonably requested by Parent or Co-Borrower, (vii) assisting in (A) the preparation,
execution and delivery of one or more currency or interest hedging agreements or (B) the amendment or modification of any of the
Company’s or its Subsidiaries’ currency or interest hedging agreements, if any, in each case, on terms that are reasonably
requested by Parent or Co-Borrower in connection with the Debt Financing; provided that no obligation of the Company or any of
its Subsidiaries under any such agreements or amendments shall be effective until the Effective Time, (viii) in connection with
the loan financing contemplated by the Debt Commitment Letter, providing customary authorization letters to the Financing Source
for the Debt Financing authorizing the distribution of information to prospective lenders (so long as such Persons agree to be
bound by customary confidentiality undertakings reasonably satisfactory to Company and of which Company shall be a beneficiary)
and containing a customary representation to the Financing Source for the Debt Financing that such information to the extent provided
by the Company does not contain a material
misstatement or omission
and containing a representation to the Financing Sources that the public side versions of such documents, if any, with respect
to such information provided by the Company, do not include material non-public information about the Company or its Subsidiaries
or their securities, (ix) using commercially reasonable efforts to arrange for customary payoff letters, lien terminations and
instruments of discharge to be delivered at Closing providing for the payoff, discharge and termination on the Closing Date of
all indebtedness contemplated by this Agreement to be paid off, discharged and terminated on the Closing Date; provided, that neither
the Company nor its Subsidiaries shall be required to enter into any agreement that is not contingent upon the Closing, (x) providing
at least three (3) business days prior to the expected Closing Date all documentation and other information about the Company and
each of its Subsidiaries as is requested by the Financing Source for the Debt Financing and required under applicable “know
your customer” and anti-money-laundering rules and regulations including the USA PATRIOT Act to the extent reasonably requested
of Company in writing at least ten (10) days in advance of such expected Closing Date, (xi) using commercially reasonable
efforts to cause accountants to consent to the use of their reports in any material relating to the Debt Financing, (xii) assisting
in obtaining corporate and facilities ratings for the Debt Financing, (xiii) assisting with the execution, preparing and delivering
of original stock certificates and original stock powers for the Company’s Subsidiaries to the Financing Sources (including
providing copies thereof prior to the Closing Date) on or prior to the Closing Date, and (xiv) ensuring that there are no competing
issues of debt securities or syndicated credit facilities of the Company and its Subsidiaries being offered or arranged between
the execution of this Agreement and the Effective Time, . Parent shall promptly (but in any event, within five (5) business days),
upon request by the Company, reimburse the Company for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’
and accountants costs and expenses) incurred by the Company or any of its Subsidiaries in connection with the cooperation of the
Company and its Subsidiaries contemplated by this Section 6.11 and shall indemnify and hold harmless the Company, its Subsidiaries
and their respective Representatives from and against any and all direct and actual losses (other than lost profits), damages,
claims, liabilities, costs or expenses suffered or incurred by any of them in connection with the arrangement of the Financing,
any action taken by them at the request of Parent pursuant to this Section 6.11(b) and any information used in connection therewith,
except, in each case, insofar as such losses, damages, claims, liabilities, costs or expenses (i) arose out of or resulted
from the common law fraud, willful misconduct or gross negligence of the Company, its Subsidiaries or their Representatives, (ii) directly
resulted from the breach of any of the obligations of the Company, its Subsidiaries or their Representatives under this Agreement
or (iii) that were agreed to in a settlement without the written consent of Parent (such consent not to be unreasonably withheld
or delayed) and the Guaranty shall guarantee the reimbursement and indemnification obligations of Parent pursuant to this Section
6.11. If the Company at any point believes that it has delivered the Required Information in accordance with this Section 6.11(b),
it may deliver to the Parent a written notice to such effect, in which case the Company shall be deemed to have delivered the Required
Information unless the Parent shall have provided to the Company within three (3) business days a written notice describing in
reasonable detail what information that constitutes Required Information the Company has not delivered; provided, further, that
the determination as to whether the Required Information has been delivered shall not be contingent upon the availability of Debt
Financing.
(c) Notwithstanding
anything to the contrary contained in this Section 6.11, (i) none of the Company, any of its Subsidiaries or any of their respective
directors or officers shall be obligated to adopt or approve resolutions or execute consents to approve or authorize the execution
of the Debt Financing (other than management letters in order to obtain auditor consent) unless such officers will continue in
such positions or in similar positions after the Effective Time and, in each case, such documents shall not become effective until
the Effective Time or thereafter, (ii) no obligation of the Company or any of its Subsidiaries under any agreement, certificate,
document or instrument (other than the authorization letters referred to above) shall be effective until the Effective Time (and
nothing contained in this Section 6.11 or otherwise shall require any of the Company’s Subsidiaries, prior to the Effective
Time, to be an obligor with respect to the Debt Financing, or require the Company to be an obligor with respect to the Debt Financing),
(iii) none of the Company or any of its Subsidiaries or Representatives shall be required to pay or incur any liability for any
commitment or other fee or pay or incur any other liability in connection with the Debt Financing prior to the Effective Time,
and (iv) neither the Company nor its Subsidiaries shall be required to, prior to the Closing, (x) approach landlords or any other
bailees to discuss landlord waivers, leasehold mortgages, bailee waivers or other agreements limiting the rights of such third
parties or (y) consent to the pre-filing of UCC-1s or any other grant of Liens or other encumbrances.
(d) Nothing
in this Section 6.11 shall require such cooperation by the Company to the extent it would (i) cause any condition to Closing set
forth in Section 7 or any Offer Condition to fail to be satisfied or otherwise cause any breach of this Agreement that would provide
Parent the right to terminate this Agreement (unless waived by Parent), (ii) require the Company or any of its Subsidiaries to
take any action that will conflict with or violate the Company’s organizational documents or any Legal Requirements or result
in the contravention of, or would reasonably be expected to result in a violation or breach of, or default under, any Material
Contract in any material respect (in each case prior to the Effective Time and in each case with no such restriction, conflict
or violation being provided for or entered into under such organizational document in contemplation of this clause (ii)),
(iii) result in any officer or director of the Company or any of its Subsidiaries incurring any personal liability with respect
to any matters relating to the Financing or (iv) interfere unreasonably with the business or operations of the Company or any of
its Subsidiaries.
(e) All
non-public or otherwise confidential information regarding the Company and its Subsidiaries obtained by Parent, Merger Sub and
their respective Representatives pursuant to this Section 6.11 shall be kept confidential in accordance with the Confidentiality
Agreement.
6.12 FIRPTA
Certificate.
The Company shall deliver an affidavit, under penalties of perjury, stating that
the Company is not and has not been a United States real property holding corporation, dated as of the Closing Date and in form
and substance required under Treasury Regulation Section 1.897-2(h).
6.13 Rule
14d-10 Matters.
Prior to the Acceptance Time and to the extent permitted by applicable Legal
Requirements, the Compensation Committee of the Company’s Board of Directors, at a meeting duly called and held, will approve,
as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(2)
under
the Exchange Act, each agreement, arrangement or understanding between Merger Sub, the Company or their respective Affiliates and
any of the officers, directors or employees of the Company that are effective as of the date of this Agreement or are entered into
after the date of this Agreement and prior to the Acceptance Time pursuant to which compensation is paid to such officer, director
or employee and will take all other action reasonably necessary to satisfy the requirements of the non-exclusive safe harbor set
forth in Rule 14d-10(d)(2) under the Exchange Act.
SECTION 7. Conditions
Precedent to The Merger
7.1
Conditions to Each Party’s Obligation To Effect the Merger.
The obligations of the
parties to effect the Merger are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) If
the adoption of this Agreement by the stockholders of the Company is required by applicable Legal Requirements, this Agreement
shall have been duly adopted by the Required Company Stockholder Vote.
(b) (i)
the waiting period applicable to the Merger under the HSR Act shall have expired or been terminated and (ii) all approvals, filings,
or waiting periods under the Antitrust Laws set forth in Part 7.1(b) of the Company Disclosure Schedule required to consummate
the Merger shall have been obtained or filed or shall have expired or been terminated, in each case as set forth in Part 7.1(b)
of the Company Disclosure Schedule.
(c) Unless
the Offer Termination shall have occurred, Merger Sub shall have accepted for payment all Shares validly tendered (and not validly
withdrawn) pursuant to the Offer;
provided, however,
that neither Parent nor Merger Sub shall be entitled to assert the
failure of this condition if, in breach of this Agreement or the terms of the Offer, Merger Sub fails to purchase any Shares validly
tendered (and not validly withdrawn) pursuant to the Offer.
(d) There
shall not have been issued by any court of competent jurisdiction or remain in effect any temporary restraining order, preliminary
or permanent injunction or other order preventing the consummation of the Merger, nor shall any action have been taken, or any
Legal Requirement or order promulgated, entered, enforced, enacted, issued or deemed applicable to the Merger by any Governmental
Body which directly or indirectly prohibits, or makes illegal, the acceptance for payment of or payment for Shares or the consummation
of the Merger; provided, however, that a party shall not be permitted to invoke this Section 7.1(d) unless it shall have taken
all actions required under this Agreement to have any such order lifted.
7.2 Conditions
to Obligations of Parent and Merger Sub.
Solely if the Offer Termination shall
have occurred or the Acceptance Time shall not have occurred, the obligations of Parent and Merger Sub to effect the Merger shall
be further subject to the satisfaction, at or prior to the Closing, of each of the following conditions:
(a) the
representations and warranties of the Company set forth in Sections 3.3(a), 3.3(c) (first sentence), and 3.3(d) (second sentence)
(Capitalization) of the Agreement shall have been accurate in all respects as of the date of the Agreement and shall be accurate
in all respects at and as of the Closing Date as if made on and as of such Closing Date, except
(other than a result of a
willful breach by the Company) where the failure to be so accurate in all respects would not reasonably be expected to result in
additional cost, expense or liability to the Company, Parent and their Affiliates, individually or in the aggregate that is more
than $1,000,000 (it being understood that, for purposes of determining the accuracy of such representations and warranties, (i)
any update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement
shall be disregarded and (ii) the truth and correctness of those representations or warranties that address matters only as of
a specific date shall be measured (subject to the applicable materiality standard as set forth in this Section 7.2(a)) only as
of such date;
(b) the
representations and warranties of the Company set forth in Sections 3.3 (Capitalization) (other than Sections 3.3(a), 3.3(c) (first
sentence) and 3.3(d) (second sentence)), 3.19 (Authority; Binding Nature of Agreement), 3.21 (Vote Required) and 3.24 (Financial
Advisor) of the Agreement shall have been accurate in all material respects as of the date of the Agreement, and shall be accurate
in all material respects at and as of the Closing Date as if made on and as of such Closing Date (it being understood that, for
purposes of determining the accuracy of such representations and warranties, (i) all “Material Adverse Effect” qualifications
and other materiality qualifications contained in such representations and warranties shall be disregarded, (ii) any update of
or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement shall be
disregarded and (iii) the truth and correctness of those representations or warranties that address matters only as of a specific
date shall be measured (subject to the applicable materiality standard as set forth in this Section 7.2(b)) only as of such date);
(c) the
representations and warranties of the Company set forth in Section 3.5(b) (No Material Adverse Effect) shall have been accurate
in all respects as of the date of the Agreement and shall be accurate in all respects at and as of the Closing Date as if made
on and as of such Closing Date (it being understood that any update of or modification to the Company Disclosure Schedule made
or purported to have been made after the date of the Agreement shall be disregarded);
(d) the
representations and warranties of the Company set forth in the Agreement (other than those referred to in clauses “(a)”,
“(b)” or “(c)”) above) shall have been accurate in all respects as of the date of the Agreement, and shall
be accurate in all respects at and as of the Closing Date as if made on and as of such date, except that any inaccuracies in such
representations and warranties will be disregarded if the circumstances giving rise to all such inaccuracies (considered collectively)
do not constitute, and would not reasonably be expected to have, a Material Adverse Effect (it being understood that, for purposes
of determining the accuracy of such representations and warranties, (i) all “Material Adverse Effect” qualifications
and other materiality qualifications contained in such representations and warranties shall be disregarded, (ii) any update of
or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement shall be
disregarded and (iii) the truth and correctness of those representations or warranties that address matters only as of a specific
date shall be measured (subject to the applicable materiality standard as set forth above) only as of such date);
(e) the
Company shall have performed or complied in all material respects with any covenant or obligation that the Company is required
to comply with or to perform under the Agreement prior to the Closing Date, or, if not complied with or performed in all material
respects, such noncompliance or failure to perform shall have been cured;
(f)
Parent and Merger Sub shall have received certificates executed on behalf of the Company by the chief executive
officer or chief financial officer of the Company, certifying that the conditions set forth in Sections 7.2(a), (b), (c), (d) and
(e) have been satisfied; and
(g) Since
the date of this Agreement, there shall not have occurred a Material Adverse Effect that shall be continuing as of the Closing
Date.
7.3 Conditions
to Obligation of the Company.
Solely if the Offer Termination shall have occurred or the
Acceptance Time shall not have occurred, the obligations of the Company to effect the Merger shall be further subject to the satisfaction,
at or prior to the Closing, of each of the following conditions:
(a) The
representations and warranties of Parent and Merger Sub set forth in Section 4.1 (Due Organization), 4.3 (Authority; Binding Nature
of Agreement), 4.9(b) (Financing) and 4.10 (Solvency) of the Agreement shall have been accurate in all material respects as of
the date of the Agreement, and shall be accurate in all material respects at and as of the Closing Date as if made on and as of
such date (it being understood that, for purposes of determining the accuracy of such representations and warranties, (i) all materiality
qualifications contained in such representations and warranties shall be disregarded and (ii) the truth and correctness of those
representations or warranties that address matters only as of a specific date shall be measured (subject to the applicable materiality
standard as set forth above) only as of such date);
(b) The
representations and warranties of Parent and Merger Sub set forth in the Agreement (other than those referred to in clause “(a)”
above) shall have been accurate in all respects as of the date of the Agreement, and shall be accurate in all respects at and as
of the Closing Date as if made on and as of such date, except that any inaccuracies in such representations and warranties will
be disregarded if the circumstances giving rise to all such inaccuracies (considered collectively) do not constitute, and would
not reasonably be expected to have, a Parent Material Adverse Effect (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (i) all materiality qualifications contained in such representations and warranties
shall be disregarded and (ii) the truth and correctness of those representations or warranties that address matters only as of
a specific date shall be measured (subject to the applicable materiality standard as set forth above) only as of such date);
(c) Parent
and Merger Sub shall have performed or complied with in all material respects any covenant or obligation that Parent or Merger
Sub is required to comply with or to perform under the Agreement prior to the Closing Date, or, if not complied with or performed
in all material respects, such noncompliance or failure to perform shall have been cured; and
(d) The
Company shall have received certificates executed on behalf of Parent by the chief executive officer or chief financial officer
of Parent, certifying that the conditions set forth in Sections 7.3(a), (b) and (c) have been satisfied.
SECTION
8.
Termination
.
8.1 Termination
.
This Agreement may be terminated prior to the Effective Time (whether before or after the adoption of this Agreement by the Required
Company Stockholder Vote, except as otherwise expressly noted):
(a) by
mutual written consent of Parent and the Company at any time prior to the Acceptance Time or if an Offer Termination occurs, at
any time thereafter;
(b) by
either the Company or Parent, if the (i) Offer Termination occurs and (ii) the Company Stockholders’ Meeting (including any
adjournments and postponements thereof) shall have been held and completed and the Company’s stockholders shall have taken
a final vote on a proposal to approve this Agreement and the Merger, and this Agreement and the Merger shall not have been approved
at the Company Stockholders’ Meeting (and shall not have been approved at any adjournment or postponement thereof) by the
Required Company Stockholder Vote;
provided that
the right to terminate this Agreement pursuant to this Section 8.1(b) shall
not be available to a Party if such Party is in breach of its obligations under Section 6.1(c) or (d);
(c) by
either Parent or the Company if a court of competent jurisdiction or other Governmental Body shall have issued a decree or ruling,
or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acceptance
for payment of Shares pursuant to the Merger or making consummation of the Merger illegal, which order, decree, ruling or other
action shall be final and nonappealable;
provided
,
however
, that a Party shall not be permitted to terminate this
Agreement pursuant to this Section 8.1(c) if the issuance of such final and nonappealable order, decree, ruling or other action
is primarily attributable to a failure on the part of such Party to perform in any material respect any covenant or obligation
in this Agreement required to be performed by such Party at or prior to the Effective Time;
(d) by
Parent at any time prior to the earlier to occur of the Acceptance Time or the receipt of the Required Company Stockholder Vote,
if, (i) whether or not permitted to do so: (A) the Company’s Board of Directors shall have failed to include the Company
Board Recommendation in the Proxy Statement or the Schedule 14D-9, in each case, when mailed, or shall have effected a Company
Adverse Change Recommendation; (B) the Board of Directors of the Company shall have failed to publicly reaffirm its recommendation
of this Agreement in the absence of a publicly announced Acquisition Proposal within the earlier of ten (10) business days after
Parent so requests in writing and two (2) business days prior to the Company Stockholders’ Meeting,
provided that
,
Parent may only make such request once every thirty (30) days,
provided
,
further
,
that
if an Acquisition Proposal
shall have been publicly disclosed, Parent may make such request up to three (3) times every thirty (30) days; or (C) in the case
of a tender offer or exchange offer subject to Regulation 14D under the Exchange Act, the Company’s Board of Directors fails
to recommend, in a Solicitation/Recommendation Statement on Schedule 14D-9,
rejection of such tender
offer or exchange offer within ten (10) business days of the commencement of such tender offer or exchange offer or (ii) there
has occurred a material breach of Section 5.3;
(e) by
either Parent or the Company if the Effective Time shall not have occurred on or prior to the close of business on March 22, 2014
(the “
End Date
”);
provided
,
however
, that a Party shall not be permitted to terminate this
Agreement pursuant to this Section 8.1(e) if the failure of the Effective Time to occur prior to the End Date was primarily due
to the failure of such Party to perform in all material respects any of its obligations under this Agreement;
(f) by
the Company, at any time prior to the earlier to occur of the Acceptance Time or receipt of the Required Company Stockholder Vote,
in order to accept a Superior Offer and enter into a binding written definitive acquisition agreement providing for the consummation
of a transaction constituting a Superior Offer (a “
Specified Agreement
”), if (i) the Company has complied
in all material respects with the requirements of Section 5.3 and Section 6.1(a) and (ii) prior to such termination (or if the
Specified Agreement is executed on a day that is not a business day, the preceding business day), the Company pays the Termination
Fee due to Parent under Section 8.3(b);
(g) by
Parent at any time prior to the Acceptance Time or if an Offer Termination occurs, at any time prior to the Closing, if a breach
of any representation or warranty or failure to perform any covenant or obligation contained in this Agreement on the part of the
Company shall have occurred that (i) if the Offer Termination shall not have occurred, the condition set forth in clause “(b)”
or “(c)” of Annex I would not be satisfied, (ii) if the Offer Termination shall have occurred, would cause a failure
of the conditions in Section 7.2(a), (b), (c), (d) or (e) to exist and in the case of each of the foregoing clauses “(i)”
and “(ii)” cannot be cured by the Company by the End Date, or if capable of being cured, shall not have commenced to
have been cured within fifteen (15) days of the date Parent gives the Company notice of such breach or failure to perform;
provided,
however,
that, Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(g) if either Parent
or Merger Sub is then in material breach of any representations, warranties, covenants or other agreements hereunder such that
the Company has the right to terminate this Agreement pursuant to Section 8.1(h);
(h) by
the Company at any time prior to the Acceptance Time or if an Offer Termination occurs, at any time prior to the Closing, if a
breach of any representation or warranty or failure to perform any covenant or obligation contained in this Agreement on the part
of Parent or Merger Sub shall have occurred that would cause a failure of the conditions in Section 7.3(a), (b) or (c) to exist
and cannot be cured by Parent or Merger Sub by the End Date, or if capable of being cured, shall not have commenced to have been
cured within fifteen (15) days of the date the Company gives Parent notice of such breach or failure to perform;
provided, however
,
that, the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(h) if it is then in material
breach of any representations, warranties, covenants or other agreements hereunder that would result in the conditions to Closing
set forth in Section 7.1 or Section 7.2 not being satisfied;
(i) by
the Company, if the Offer Termination has occurred and (A) the Marketing Period has ended and the conditions set forth in Sections
7.1 and 7.2 (other than those conditions that by their nature are to be satisfied by actions taken at the Closing) have been satisfied,
(B) the Company has irrevocably confirmed by notice to Parent after the end of the Marketing Period that all conditions set forth
in Sections 7.1 and 7.2 have been satisfied as of the date of such notice (other than those conditions that by their nature are
to be satisfied by actions taken at the Closing) and, if there any unsatisfied conditions in Section 7.3 (other than those conditions
that by their nature are to be satisfied by actions taken at the Closing) that it is willing to waive any unsatisfied conditions
in Section 7.3 (other than those conditions that by their nature are to be satisfied by actions taken at the Closing) and (C) the
Merger shall not have been consummated within three (3) business days after the delivery of such notice;
(j) by
Parent or the Company if for any reason other than the occurrence of the Offer Termination, the Offer (as it may have been extended
pursuant to Section 1.1(c)) expires as a result of the non-satisfaction of one or more Offer Conditions, or is terminated
or withdrawn prior to the Acceptance Time, without Merger Sub having accepted for payment any Shares tendered pursuant to the Offer;
provided, however
, that a party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(j)
if the non-satisfaction of any Offer Condition or the termination or withdrawal of the Offer is attributable to the failure of
such party (or any affiliate of such party) to perform any covenant or other obligation under this Agreement.
8.2 Effect
of Termination.
In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof
shall be given to the other Party or Parties, specifying the provision hereof pursuant to which such termination is made, and this
Agreement shall be of no further force or effect and there shall be no liability on the part of Parent, Merger Sub or the Company
or their respective directors, officers and Affiliates following any such termination;
provided, however,
that (a) this
Section 8.2, Section 8.3, Section 9 and the expense reimbursement and indemnification provisions of Section 6.11(b) shall survive
the termination of this Agreement and shall remain in full force and effect, (b) the Confidentiality Agreement shall survive the
termination of this Agreement and shall remain in full force and effect in accordance with its terms; (c) the Guaranty shall survive
the termination of this Agreement and shall remain in full force and effect in accordance with its terms; and (d) subject to the
limitations set forth in Section 8.3, the termination of this Agreement shall not relieve any Party from any liability for willful
and material breach of this Agreement prior to the date of termination and common law fraud. Nothing shall limit or prevent any
Party from exercising any rights or remedies it may have under Section 9.5(b) in lieu of terminating this Agreement pursuant to
Section 8.1.
8.3 Expenses;
Termination Fee.
(a) Except
as set forth in this Section 8.3 and the expense reimbursement and indemnification provisions of Section 6.11(b), all fees and
expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such expenses, whether
or not the Merger is consummated.
(b) In
the event that:
(i) this
Agreement is terminated by the Company pursuant to Section 8.1(f);
(ii) this
Agreement is terminated by Parent pursuant to Section 8.1(d)(i); or
(iii) (x)
this Agreement is terminated pursuant to Section 8.1(b) or Section 8.1(g) (as a result of any willful breach), (y) any Person shall
have publicly disclosed or shall have made known to the Company’s Board of Directors a
bona fide
Acquisition Proposal
after the date hereof and prior to such termination (unless irrevocably, in good faith and, if such Acquisition Proposal is public,
publicly withdrawn prior to such termination), and (z) within twelve (12) months of such termination the Company shall have entered
into a definitive agreement with respect to an Acquisition Proposal or consummated an Acquisition Proposal (provided that for purposes
of this clause (z) the references to “20%” in the definition of “Acquisition Proposal” shall be deemed
to be references to “80%”);
then, in any such event under clause “(i)”, “(ii)”
or “(iii)” of this Section 8.3(b), the Company shall pay to Parent or its designee the applicable Termination Fee (less,
if applicable, the Expense Reimbursement previously paid to Parent by the Company) by wire transfer of same day funds (x) in the
case of Section 8.3(b)(ii), within two (2) business days after such termination, (y) prior to (or if the Specified Agreement is
executed on a day that is not a business day, the next business day) such termination if pursuant to Section 8.1(b)(i) or (z) in
the case of Section 8.3(b)(iii), prior to the consummation of the Acquisition Proposal referred to in subclause (iii)(z) above;
it being understood that in no event shall the Company be required to pay the applicable Termination Fee on more than one occasion.
As used herein, “
Termination Fee
” shall mean a cash amount equal to $24,136,000. In the event that Parent
or its designee shall receive full payment pursuant to this Section 8.3(b), the receipt of the applicable Termination Fee, the
Expense Reimbursement and the expenses referred to in Section 8.3(f) shall be deemed to be liquidated damages for any and all losses
or damages suffered or incurred by Parent, Merger Sub, any of their respective Affiliates or any other Person in connection with
this Agreement (and the termination hereof), the transactions contemplated hereby (and the abandonment thereof) or any matter forming
the basis for such termination, and none of Parent, Merger Sub, any of their respective Affiliates or any other Person shall be
entitled to bring or maintain any claim, action or proceeding against the Company or any of its Affiliates arising out of or in
connection with this Agreement, any of the transactions contemplated hereby or any matters forming the basis for such termination;
provided
,
however
, that nothing in this Section 8.3(b) shall limit the rights of Parent and Merger Sub under Section
9.5(b);
provided, further, however
, nothing in this Section 8.3(b) shall relieve the Company of liability for any willful
and material breach of this Agreement.
(c) If
this Agreement is terminated by:
(i) Parent
pursuant to Section 8.1(e) and: (A) at the time of such termination, each of the Offer Conditions has been satisfied or waived
(other than the condition set forth in clause “(h)” of Annex I due to the termination of this Agreement pursuant to
Section 8.1(e));
(ii) the
Company pursuant to Section 8.1(e) and: (A) at the time of such termination, each of the Offer Conditions has been satisfied or
waived (other than he condition set forth in clause “(h)” of Annex I due to the termination of this Agreement pursuant
to Section 8.1(e)) and (B) the Company shall have given Parent written notice at least five (5) business days prior to termination
stating the Company’s intention to terminate this Agreement pursuant to Section 8.1(e) (and the basis for such termination);
(iii) the
Company pursuant to Section 8.1(i) if the condition set forth in Section 7.2(f) has been satisfied; or
(iv) the
Company pursuant to Section 8.1(j) if Parent did not, at the time of the Company’s termination, have a right to terminate
this Agreement pursuant to Section 8.1(j);
then Parent shall pay to
the Company by wire transfer of same day funds, within two (2) business days after such termination, a non-refundable termination
fee of $48,273,000 (the “
Parent Termination Fee
”), it being understood that in no event shall Parent
be required to pay the Parent Termination Fee on more than one occasion;
provided, that
in the case of the termination of
this Agreement by the Parent pursuant to Section 8.1(c)(i), the Parent Termination Fee shall be paid by Parent at or prior to the
time of such termination. In the event that Company shall receive full payment pursuant to this Section 8.3(c), together with indemnification
pursuant to Section 6.11(b) and reimbursement of any applicable expenses pursuant to Section 8.3(e), the receipt of the Parent
Termination Fee together with such expenses shall be deemed to be the only monetary damages for any and all losses or damages suffered
or incurred by the Company or any other Person in connection with this Agreement, the Financing Letters, or the Guaranty (and the
termination hereof), the transactions contemplated hereby and thereby (and the abandonment or termination thereof) or any matter
forming the basis for such termination, and neither the Company nor any other Person shall be entitled to bring or maintain any
claim, action or proceeding against Parent, Merger Sub or any other Parent Related Party (as defined below) arising out of or in
connection with this Agreement, the Financing Letters, or the Guaranty, any of the transactions contemplated hereby or thereby
(or the abandonment or termination thereof) or any matters forming the basis for such termination.
(d) In
the event this Agreement is terminated by Parent pursuant to Section 8.1(g) as a result of a willful material breach by the Company,
then the Company shall reimburse Parent for its actual and reasonable out-of-pocket expenses in an amount not to exceed $4,505,000
(the “
Expense Reimbursement
”), by wire transfer of immediately available funds on the second (2nd) business
day following the date of such termination of this Agreement;
provided
, that the existence of circumstances which would
require the Termination Fee to become subsequently payable by the Company pursuant to Section 8.3(b) shall not relieve the Company
of its obligations to pay the Expense Reimbursement pursuant to this Section 8.3(d); and
provided
,
further
, that
the payment by the Company of the Expense Reimbursement pursuant to this Section 8.3(d) shall not relieve the Company of any subsequent
obligation to pay the Termination Fee pursuant to Section 8.3(b) except to the extent indicated in Section 8.3(b).
(e) For
the avoidance of doubt, (1) under no circumstances shall the collective monetary damages payable by Parent, Merger Sub or any of
their Affiliates, for breaches under
this Agreement or the Equity
Funding Letter exceed $48,273,000 in the aggregate for all such breaches (and any indemnification pursuant to Section 8.3(f), but
excluding any indemnification pursuant to Section 6.11(b)) (the “
Parent Liability Limitation
”) and (2)
while the Company may pursue specific performance in accordance with Section 9.5(b), under no circumstances shall the Company be
permitted or entitled to receive both specific performance of the type contemplated by Section 9.5(b) and any money damages. In
no event shall the Company and its Subsidiaries and any of their respective former, current or future officers, directors, partners,
stockholders, optionholders, managers, members or Affiliates (collectively, “
Company Related Parties
”)
seek or obtain, nor shall they permit any of their Representatives or any other Person on their behalf to seek or obtain, nor shall
any Person be entitled to seek or obtain, any monetary recovery or award in excess of the Parent Liability Limitation against Parent,
Merger Sub, the Equity Investor, the Financing Sources or any other Available Financing sources or any of their respective former,
current or future general or limited partners, stockholders, financing sources, managers, members, directors, officers or Affiliates
(collectively, the “
Parent Related Parties
”), and in no event shall the Company or any of its Subsidiaries
be entitled to seek or obtain any monetary damages of any kind in excess of the Parent Liability Limitation against the Parent
Related Parties, including consequential, special, indirect or punitive damages for, or with respect to, this Agreement, the Equity
Funding Letter or the Guaranty or the transactions contemplated hereby and thereby (including, any breach by Equity Investor, Parent
or Merger Sub), the termination of this Agreement, the failure to consummate the transactions contemplated by this Agreement or
any claims or actions under applicable Legal Requirements arising out of any such breach, termination or failure.
(f) The
Parties acknowledge that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated by
this Agreement and that, without these agreements, the Parties would not enter into this Agreement; accordingly, if the Company
or Parent, as the case may be, fails to timely pay any amount due pursuant to this Section 8.3, and, in order to obtain the payment,
Parent or the Company, as the case may be, commences a Legal Proceeding which results in a judgment against the other Party, with
respect to Parent or Merger Sub, or Parties, with respect to the Company, for the payment set forth in this Section 8.3, such paying
Party shall pay the other Party or Parties, as applicable, its reasonable and documented costs and expenses (including reasonable
and documented attorneys’ fees) in connection with such suit, together with interest on such amount at the prime rate as
published in the Wall Street Journal in effect on the date such payment was required to be made through the date such payment was
actually received. Except as provided in Section 8.3, and subject to Section 9.5(b), as applicable, payment of the fees and expenses
described in this Section 8.3 shall constitute the sole and exclusive remedy of the Parties in connection with any termination
of this Agreement.
(g) Notwithstanding
anything to the contrary in this Agreement, in no event shall any Non-Recourse Parent Party (as defined in the Equity Funding Letter,
which excludes, for the avoidance of doubt, Equity Investor, Parent and Merger Sub) have any liability for monetary damages to
the Company or its Subsidiaries relating to or arising out of this Agreement or the transactions contemplated hereby, other than
Equity Investor’s obligations under the Guaranty and the Equity Funding Letter and other than the obligations of Parent and
Merger Sub to the extent expressly provided herein. In no event shall the Company seek or obtain, nor shall they permit any of
its Representatives to seek or obtain, nor shall any Person be entitled to seek or obtain, any monetary recovery or monetary award
against any Non-Recourse Parent Party
with respect to, this Agreement,
Equity Funding Letter or the Guaranty or the transactions contemplated hereby and thereby (including, any breach by Equity Investor,
Parent or Merger Sub), the termination of this Agreement, the failure to consummate the Transactions or any claims or actions under
applicable Legal Requirements arising out of any such breach, termination or failure, other than from Parent or Merger Sub to the
extent expressly provided for in this Agreement, the Equity Investor to the extent expressly provided for in the Guaranty and the
Equity Funding Letter.
SECTION 9. Miscellaneous
Provisions
9.1 Amendment.
Prior to the Effective Time this Agreement may be amended with the approval of the respective
Boards of Directors of the Company and Parent at any time (whether before or after the adoption of this Agreement by the Company’s
stockholders);
provided, however
, that after any such adoption of this Agreement by the Company’s stockholders, no
amendment shall be made which by applicable Legal Requirements requires further approval of the stockholders of the Company without
the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto. Notwithstanding anything to the contrary, Section 9.1 and Section 9.5 (and the related definitions
in this Agreement used therein, but only with respect to their use in such Sections as they relate specifically to the Financing
Sources) shall not be amended, modified, supplemented or waived in a manner that is adverse in any material respect to any Financing
Source without the prior written consent of the Administrative Agent (as defined in the Debt Commitment Letter) for such Financing
Source.
9.2 Waiver.
No failure on the part of any Party to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of any Party in exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No Party shall
be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such Party; and any such waiver shall not be applicable or have any effect except in the specific instance
in which it is given.
9.3 No
Survival of Representations and Warranties.
None of the representations and warranties contained
in this Agreement, the Company Disclosure Schedule or in any certificate or schedule or other document delivered pursuant to this
Agreement shall survive the Merger.
9.4 Entire
Agreement; Counterparts.
This Agreement and the other agreements and schedules referred to herein
constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among or between
any of the Parties, with respect to the subject matter hereof and thereof;
provided, however
, that the Confidentiality Agreement
shall not be superseded and shall remain in full force and effect;
provided, further, that
, if the Effective Time occurs,
the Confidentiality Agreement shall automatically terminate and be of no further force and effect. This Agreement may be executed
in several counterparts,
each
of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed
Agreement (in counterparts or otherwise) by PDF shall be sufficient to bind the parties to the terms and conditions of this Agreement.
9.5 Applicable
Legal Requirements; Jurisdiction; Specific Performance; Remedies.
(a) This
Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof. Subject to Section 9.5(c), in any action or proceeding
arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement: (i) each of the Parties
irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the Chancery Court of the State
of Delaware and any state appellate court therefrom or, if such court lacks subject matter jurisdiction, the United States District
Court sitting in New Castle County in the State of Delaware, (it being agreed that the consents to jurisdiction and venue set forth
in this Section 9.5(a) shall not constitute general consents to service of process in the State of Delaware and shall have no effect
for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the Parties
hereto); and (ii) each of the Parties irrevocably consents to service of process by first class certified mail, return receipt
requested, postage prepaid, to the address at which such Party is to receive notice in accordance with Section 9.8. The Parties
hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by applicable Legal Requirements;
provided
,
however
, that
nothing in the foregoing shall restrict any Party’s rights to seek any post-judgment relief regarding, or any appeal from,
such final trial court judgment. Notwithstanding anything else in this Section 9.5 or elsewhere in this Agreement, the Parties
hereto agree that New York State or United States federal courts sitting in the borough of Manhattan, New York City (and any New
York State or United States Federal court from which appeal therefrom may validly be taken) shall have exclusive jurisdiction over
the Parties and their Affiliates in and over any such action, arbitration, claim or proceeding brought against any Financing Sources
under the Debt Commitment Letter (including each Financing Source) or any of their respective affiliates in connection with this
Agreement, any Debt Commitment Letter or the transactions contemplated hereby or thereby, or the failure of the transactions set
forth in the Debt Commitment Letter to be consummated, and nothing in this Section 9.5 or elsewhere in this Agreement shall be
construed to provide otherwise, and each of the Parties hereto agree that it will not, and it will not permit any of its Affiliates
to, bring or support anyone else in bringing any such action, arbitration, claim or proceeding in any forum other than New York
State or United States federal courts sitting in the borough of Manhattan, New York City (and any New York State or United States
Federal court from which appeal therefrom may validly be taken).
(b) The
Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur
in the event that the Parties hereto do not perform their obligations under the provisions of this Agreement in accordance with
its specified terms or otherwise breach such provisions. The Parties acknowledge and agree that (a) the Parties shall be entitled
to an injunction or injunctions, specific performance, or other equitable relief, to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in the courts described in Section 9.5(a) without proof of damages or
otherwise, this being in
addition to any other remedy to which they are entitled under this Agreement, (b) the provisions set forth in Section 8.3 (i) are
not intended to and do not adequately compensate for the harm that would result from a breach of this Agreement and (ii) shall
not be construed to diminish or otherwise impair in any respect any Party’s right to specific enforcement and (b) the right
of specific performance is an integral part of the transactions contemplated by this Agreement and without that right, neither
the Company nor Parent would have entered into this Agreement. Notwithstanding the foregoing, it is explicitly agreed that the
Company shall have the right to an injunction, specific performance or other equitable remedies in connection with enforcing Parent’s
obligation to cause the Equity Financing to be funded to fund the Merger (including to cause Parent to enforce the obligations
of the Equity Investor under the Equity Funding Letter in order to cause the Equity Financing to be timely completed). Each of
the Parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief
on the basis that the other Parties hereto have an adequate remedy at law or an award of specific performance is not an appropriate
remedy for any reason at law or equity. The Parties hereto acknowledge and agree that any Party seeking an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with
this Section 9.5(b) shall not be required to provide any bond or other security in connection with any such order or injunction.
(c) EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM INVOLVING DEBT FINANCING SOURCES UNDER THE DEBT FINANCING LETTER (AND THEIR RESPECTIVE AFFILIATES)).
9.6 Assignability.
This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit
of, the Parties hereto and their respective successors and permitted assigns;
provided, however,
that neither this Agreement
nor any of the rights hereunder may be assigned without the prior written consent of the other Parties hereto, and any attempted
assignment of this Agreement or any of such rights without such consent shall be void and of no effect;
provided
,
further
,
however
, that Parent or Merger Sub may (i) assign this Agreement to any of their Affiliates (provided that such assignment
shall not (A) affect the obligations of the Equity Investor under the Equity Funding Letter or the Guaranty or (B) impede or delay
the consummation of the Transactions or otherwise impede the rights of the stockholders of the Company under this Agreement) and/or
(ii) pledge its rights hereunder as security to its Financing Source or any other Available Financing source; provided that no
such assignment or pledge permitted pursuant to this Section 9.6 shall relieve Parent of its obligations hereunder.
9.7 No
Third Party Beneficiaries.
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any Person (other than the Parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement; except for: (i) if the Acceptance Time or Effective Time occurs (A) the right of the Company’s stockholders
to receive the Offer Price or Merger Consideration, as applicable and (B) the right of the holders of Company Options to receive
the Merger Consideration pursuant to Section 2.8; (ii) the provisions set forth in Section 6.5 of this Agreement, (iii) the rights
of persons who are explicitly
provided
to be third party beneficiaries of the Guaranty and the Equity Funding Letter to the extent of the rights set forth therein, and
(iv) the rights of Financing Sources, other Available Financing sources and sources of debt financing for the Transactions set
forth in Section 9.1, Section 9.5, this Section 9.7 and Section 9.11.
9.8 Notices.
Any notice or other communication required or permitted to be delivered to any Party
under this Agreement shall be in writing and shall be deemed properly delivered, given and received (a) upon receipt when delivered
by hand, (b) two (2) business days after sent by registered mail or by courier or express delivery service, (c) if sent by email
transmission prior to 6:00 p.m. recipient’s local time, upon transmission when receipt is confirmed, or (d) if sent by email
transmission after 6:00 p.m. recipient’s local time and receipt is confirmed, the business day following the date of transmission;
provided
that in each case the notice or other communication is sent to the physical address or email address set forth
beneath the name of such Party below (or to such other physical address or email address as such Party shall have specified in
a written notice given to the other Parties hereto):
|
if to Parent or Merger Sub (or following the Effective Time, the Company):
|
|
|
|
c/o Vista Equity Partners
|
|
401 Congress Avenue
|
|
Suite 3100
|
|
Austin, TX 78701
|
|
Attention:
|
Brian N. Sheth
|
|
|
Michael Fosnaugh
|
|
Email:
|
BSheth@vistaequitypartners.com
|
|
|
MFosnaugh@vistaequitypartners.com
|
|
|
|
|
with a copy to (which shall not constitute notice):
|
|
|
|
|
Kirkland & Ellis LLP
|
|
601 Lexington Avenue
|
|
New York, NY 10022
|
|
Attention:
|
David Breach
|
|
|
Daniel Wolf
|
|
Email:
|
David.Breach@kirkland.com
|
|
|
Daniel.Wolf@kirkland.com
|
|
|
|
|
if to the Company (prior to the Effective Time):
|
|
|
|
Greenway Medical Technologies, Inc.
|
|
100 Greenway Boulevard
|
|
Carrollton, Georgia 30117
|
|
Attention:
|
Wyche T. Green, III
|
|
Email:
|
TeeGreen@greenwaymedical.com
|
|
|
|
|
with a copy to (which shall not constitute notice):
|
|
Paul Hastings LLP
|
|
1170 Peachtree Street, N.E. Suite 100
|
|
Atlanta, GA 30309
|
|
Attention:
|
Reinaldo Pascual
|
|
Email:
|
reypascual@paulhastings.com
|
9.9 Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the
validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If a final judgment
of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the Parties
hereto agree that the court making such determination shall have the power to limit such term or provision, to delete specific
words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable
as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the Parties hereto agree
to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to
the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.
9.10 Obligation
of Parent and the Company.
The Company and Parent, as applicable, shall each ensure that each
of its Subsidiaries duly performs, satisfies and discharges on a timely basis each of the covenants, obligations and liabilities
applicable to its Subsidiaries under this Agreement, and the Company and Parent, as applicable, shall be jointly and severally
liable with its respective Subsidiaries for the due and timely performance and satisfaction of each of said covenants, obligations
and liabilities.
9.11 No
Recourse.
Notwithstanding anything to the contrary contained herein, the Company (on behalf of
itself, and any of its Affiliates, directors, officers, employees, agents and Representatives) hereby waives any rights or claims
against any Financing Source or any other Available Financing source in connection with this Agreement, the Debt Commitment Letter,
the Debt Financing, the Available Financing, or in respect of any other document or theory of law or equity (whether in tort, contract
or otherwise) or in respect of any oral or written representations made or alleged to be made in connection herewith or therewith
and the Company (on behalf of itself and any of its Affiliates, directors, officers, employees, agents and Representatives) agrees
not to commence any action or proceeding against any Financing Source or any other Available Financing source in connection with
this Agreement, the Debt Commitment Letter, the Debt Financing, the Available Financing, or in respect of any other document or
theory of law or equity and agrees to cause any such action or proceeding asserted by the Company (on behalf of itself and any
of its Affiliates, directors, officers, employees, agents and Representatives) in connection with this Agreement, the Debt Commitment
Letter, the Debt Financing, the Available Financing or in respect of any other document or theory of law or equity against any
Financing Source or any other Available Financing source to be dismissed or otherwise terminated. In furtherance and not in limitation
of the foregoing waiver, it is acknowledged and agreed that no Financing Source nor or any other Available Financing source shall
have any liability for any claims or damages to the Company in connection with this Agreement, the Debt Commitment
Letter,
the Debt Financing, the Available Financing or the transactions contemplated hereby or thereby.
9.12 Construction.
(a) For
purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include masculine and feminine genders.
(b) The
parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party
shall not be applied in the construction or interpretation of this Agreement.
(c) As
used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed
to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”
(d) Except
as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits,” “Annexes”
and “Schedules” are intended to refer to Sections of this Agreement and Exhibits, Annexes or Schedules to this Agreement.
(e) The
bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.
[Signature page follows]
In
Witness Whereof
, the parties have caused this Agreement to be executed as of the date first above written.
|
Greenway Medical Technologies
, Inc.
|
|
|
|
|
|
By:
|
|
/s/ Wyche T. Green, III
|
|
Name:
|
|
Wyche T. Green, III
|
|
Title:
|
|
President and CEO
|
|
|
|
|
|
VCG Holdings, LLC
|
|
|
|
|
|
By:
|
|
/s/ James P. Hickey
|
|
Name:
|
|
James P. Hickey
|
|
Title:
|
|
President
|
|
|
|
|
|
Crestview Acquisition Corp.
|
|
|
|
|
|
By:
|
|
/s/ James P. Hickey
|
|
Name:
|
|
James P. Hickey
|
|
Title:
|
|
President
|
Exhibit
A
Certain
Definitions
For purposes of the Agreement
(including this
Exhibit A
):
1999 Plan.
“
1999
Plan
” means the Company's 1999 Stock Option Plan.
2004 Plan. “
2004
Plan
”
means the Company's 2004 Stock Plan.
2011 Plan.
“
2011
Plan
” means the Company’s 2011 Stock Plan.
Acceleration Time.
“
Acceleration
Time
” shall mean the earlier to occur of the Acceptance Time and the Effective Time.
Acceptable Confidentiality
Agreement.
“
Acceptable Confidentiality Agreement
” is defined in Section 5.3(a) of the Agreement.
Acceptance Time.
“
Acceptance
Time
” is defined in Section 1.1(f) of the Agreement.
Acquired Corporation
Product.
“
Acquired Corporation Product
” shall mean any product or service licensed or sold,
or from which any licensing, maintenance, subscription or other revenue is derived or intended to be derived, by any of the Acquired
Corporations on or after the date hereof as well as any product or service in development on or after the date hereof.
Acquired Corporation
Returns.
“
Acquired Corporation Returns
” is defined in Section 3.14(a) of the Agreement.
Acquired Corporations.
“
Acquired Corporations
” shall mean the Company and each of its Subsidiaries, collectively.
Acquisition Proposal
.
“
Acquisition Proposal
” shall mean any proposal or offer from any Person (other than Parent and its Affiliates)
or “group”, within the meaning of Section 23(d) of the Exchange Act, relating to, in a single transaction or series
of related transactions, any (A) acquisition or license of assets of the Company and its Subsidiaries equal to 20% or more of the
Company’s consolidated assets or to which 20% or more of the Company’s revenues or earnings on a consolidated basis
are attributable, (B) issuance or acquisition of 20% or more of the outstanding Company Common Stock, (C) recapitalization, tender
offer or exchange offer that if consummated would result in any Person or group beneficially owning 20% or more of the outstanding
Company Common Stock or (D) merger, consolidation, amalgamation, share exchange, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company that if consummated would result in any Person or group beneficially owning
20% or more of the outstanding Company Common Stock, in each case other than the Transactions.
Affiliate.
“
Affiliate
”
shall mean, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For this purpose, “control” (including, with its correlative meanings, “controlled
by” and “under common
control with”) shall
mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person,
whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
Agreement.
“
Agreement
”
shall mean the Agreement and Plan of Merger to which this
Exhibit A
is attached, as it may be amended from time to time.
Antitrust Laws.
“
Antitrust
Laws
” shall mean the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission
Act, as amended, all applicable foreign anti-trust laws and all other applicable Legal Requirements issued by a Governmental Body
that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint
of trade or lessening of competition.
Available Financing.
“
Available Financing
” shall mean any permitted replacement, amended, supplemented, restated, amended
and restated, modified, or alternative financing, including, without limitation, the Debt Financing; it being understood and agreed
that for purposes of Section 6.11, for the avoidance of doubt, Available Financing shall not include any offering of debt securities.
Available Financing
Letter.
“
Available Financing Letter
” shall mean any commitment letter (together with all exhibits
and annexes thereto) and any Redacted Fee Letter related to any Available Financing.
Balance Sheet.
“
Balance
Sheet
” is defined in Section 3.6 of the Agreement.
Book-Entry Shares.
“
Book-Entry
Shares
”
shall mean non-certificated Shares represented by book-entry.
business day.
“
business
day
” shall mean means a day except a Saturday, a Sunday or other day on which banks in the City of New York are authorized
or required by Legal Requirements to be closed.
Business Systems. “
Business
Systems
”
is defined in Section 3.8(g) of the Agreement.
Certificates.
“
Certificates
”
is defined in Section 2.6(b) of the Agreement.
C.F.R. “
C.F.R.
”
shall mean the Code of Federal Regulations, as amended.
Change in Circumstance
.
“
Change in Circumstance
” shall mean any material event or development or material change in circumstances
with respect to the Company that was (i) neither known to the Company’s Board of Directors nor reasonably foreseeable as
of or prior to the date hereof nor actually known by the chief executive officer or chief financial officer of the Company nor
reasonably foreseeable as of or prior to the date hereof and (ii) does not relate to (A) any Acquisition Proposal, (B) any events,
changes or circumstances relating to Equity Investor, Parent, Merger Sub or any of their Affiliates, (C) clearance of the Merger
under the Antitrust Laws or (D) the mere fact the Company meets or exceeds any internal or published projections, forecasts, estimates
or predictions of revenue, earnings or other financial or operating metrics for any period ending on or after the date hereof,
or changes after the date of
this Agreement in the market
price or trading volume of the Company Common Stock or the credit rating of the Company (however, the underlying reasons for such
events may constitute such material event, development or change in circumstances).
Change of Control Payment
.
“
Change of Control Payment
” is defined in Section 3.9(a)(vii) of the Agreement.
Closing
. “
Closing
”
is defined in Section 2.3(a) of the Agreement.
Closing Date
. “
Closing
Date
” is defined in Section 2.3(a) of the Agreement.
Co-Borrower. “
Co-Borrower
”
shall mean Vitera Healthcare Solutions, LLC.
Code.
“
Code
”
shall mean the Internal Revenue Code of 1986, as amended and the rules and regulations promulgated thereunder.
Company
. “
Company
”
is defined in the preamble to the Agreement.
Company Adverse Change
Recommendation.
“
Company Adverse Change Recommendation
” is defined in Section 6.1(a) of the Agreement.
Company Associate.
“
Company
Associate
”
shall mean each officer or other employee, or individual who is an independent contractor,
consultant or director, of or to any of the Acquired Corporations.
Company Board Recommendation.
“
Company Board Recommendation
” is defined in Recital C of the Agreement.
Company Common Stock
.
“
Company Common Stock
” shall mean the common stock, $0.0001 par value per share, of the Company.
Company Contract.
“
Company
Contract
”
shall mean any Contract to which any of the Acquired Corporations is a party.
Company Disclosure Documents.
“
Company Disclosure Documents
” is defined in Section 3.4(g)(i) of the Agreement.
Company Disclosure Schedule
.
“
Company Disclosure Schedule
” shall mean the disclosure schedule that has been prepared by the Company
in accordance with the requirements of the Agreement and that has been delivered by the Company to Parent on the date of the Agreement.
Company Employee Agreement.
“
Company Employee Agreement
”
shall mean each management, employment, severance, retention,
transaction bonus, change in control, consulting, relocation, repatriation or expatriation agreement or other Contract between:
(a) any of the Acquired Corporations; and (b) any Company Associate (other than any Company Associate that is part time or
paid on an hourly basis), other than any such Contract that is terminable “at will” (or following a notice period imposed
by applicable Legal Requirements) without any obligation
on
the part of any Acquired Corporation to make any severance, termination, change in control or similar payment or to provide any
benefit.
Company Equity Plans.
“
Company Equity Plans
” shall mean the 1999 Plan, 2004 Plan and 2011 Plan.
Company IP.
“
Company
IP
”
shall mean (a) all Intellectual Property Rights that are owned or purported to be owned by the
Acquired Corporations, (b) all Intellectual Property Rights licensed by the Acquired Corporations and (c) all other Intellectual
Property Rights that are used by the Acquired Corporation in the operation of the Company’s business as currently conducted.
Company Lease.
“
Company
Lease
”
shall mean any Company Contract pursuant to which the Acquired Corporations lease or sublease
Leased Real Property from another Person.
Company Manufacturer.
“
Company Manufacturer
”
shall mean any third party that is a supplier, manufacturer or contractor for the
Company with respect to the manufacture of the Company products or services or product components for the Company.
Company Options.
“
Company Options
” shall mean all options to purchase Shares (whether granted by the Company pursuant
to the Company Equity Plans, assumed by the Company in connection with any merger, acquisition or similar transaction or otherwise
issued or granted).
Company Preferred Stock.
“
Company Preferred Stock
” shall mean the preferred stock, no par value, of the Company.
Company Related Parties.
“
Company Related Parties
”
is defined in Section 8.3(e) of the Agreement.
Company SEC Documents.
“
Company SEC Documents
” is defined in Section 3.4(a) of the Agreement.
Company Stockholders’
Meeting.
“
Company Stockholders’ Meeting
”
is defined in Section 6.1(d) of the Agreement.
Confidentiality Agreement
.
“
Confidentiality Agreement
”
is defined in Section 5.1 of the Agreement.
Consent
. “
Consent
”
shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).
Continuing Directors.
“
Continuing Directors
” is defined in Section 1.3(b) of the Agreement.
Continuing Employees
.
“
Continuing Employees
”
is defined in Section 6.4 of the Agreement.
Contract
. “
Contract
”
shall mean any written, oral or other agreement, contract, subcontract, lease, understanding, instrument, bond, debenture, note,
option, warrant, warranty, purchase order, license, sublicense, insurance policy, benefit plan or legally binding commitment or
undertaking of any nature (except, in each case, ordinary course of business purchase orders).
Debt Commitment Letter.
“
Debt Commitment Letter
” is defined in Section 4.9(a) of the Agreement.
Debt Financing.
“
Debt
Financing
” is defined in Section 4.9(a) of the Agreement.
Determination Notice.
“
Determination Notice
” is defined in Section 6.1(b)(i) of the Agreement.
DGCL.
“
DGCL
”
shall mean the Delaware General Corporation Law, as amended.
Dissenting Shares.
“
Dissenting
Shares
” is defined in Section 2.7 of the Agreement.
DOJ
. “
DOJ
”
shall mean the U.S. Department of Justice.
Effective Time
.
“
Effective Time
” is defined in Section 2.3(b) of the Agreement.
EHR. “
EHR
”
shall mean the Company’s Greenway PrimeSUITE electronic health record.
Employee Plan.
“
Employee
Plan
”
shall mean any salary, bonus, vacation, deferred compensation, incentive compensation, stock
purchase, stock option, severance pay, termination pay, death and disability benefits, hospitalization, medical, life or other
insurance, flexible benefits, supplemental unemployment benefits, profit-sharing, pension or retirement plan, policy, program,
agreement or arrangement and each other employee benefit plan, or arrangement sponsored, maintained, contributed to or required
to be contributed to by any of the Acquired Corporations for the benefit of any current or former employee of any of the Acquired
Corporations or with respect to which any of the Acquired Corporations have any liability.
Encumbrance
. “
Encumbrance
”
shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, interference, option, right of first
refusal, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of
any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived
from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other
attribute of ownership of any asset); provided, however, that non-exclusive licenses of Intellectual Property Rights granted in
the ordinary course of business shall not be Encumbrances hereunder.
End Date.
“
End
Date
” is defined in Section 8.1(e) of the Agreement.
Entity.
“
Entity
”
shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint
stock company), firm, society or other enterprise, association, organization or entity.
Environmental Law.
“
Environmental Law
” shall mean any federal, state, local or foreign Legal Requirement relating
to pollution or protection of human health, worker health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata), including any law or regulation relating to emissions, discharges, releases or threatened releases
of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
Equity Funding Letter.
“
Equity Funding Letter
” is defined in Section 4.9(a) of the Agreement.
Equity Financing.
“
Equity
Financing
” is defined in Section 4.9(a) of the Agreement.
Equity Investor.
“
Equity
Investor
” is defined in Recital F to the Agreement.
ERISA.
“
ERISA
”
shall mean the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act
. “
Exchange
Act
” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Expense Reimbursement.
“
Expense Reimbursement
”
is defined in Section 8.3(d) of the Agreement.
Expiration Date.
“
Expiration
Date
” is defined in Section 1.1(c) of the Agreement.
Extension Deadline.
“
Extension Deadline
” is defined in Section 1.1(c) of the Agreement.
FDA. “
FDA
”
shall mean the U.S. Food and Drug Administration.
FDA Permits. “
FDA
Permits
”
shall mean all applicable certificates, authorizations, permits, registrations, clearances, approvals, and
licenses issued, and exemptions (including 510(k) premarket notification and investigational device exemptions) authorized by the
FDA and comparable state or foreign Governmental Bodies having equivalent authority over medical devices necessary to conduct its
business and to research, develop, manufacture, process, produce, sell, market, distribute, transport, import and export its products.
FDA Proceedings. “
FDA
Proceedings
”
shall mean any action, suit, charge, complaint, proceeding (including any civil, criminal, judicial,
administrative or investigative proceeding including any such proceeding related to conduct for which debarment is mandated or
permitted under Section 335(a) of Title 21 of the FDCA ), FDA inspection, FDA warning letter, FDA untitled letter, FDA notice of
violation letter, FDA Form 483, inspectional observations, or any other written communication from the FDA or any state or foreign
Government Body having equivalent authority over medical devices..
FDA Requirements. “
FDA
Requirements
”
shall mean all applicable Legal Requirements (including, but not limited to, Section 321 et. seq.
of Title 21 of the FDCA) administered or issued by the FDA or any applicable, comparable state or foreign Governmental
Body having equivalent authority
over medical devices, including requirements related to premarket clearance, exemption from premarket clearance, premarket approval,
establishment registration and product listing, medical device reporting, corrections and removals, recalls, import and export
requirements, product labeling, promotional materials and advertising, supplier qualification, purchasing controls, product testing,
quality system regulation, and good manufacturing practices.
FDCA. “
FDCA
”
shall mean the Federal Food, Drug, and Cosmetics Act, as amended.
Financing.
“
Financing
”
is defined in Section 4.9(a) of the Agreement.
Financing Letters.
“
Financing
Letters
” is defined in Section 4.9(a) of the Agreement.
Financing Source.
“
Financing
Source
”
means the lenders party to and the other financial institutions committing to provide extensions of
credit under the Debt Commitment Letter and their respective former, current or future general or limited partners, stockholders,
managers, members, directors, officers or Affiliates.
FTC
. “
FTC
”
shall mean the U.S. Federal Trade Commission.
GAAP.
“
GAAP
”
is defined in Section 3.4(b) of the Agreement.
Governmental Authorization
.
“
Governmental Authorization
” shall mean any: (a) permit, license, certificate, franchise, permission,
variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under
the authority of any Governmental Body or pursuant to any Legal Requirement; (b) right under any Contract with any Governmental
Body; or (c) FDA Permit.
Governmental Body
.
“
Governmental Body
” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental
or quasi-governmental authority of any nature including any governmental division, department, agency (including the FDA), commission,
instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court, arbitrator or
other tribunal.
Group Health Plan.
“
Group
Health Plan
” is defined in Section 3.27(a) of the Agreement.
Guaranty. “
Guaranty
”
is defined in Recital G to the Agreement.
Hazardous Materials.
“
Hazardous Materials
”
shall mean any waste, material, or substance that is listed,
regulated or defined under any Environmental Law and includes any pollutant, chemical substance, hazardous substance, hazardous
waste, special waste, solid waste, asbestos, mold, radioactive material, polychlorinated biphenyls, petroleum or petroleum-derived
substance or waste.
Healthcare Proceedings.
“
Healthcare Proceedings
”
shall mean any (a) corporate integrity agreement, deferred prosecution agreement,
consent decree, settlement agreement or
similar agreement or order
mandating or prohibiting future or past activities; (b) investigation by the Department of Justice, the Office of the Inspector
General of the U.S. Department of Health and Human Services, the Centers for Medicare and Medicaid Services, any state Attorney
General, state Medicaid Agency,
qui tam relator
, for promotional, billing, coding, reimbursement or other fraud and abuse
or related issues; or (c) Legal Proceeding which has resulted in, or the result of which could include suspension or debarment
from contracting with the federal government.
HIPAA
. “
HIPAA
”
shall mean collectively the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, as amended
and supplemented by the Health Information Technology for Economic and Clinical Health Act (commonly referred to as “
HITECH
”)
of the American Recovery and Reinvestment Act of 2009 (commonly referred to as “
ARRA
”), Pub. Law No.
111-5, and its implementing regulations as each is amended from time to time.
HSR Act
. “
HSR
Act
” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Indebtedness.
“
Indebtedness
”
shall mean (i) any indebtedness for borrowed money (including the issuance of any debt security) to any Person other than the Company
or any of its Subsidiaries and any capital leases, (ii) any obligations evidenced by notes, bonds, debentures or similar Contracts
to any Person other than the Company or any of its Subsidiaries, (iii) any obligations in respect of letters of credit and bankers’
acceptances (other than letters of credit used as security for leases), or (iv) any guaranty of any such obligations described
in clauses “(i)” through “(iii)” of any Person other than the Company or any of its Subsidiaries (other
than, in any case, accounts payable to trade creditors and accrued expenses, in each case arising in the ordinary course of business).
Indemnified Persons.
“
Indemnified Persons
”
is defined in Section 6.5(a) of the Agreement.
Indemnifying Parties.
“
Indemnifying Parties
”
is defined in Section 6.5(b) of the Agreement.
Information Privacy
and Security Laws.
“
Information Privacy and Security Laws
” shall mean all laws, statutes, orders,
rules, regulations, and administrative rulings or judgments concerning the collection, maintenance, creation, transmission, use,
analysis, disclosure, storage, and/or security of Personal Information, including HIPAA, the Gramm-Leach-Bliley Act, the Fair Credit
Reporting Act, the Fair and Accurate Credit Transaction Act, the Federal Trade Commission Act, the Privacy Act of 1974, the CAN-SPAM
Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Children’s
Online Privacy Protection Act, state social security number protection laws, state data breach notification laws, and state consumer
protection laws. “Information Privacy and Security Laws” shall also include the Payment Card Industry Data Security
Standard.
Information Statement.
“
Information Statement
” is defined in Section 3.22 of the Agreement.
Initial Expiration Date.
“
Initial Expiration Date
” is defined in Section 1.1(c) of the Agreement.
Intellectual Property
Rights
.
“
Intellectual Property Rights
” shall mean and includes all past, present, and future
rights of the following types, which may exist or be created under the laws of any jurisdiction in the world: (a) rights associated
with works of authorship, including exclusive exploitation rights, copyrights, moral rights, software, databases, and mask works;
(b) trademarks, service marks, trade dress, logos, trade names and other source identifiers, domain names and URLs and similar
rights and any goodwill associated therewith; (c) rights associated with trade secrets, know how, inventions, invention disclosures,
methods, processes, protocols, specifications, techniques and other forms of technology; (d) patents and industrial property rights;
(e) other proprietary rights in intellectual property of every kind and nature; (f) rights of privacy and publicity; and (g) all
registrations, renewals, extensions, combinations, statutory invention registrations, provisionals, continuations, continuations-in-part,
provisionals, divisions, or reissues of, and applications for, any of the rights referred to in clauses “(a)” through
“(f)” above (whether or not in tangible form and including all tangible embodiments of any of the foregoing, such as
samples, studies and summaries), along with all rights to prosecute and perfect the same through administrative prosecution, registration,
recordation or other administrative proceeding, and all causes of action and rights to sue or seek other remedies arising from
or relating to the foregoing.
IRS.
“
IRS
”
shall mean the Internal Revenue Service.
knowledge.
“
knowledge
”
with respect to an Entity shall mean with respect to any matter in question the actual knowledge, after due inquiry, of such Entity’s
executive officers and, with respect to the Company, the additional Persons listed on Part A of the Company Disclosure Schedule.
Leased Real Property.
“
Leased Real Property
”
is defined in Section 3.7(b) of the Agreement.
Legal Proceeding
.
“
Legal Proceeding
” shall mean any action, suit, charge, complaint, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body
or any arbitrator or arbitration panel.
Legal Requirement
.
“
Legal Requirement
” shall mean any federal, state, local, municipal, foreign or other law, statute, constitution,
principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority
of NYSE).
Lenders. “
Lenders
”
is defined in Section 4.9(a) of the Agreement.
Marketing Period
.
“
Marketing Period
” shall mean a period of fifteen (15) consecutive “business days” (such
term shall be construed to have the same meaning as in the Debt Commitment Letter) after the date of this Agreement commencing
on the first day on which
Parent shall have received
the Required Information the Company is required to provide pursuant to Section 6.11;
provided
that (a) no day during the
period from November 27 - 28, 2013 shall be considered a business day for purposes of determining the Marketing Period but in any
event no day during such period shall restart the consecutive business day time period, and (b) if the Marketing Period were to
commence but would not be completed in accordance with its terms on or prior to December 18, 2013, then the Marketing Period shall
not commence prior to January 6, 2014. Notwithstanding the foregoing, the “Marketing Period” shall not commence and
shall be deemed not to have commenced (A) prior to the commencement of the Offer or (B) if, on or prior to the completion of such
fifteen (15) consecutive business day period, the Company shall have publicly announced any intention to restate any material financial
information included in the Required Information or that any such restatement is under consideration, in which case the Marketing
Period shall be deemed not to commence unless and until such restatement has been completed and the applicable Required Information
has been amended or the Company has announced that it has concluded that no restatement shall be required, and Parent shall have
the Required Information on the first day, throughout and on the last day of during such new fifteen (15) consecutive business
day period.
Material Adverse Effect
.
An event, occurrence, violation, inaccuracy, circumstance or other matter will be deemed to have a “
Material Adverse
Effect
” on the Acquired Corporations if such event, violation, inaccuracy, circumstance or other matter (whether
or not any such matter, considered together with all other matters, would constitute a breach to the representations, warranties,
covenants or agreements of the Company set forth in the Agreement) had or would reasonably be expected to have, individually or
in the aggregate, a material adverse effect on (a) the business, assets, financial condition or results of operations of the Acquired
Corporations taken as a whole or (b) the ability of the Company to consummate the Transactions in a timely manner;
provided,
however
, that none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and
none of the following shall be taken into account in determining whether there is, or would reasonably likely to be, a Material
Adverse Effect on the Acquired Corporations for purposes of clause (a) above: (i) any change in the market price or trading volume
of the Company’s stock; (ii) any event, violation, inaccuracy, circumstance or other matter directly resulting from the announcement
or pendency of the Transactions (other than for purposes of any representation or warranty contained in Section 3.22 but subject
to disclosures in Part 3.22 of the Company Disclosure Schedule), including to the extent so resulting in, any reduction in billings
or revenue, any disruption in (or loss of) supplier, distributor, partner, reseller or similar relationships, loss of any customer
or any loss of employees; (iii) any event, circumstance, change or effect in the industries in which the Acquired Corporations
operate or in the economy generally or other general business, financial or market conditions, except to the extent that the Acquired
Corporations are adversely affected disproportionately relative to the other participants in such industries or the economy generally,
as applicable; (iv) any event, circumstance, change or effect arising directly or indirectly from or otherwise relating to fluctuations
in the value of any currency; (v) any event, circumstance, change or effect arising directly or indirectly from or otherwise relating
to any act of terrorism, war, national or international calamity or any other similar event, except to the extent that such event,
circumstance, change or effect disproportionately affects the Acquired Corporations relative to other participants in the industries
in which the Acquired Corporations operate or the economy generally, as applicable; (vi) the failure of the Acquired Corporations
to meet internal or analysts’ expectations or projections or the results of operations of the Acquired Corporations;
(vii) any adverse effect
arising directly from or otherwise directly relating to any action taken by the Acquired Corporations at the written direction
of Parent or any action specifically required to be taken by the Acquired Corporations, or the failure of the Acquired Corporations
to take any action that the Acquired Corporations are specifically prohibited by the terms of this Agreement from taking to the
extent Parent fails to give its consent thereto after a written request therefor pursuant to Section 5.2; (viii) any change resulting
or arising from the identity of, or any facts or circumstances relating to, Parent, Merger Sub or any of their respective Affiliates,
(ix) any event, circumstance, change or effect arising directly or indirectly from or otherwise relating to any change in, or any
compliance with or action taken for the purpose of complying with, any Legal Requirement or GAAP (or interpretations of any Legal
Requirement or GAAP), or (x) any change or prospective change in the Company’s credit ratings; it being understood that the
exceptions in clauses “(i)”, “(vi)” and “(x)” shall not prevent or otherwise affect a determination
that the underlying cause of any such decline or failure referred to therein (if not otherwise falling within any of the exceptions
provided by clauses “(ii)” through “(v)” or “(vii)” through “(ix)” hereof) is or
would be reasonably likely to be a Material Adverse Effect.
Material Contract.
“
Material
Contract
” is defined in Section 3.9(a) of the Agreement.
Merger.
“
Merger
”
is defined in Recital B of the Agreement.
Merger Consideration.
“
Merger Consideration
” is defined in Section 2.5(a)(iii) of the Agreement.
Merger Sub
. “
Merger
Sub
” is defined in the preamble to the Agreement.
Minimum Condition.
“
Minimum
Condition
” is defined in Annex I to the Agreement.
NYSE.
“
NYSE
”
shall mean the New York Stock Exchange.
Non-Recourse Parent
Party.
“
Non-Recourse Parent Party
” shall have the meaning assigned to such term in the Equity Funding
Letter.
OFAC. “
OFAC
”
is defined in Section 3.25(a) of the Agreement.
Offer.
“
Offer
”
is defined in Recital A of the Agreement.
Offer Closing.
“
Offer
Closing
” is defined in Section 1.1(f) of the Agreement.
Offer Commencement Date.
“
Offer Commencement Date
” shall mean the date on which Merger Sub commences the Offer, within the
meaning of Rule 14d-2 under the Exchange Act.
Offer Conditions.
“
Offer
Conditions
” is defined in Section 1.1(b) of the Agreement.
Offer Documents.
“
Offer
Documents
” is defined in Section 1.1(e) of the Agreement.
Offer Price.
“
Offer
Price
” is defined in Recital A of the Agreement.
Offer Termination.
“
Offer
Termination
” is defined in Section 1.1(d) of the Agreement.
Offer to Purchase.
“
Offer
to Purchase
” is defined in Section 1.1(b) of the Agreement.
Owned Real Property
.
“
Owned Real Property
” is defined in Section 3.7(a) of the Agreement.
Parent
. “
Parent
”
is defined in the preamble to the Agreement.
Parent Liability Limitation
.
“
Parent Liability Limitation
” is defined in Section 8.3(e) of the Agreement.
Parent Material Adverse
Effect
. “
Parent Material Adverse Effect
” shall mean any effect, change, event or occurrence that
would individually or in the aggregate, prevent, materially delay or materially impair the ability of Parent or Merger Sub to consummate
the Transactions contemplated by this Agreement.
Parent Related Parties.
“
Parent Related Parties
”
is defined in Section 8.3(e) of the Agreement.
Parent Termination Fee.
“
Parent Termination Fee
” is defined in Section 8.3(c) of the Agreement.
Parties.
“Parties
”
shall mean Parent, Merger Sub and the Company.
Paying Agent.
“
Paying
Agent
” is defined in Section 2.6(a) of the Agreement.
Payment Fund.
“
Payment
Fund
” is defined in Section 2.6(a) of the Agreement.
Permitted Encumbrance.
“
Permitted Encumbrance
” shall mean (a) any Encumbrance that arises out of Taxes not in default and
payable without penalty or interest or the validity of which is being contested in good faith by appropriate proceedings, (b) any
Encumbrance representing the rights of customers, suppliers and subcontractors in the ordinary course of business under the terms
of any Contracts to which the relevant party is a party or under general principles of commercial or government contract law (including
without limitation mechanics’, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s,
landlords’ and similar liens granted or which arise in the ordinary course of business), (c) in the case of any Contract,
Encumbrances that are restrictions against the transfer or assignment thereof that are included in the terms of such Contract,
(d) in the case of real property, Encumbrances that are easements, rights-of-way, encroachments, restrictions, conditions and other
similar Encumbrances incurred or suffered in the ordinary course of business and which, individually or in the aggregate, do not
and would not materially impair the use (or contemplated use), utility or value of the applicable real property or otherwise materially
impair the present or contemplated business operations at such location, or zoning, entitlement, building and other land use regulations
imposed by Governmental Bodies having jurisdiction over such real property or that are otherwise set forth on a title report or
(e) Encumbrances that, individually or in the aggregate would not reasonably be expected to interfere in any material respect with
the use of the assets or the conduct of normal business operations of the relevant party.
Person.
“
Person
”
shall mean any individual, Entity or Governmental Body.
Personal Information.
“
Personal Information
” shall mean all financial, health, or other private or personal information
that identifies, relates to, describes, is capable of being associated with, or with respect to which there is a reasonable basis
to believe the information can be used to identify, an individual. Personal Information shall include genetic information, “nonpublic
personal information” as defined under the Gramm-Leach-Bliley Act, “individually identifiable health information”
as defined under HIPAA and any information that is regulated or protected under any Legal Requirements.
Pre-Closing Period.
“
Pre-Closing Period
” is defined in Section 5.1 of the Agreement.
Prohibited Healthcare
Actions. “
Prohibited Healthcare Actions
”
shall include any actions or activities that (i) are prohibited
under, or are cause for mandatory or permissive exclusion from, any Federal Health Care Program, under Sections 1128, 1128A, 1128B,
or 1877 of the SSA, or that are otherwise cause for civil or criminal penalties, including without limitation under Section 3729
of Title 31 of the United States Code, or related state or local statutes; (ii) have resulted in civil monetary penalty assessed
under Section 1128A of the SSA; (iii) have resulted in exclusion from participation under any Federal Health Care Program under
Section 1128 of the SSA; or (iv) have resulted in a charge or conviction (as defined in Section 1001.2 of Title 42 of the C.F.R.)
of any of the categories of offenses described in Sections 1128(a) or 1128(b)(1), (b)(2) or (b)(3) of the SSA.
Proxy Statement
.
“
Proxy Statement
” shall mean the proxy or information statement of the Company to be sent to the Company’s
stockholders in connection with the Company Stockholders’ Meeting.
Proxy Statement Clearance
Date.
“
Proxy Statement Clearance Date
” shall mean the date, at least ten (10) calendar days after
the filing of the preliminary Proxy Statement with the SEC, on which the SEC has, orally or in writing, confirmed that it has no
further comments on the Proxy Statement.
Redacted Fee Letter.
“
Redacted Fee Letter
”
means a fee letter from any of the Financing Sources or other Available
Financing sources in which the only redactions relate to amounts associated with or related to fees, “market flex”
provisions and “securities demand” provisions, provided that such redactions do not relate to any terms that would
adversely affect in a material manner the conditionality, enforceability, availability, termination or aggregate principal amount
of the Available Financing being made available by such Available Financing sources, except to the extent a reduction from such
Available Financing sources would be offset by an increase in the debt financing or other Available Financing being made available
by any such Financing Source or another Available Financing source.
Registered IP
. “
Registered
IP
”
shall
mean all Intellectual Property Rights that are registered or issued under the authority of
any Governmental Body, including all patents, registered copyrights, registered mask works, and registered trademarks, service
marks and trade dress, registered domain names, and all applications for any of the foregoing.
Release.
“
Release
”
shall mean any presence, emission, spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring, emptying, dumping,
disposal, migration, or release of Hazardous Materials from any source into or upon the environment, including the air, soil, improvements,
surface water, groundwater, the sewer, septic system, storm drain, publicly owned treatment works, or waste treatment, storage,
or disposal systems.
Representatives
.
“
Representatives
” shall mean officers, directors, employees, attorneys, accountants, investment bankers,
consultants, agents, financial advisors, other advisors and other representatives.
Required Company Stockholder
Vote.
“
Required Company Stockholder Vote
” shall mean the affirmative vote of the holders of a majority
of the Shares.
Required Information.
“
Required Information
” is defined in Section 6.11(b) of the Agreement.
Sanctions Laws. “
Sanctions
Laws
”
is defined in Section 3.25(a) of the Agreement.
Sarbanes-Oxley Act.
“
Sarbanes-Oxley Act
”
shall mean the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated
thereunder.
Schedule 14D-9.
“
Schedule
14D-9
” is defined in Section 1.2(c) of the Agreement.
Schedule TO.
“
Schedule
TO
” is defined in Section 1.1(a) of the Agreement.
SEC.
“
SEC
”
shall mean the United States Securities and Exchange Commission.
Securities Act
.
“
Securities Act
” shall mean the Securities Act of 1933, as amended.
Shares.
“
Shares
”
is defined in Recital A of the Agreement.
Solvent.
“
Solvent
”
is defined in Section 4.10 of the Agreement.
Specified Agreement.
“
Specified Agreement
” is defined in Section 8.1(f) of the Agreement.
SSA. “
SSA
”
shall mean the Social Security Act of 1935, as amended.
Subsidiary
. An Entity
shall be deemed to be a “
Subsidiary
” of another Person if such Person directly or indirectly owns or
purports to own, beneficially or of record, (a) an amount of voting securities or other interests in such Entity that is sufficient
to enable such Person to elect at least a majority of the members of such Entity’s Board of Directors or other governing
body, or (b) at least 50% of the outstanding equity or financial interests of such Entity.
Superior Offer
.
“
Superior Offer
” shall mean a bona fide written Acquisition Proposal that the Board of Directors of the
Company determines, in its good faith judgment, after consultation with its outside legal counsel and its financial advisor of
nationally recognized reputation, is reasonably likely to be consummated in accordance with its terms, taking into
account all legal, regulatory
and financing aspects (including certainty of closing) of the proposal and the Person making the proposal and other aspects of
the Acquisition Proposal that the Company’s Board of Directors deems relevant, and if consummated, would result in a transaction
more favorable to the Company’s stockholders (solely in their capacity as such) from a financial point of view than the transaction
contemplated by this Agreement; provided that for purposes of the definition of “Superior Offer”, the references to
“20%” in the definition of Acquisition Proposal shall be deemed to be references to “80%.”
Support Agreements.
“
Support Agreements
”
is defined in Recital E of the Agreement.
Surviving Corporation
.
“
Surviving Corporation
” is defined in Recital B of the Agreement.
Takeover Laws.
“
Takeover
Laws
” shall mean any “moratorium,” “control share acquisition,” “fair price,”
“supermajority,” “affiliate transactions,” or “business combination statute or regulation”
or other similar state anti-takeover laws and regulations.
Tax.
“
Tax
”
shall mean any tax (including any income tax, franchise tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated
tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, withholding tax or payroll tax), escheat obligation, levy, assessment, tariff, duty (including any
customs duty) or other tax of any kind whatsoever, including any charge or amount (including any fine, penalty or interest) related
to any tax, imposed, assessed or collected by or under the authority of any Governmental Body.
Tax Return
. “
Tax
Return
” shall mean any return (including any information return), report, statement, declaration, estimate, schedule,
notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be
filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any
Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating
to any Tax.
Termination Fee.
“
Termination
Fee
”
is defined in Section 8.3(b) of the Agreement.
Top-Up Option.
“
Top-Up
Option
” is defined in Section 1.4(a) of the Agreement.
Top-Up Option Shares.
“
Top-Up Option Shares
” is defined in Section 1.4(a) of the Agreement.
Transactions.
“
Transactions
”
shall mean (a) the execution and delivery of the Agreement, and (b) all of the transactions contemplated by this Agreement, including
the Offer, the Top-Up Option and the Merger.
Exhibit
B
Surviving
Corporation Certificate of Incorporation
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GREENWAY MEDICAL TECHNOLOGIES, INC.
ARTICLE ONE
The name of the corporation
is Greenway Medical Technologies, Inc. (the “Corporation”).
ARTICLE TWO
The address of the Corporation’s
registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware, 19801.
The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE THREE
The nature of the business
or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under
the General Corporation Law of the State of Delaware.
ARTICLE FOUR
The total number of shares
of stock which the Corporation has authority to issue is one thousand (1,000) shares of common stock, with a par value of $0.0001
per share.
ARTICLE FIVE
The Corporation is to have
perpetual existence.
ARTICLE SIX
In furtherance and not in
limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized to make, alter
or repeal the by-laws of the Corporation.
ARTICLE SEVEN
Meetings of stockholders
may be held within or without the State of Delaware, as the by-laws of the Corporation may provide. The books of the Corporation
may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors
or in the by-laws of the Corporation. Election of directors need not be by written ballot unless the by-laws of the Corporation
so provide.
ARTICLE EIGHT
1. To
the fullest extent permitted under the General Corporation Law of the State of Delaware, a director of the Corporation shall not
be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except
for liability: (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section
174 of the General Corporation Law of the State of Delaware; or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law of the State of Delaware is amended after the effective date of this
Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
2. Neither
any amendment nor repeal nor modification of this Article EIGHT, nor the adoption of any provision of this Certificate of Incorporation
inconsistent with this Article EIGHT, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability
of a director of the Corporation existing at the time of such amendment, repeal, modification or adoption of such an inconsistent
provision with respect to events occurring prior to the date of such amendment, repeal, modification or adoption.
ARTICLE NINE
The Corporation expressly
elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware.
ARTICLE TEN
The Corporation reserves
the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter
prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation.
ANNEX I
CONDITIONS TO THE OFFER
The obligation of Merger
Sub to accept for payment and pay for Shares validly tendered (and not withdrawn) pursuant to the Offer is subject to the satisfaction
of the conditions set forth in clauses “(a)” through “(h)” below. Accordingly, notwithstanding any other
provision of the Offer or this Agreement to the contrary, Merger Sub shall not be required to accept for payment or (subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act) pay for, and may delay the acceptance
for payment of, or (subject to any such rules and regulations) the payment for, any tendered Shares, and, to the extent permitted
by this Agreement, may terminate the Offer: (i) upon termination of this Agreement; and (ii) at any scheduled Expiration
Date (subject to any extensions of the Offer pursuant to Section 1.1(d) of this Agreement) or amend the Offer as otherwise
permitted by this Agreement, if: (A) the Minimum Condition shall not be satisfied by 12:00 midnight, Eastern Time, on the
Expiration Date of the Offer; or (B) any of the additional conditions set forth in clauses “(b)” through “(h)”
below shall not be satisfied or waived in writing by Parent:
(a) there
shall have been validly tendered and not validly withdrawn Shares that, considered together with all other Shares (if any) beneficially
owned by Parent and its affiliates plus the number of all Shares to be purchased by Parent or Merger Sub pursuant to the Top-Up
Option, represent one more than 90% of the sum of (w) the total number of Shares outstanding at the time of the expiration
of the Offer, (x) the aggregate number of Shares issuable to holders of Company Options from which the Company or its Representatives
have received notices of exercise prior to the expiration of the Offer (and as to which Shares have not yet been issued to such
exercising holders of Company Options) and (y) the number of all Shares to be purchased by Parent or Merger Sub pursuant to the
Top-Up Option (the “
Minimum Condition
”);
(b) (i)
the representations and warranties of the Company set forth in Sections 3.3(a), 3.3(c) (first sentence), and 3.3(d) (second sentence)
(Capitalization) of the Agreement shall have been accurate in all respects as of the date of the Agreement and shall be accurate
in all respects at and as of the Expiration Date as if made on and as of such Expiration Date, except (other than a result of a
willful breach by the Company) where the failure to be so accurate in all respects would not reasonably be expected to result in
additional cost, expense or liability to the Company, Parent and their Affiliates, individually or in the aggregate that is more
than $1,000,000 (it being understood that, for purposes of determining the accuracy of such representations and warranties, (A)
any update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement
shall be disregarded and (B) the truth and correctness of those representations or warranties that address matters only as of a
specific date shall be measured (subject to the applicable materiality standard as set forth in this clause (b)(i)) only as of
such date;
(ii) the
representations and warranties of the Company set forth in Sections 3.3 (Capitalization) (other than Sections 3.3(a), 3.3(c) (first
sentence) and 3.3(d) (second sentence)), 3.19 (Authority; Binding Nature of Agreement), 3.21 (Vote Required) and 3.24 (Financial
Advisor) of the Agreement shall have been accurate in all material respects as of the date of the Agreement, and shall be accurate
in all material respects at and as of the
Expiration Date as if made
on and as of such Expiration Date (it being understood that, for purposes of determining the accuracy of such representations and
warranties, (A) all “Material Adverse Effect” qualifications and other materiality qualifications contained in such
representations and warranties shall be disregarded, (B) any update of or modification to the Company Disclosure Schedule made
or purported to have been made after the date of the Agreement shall be disregarded and (C) the truth and correctness of those
representations or warranties that address matters only as of a specific date shall be measured (subject to the applicable materiality
standard as set forth in this clause (b)(ii)) only as of such date);
(iii) the
representations and warranties of the Company set forth in Section 3.5(b) (No Material Adverse Effect) shall have been accurate
in all respects as of the date of the Agreement and shall be accurate in all respects at and as of the Expiration Date as if made
on and as of such Expiration Date (it being understood that any update of or modification to the Company Disclosure Schedule made
or purported to have been made after the date of the Agreement shall be disregarded);
(iv) the
representations and warranties of the Company set forth in the Agreement (other than those referred to in clauses “(i)”,
“(ii)” or “(iii)”) above) shall have been accurate in all respects as of the date of the Agreement, and
shall be accurate in all respects at and as of the Expiration Date as if made on and as of such date, except that any inaccuracies
in such representations and warranties will be disregarded if the circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute, and would not reasonably be expected to have, a Material Adverse Effect (it being understood that,
for purposes of determining the accuracy of such representations and warranties, (A) all “Material Adverse Effect”
qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded, (B)
any update of or modification to the Company Disclosure Schedule made or purported to have been made after the date of the Agreement
shall be disregarded and (C) the truth and correctness of those representations or warranties that address matters only as of a
specific date shall be measured (subject to the applicable materiality standard as set forth above) only as of such date);
(c) the
Company shall have complied with or performed in all material respects all of the Company’s covenants and agreements it is
required to comply with or perform at or prior to the Acceptance Time;
(d) since
the date hereof, there shall not have occurred a Material Adverse Effect that shall be continuing as of the Expiration Date;
(e) the
waiting period (or any extension thereof) applicable to the Offer or the Merger under the HSR Act shall have expired or been terminated;
(f) Parent
and Merger Sub shall have received certificates executed on behalf of the Company by the Company’s Chief Executive Officer
and Chief Financial Officer confirming that the conditions set forth in clauses “(b),” “(c)” and “(d)”
of this Annex I have been duly satisfied;
(g) There
shall not have been issued by any court of competent jurisdiction or remain in effect any temporary restraining order, preliminary
or permanent injunction or other order preventing the acquisition of or payment for Shares pursuant to the Offer nor shall any
action have been taken, or any Legal Requirement or order promulgated, entered, enforced, enacted, issued or deemed applicable
to the Offer or the Merger by any Governmental Body which directly or indirectly prohibits, or makes illegal, the acceptance for
payment of or payment for Shares pursuant to the Offer, or the consummation of the Merger;
provided, however
, that Parent
and Merger Sub shall not be permitted to invoke this clause “(g)” unless they shall have taken all actions required
under this Agreement to have any such order lifted; and
(h) this
Agreement shall not have been terminated in accordance with its terms.
The foregoing conditions
are for the sole benefit of Parent and Merger Sub and (except for the Minimum Condition) may be waived by Parent and Merger Sub,
in whole or in part at any time and from time to time, in the sole discretion of Parent and Merger Sub. The failure by Parent or
Merger Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right
shall be deemed an ongoing right which may be asserted at any time and from time to time.
The capitalized terms used
in this Annex I and not defined in this Annex I shall have the meanings set forth in the Agreement and Plan of Merger, dated as
of September 23, 2013, by and among Greenway Medical Technologies, Inc., Crestview Acquisition Corp. and VCG Holdings, LLC.
ANNEX B
September 23, 2013
STRICTLY CONFIDENTIAL
The Board of Directors
Greenway Medical Technologies, Inc.
100 Greenway Boulevard
Carrollton, GA 30117
Members of the Board of Directors:
You have requested our opinion as to the
fairness, from a financial point of view, to the holders of common stock, par value $0.0001 per share (the “Company Common
Stock”), of Greenway Medical Technologies, Inc. (the “Company”) of the consideration to be paid to such holders
in the proposed Tender Offer and Merger (each as defined below) pursuant to the Agreement and Plan of Merger, dated as of September 23,
2013 (the “Agreement”), among the Company, VCG Holdings, LLC (the “Acquiror”) and its wholly-owned subsidiary,
Crestview Acquisition Corp. (“Acquisition Sub”). Pursuant to the Agreement, the Acquiror will cause Acquisition Sub
to commence a tender offer for all the shares of the Company Common Stock (the “Tender Offer”) at a price for each
share equal to $20.35 (the “Consideration”) payable in cash. The Agreement further provides that, following completion
of the Tender Offer, or if the Tender Offer is not consummated under circumstances specified in the Agreement, Acquisition Sub
will be merged with and into the Company (the “Merger”) and each outstanding share of Company Common Stock, other than
shares of Company Common Stock held in treasury or owned by the Acquiror and its affiliates and other than Dissenting Shares (as
defined in the Agreement), will be converted into the right to receive an amount equal to the Consideration in cash. The Tender
Offer and Merger, together and not separately, are referred to herein as the “Transaction”.
In connection with preparing our opinion,
we have (i) reviewed the Agreement; (ii) reviewed the Tender and Support Agreements, dated as of September 23, 2013, among
the Acquiror, Acquisition Sub and certain stockholders of the Company; (iii) reviewed certain publicly available business and financial
information concerning the Company and the industries in which it operates; (iv) compared the proposed financial terms of the Transaction
with the publicly available financial terms of certain transactions involving companies we deemed relevant and the consideration
paid for such companies; (v) compared the financial and operating performance of the Company with publicly available information
concerning certain other companies we deemed relevant and reviewed the current and historical market prices of the Company Common
Stock and certain publicly traded securities of such other companies; (vi) reviewed certain internal financial analyses and forecasts
prepared by the management of the Company relating to its business; and (vii) performed such other financial studies and analyses
and considered such other information as we deemed appropriate for the purposes of this opinion.
In addition, we have held discussions with
certain members of the management of the Company with respect to certain aspects of the Transaction, and the past and current business
operations of the Company, the financial condition and future prospects and operations of the Company, and certain other matters
we believed necessary or appropriate to our inquiry.
In giving our opinion, we have relied upon
and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with
us by the Company or otherwise reviewed by or for us, and we have not independently verified (nor have we assumed responsibility
or liability for independently verifying) any such information or its accuracy or completeness. We have not conducted or been provided
with any valuation or appraisal of any assets or liabilities, nor have we
evaluated the solvency of the Company or the Acquiror under
any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts
provided to us or derived therefrom, we have assumed that they have been reasonably prepared based on assumptions reflecting the
best currently available estimates and judgments by management as to the expected future results of operations and financial condition
of the Company to which such analyses or forecasts relate. We express no view as to such analyses or forecasts or the assumptions
on which they were based. We have also assumed that the Transaction and the other transactions contemplated by the Agreement will
be consummated as described in the Agreement. We have also assumed that the representations and warranties made by the Company
and the Acquiror in the Agreement and the related agreements are and will be true and correct in all respects material to our analysis.
We are not legal, regulatory or tax experts and have relied on the assessments made by advisors to the Company with respect to
such issues. We have further assumed that all material governmental, regulatory or other consents and approvals necessary for the
consummation of the Transaction will be obtained without any adverse effect on the Company or on the contemplated benefits of the
Transaction.
Our opinion is necessarily based on economic,
market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood
that subsequent developments may affect this opinion and that we do not have any obligation to update, revise, or reaffirm this
opinion. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be paid to the holders
of the Company Common Stock in the proposed Transaction and we express no opinion as to the fairness of any consideration paid
in connection with the Transaction to the holders of any other class of securities, creditors or other constituencies of the Company
or as to the underlying decision by the Company to engage in the Transaction. Furthermore, we express no opinion with respect to
the amount or nature of any compensation to any officers, directors, or employees of any party to the Transaction, or any class
of such persons relative to the Consideration to be paid to the holders of the Company Common Stock in the Transaction or with
respect to the fairness of any such compensation
.
We were not authorized to and did not solicit
any expressions of interest from any other parties with respect to the sale of all or any part of the Company or any other alternative
transaction.
We have acted as financial advisor to the
Company with respect to the proposed Transaction and will receive a fee from the Company for our services, a substantial portion
of which will become payable only if the proposed Transaction is consummated. In addition, the Company has agreed to indemnify
us for certain liabilities arising out of our engagement. Please be advised that during the two years preceding the date of this
letter, neither we nor our affiliates have had any other material financial advisory or other material commercial or investment
banking relationships with the Acquiror. During the two years preceding the date of this letter, we and our affiliates have had
commercial or investment banking relationships with the Company and with certain other portfolio companies of Vista Equity Partners,
for which we and such affiliates have received customary compensation. Such services during such period have included acting as
lead left bookrunner on the Company’s initial public offering in February 2012 and acting as an arranger of certain
credit facilities for certain of Vista Equity Partners’ other portfolio companies. In addition, our commercial banking affiliate
is an agent bank and a lender under outstanding credit facilities of certain of Vista Equity Partners’ other portfolio companies,
for which it receives customary compensation or other financial benefits. In the ordinary course of our businesses, we and our
affiliates may actively trade the debt and equity securities of the Company for our own account or for the accounts of customers
and, accordingly, we may at any time hold long or short positions in such securities.
On the basis of and subject to the foregoing,
it is our opinion as of the date hereof that the consideration to be paid to the holders of the Company Common Stock in the proposed
Transaction is fair, from a financial point of view, to such holders.
The issuance of this opinion has been approved
by a fairness opinion committee of J.P. Morgan Securities LLC. This letter is provided to the Board of Directors of the Company
(in its capacity as such) in connection with and for the purposes of its evaluation of the Transaction. This opinion does not constitute
a recommendation to any shareholder of the Company as to whether such shareholder should tender its shares into the Tender Offer
or how such shareholder should vote with respect to the Transaction or any other matter. This opinion may not be disclosed, referred
to, or communicated (in whole or in part) to any
third party for any purpose whatsoever except with our prior
written approval. This opinion may be reproduced in full in any proxy or information statement mailed to shareholders of the Company
but may not otherwise be disclosed publicly in any manner without our prior written approval.
Very truly yours,
J.P. MORGAN SECURITIES LLC
ANNEX C
SECTION 262 OF THE GENERAL CORPORATION
LAW OF THE STATE OF DELAWARE
§ 262. Appraisal Rights
.
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(a)
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Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
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(b)
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Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (3) of this section, § 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:
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(1)
Provided,
however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available
for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or
consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and
further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2)
Notwithstanding
paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation
pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except:
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a.
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Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
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b.
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Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
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c.
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Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
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d.
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Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section.
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(3)
In
the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 251(h), § 253 or §
267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares
of the subsidiary Delaware corporation.
(4)
In
the event of an amendment to a corporation’s certificate of incorporation contemplated by § 363(a) of this title, appraisal
rights shall be available as contemplated by § 363(b) of this title, and the procedures of this section, including those set
forth in subsections (d) and (e) of this section,
shall apply as nearly as practicable, with the word
“amendment” substituted for the words “merger or consolidation”, and the word “corporation”
substituted for the words “constituent corporation” and/or “surviving or resulting corporation”.
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(c)
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Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable.
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(d)
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Appraisal rights shall be perfected as follows:
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(1)
If
a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at
a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who
was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of
this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that
appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a
copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each
stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking
of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will
be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby
to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute
such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10
days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder
of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger
or consolidation of the date that the merger or consolidation has become effective; or
(2)
If
the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either
a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within
10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled
to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares
of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and,
if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given
on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the
merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice
or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the tender
or exchange offer contemplated by § 251(h) of this title and 20 days after the date of mailing of such notice, demand in writing
from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of
such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying
each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to
all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than
20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title,
later than the later of the consummation of the tender
or exchange offer contemplated by § 251(h) of this
title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled
to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit
of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that
such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the
notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on
which the notice is given.
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(e)
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Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder’s written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection.
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(f)
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Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
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(g)
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At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.
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(h)
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After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically
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governing appraisal proceedings. Through such proceeding
the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation
of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines
otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall
be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established
from time to time during the period between the effective date of the merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an
appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection
(f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal
rights under this section.
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(i)
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The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.
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(j)
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The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
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(k)
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From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
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(l)
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The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
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