0001193125-12-121780.txt : 20120319 0001193125-12-121780.hdr.sgml : 20120319 20120319171327 ACCESSION NUMBER: 0001193125-12-121780 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20120319 DATE AS OF CHANGE: 20120319 GROUP MEMBERS: EXPEDITION HOLDING COMPANY, INC. GROUP MEMBERS: EXPEDITION MERGER SUB, INC. GROUP MEMBERS: INSIGHT VENTURE ASSOCIATES COINVESTMENT II, L.P. GROUP MEMBERS: INSIGHT VENTURE ASSOCIATES VII, L.P. GROUP MEMBERS: INSIGHT VENTURE ASSOCIATES VII, LTD. GROUP MEMBERS: INSIGHT VENTURE PARTNERS (CAYMAN) VII, L.P. GROUP MEMBERS: INSIGHT VENTURE PARTNERS (CO-INVESTORS) VII, L.P. GROUP MEMBERS: INSIGHT VENTURE PARTNERS (DELAWARE) VII, L.P. GROUP MEMBERS: INSIGHT VENTURE PARTNERS COINVESTMENT FUND II, L.P. GROUP MEMBERS: INSIGHT VENTURE PARTNERS VII, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUEST SOFTWARE INC CENTRAL INDEX KEY: 0001088033 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 330231678 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-58377 FILM NUMBER: 12701364 BUSINESS ADDRESS: STREET 1: 5 POLARIS WAY CITY: ALISO VIEJO STATE: CA ZIP: 92656 BUSINESS PHONE: 9497548000 MAIL ADDRESS: STREET 1: 5 POLARIS WAY CITY: ALISO VIEJO STATE: CA ZIP: 92656 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Insight Holdings Group, LLC CENTRAL INDEX KEY: 0001305473 IRS NUMBER: 352158588 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 680 FIFTH AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-230-9200 MAIL ADDRESS: STREET 1: 680 FIFTH AVENUE, 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D 1 d318396dsc13d.htm SCHEDULE 13D Schedule 13D

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934*

 

 

QUEST SOFTWARE, INC.

(Name of Issuer)

 

 

Common stock, par value $0.001 per share

(Title of Class of Securities)

74834T-10-3

(CUSIP Number)

Blair Flicker, Esq.

c/o Insight Venture Management, LLC

680 Fifth Avenue, 8th Floor

New York, New York 10019

(212) 230-9200

With copies to:

Gordon R. Caplan, Esq.

Morgan D. Elwyn, Esq.

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

(212) 728-8000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

March 8, 2012

(Date of Event Which Requires Filing of This Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Expedition Holding Company, Inc.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    CO

 

 

 

- 2 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Expedition Merger Sub, Inc.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    CO

 

 

 

- 3 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Partners VII, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 4 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Partners (Cayman) VII, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Cayman Islands

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 5 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Partners (Co-Investors) VII, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Cayman Islands

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 6 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Partners (Delaware) VII, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 7 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Partners Coinvestment Fund II, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 8 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Associates VII, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 9 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Associates VII, Ltd.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Cayman Islands

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    CO

 

 

 

- 10 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Venture Associates Coinvestment II, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    PN

 

 

 

- 11 -


SCHEDULE 13D

 

CUSIP No. 74834T-10-3  

 

  1   

NAME OF REPORTING PERSONS.

 

Insight Holdings Group, LLC

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS (See Instructions)

 

    OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)  ¨

 

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

    Delaware

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     7    

SOLE VOTING POWER

 

    0

     8   

SHARED VOTING POWER

 

    0

     9   

SOLE DISPOSITIVE POWER

 

    0

   10   

SHARED DISPOSITIVE POWER

 

    30,523,7051

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

    30,523,7051

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)  ¨

 

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

    35.6% (based on 83,546,877 shares of Common Stock outstanding as of March 5, 2012)

14

 

TYPE OF REPORTING PERSON (See Instructions)

 

    OO

 

 

 

- 12 -


Item 1. Security and Issuer

This statement on Schedule 13D (this “Statement”) is being filed on behalf of the Reporting Persons (as defined in Item 2(a) below) with respect to the shares of Common Stock, par value $0.001 per share (the “Common Stock”), of Quest Software, Inc., a Delaware corporation (the “Company”), whose principal executive offices are located at 5 Polaris Way, Aliso Viejo, CA 92656.

Item 2. Identity and Background

(a) This Statement is being filed by the following persons (each a “Reporting Person” and, collectively, the “Reporting Persons”): (i) Expedition Holding Company, Inc., a Delaware corporation (“Parent”); (ii) Expedition Merger Sub, Inc., a Delaware corporation (“Merger Sub”); (iii) Insight Venture Partners VII, L.P., a Delaware limited partnership (“IVP”); (iv) Insight Venture Partners (Cayman) VII, L.P., a Cayman Islands exempted limited partnership (“IVP Cayman”); (v) Insight Venture Partners (Co-Investors) VII, L.P., a Cayman Islands exempted limited partnership (“IVP Co-Investors”); (vi) Insight Venture Partners (Delaware) VII, L.P., a Delaware limited partnership (“IVP Delaware”, and together with IVP, IVP Cayman and IVP Co-Investors, the “Insight VII Funds”); (vii) Insight Venture Partners Coinvestment Fund II, L.P., a Delaware limited partnership (“IVP Coinvestment”, and collectively with the Insight VII Funds, the “Insight Parties”); (viii) Insight Venture Associates VII, L.P., a Delaware limited partnership (“IVA”); Insight Venture Associates VII, Ltd., a Cayman Islands exempted company (“IVA Ltd”); (ix) Insight Venture Associates Coinvestment II, L.P., a Delaware limited partnership (“IVA Coinvestment”); and (x) Insight Holdings Group, LLC, a Delaware limited liability company (“Insight Holdings”). The general partner of each of the Insight VII Funds is IVA, whose general partner is IVA Ltd. The sole shareholder of IVA Ltd is Insight Holdings, which is managed by a three person Board of Managers. The general partner of IVP Coinvestment is IVA Coinvestment, whose general partner is Insight Holdings.

Schedule I hereto, with respect to Parent, Schedule II hereto, with respect to Merger Sub, Schedule III hereto, with respect to Insight Holdings, and Schedule IV hereto with respect to IVA Ltd set forth lists of all the directors and executive officers or persons holding equivalent positions (the “Scheduled Persons”) of each such Reporting Person.

The Reporting Persons are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)-3 of the Securities Exchange Act, as amended (the “Exchange Act”). The Joint Filing Agreement among the Reporting Persons to file this Statement jointly in accordance with Rule 13d-1(k) of the Exchange Act is attached hereto as Exhibit 99.1 (the “Joint Filing Agreement”).

(b) The address of the principal business and principal office of each of the Reporting Persons is c/o Insight Venture Management, LLC, 680 Fifth Avenue, New York, New York 10019. Schedule I, Schedule II, Schedule III, and Schedule IV hereto set forth the principal business address of each Scheduled Person.

 

- 13 -


(c) The principal business of each of the Insight Parties is making private equity and related investments. The principal business of IVA is acting as the general partner of the Insight VII Funds. The principal business of IVA Ltd is acting as the general partner of IVA, and other affiliated entities. The principal business of IVA Coinvestment is acting as the general partner of IVP Coinvestment. The principal business of Insight Holdings is acting as the general partner of IVA Coinvestment, and other affiliated entities. Parent and Merger Sub are newly formed entities organized by the Insight Parties for the purpose of making an equity investment in the Company in connection with the Merger (see Item 4 below). Parent is owned by: (i) IVP, holding 38.99% of Parent’s common stock; (ii) IVP Cayman, holding 17.16% of Parent’s common stock; (iii) IVP Co-Investors, holding 0.90% of Parent’s common stock; (iv) IVP Delaware, holding 2.47% of Parent’s common stock; and (v) IVP Coinvestment, holding 40.48% of Parent’s common stock. Merger Sub is a wholly owned subsidiary of Parent. Schedule I, Schedule II, Schedule III, and Schedule IV hereto set forth the principal occupation or employment of each Scheduled Person.

(d) During the last five years, none of the Reporting Persons nor any of the Scheduled Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Reporting Persons nor any of the Scheduled Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

(f) Parent, Merger Sub, IVP, IVP Delaware, IVP Coinvestment, IVA, IVA Coinvestment and Insight Holdings are organized under the laws of the State of Delaware. IVP Cayman, IVP Co-Investors and IVA Ltd are organized under the laws of the Cayman Islands. Schedule I, Schedule II, Schedule III, and Schedule IV hereto set forth the citizenships of each of the Scheduled Persons who is a natural person.

Item 3. Source and Amount of Funds or Other Consideration

As described in response to Item 4, the shares of Common Stock to which this Statement relates have not been purchased by the Reporting Persons as of the date of this filing, and thus no funds were used for this purpose.

It is anticipated that the funding for the transactions contemplated by the Merger Agreement (the “Transactions”) will consist of a combination of (i) equity financing in the form of cash to be contributed to Parent by the Insight Parties as described in Item 4 below, (ii) equity financing in the form of Rollover Shares (as defined below) to be contributed to Parent as described in Item 4 below, and (iii) debt financing.

As a condition to Parent’s and Merger Sub’s willingness to enter into the Merger Agreement (as defined below), Parent, Merger Sub, the Insight Parties, Vincent C. Smith, the Vincent C. Smith Annuity Trust 2010-1, the Vincent C. Smith Annuity Trust 2010-2 and the

 

- 14 -


Vincent C. Smith Annuity Trust 2011-1 (such trusts, together with Mr. Smith, the “VS Parties”) entered into that certain Transaction Support Agreement, dated as of March 8, 2012 (the “Transaction Support Agreement”). Pursuant to the Transaction Support Agreement, each VS Party has agreed, among other things, not to transfer, prior to the termination of such agreement, any shares of Common Stock of the Company owned by them (subject to certain exceptions) without the prior written consent of the Insight Parties.

None of the Reporting Persons or the Company paid additional consideration to any of the VS Parties in connection with the execution and delivery of the Transaction Support Agreement.

Item 4. Purpose of Transaction

On March 9, 2012, the Company announced in a press release (the “Press Release”) that it had entered into the Agreement and Plan of Merger, dated as of March 8, 2012, by and among Parent, Merger Sub and the Company (the “Merger Agreement”). The Press Release has been filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012, and is incorporated herein by reference in its entirety as Exhibit 99.7. Pursuant to the Merger Agreement, at Closing (as defined in the Merger Agreement) and subject to satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into the Company (the “Merger”).

Concurrently with the execution of the Merger Agreement, the Insight Parties, the VS Parties, Parent and Merger Sub entered into a Transaction Support Agreement, pursuant to which the VS Parties agreed not to transfer any shares of Common Stock (subject to certain exceptions) without the prior written consent of the Insight Parties. The parties to the Transaction Support Agreement agreed that the Insight Parties would not permit Parent or Merger Sub to commit to, or enter into any material amendment, modification, waiver or alteration (which shall include any change in price) of the Merger Agreement, the Equity Commitment Letter or he Debt Commitment Letter without prior written consent of the VS Parties (a “Consent Triggering Event”). The Transaction Support Agreement also restricts the VS Parties from disclosing any assumption, information, evaluation or view of Insight or its affiliates or representatives in connection with the Merger, subject to certain exemptions. The Insight Parties, Parent and Merger Sub have agreed that the Transaction Support Agreement will not restrict or prevent Mr. Smith from engaging in or entering into any unsolicited discussions, agreements, understandings or arrangements with any third party regarding the participation by the VS Parties in any other acquisition transaction involving the Company, and does not restrict Mr. Smith from taking or refraining from any action in his capacity as an executive officer or as a member of the Board of Directors of the Company.

In addition, the Transaction Support Agreement provides that on the Closing Date, Parent, the Insight Parties and the VS Parties shall enter into a previously negotiated Stockholders Agreement which includes, among other terms, restrictions on the transfer of securities of Parent, governance provisions and registration rights for certain holders of securities of Parent. Pursuant to the Transaction Support Agreement, Parent has also agreed to loan the VS Parties $120 million, immediately prior to the Closing, which amount will be used by the VS

 

- 15 -


Parties to repay outstanding indebtedness of the VS Parties encumbering the Rollover Shares (as defined below). Such loan will be secured by 100% of the common stock of Parent held by the VS Parties following the closing of the Merger, and will be recourse to the VS Parties to the extent of 50% of the then outstanding principal amount of such loan plus accrued interest thereon. The interest rate on such loan is subject to further negotiation between the VS Parties and the Insight Parties, and will depend on certain factors, including the current interest rate payable by the VS Parties on the indebtedness encumbering the Rollover Shares and the costs to unwind such indebtedness. Such loan would have the same maturity date as the senior term facility of the Company to be entered into at the Closing, require mandatory prepayment in certain circumstances and shall include customary restrictive covenants and events of default.

The Transaction Support Agreement will automatically terminate on the earliest of (i) the date the Merger is consummated, (ii) the date that the Merger Agreement is validly terminated in accordance with its terms or (iii) the occurrence of a Consent Triggering Event that, to the extent subject to cure, was not subsequently cured by the Insight Parties.

The Transaction Support Agreement does not grant any voting power over any of the VS Parties’ Owned Shares to any of the Insight Parties. Concurrently with the execution of the Merger Agreement and in their capacities as stockholders of the Company, the VS Parties entered into a voting agreement (the “Voting Agreement”) with the Company, pursuant to which they agreed to, among other things, vote their shares in favor of the approval of the Merger Agreement and other proposals necessary to consummate the Merger, unless such Voting Agreement is terminated pursuant to its terms. A copy of the Transaction Support Agreement is attached as Exhibit 99.2 to this Statement and is incorporated by reference herein.

Also, concurrently with the Merger Agreement, the VS Parties entered into a commitment letter (the “Rollover Letter”) with Parent pursuant to which the VS Parties will contribute, prior to the closing and subject to the terms and conditions therein, all of their shares of Common Stock, stock options (other than those 432,982 shares, the economic value of which have been transferred to Mr. Smith’s former spouse pursuant to a domestic relations order) and restricted stock units of the Company (the “Rollover Shares”) to Parent in exchange for equity interests in Parent. A copy of the Rollover Letter is attached hereto as Exhibit 99.3 to this Statement and is incorporated by reference herein.

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Common Stock of the Company, issued and outstanding immediately prior to the Effective Time, will be converted into the right to receive $23.00 in cash (the “Merger Consideration”), excluding (1) shares owned by stockholders who have perfected, and not withdrawn a demand for or lost the right to, appraisal rights under Delaware law, (2) treasury shares, (3) shares held by Parent, Merger Sub or any other wholly owned subsidiary of Parent, and (4) the Rollover Shares.

Also, concurrently with the execution of the Merger Agreement, the Insight Parties and the VS Parties delivered a Limited Guaranty (the “Limited Guaranty”) to the Company in respect of certain obligations of Parent and Merger Sub under the Merger Agreement. The Limited Guaranty has been filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012, and is incorporated herein by reference in its entirety as Exhibit 99.4.

 

- 16 -


Parent has obtained an equity commitment letter from the Insight Parties (the “Equity Commitment Letter”) and a debt financing commitment from the lenders identified therein (the “Debt Commitment Letter”) for the transactions contemplated by the Merger Agreement. A copy of the Equity Commitment Letter from the Insight Parties is attached as Exhibit 99.5 to this Statement and is incorporated by reference herein. A copy of the Debt Commitment Letter is attached as Exhibit 99.6 to this Statement and is incorporated by reference herein.

Consummation of the Merger is subject to various conditions, including, (i) the affirmative vote by the holders of a majority of the outstanding shares of Common Stock, (ii) the affirmative vote by the holders of a majority of the outstanding unaffiliated shares of Common Stock held by Parent, Merger Sub or any of the VS Parties, (iii) the absence of any law, injunction, judgment or ruling enjoining or prohibiting the Merger, (iv) the accuracy of the representations and warranties made by the parties, (v) the performance by the parties in all material respects of their covenants, obligations and agreements under the Merger Agreement, (vi) the expiration or early termination of the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other required government approvals, (vii) the absence of a material adverse effect on the Company, (viii) that the Common Stock of the Company is listed on The Nasdaq Global Select Market on the Closing Date (as defined in the Merger Agreement), and (ix) certain other customary conditions. Parent is also not required to consummate the Merger until after completion of a marketing period for the financing it is using to fund a portion of the Merger Consideration.

The information disclosed in this paragraph and the preceding paragraphs of this Item 4 is qualified in its entirety by reference to the Merger Agreement, a copy of which has been filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012, and is incorporated by reference in its entirety as Exhibit 99.8, the Press Release, the Transaction Support Agreement, the Rollover Commitment Letter, the Limited Guaranty, the Equity Commitment Letter and the Debt Commitment Letter, each of which is filed as an exhibit hereto and is incorporated herein by reference.

Other than as described in Item 3 and Item 4 above, and except as otherwise disclosed herein or in the Merger Agreement, the Transaction Support Agreement, the Rollover Commitment Letter, the Limited Guaranty, the Equity Commitment letter or in the Debt Commitment Letter, the Reporting Persons have no present plans or proposals that would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of the instructions to Item 4 of Schedule 13D. The Reporting Persons may at any time review or reconsider their position with respect to the Company and formulate plans or proposals with respect to any of such matters, and may at any time determine to increase or decrease its ownership of Common Stock.

The information required by Item 4 not otherwise provided herein is set forth in Item 3 and is incorporated herein by reference.

 

- 17 -


Item 5. Interest in Securities of the Issuer

(a) The VS Parties collectively own 30,523,7051 shares of Common Stock. The Reporting Persons, for the purpose of Rule 13d-3 under the Exchange Act, therefore may, by reason of the execution and delivery of the Transaction Support Agreement, be deemed to share beneficial ownership over 30,523,7051 shares of Common Stock, which would represent 35.6% of the Common Stock of the Company issued and outstanding as of March 5, 2012, as disclosed in the Merger Agreement. The Reporting Persons expressly disclaim such beneficial ownership, and nothing herein shall be deemed to be an admission by the Reporting Persons as to the beneficial ownership of such shares.

(b) The Reporting Persons, by reason of the execution and delivery of the Transaction Support Agreement, may be deemed to have shared dispositive power with the VS Parties with respect to 30,523,7051 shares of Common Stock, representing approximately 35.6% of the Common Stock of the Company issued and outstanding as of March 5, 2012, as disclosed in the Merger Agreement. Neither the filing of this Statement nor any of its contents shall be deemed to constitute an admission that any Reporting Person or any of its affiliates is the beneficial owner of any shares of Common Stock for purposes of Section 13(d) of the Exchange Act or for any other purpose. The Reporting Persons do not control the voting of shares held by the VS Parties, and do not possess any other rights as a Company stockholder with respect to such shares.

(c) Except as described in this Statement (including the schedules to this Statement), during the last sixty (60) days there were no transactions in the Common Stock effected by the Reporting Persons.

(d) Except as set forth in this Item 5 and for persons referred to in Item 2 above, no person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock that may be deemed to be beneficially owned by the Reporting Persons.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Persons have entered into the Joint Filing Agreement, attached hereto as Exhibit 99.1, with respect to the joint filing of this Statement.

Except as described herein, there are no contracts, arrangements, undertakings or relationships (legal or otherwise) among the persons named in Item 2 above or between such persons and any other person with respect to any securities of the Company.

Item 7. Material to Be Filed as Exhibits

 

Exhibit 99.1

   Joint Filing Agreement, dated March 19, 2012.

 

- 18 -


Exhibit 99.2

   Transaction Support Agreement, dated as of March 8, 2012, by and among the Insight Parties, the VS Parties, Parent and Merger Sub.

Exhibit 99.3

   Rollover Commitment Letter, dated as of March 8, 2012, from the VS Parties to Parent.

Exhibit 99.4

   Limited Guaranty, dated as of March 8, 2012, from the Insight Parties and VS Parties to Company (incorporated by reference to 10.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012).

Exhibit 99.5

   Equity Commitment Letter, dated as of March 8, 2012, from the Insight Parties to Parent.

Exhibit 99.6

   Debt Commitment Letter, dated as of March 8, 2012, by and among JP Morgan Chase Bank, N.A., J.P. Morgan Securities, LLC, Royal Bank of Canada, Barclays Bank PLC and Parent.

Exhibit 99.7

   Press Release of the Company, dated March 9, 2012 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012).

Exhibit 99.8

   Agreement and Plan of Merger, dated as of March 8, 2012, by and among Parent, Merger Sub and the Company (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 9, 2012).

 

1 

Includes an aggregate of 153,440 shares owned by Vincent C. Smith’s (“Mr. Smith”) minor children. Mr. Smith disclaims beneficial ownership of the common shares held by his children. Includes 1,262,459 shares held by Vincent C. Smith Annuity Trust 2010-1, 946,844 shares held by Vincent C. Smith Annuity Trust 2010-2, and 1,275,000 shares held by Vincent C. Smith Annuity Trust 2011-1. Includes 2,239,037 shares issuable upon exercise of stock options that are exercisable within 60 days of March 8, 2012; the economic value of 432,982 of these shares has been transferred to Mr. Smith’s former spouse pursuant to a domestic relations order and Mr. Smith disclaims beneficial ownership of these 432,982 shares.

 

- 19 -


SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: March 19, 2012     EXPEDITION HOLDING COMPANY, INC.
    By:  

/s/ Michael Triplett

      Name:   Michael Triplett
      Title:   President
Dated: March 19, 2012     EXPEDITION MERGER SUB, INC.
    By:  

/s/ Michael Triplett

    Name:   Michael Triplett
    Title:   President
Dated: March 19, 2012     INSIGHT VENTURE PARTNERS VII, L.P.
    By: Insight Venture Associates VII, L.P., its general partner
    By: Insight Ventures Associates VII, Ltd., its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President


Dated: March 19, 2012     INSIGHT VENTURE PARTNERS (CAYMAN) VII, L.P.
    By:   Insight Venture Associates VII, L.P., its general partner
    By:   Insight Venture Associates VII, Ltd., its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE PARTNERS VII (CO-INVESTORS), L.P.
    By:   Insight Venture Associates VII, L.P., its general partner
    By:   Insight Venture Associates VII, Ltd., its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE PARTNERS (DELAWARE) VII, L.P.
    By:   Insight Venture Associates VII, L.P., its general partner
    By:   Insight Venture Associates VII, Ltd., its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President


Dated: March 19, 2012     INSIGHT VENTURE PARTNERS COINVESTMENT FUND II, L.P.
    By: Insight Venture Associates Coinvestment II, L.P., its general partner
    By: Insight Holdings Group, LLC, its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES VII, L.P.
    By:   Insight Venture Associates VII, Ltd., its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES VII, LTD.
      By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President


Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES COINVESTMENT II, L.P.
    By: Insight Holdings Group, LLC, its general partner
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President
Dated: March 19, 2012     INSIGHT HOLDINGS GROUP, LLC
    By:  

/s/ Blair M. Flicker

      Name:   Blair M. Flicker
      Title:   Vice President


SCHEDULE I

Expedition Holding Company, Inc.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Michael Triplett, Director   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Richard Wells, Director   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Michael Triplett, President   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Richard Wells, Vice President and Secretary   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.


SCHEDULE II

Expedition Merger Sub, Inc.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Michael Triplett, Director

  

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.

Richard Wells, Director

  

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Michael Triplett, President   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Richard Wells, Vice President and Secretary   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.


SCHEDULE III

Insight Holdings Group, LLC

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Jeffrey Horing, Manager   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Deven Parekh, Manager   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Peter Sobiloff, Manager   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.


SCHEDULE IV

Insight Venture Associates VII, Ltd.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Jeffrey Horing, Director   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
Blair Flicker, Alternate Director   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   General Counsel and Managing Director of Insight Venture Partners    U.S.A.

 

Name and Position of Officer or
Director

  

Principal Business Address

  

Principal Occupation or
Employment

  

Citizenship

Blair Flicker, Vice President and General Counsel   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   General Counsel and Managing Director of Insight Venture Partners    U.S.A.
Mark Lessing, Vice President   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Chief Financial Officer and Managing Director of Insight Venture Partners    U.S.A.
Deven Parekh, Vice President   

680 Fifth Avenue, 8th Floor

New York, NY 10019

   Managing Director of Insight Venture Partners    U.S.A.
EX-99.1 2 d318396dex991.htm JOINT FILING AGREEMENT, DATED MARCH 19, 2012. Joint Filing Agreement, dated March 19, 2012.

Exhibit 99.1

JOINT FILING AGREEMENT

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that it knows or has reason to believe that such information is inaccurate. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument.

 

Dated: March 19, 2012     EXPEDITION HOLDING COMPANY, INC.
    By:  

/s/ Michael Triplett

      Name:   Michael Triplett
      Title:   President
Dated: March 19, 2012     EXPEDITION MERGER SUB, INC.
    By:  

/s/ Michael Triplett

      Name:   Michael Triplett
      Title:   President


Dated: March 19, 2012     INSIGHT VENTURE PARTNERS VII, L.P.
    INSIGHT VENTURE PARTNERS (CAYMAN) VII, L.P.
    INSIGHT VENTURE PARTNERS VII (CO-INVESTORS), L.P.
    INSIGHT VENTURE PARTNERS (DELAWARE) VII, L.P.
      By:   Insight Venture Associates VII, L.P.,
        its general partner
      By:   Insight Venture Associates VII, Ltd.,
        its general partner
        By:  

/s/ Blair M. Flicker

          Name:   Blair M. Flicker
          Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE PARTNERS COINVESTMENT FUND II, L.P.
      By:   Insight Venture Associates Coinvestment II, L.P., its general partner
      By:   Insight Holdings Group, LLC, its general partner
        By:  

/s/ Blair M. Flicker

          Name:   Blair M. Flicker
          Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES VII, L.P.
      By:   Insight Venture Associates VII, Ltd.,
        its general partner
        By:  

/s/ Blair M. Flicker

          Name:   Blair M. Flicker
          Title:   Vice President

 

- 2 -


Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES VII, LTD.
        By:  

/s/ Blair M. Flicker

          Name:   Blair M. Flicker
          Title:   Vice President
Dated: March 19, 2012     INSIGHT VENTURE ASSOCIATES COINVESTMENT II, L.P.
      By:   Insight Holdings Group, LLC, its general partner
        By:  

/s/ Blair M. Flicker

          Name:   Blair M. Flicker
          Title:   Vice President
Dated: March 19, 2012     INSIGHT HOLDINGS GROUP, LLC
        By:  

/s/ Blair M. Flicker

          Name:     Blair M. Flicker
          Title:     Vice President

 

- 3 -

EX-99.2 3 d318396dex992.htm TRANSACTION SUPPORT AGREEMENT Transaction Support Agreement

Exhibit 99.2

EXECUTION VERSION

TRANSACTION SUPPORT AGREEMENT

This Transaction Support Agreement (this “Agreement”), dated March 8, 2012, is by and among Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners (Co-Investors) VII, L.P., Insight Venture Partners (Delaware) VII, L.P., and Insight Venture Partners Coinvestment Fund II, L.P. (collectively, “Insight”), Vincent Smith (“VS”) and the Vincent C. Smith Annuity Trust 2010-1,the Vincent C. Smith Annuity Trust 2010-2, and the Vincent C. Smith Annuity Trust 2011-1 (collectively with VS, the “VS Parties”), Expedition Holding Company, Inc. (“Parent”), and Expedition Merger Sub, Inc. (“Merger Sub”). Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Merger Agreement (as defined below).

RECITALS

WHEREAS, Insight has caused the formation of Parent and its wholly-owned subsidiary, Merger Sub;

WHEREAS, concurrently with the execution hereof, Parent, Merger Sub and Quest Software, Inc. (the “Company”) have entered into an Agreement and Plan of Merger, dated as of the date hereof (as may be amended in accordance with Section 2 of this Agreement, the “Merger Agreement”), pursuant to which Merger Sub will be merged with and into the Company and the Company will become a wholly-owned subsidiary of Parent; and

WHEREAS, Parent, Merger Sub, Insight and each of the VS Parties desire to agree to certain terms and conditions that will govern certain aspects of their relationship with respect to the transactions contemplated by the Merger Agreement.

AGREEMENT

In consideration of the mutual promises and covenants set forth herein, Parent, Merger Sub, Insight and each VS Party agree as follows:

Section 1. Transfer.

(a) Each VS Party agrees, and agrees to cause his or its Affiliates, not to, other than as may be required by a court order or as a result of operation of law in connection with the Company or any VS Party consummating a transaction which is not prohibited by the terms of this Agreement at a time when no VS Party has violated this Agreement in any material respect, (i) sell, transfer, pledge, encumber, assign or otherwise dispose of (including, without limitation, by gift, merger, consolidation or reorganization), or enter into any contract, option or other agreement providing for the sale, transfer, pledge, encumbrance, assignment or other disposition of or any interest in, or limitation on the voting rights of, or otherwise transfer (any such action, a “Transfer”) any of the Owned Shares (as defined below) owned by it or him, (ii) enter into any binding written agreement with respect to any Transfer of any or all of the Owned Shares owned by it or him or any interest therein, (iii) grant any proxies or powers of attorney in or with respect to the Owned Shares owned by it or him, deposit any Owned Shares owned by it or him into a voting trust or enter into a voting agreement or arrangement with respect to any Owned Shares owned by it or him, or take any other action, that would in any way restrict, limit


or interfere with the performance of its or his obligations hereunder other than in connection with any Transfer which is an Excluded Transfer (as defined below). The foregoing restrictions on Transfers shall not prohibit (x) the exercise by any VS Party of any Company stock options or the conversion of any Restricted Stock Units, (y) the taking of any action otherwise prohibited by this Section 1(a) in connection with the consummation of any Company Acquisition Agreement that constitutes a Superior Proposal or pursuant to any rollover, contribution or similar agreement entered into by any VS Party in connection with such Superior Proposal, or (z) any Transfers by any VS Party (A) in connection with the transactions contemplated by the Merger Agreement and by the Rollover Letter, (B) to any member of VS’s immediate family (including his current or former spouse and their respective immediate families) or for estate planning purposes (such transferees pursuant to this clause (B), “Permitted Transferees”), or (C) in connection with the exercise of remedies of lenders to the VS Parties for which the Owned Shares are pledged as collateral as of the date hereof pursuant to the agreements set forth on Schedule A hereto (or any financing facility entered into after the date hereof to replace such specified facilities) other than as a result of any willful act or omission by any VS Party (it being understood that the failure by any VS Party to use reasonable efforts to avoid any such Transfer, including a failure to use reasonable efforts to refinance such indebtedness on terms that are not materially less favorable to such VS Party and do not require any such VS Party to post any collateral other than Owned Shares or incur any expense (other than any expense that is reasonable or customary for the refinancing of a loan of this type), shall constitute a willful act or omission for purposes of this Section 1) (any such Transfer, an “Excluded Transfer”); provided, in each case, that the VS Party complies with the other provisions of this Agreement and, in the case of the foregoing clause (B), the Permitted Transferee agrees to be bound by the provisions of this Agreement with respect to such transferred Owned Shares in a written instrument reasonably satisfactory to Insight, pursuant to which such transferee shall be bound by all of the obligations applicable to such VS Party transferring such Owned Shares, and VS shall have the right, power and authority to act on behalf of such transferees with respect to such Owned Shares in connection with the obligations set forth in this Agreement. For purposes of this Agreement, “Owned Shares” means, without duplication, the aggregate number of shares of common stock of the Company, or options to acquire common stock of the Company, that any VS Party or any of its or his Affiliates is the record or beneficial owner of, together with any shares of common stock of the Company or other voting capital stock of Company acquired after the date hereof by any VS Party or any of its or his Affiliates, whether upon the exercise of warrants, options, conversion of convertible securities or otherwise.

(b) Each VS Party has entered into the rollover commitment letter in substantially the form attached hereto as Exhibit A, and Insight shall cause Parent to, and Parent shall, include such rollover commitment letter in the form attached as Exhibit A as the Rollover Letter described as an exhibit to the Merger Agreement.

Section 2. Transaction Terms.

(a) Parent, Merger Sub, Insight and the VS Parties each agree to pursue, and cooperate with each other with respect to, the transactions contemplated by the Merger Agreement, the Equity Financing, the Debt Financing and the Rollover Investment (collectively, the “Transactions”) in accordance with the terms of this Agreement, the Merger Agreement, the Equity Funding Letters, the Debt Commitment Letter and the Rollover Letter; provided, that

 

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Insight may, in its sole discretion, elect to assign all or any portion of its equity funding commitment contemplated by the Equity Funding Letters which is in excess of its equity funding commitment in the amount of one hundred and fifty million dollars ($150,000,000) (each such assignee, an “Additional Equity Investor”); provided that each such assignee agrees to be bound by the provisions of this Agreement, the Equity Funding Letters, the Guaranty and each other agreement or document entered into by Insight in connection with this transaction, in a written instrument reasonably satisfactory to Insight and the VS Parties, pursuant to which such assignee shall be bound by all of the obligations applicable to Insight, and Insight shall have the right, power and authority to act on behalf of such assignees with respect to the Transactions. Insight may elect to cause Parent and Merger Sub to amend, modify or alter any of the terms of the Merger Agreement, the Equity Funding Letter or the Debt Financing Letter (or any other Exhibit thereto) after consultation, in good faith, with VS; provided, however, that Insight shall not, without the prior written consent of the VS Parties, permit Parent or Merger Sub to, and neither Parent nor Merger Sub shall commit to, or enter into any amendment, modification, waiver or alteration (which shall include any change in price) of the Merger Agreement, the Equity Funding Letter or the Debt Financing Letter that (i) could reasonably be expected to materially and adversely impact the VS Parties, (ii) alters the form or amount of merger consideration, waives the satisfaction of any of obligations of Parent and Merger Sub to effect the Closing as set forth in Sections 6.1 and 6.2 of the Merger Agreement or alters the amount or conditions under which the Parent Termination Fee or Damages Remedy would be payable by Parent or (iii) changes the structure or intended tax treatment of the Merger or any of the Transactions (any alteration, modification, waiver or amendment described in clause (i), (ii) or (iii) above that was not consented to in writing by the VS Parties, a “Consent Triggering Event”). Insight hereby agrees to give the VS Parties advance written notice of any Consent Triggering Event as promptly as practicable following the occurrence of any Consent Triggering Event which has not been previously agreed to in writing by the VS Parties, and the VS Parties will notify Insight in writing whether or not such VS Parties consents thereto, within 24 hours of receipt of such notice, or in the case of a Consent Triggering Event that relates to a notice period described in Section 5.2(e) or Section 5.2(f) of the Merger Agreement (a “Matching Period”), then in no event later than the end of such Matching Period.

(b) The VS Parties hereby agree that they shall not be entitled to any portion of any Termination Fee that may be payable by the Company to Parent or Merger Sub in connection with a termination of the Merger Agreement. In the event that Parent or Merger Sub receives the Parent Expenses and/or Parent, Merger Sub, Insight or any of their respective affiliates receives any reimbursement, fee, payment or other amount as a result of any litigation, settlement or other action relating to such termination of the Merger Agreement (other than the Termination Fee), the Debt Commitment Letter or any of the transactions contemplated thereby (the “Parent Expenses Recovery”) in connection with a termination of the Merger Agreement, each of Insight and the VS Parties shall be reimbursed by Parent for their documented, third party, out-of-pocket fees and expenses for legal, due diligence, accounting and travel incurred in connection with the negotiation, preparation, interpretation and execution of this Agreement, the Merger Agreement, the Equity Funding Letters, the Debt Commitment Letter, the Rollover Letter, the Stockholders Agreement and any agreements or other matters relating thereto, including any and all costs and expenses in connection with any action, suit or proceeding brought by any person (other than a party hereto) relating to, or arising from, the transactions contemplated by the Merger Agreement (“Reimbursable Expenses”); provided, in the event that

 

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the amount of the Parent Expenses Recovery is not sufficient to reimburse all of Insight’s and the VS Parties’ Reimbursable Expenses, in each case in connection with the transactions contemplated by the Merger Agreement, such reimbursement shall be made to Insight, on the one hand, and the VS Parties, on the other hand, on pro rata basis based on the relative amount of their respective Reimbursable Expenses. Insight, on the one hand, and the VS Parties, jointly and severally on the other, shall each have an obligation to pay, or reimburse Parent, for fifty percent (50%) of any Parent Termination Fee, Damages Remedy and/or amounts pursuant to Section 7.3(d) of the Merger Agreement, in each case that Parent or Merger Sub actually become required to pay to the Company pursuant to the terms of the Merger Agreement (collectively, “Parent Obligations”) and each of the parties hereto agrees that (1) the Parent Obligations shall be first paid from any amount by which any Parent Expense Recovery exceeds the aggregate Reimbursable Expenses of the parties, and (2) if the Parent Expense Recovery exceeds the Reimbursable Expenses and the Parent Obligations actually due and payable in accordance with the Merger Agreement, then the remaining balance of such Parent Expense Recovery shall be allocated equally among Insight, on the one hand, and the VS Parties, on the other hand. The parties hereto further agree to the extent such Parent Expense Recovery is insufficient to satisfy the Parent Obligations, then such unpaid portion of the Parent Obligations shall be allocated equally among Insight, on the one hand, and the VS Parties, on the other hand; provided, that if Insight, on the one hand, or the VS Parties, on the other, pay any portion of the Parent Obligations pursuant to the Guaranty, or otherwise, in any other proportion than as described herein, then Insight, on the one hand, or the VS Parties, on the other, shall have a right to contribution from the other party and shall be entitled to indemnification from the other party in respect of any costs or expenses (including attorneys fees) expended in enforcing such right of contribution or indemnity; provided, further, in the event that Parent, Merger Sub or any Guarantor (as defined in the Guaranty) becomes obligated to pay any Parent Obligations as a result of (i) any material breach of the Rollover Letter by any VS Party or any VS Party’s failure to fund the Rollover Investment (or any portion thereof) when required to do so pursuant to the terms and conditions of the Rollover Letter (other than a failure to fund the Rollover Investment that results from the exercise of remedies by lenders to the VS Parties for which Rollover Shares are pledged as collateral as of the date hereof pursuant to the agreements set forth on Schedule A hereto (or any financing facility entered into after the date hereof to replace such specified facilities), but in no event excluding any such failure that results from any willful act or omission by any VS Party, it being understood that the failure by any VS Party to use reasonable efforts to avoid any such exercise of remedies, including a failure to use reasonable efforts to refinance such indebtedness on terms that are not materially less favorable to such VS Party and do not require any such VS Party to post any collateral other than Owned Shares or incur any expense (other than any expense that is reasonable or customary for the refinancing of a loan of this type), shall constitute a willful act or omission for purposes of this Section 2(b), and Insight has irrevocably confirmed that the Equity Financing would be funded at the Closing if the Rollover Investment was funded, then the VS Parties shall, jointly and severally, pay, or cause to be paid (or reimburse Parent, Merger Sub, Insight or any of their respective Affiliates to the extent they have paid, pursuant to the Guaranty or otherwise, any portion of) the full amount of any such Parent Obligations when such amounts are due and payable by Parent pursuant to the terms of the Merger Agreement, or (ii) Insight’s failure to (A) fund the Equity Financing when required to do so pursuant to the terms and conditions of the Equity Funding Letters, and the VS Parties have irrevocably confirmed that the Rollover Investment would be funded at the Closing if the

 

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Equity Financing was funded, (B) cause Parent or Merger Sub to either perform any action which Parent or Merger Sub was required to perform, or refrain from taking any action which was prohibited, pursuant to the terms of the Merger Agreement, in each case which actions were solely within Insight’s control (for the avoidance of doubt, neither (x) any action that would require Insight to fund any amounts in excess of those expressly set forth in the Equity Funding Letters, nor (y) any Financing Failure that was not directly and proximately caused by a willful or intentional breach by Insight of Section 5.5(a) of the Merger Agreement, shall be a failure to cause the performance of any required action, or the failure to refrain from taking any prohibited action, for purposes of this subsection (B)), or (C) obtain the consent of the VS Parties with respect to any Consent Triggering Event without curing, if capable of cure, such failure within two (2) Business Days, then Insight shall pay, or cause to be paid (or reimburse the VS Parties to the extent they have paid, pursuant to the Guaranty or otherwise, any portion of) the full amount of any such Parent Obligations when such amounts are due and payable by Parent pursuant to the terms of the Merger Agreement.

(c) In connection with any claim relating to the payment of the Parent Obligations, the parties hereto agree that neither Insight, on one hand, nor the VS Parties, on the other hand, shall, without the prior written consent of the other party (which consent will not be unreasonably conditioned, withheld or delayed), settle, compromise or offer to settle or compromise such claim relating to the Parent Obligations on a basis that would result in (i) the imposition of a consent order, injunction or decree that would restrict or mandate the future activity or conduct of the other party or any of its Affiliates, (ii) a finding or admission of a violation of Law or violation of the rights of any Person by such other party or any of its Affiliates, or (iii) any monetary liability of the other party that will not be promptly paid or reimbursed by the settling or compromising such claim.

(d) On the Closing Date, Parent, Insight and the VS Parties shall (i) enter into that certain Stockholders Agreement, substantially in the form attached hereto as Exhibit B, (ii) cause the Certificate of Incorporation and Bylaws of Parent to be amended and restated in a form to be agreed upon between Insight and the VS Parties within ten (10) Business Days of the date hereof, which shall reflect the terms of the Stockholders Agreement, and (iii) cause Parent to enter into management rights letters with Insight on customary terms and in a form reasonably acceptable to Insight, in substantially the form attached hereto as Exhibit C. Each Additional Equity Investor shall execute a joinder to that certain Stockholders Agreement thereby becoming parties thereto as Institutional Investors (as defined therein).

(e) Parent shall, and shall cause the Company to promptly after the consummation of the Merger, reimburse Insight and the VS Parties for all of their Reimbursable Expenses.

Section 3. Confidentiality; Participation in Takeover Proposals.

(a) Each VS Party agrees that he or it will not disclose any assumption, information, evaluation or view of Insight or its Affiliates or representatives in connection with the Transactions (collectively, the “Confidential Information”), other than to (i) his or its representatives who legitimately need to know such information and are bound by obligations of confidentiality to Insight or the VS and (ii) the extent required by law (in which case VS will, to

 

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the extent not prohibited by law, provide Insight with advance notice of such required disclosure and reasonably cooperate with Insight (at Insight’s sole cost and expense) to limit or prevent such disclosure).

(b) Notwithstanding anything to the contrary in this Agreement, (i) nothing herein shall prevent VS from (A) engaging or entering into any unsolicited discussions, agreements, understandings or arrangements with any third Person regarding his or his Affiliates’ or its or its Affiliates’ direct or indirect equity participation, investment or reinvestment with respect to any Takeover Proposal (or as otherwise permitted by (C) below), (B) if requested by the Board of Directors of the Company or the Special Committee, participating in a due diligence process with any third party with respect to any potential Takeover Proposal or (C) from complying with any agreement between VS and the Company with respect to his obligations to participate in the activities of the Company relation to the Go-Shop Period, in connection with a potential Takeover Proposal or any other matter relating to the actions which the Company may take during the Go-Shop Period, and (ii) none of the provisions of this Agreement shall restrict VS from taking, or refraining from taking, any action solely in his capacity as a member of or Chairman of the Board of Directors of the Company or an executive officer of the Company.

Section 4. VS Loan. As of the date hereof, the VS Parties have indebtedness for borrowed money in the aggregate principal amount in excess of $120 million pursuant to those certain agreements set forth on Schedule A (individually and/or collectively as the context requires, the “Existing Loan”), which indebtedness is secured by a pledge of all shares of Common Stock of the Company held by the VS Parties. From and after the date hereof, until the earlier of the Closing Date and the date on which the Merger Agreement is validly terminated in accordance with its terms, no Existing Loan shall be modified or amended, in any material respect, other than with respect to any partial or full repayment of the Existing Loan that does not involve the sale, transfer or other disposition of any Owned Shares other than pursuant to an Excluded Transfer. Parent, Merger Sub, Insight and the VS Parties agree that, on the Closing Date, Parent shall loan the VS Parties $120 million immediately prior the Closing, on the terms and conditions of the term sheet attached hereto as Exhibit D, as modified only as agreed in writing by the VS Parties (the “VS Loan”), with the proceeds of the VS Loan being used to repay each Existing Loan in full, immediately prior to the consummation of the Merger, in order to effect the release of any liens, charges or encumbrances on the Owned Shares on or immediately prior to the time in which such VS Parties are required to consummate the Rollover Investment at the Closing. At the Closing, the VS Parties and the Company shall enter into a promissory note and pledge and security agreement reflecting the terms set forth on Exhibit D, and otherwise reasonably acceptable to each of the parties hereto, which shall govern the terms and conditions of the VS Loan. The obligations of the VS Parties set forth in the immediately preceding sentence are expressly conditioned upon the satisfaction of the conditions to the Rollover Investment set forth in the Rollover Letter, including the funding of the VS Loan in an amount and at a time sufficient to discharge the outstanding Existing Loans immediately prior to the Closing and consummate the Rollover Investment substantially simultaneously with the Closing.

Section 5. Public Relations Coordination. Each of the parties hereto will coordinate in good faith with respect to any and all press releases, other public relations materials or any required filings by Insight, the VS Parties, Parent or Merger Sub with respect to the Transactions or the transactions contemplated by this Agreement; provided that, in the case of VS, this Section 5 shall not apply in connection with his capacity as an officer or director of the Company.

 

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Section 6. Termination. The respective rights and obligations of each party hereto under this Agreement will terminate concurrently with the earlier of (i) the consummation of the transactions contemplated by the Merger Agreement, (ii) the termination of the Merger Agreement in accordance with its terms or (iii) a Consent Triggering Event having occurred that, to the extent subject to cure, was not subsequently cured by Insight two (2) Business Days after notice of such Consent Triggering Event was provided to Insight by VS; provided, however, that the rights and obligations set forth in Section 2(d) (as a result of a termination as a result of clause (i) above), Section 2(b), Section 2(c), Sections 3(a), 5, 7, 8, 9 and this Section 6 (the “Surviving Obligations”) shall survive such termination; provided, further, that no termination pursuant to this Section 6 shall relieve any party hereto of any liability hereunder resulting from any breach of this Agreement prior to such termination. Upon termination of this Agreement in accordance with this Section 6, this Agreement (other than the Surviving Obligations) shall become void and of no further force or effect and the transactions contemplated hereby shall be abandoned, and no party shall have any further obligations or liabilities hereunder.

Section 7. Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the law of any other state. Each of the parties to this Agreement (a) consents to submit itself or himself to the personal jurisdiction of the Court of Chancery of the State of Delaware in any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, (b) agrees that all claims in respect of such action or proceeding may be heard and determined only in such court, (c) agrees that it or he shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court and (d) agrees not to bring any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement in any other court. Each of the parties hereto waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. To the fullest extent permitted by law, any party hereto may make service on another party by sending or delivering a copy of the process to the party to be served in a manner permitted under the laws of the State of Delaware. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTIONS, SUITS, DEMAND LETTERS, JUDICIAL, ADMINISTRATIVE OR REGULATORY PROCEEDINGS, OR HEARINGS, NOTICES OF VIOLATION OR INVESTIGATIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND (B) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY.

Section 8. Specific Performance. Each of the parties hereto agrees that irreparable damage would occur in the event that any covenant, obligation or agreement set forth in this Agreement were not performed by him or it in accordance with its specific terms or were

 

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otherwise breached. Each of the parties hereto agrees that, in the event of any breach or threatened breach by him or it of any covenant, obligation or agreement contained in this Agreement, such failure to perform or breach may cause the other parties hereto to sustain damages for which he or it would not have an adequate remedy at law for money damages, and thus each of the parties hereto shall be entitled (in addition to any other remedy that may be available to him or it, including monetary damages) to seek (a) a decree or order of specific performance to enforce the observance and performance of such covenant, obligation or agreement and (b) an injunction restraining such breach or threatened breach. Each of the parties hereto further agrees that the other parties hereto shall not be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 8, and each of the parties hereto irrevocably waives any right he or it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

Section 9. Miscellaneous.

(a) 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 hereof so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party, or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable 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 so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party, and this Agreement shall be 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.

(b) Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the parties hereto may be corporations, limited partnerships or trusts, Parent, Merger Sub, Insight and each VS Party covenants, agrees and acknowledges that no recourse under this Agreement shall be had against any of the Non-Recourse Parties, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Non-Recourse Party under this Agreement for any claim based on, in respect of or by reason of such obligations or their creation. As used herein, the term “Non-Recourse Parties” shall mean, collectively, with respect to Parent, Merger, Sub, Insight or any VS Party, any of their respective former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, management companies, members, stockholders, Affiliates or assignees and any and all former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, management companies, members, stockholders,

 

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Affiliates or assignees of any of the foregoing, and any and all former, current or future estates, heirs, executors, administrators, trustees, successors or assigns of any of the foregoing, only in such capacities; provided, nothing in this Section 9(b) shall limit the recourse under this Agreement against any Additional Equity Investor, Permitted Transferee, or any other Person that becomes party to this Agreement, or to whom any rights or obligations are assigned in accordance with this Agreement.

(c) The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.

(d) This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any person or entity who or which is not a party hereto. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by any of the parties without the prior written consent of the other parties, other than, (i) in the case of Insight, to any Additional Equity Investor in accordance with Section 2(a) and (ii) in the case of any VS Investors, to any Permitted Transferee in accordance with Section 1(b). No assignment by any party hereto shall relieve such party of any of its obligations hereunder. Subject to the preceding two sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 9(d) shall be null and void.

(e) This Agreement may not be amended, altered, supplemented, waived or otherwise modified except upon the execution and delivery of a written agreement executed by each of the parties hereto. Each party hereto agrees that it shall not indirectly accomplish that which it is not permitted to accomplish directly under this Agreement.

(f) This Agreement (including the Exhibits hereto and the documents and instruments referred to herein), together with the Merger Agreement, the Guaranty, the Equity Funding Letters and the Rollover Letter, constitutes the entire agreement among the parties to this Agreement and supersedes any prior understandings, agreements or representations by or among the parties hereto, or any of them, written or oral, with respect to the subject matter hereof, and the parties hereto specifically disclaim reliance on any such prior understandings, agreements or representations to the extent not embodied in this Agreement.

(g) All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (A) on the date of service if served personally on the party to whom notice is to be given; (B) on the day of transmission if sent via facsimile transmission to the facsimile number specified by the applicable party in the Stockholders Agreement, and confirmation of receipt is obtained promptly after completion of transmission; (C) on the day after delivery to Federal Express or a similar overnight courier; or (D) on the fifth (5th) day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid and properly addressed, to the party at its address specified in the Stockholders Agreement.

 

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(h) This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other party, it being understood that all parties need not sign the same counterpart. This Agreement may be executed and delivered by facsimile transmission or via email in .pdf format.

(i) This Agreement does not establish or otherwise constitute a joint venture or a partnership between the parties, nor constitute any party an agent of any other party for any purpose.

[remainder of the page intentionally left blank]

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as of the date first set forth above.

 

INSIGHT VENTURE PARTNERS VII, L.P.
by:   Insight Venture Associates VII, L.P., its general partner
by:   Insight Venture Associates VII, Ltd., its general partner
By:  

/s/ Blair M. Flicker

  Name:   Blair M. Flicker
  Title:   Vice President
INSIGHT VENTURE PARTNERS (CAYMAN) VII, L.P.
by: Insight Venture Associates VII, L.P., its general partner
by: Insight Venture Associates VII, Ltd., its general partner
By:  

/s/ Blair M. Flicker

  Name:   Blair M. Flicker
  Title:   Vice President
INSIGHT VENTURE PARTNERS VII (CO-INVESTORS), L.P.
by: Insight Venture Associates VII, L.P., its general partner
by: Insight Venture Associates VII, Ltd., its general partner
By:  

/s/ Blair M. Flicker

  Name:   Blair M. Flicker
  Title:   Vice President

[Signature page to Transaction Support Agreement]


INSIGHT VENTURE PARTNERS (DELAWARE) VII, L.P.
by: Insight Venture Associates VII, L.P., its general partner
by: Insight Venture Associates VII, Ltd., its general partner
By:  

/s/ Blair M. Flicker

  Name:   Blair M. Flicker
  Title:   Vice President
INSIGHT VENTURE PARTNERS COINVESTMENT FUND II, L.P.
By:   Insight Venture Associates Coinvestment II, L.P., its general partner
By:   Insight Holdings Group, LLC, its general partner
By:  

/s/ Blair M. Flicker

  Name:   Blair M. Flicker
  Title:   Vice President

[Signature page to Transaction Support Agreement]


IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as of the date first set forth above.

 

/s/ Vincent Smith

Vincent C. Smith
VINCENT C. SMITH ANNUITY TRUST 2010-1
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee
VINCENT C. SMITH ANNUITY TRUST 2010-2
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee

[Signature page to Transaction Support Agreement]


VINCENT C. SMITH ANNUITY TRUST 2011-1
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee

[Signature page to Transaction Support Agreement]


IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement as of the date first set forth above.

 

EXPEDITION HOLDING COMPANY, INC.
By:  

/s/    Michael Triplett

  Name:    Michael Triplett
  Title:      President
EXPEDITION MERGER SUB, INC.
By:  

/s/    Michael Triplett

  Name:    Michael Triplett
  Title:      President

[Signature page to Transaction Support Agreement]

EX-99.3 4 d318396dex993.htm ROLLOVER COMMITMENT LETTER, DATED AS OF MARCH 8, 2012 Rollover Commitment Letter, dated as of March 8, 2012

Exhibit 99.3

EXECUTION VERSION

March 8, 2012

Expedition Holding Company, Inc.

c/o Insight Venture Management, LLC

680 Fifth Avenue, 8th Floor

New York, New York 10019

Ladies and Gentlemen:

This letter agreement (this “Agreement”) sets forth the commitment of the undersigned (the “Equity Providers”), subject to the terms and conditions contained herein, to transfer, contribute and deliver the number of shares of Company Common Stock described in Section 1 below to Expedition Holding Company, Inc., a Delaware corporation (“Parent”) in exchange for the equity of Parent described in Section 1 below. It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), dated as of the date hereof, by and among Quest Software, Inc. (the “Company”), Parent and Expedition Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), Merger Sub will be merged with and into the Company (the “Merger”), with the Company being the surviving entity of such Merger and a wholly-owned subsidiary of Parent. The parties hereto acknowledge and agree that, as an integral part of the Merger, (i) the transfer by the Equity Providers of Company Common Stock to Parent in exchange for stock of Parent, pursuant to the terms of this Agreement, and (ii) the transfer by the Sponsors (as defined below) of cash to Parent in exchange for stock of Parent, pursuant to the terms of the Equity Funding Letter, are collectively intended to qualify as transfers within the meaning of Section 351(a) of the Code. Each capitalized term used and not defined herein shall have the meaning ascribed thereto in the Merger Agreement.

1. Equity Commitment. Each Equity Provider hereby commits (its “Equity Commitment”), subject to the terms and conditions set forth herein, to transfer, contribute and deliver to Parent immediately prior to the Effective Time, following the funding of the Shareholder Loan (as defined in the Debt Commitment Letter) from the proceeds of the Equity Financing and/or the Debt Financing and substantially concurrently with the funding of the Debt Financing and the Shareholder Loan and following the repayment of the Existing Loan (as defined in the Transaction Support Agreement) with the proceeds of the Shareholder Loan and the release by the lenders under such Existing Loan of all applicable Liens on such Rollover Contribution Shares existing pursuant to the Existing Loan, all of the shares of Company Common Stock set forth beside his or its name on Schedule A hereto, unless otherwise noted therein (the aggregate amount of such Company Common Stock, the “Rollover Contribution Shares”) in exchange for a pro rata (in kind and amount) share of Class A Common Stock, par value $0.01 per share, of Parent (the “Class A Common Stock”) based on the value of the aggregate equity contributions to Parent made in connection with the Merger at or prior to the Effective Time and assuming that the value of each Rollover Contribution Share is equal to the Merger Consideration. The Class A Common Stock shall be issued in accordance with and subject to the terms and conditions set forth in that certain Stockholders Agreement to be entered into on the Closing Date by and among Parent, Sponsors, the Equity Providers and certain other investors specified therein (the


Stockholders Agreement”), in substantially the form attached to the Transaction Support Agreement (as defined below). The capital stock of the Parent issuable to the Equity Providers and each other party providing Equity Financing shall be in the amounts and in the classes set forth on Schedule B attached hereto. Each Equity Provider hereby agrees that he or it shall use reasonable efforts to ensure that no portion of the Rollover Contribution Shares shall be transferred or otherwise disposed prior to the Closing other than pursuant to an Excluded Transfer (as defined in the Transaction Support Agreement), including, without limitation, pursuant to any foreclosure with respect to any Rollover Contribution Shares that are pledged as collateral to secure indebtedness of any Equity Provider; provided, that no Equity Provider shall, in connection with such reasonable efforts, be required to refinance such indebtedness on terms that (i) are materially less favorable to such Equity Provider or (ii) require any such Equity Provider to post any collateral other than Rollover Contribution Shares or incur any expense (other than any expense that is reasonable or customary for the refinancing of a loan of this type) to consummate such refinancing.

2. Option and RSU Commitment. Each Equity Provider hereby acknowledges and agrees that immediately prior to the Effective Time, (i) each of the Options and Restricted Stock Units set forth beside his or its name on Schedule A hereto (such Options and Restricted Stock Units, the “Rollover Equity Awards”) will be exchanged for a stock option (a “Parent Option”) or restricted stock unit (a “Parent RSU” and, together with the Parent Options, the “Parent Equity Awards”), as applicable, pursuant to and subject to the terms provided herein, in the Stockholders Agreement and in Parent’s stock incentive plan (such plan to be adopted prior to the Effective Time with such customary terms and conditions appropriate for a private company as are mutually agreed upon by each Equity Provider and Parent, and as amended from time to time in accordance with the provisions thereof, the “Plan”), with respect to the number of shares of equity of Parent as set forth on Schedule A hereto and, if applicable, with an exercise price per share of equity of Parent as set forth on Schedule A hereto, in each case subject to adjustment pursuant to the Plan in respect of transactions occurring after the Effective Time (its “Equity Award Commitment” and, together with the Equity Commitment, the “Commitments”), and (ii) any Options and Restricted Stock Units not otherwise set forth on Schedule A hereto shall be cancelled as of the Effective Time without payment therefor and have no further force or effect. The exchange of an Option for a Parent Option is intended to qualify as an option substitution under Treas. Reg. §1.409A-1(b)(5)(v)(D) and will be construed accordingly. Without limiting the foregoing, (i) the Parent Equity Awards will, to the extent not vested as of the Effective Time, continue to vest in accordance with the vesting schedule set forth in the corresponding Rollover Equity Award; (ii) the Parent Options will expire not later than the latest date on which the corresponding Option would have expired; (iii) the Parent Options will remain subject to the post-termination provisions applicable to the corresponding Option; and (iv) the Parent Equity Awards will be governed in all respects by the terms of the corresponding Option and Restricted Stock Unit, except for (A) the number and type of shares of equity of Parent subject to the Parent Option, (B) the exercise price of the Parent Option, (C) the provisions of the Plan applicable to governance, amendment, termination, administration, interpretation, transfer restrictions, drag along rights, voting proxies and similar matters, to the extent not inconsistent with the terms of the Stockholders Agreement, and (D) all other provisions of the Plan that as applied to the Parent Option would not be treated as inconsistent with satisfaction of the requirements of Treas. Reg. §1.409A-1(b)(5)(v)(D). The Equity Provider acknowledges and agrees that the provisions of Section 2 of the Merger Agreement shall not apply to the Rollover Equity Awards and that the consummation of the Merger in accordance with the terms of the Merger Agreement will not result in any accelerated vesting of the Rollover Equity Awards.

 

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3. Conditions. The Commitments shall be subject to (i) the execution and delivery of the Merger Agreement by the Company, (ii) the satisfaction or waiver of each of the conditions to Parent’s and Merger Sub’s obligations to effect the Closing set forth in Sections 6.1 and 6.2 of the Merger Agreement (other than any conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions), as determined by Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners VII (Co-Investors), L.P., Insight Venture Partners (Delaware) VII, L.P. and Insight Venture Partners Coinvestment Fund II, L.P. (collectively, the “Sponsors”), or as determined by a court enforcing a Sponsors’ or the Equity Providers’ equity commitments in a proceeding in accordance with Section 8.8 of the Merger Agreement, (iii) the Debt Financing (including any alternative financing that has been obtained in accordance with, and satisfies the conditions of, Section 5.5(a) of the Merger Agreement) has been funded in accordance with the terms thereof or will be funded in accordance with the terms thereof at the Closing if the Equity Financing is funded at the Closing and the Rollover Investment is made at Closing, (iv) the substantially simultaneous closing of the contributions contemplated by each of the Equity Funding Letters (subject only to the funding of the Debt Financing and the receipt of the Rollover Investment at Closing), (v) the substantially simultaneous consummation of the Merger in accordance with the terms of the Merger Agreement, (vi) the funding of the Shareholder Loan in accordance with the terms of the Financing Letters, and (vii) the Transaction Support Agreement, dated as of the date hereof, by and among Sponsors, the Equity Providers, Parent and Merger Sub (the “Transaction Support Agreement”) has not been terminated due to the occurrence of a Consent Triggering Event (as defined in the Transaction Support Agreement).

4. Parties in Interest; Third Party Beneficiaries. The parties hereto hereby agree that their respective agreements and obligations set forth herein are solely for the benefit of the other parties hereto and their respective successors and permitted assigns, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the Sponsors and the parties hereto and their respective successors and permitted assigns any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Parent to enforce, the obligations set forth herein; provided, that the Company is an express third-party beneficiary hereof and shall have the right directly to enforce specifically the terms and provisions of this Agreement against the Equity Providers in accordance with the terms of this Agreement and the Merger Agreement.

5. Enforceability. This Agreement may only be enforced by (i) Parent at the direction of the Sponsors, (ii) the Company pursuant to the Company’s right to seek specific performance of the Parent’s obligation to enforce each of the Equity Providers’ obligation to fund the Commitments in accordance with the terms hereof, pursuant to, and subject to, and solely in accordance with, the terms and conditions of, Section 8.8 of the Merger Agreement and those set forth herein or (iii) the Company directly seeking specific performance of each Equity Provider’s obligation to fund its Commitments under the circumstances and only under the circumstances in which the Company would be permitted by Section 8.8 of the Merger Agreement to obtain specific performance requiring Parent to enforce each Equity Provider’s obligation to fund its

 

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Commitments. Each Equity Provider agrees that irreparable damage may occur in the event that any covenant, obligation or agreement set forth in this Agreement were not performed by him or it in accordance with its specific terms or were otherwise breached. Each Equity Provider agrees that, in the event of any breach or threatened breach by it or him of any covenant, obligation or agreement contained in this Agreement, such failure to perform or breach will cause Parent and/or the Company to sustain damages for which they would not have an adequate remedy at law for money damages, and thus Parent and/or the Company shall be entitled (in addition to any other remedy that may be available to them, including monetary damages) to seek (a) a decree or order of specific performance to enforce the observance and performance of such covenant, obligation or agreement and (b) an injunction restraining such breach or threatened breach. Each Equity Provider further agrees that neither Parent nor the Company shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 5, and each Equity Provider irrevocably waives any right he may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

6. No Modification; Entire Agreement. This Agreement may not be amended or otherwise modified (including termination by mutual consent of the parties hereto) without the prior written consent of Parent, the Equity Providers, the Sponsors and the Company. Together with the Transaction Support Agreement and the Guaranty, this Agreement constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between the Equity Providers or any of their respective Affiliates, on the one hand, and Parent or any of its Affiliates, on the other, with respect to the transactions contemplated hereby or thereby. No transfer of any rights or obligations hereunder (including with respect to the contribution, transfer and delivery of the Rollover Contribution Shares and Rollover Equity Awards) shall be permitted without the consent of Parent, the Equity Providers and the Company. Any transfer in violation of the preceding sentence shall be null and void.

7. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. The parties hereto consent to the service of process in any manner permitted by the laws of the State of Delaware. 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.

8. Counterparts. This Agreement may be executed in any number of counterparts (including by facsimile or by .pdf delivered via email), each such counterpart when executed being deemed to be an original instrument, and all such counterparts shall together constitute one and the same agreement.

 

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9. Confidentiality. This Agreement shall be treated as confidential and is being provided to Parent and the Company solely in connection with the Merger. This Agreement may not be used, circulated, quoted or otherwise referred to in any document by any Equity Provider, Parent, any Sponsor or the Company except with the prior written consent of each of the parties hereto in each instance; provided, that no such written consent is required for any disclosure of the existence or content of this Agreement (i) to the extent required by applicable Law, the applicable rules of any national securities exchange or in connection with any SEC filing relating to the Merger provided, that the disclosing Equity Provider or the Company, as applicable, will, to the extent not prohibited by applicable Law, provide Parent an opportunity to review such required disclosure in advance of such public disclosure being made), (ii) to an Equity Provider’s, Parent’s or the Company’s Affiliates and Representatives who may need to know of the existence of this Agreement (iii) to the extent that the information is already publicly available other than as a result of a breach of this Agreement by the Equity Provider, the Company or any other Person or (iv) pursuant to any litigation relating to the Merger Agreement or the transactions contemplated thereby.

10. Termination. The obligation of the Equity Providers under or in connection with this Agreement will terminate automatically and immediately upon the earliest to occur of (a) the Closing (at which time all such obligations shall be discharged) and (b) the termination of the Merger Agreement pursuant to its terms (unless the Company shall have previously commenced an action pursuant to clauses (ii) or (iii) of the first sentence of Section 5 hereof, in which case this Agreement shall terminate upon the final, non-appealable resolution of such action and satisfaction by the Equity Providers of any obligations finally determined or agreed to be owed by the Equity Providers, consistent with the terms hereof).

11. No Assignment. The Commitments evidenced by this Agreement shall not be assignable, in whole or in part, by Parent (or any successor or assign of Parent) without the Equity Providers’ and the Company’s prior written consent, which consent may be withheld for any or no reason, and no such consent in a given instance shall constitute a waiver of this requirement as to any subsequent assignment. Any purported assignment of this Agreement or the Commitments in contravention of this Section 11 shall be void.

12. Representations and Warranties of each Equity Provider. Each Equity Provider hereby represents and warrants with respect to itself to Parent that (a) if such Equity Provider is not a natural person, it has all limited partnership, trust or other organizational power and authority to execute, deliver and perform this Agreement; (b) if such Equity Provider is a natural person, the execution, delivery and performance of this Agreement by it has been duly and validly authorized and approved by all necessary limited partnership, trust or other organizational action by it; (c) this Agreement has been duly and validly executed and delivered by it or him and constitutes a valid and legally binding obligation of it or him, enforceable against it or him in accordance with the terms of this Agreement; (d) the execution, delivery and performance by the undersigned of this Agreement does not (i) violate the organizational documents of such Equity Provider, (ii) violate any applicable Law or judgment applicable to it or him, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any Contract to which such Equity Provider is a party; (e) it or he had access to all of the information they required in order to evaluate its investment in Parent; (f) it or he is an

 

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“accredited investor” within the meaning of Rule 501 under the United States Securities Act of 1933, as amended (the “1933 Act”), as amended, including by Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act; (g) it or he is acquiring the equity of Parent described in Section 1 for its or his own account (or for the account of the trust or plan or other entity referred to in the signature block at the end of this Agreement), for investment and not with a view to any resale or distribution thereof; and (h) it or he understands that the shares of Parent have not been registered under the 1933 Act or any United States state securities laws and may not be assigned, sold or otherwise transferred without registration under the 1933 Act or any relevant state securities laws or exemption therefrom, that Parent has no obligation or intention to register such shares under the 1933 Act or United States state securities laws, or to permit sales pursuant to Regulation A under the 1933 Act; and that it or he must therefore bear the economic risk of holding shares in the Company for an indefinite period of time.

13. Representations and Warranties of Parent. Parent hereby represents and warrants with respect to itself to each Equity Provider, as of the date hereof and again on the Closing Date, that (a) Parent has all corporate and authority to execute, deliver and perform this Agreement; (b) the execution, delivery and performance of this Agreement by Parent has been duly and validly authorized and approved by all necessary corporate organizational action and constitutes a valid and legally binding obligation of Parent, enforceable against Parent in accordance with the terms of this Agreement; (c) the execution, delivery and performance by the undersigned of this Agreement does not (i) violate the organizational documents of Parent, (ii) violate any applicable Law or judgment applicable to Parent, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any Contract to which Parent is a party (including the Merger Agreement, the Transaction Support Agreement or any other document or agreement referenced herein or therein); (d) each of the Merger Agreement, the Transaction Support Agreement, the Debt Commitment Letter and the Equity Funding Letters are in full force and effect, and Parent is not in breach of any provision thereof; (e) the Debt Commitment Letter, together with the Equity Financing, includes an amount sufficient to fund the Shareholder Loan substantially simultaneously with the Closing; (f) the Shareholder Loan shall be funded in accordance with the terms of the Financing Letters and (g) Parent has been authorized to, and has committed to enter into the Stockholders Agreement effective upon the Closing Date.

[signature page follows]

 

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EQUITY PROVIDERS:

Vincent C. Smith

Vincent Smith
Vincent C. Smith Annuity Trust 2010-1
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee
Vincent C. Smith Annuity Trust 2010-2
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee
Vincent C. Smith Annuity Trust 2011-1
By:  

/s/ Vincent C. Smith

Name: Vincent C. Smith
Title: Trustee

[Signature Page to Rollover Commitment Letter]


Agreed to and accepted:

 

EXPEDITION HOLDING COMPANY, INC.
By:  

/s/ Michael Triplett

Name: Michael Triplett
Title: President

[Signature Page to Rollover Commitment Letter]

EX-99.5 5 d318396dex995.htm EQUITY COMMITMENT LETTER, DATED AS OF MARCH 8, 2012 Equity Commitment Letter, dated as of March 8, 2012

Exhibit 99.5

EXECUTION VERSION

March 8, 2012

Expedition Holding Company, Inc.

c/o Insight Venture Management, LLC

680 Fifth Avenue, 8th Floor

New York, New York 10019

Ladies and Gentlemen:

This letter agreement (this “Agreement”) sets forth the commitment of certain funds managed by Insight Venture Management, LLC, which are party hereto (the “Insight Funds”), subject to the terms and conditions contained herein, to purchase certain equity interests of Expedition Holding Company, Inc., a newly formed Delaware corporation (“Parent”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), dated as of the date hereof, by and among Quest Software, Inc. (the “Company”), Parent and Expedition Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will be merged with and into the Company (the “Merger”), with the Company being the surviving entity of such Merger and a wholly-owned subsidiary of Parent. Each capitalized term used and not defined herein shall have the meaning ascribed thereto in the Merger Agreement.

1. Commitment. Each of the Insight Funds hereby commits (the “Commitment”), subject to the terms and conditions set forth herein, that, at or prior to the Closing, it shall purchase, or shall cause the purchase of, directly or indirectly through one or more intermediate entities, its pro rata percentage as set forth on Schedule I hereto of equity securities of Parent with an aggregate purchase price in cash equal to $210,000,000, to (i) fund a portion of the aggregate Merger Consideration and any other amounts required to be paid pursuant to the Merger Agreement, (ii) pay all related fees and expenses pursuant to the Merger Agreement and (iii) fund all or a portion of that certain shareholder loan to be issued by Parent in connection with the Closing; provided, that the amount of the Commitment to be funded under this Agreement may be reduced, on a dollar for dollar basis, in the sole discretion of the Insight Funds to the extent that Parent does not require the full amount of the Commitment to fund the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement and to pay fees and expenses contemplated thereby. The proceeds from the Commitment pursuant to this Agreement shall be used by Parent solely to satisfy the purposes set forth in the foregoing sentence and not for any other purpose.

2. Conditions. The Commitment shall be subject to (i) the execution and delivery of the Merger Agreement by the Company, (ii) the satisfaction or waiver of each of the conditions to Parent’s and Merger Sub’s obligations to effect the Closing set forth in Sections 6.1 and 6.2 of the Merger Agreement (other than any conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions), (iii) (a) the Debt Financing (including any alternative financing that has been obtained in accordance


with, and satisfies the conditions of, Section 5.5(a) of the Merger Agreement) has been funded in accordance with the terms thereof or will be funded in accordance with the terms thereof at the Closing if the Equity Financing is funded at the Closing and the Rollover Investment is made at Closing and (b) the Rollover Investment is made at Closing or will be made at Closing if the Debt Financing and the Equity Financing are funded at Closing, and (iv) the substantially simultaneous consummation of the Merger in accordance with the terms of the Merger Agreement. Each of the Insight Funds may allocate all or a portion of its investment to other Persons, and its Commitment hereunder will be reduced by any amounts actually contributed to Parent by such Persons (and not returned) at or prior to the Closing Date for the purpose of funding a portion of the aggregate Merger Consideration, any other amounts required to be paid pursuant to the Merger Agreement and related fees and expenses pursuant to the Merger Agreement.

3. Parties in Interest; Third Party Beneficiaries. The parties hereto hereby agree that their respective agreements and obligations set forth herein are solely for the benefit of the other parties hereto and their respective successors and permitted assigns, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto and their respective successors and permitted assigns any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Parent to enforce, the obligations set forth herein; provided, that the Company is an express third-party beneficiary hereof and shall have the enforcement rights provided in Section 4 and Section 8.8 of the Merger Agreement.

4. Enforceability. This Agreement may only be enforced by (i) Parent at the direction of the Insight Funds, (ii) the Company pursuant to the Company’s right to seek specific performance of Parent’s obligation to enforce the Insight Funds’ obligation to fund the Commitment in accordance with the terms hereof, pursuant to, and subject to, and solely in accordance with, the terms and conditions of, Section 8.8 of the Merger Agreement and those set forth herein or (iii) the Company directly seeking specific performance of each Insight Fund’s obligation to fund its Commitment under the circumstances and only under the circumstances in which the Company would be permitted by Section 4(ii) of this Agreement and Section 8.8 of the Merger Agreement to obtain specific performance requiring Parent to enforce the Insight Funds’ obligation to fund its Commitment. Each Insight Fund agrees that irreparable damage may occur in the event that any covenant, obligation or agreement set forth in this Agreement were not performed by it in accordance with its specific terms or were otherwise breached. Each Insight Fund agrees that, in the event of any breach or threatened breach by it of any covenant, obligation or agreement contained in this Agreement, such failure to perform or breach may cause Parent and the Company to sustain damages for which they would not have an adequate remedy at law for money damages, and thus Parent and the Company shall be entitled (in addition to any other remedy that may be available to them, including monetary damages) to seek (a) a decree or order of specific performance to enforce the observance and performance of such covenant, obligation or agreement and (b) an injunction restraining such breach or threatened breach. Each Insight Fund further agrees that neither Parent nor the Company shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 4, and each Insight Fund irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

 

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5. No Modification; Entire Agreement. This Agreement may not be amended or otherwise modified without the prior written consent of Parent, the Insight Funds and the Company. Together with the Merger Agreement and the Confidentiality Agreement, this Agreement constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between the Insight Funds or any of their Affiliates, on the one hand, and Parent or any of its Affiliates, on the other, with respect to the transactions contemplated hereby. Except as expressly permitted in Section 2 hereof, no transfer or assignment of any rights or obligations hereunder shall be permitted without the prior written consent of Parent, the Insight Funds and the Company. Any transfer in violation of the preceding sentence shall be null and void.

6. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of laws principles. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such action or proceeding. The parties hereto consent to the service of process in any manner permitted by the laws of the State of Delaware. 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.

7. Counterparts. This Agreement may be executed in any number of counterparts (including by facsimile or by .pdf delivered via email), each such counterpart when executed being deemed to be an original instrument, and all such counterparts shall together constitute one and the same agreement.

8. Confidentiality. This Agreement shall be treated as confidential and is being provided to Parent and the Company solely in connection with the Merger. This Agreement may not be used, circulated, quoted or otherwise referred to in any document by Parent or the Company except with the prior written consent of Parent in each instance; provided, that no such written consent is required for any disclosure of the existence or content of this Agreement (i) to the extent required by applicable Law, the applicable rules of any national securities exchange or in connection with any SEC filing relating to the Merger (provided, that Parent or the Company, as applicable, will provide the Insight Funds an opportunity to review such required disclosure in advance of such public disclosure being made), (ii) to the extent that the information is already publicly available other than as a result of a breach of this Agreement by Parent, the Company or any other Person, (iii) pursuant to any litigation relating to the Merger, the Merger Agreement or the transactions contemplated thereby or (iv) Parent’s or the Company’s Affiliates and Representatives who need to know of the existence of this Agreement.

 

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9. Termination. The obligations of the Insight Funds under or in connection with this Agreement will terminate automatically and immediately upon the earliest to occur of (a) the Closing (at which time all such obligations shall be discharged) and (b) the termination of the Merger Agreement pursuant to its terms (unless the Company shall have previously commenced an action pursuant to clauses (ii) or (iii) of the first sentence of Section 4 hereof, in which case this Agreement shall terminate upon the final, non-appealable resolution of such action and satisfaction of the Insight Funds of any obligations finally determined or agreed to be owed by the Insight Funds, consistent with the terms hereof).

10. No Assignment. The Commitment evidenced by this Agreement shall not be assignable, in whole or in part, by Parent without the Insight Funds’ prior written consent, and the granting of such consent in a given instance shall be solely in the discretion of the Insight Funds and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Any purported assignment of this Agreement or the Commitment in contravention of this Section 10 shall be void.

11. Representations and Warranties. Each of the Insight Funds hereby, jointly and severally, represents and warrants to Parent that (a) it has all limited partnership power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it has been duly and validly authorized and approved by all necessary limited partnership, corporate or other organizational action by it, (c) this Agreement has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against it in accordance with the terms of this Agreement, (d) its Commitment is less than the maximum amount that it is permitted to invest in any one portfolio investment pursuant to the terms of its constituent documents or otherwise, (e) it has uncalled capital commitments or otherwise has available funds in excess of the sum of its Commitment hereunder plus the aggregate amount of all other commitments and obligations it currently has outstanding and (f) the execution, delivery and performance by the undersigned of this letter agreement do not (i) violate the organizational documents of the undersigned, (ii) violate any applicable Law or judgment or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any Contract to which the undersigned is a party.

12. Severability. If any term, condition or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision hereof is invalid, illegal or incapable of being enforced, (a) a suitable and equitable term or provision determined by a court of competent jurisdiction shall be substituted therefor in order to carry out, so far as may be valid, legal and enforceable under applicable Law, the intent and purpose of such invalid, illegal or unenforceable term or provision and (b) the remainder of this Agreement and the application of such terms and other provision to other Persons or circumstances shall not be affected by such invalidity, illegality or unenforceability, nor shall such invalidity, illegality or unenforceability affect the validity, legality or enforceability of such term or provision, or the application of such term or provision, in any other jurisdiction.

[signature page follows]

 

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Insight Venture Partners VII, L.P.
  by:   Insight Venture Associates VII, L.P., its general partner
  by:   Insight Venture Associates VII, Ltd., its general partner
By:    

/s/ Blair M. Flicker

    Name:   Blair M. Flicker
    Title:   Vice President
Insight Venture Partners (Cayman) VII, L.P.
  by:   Insight Venture Associates VII, L.P., its general partner
  by:   Insight Venture Associates VII, Ltd., its general partner
By:    

/s/ Blair M. Flicker

    Name:   Blair M. Flicker
    Title:   Vice President
Insight Venture Partners VII (Co-Investors), L.P.
  by:   Insight Venture Associates VII, L.P., its general partner
  by:   Insight Venture Associates VII, Ltd., its general partner
By:    

/s/ Blair M. Flicker

    Name:   Blair M. Flicker
    Title:   Vice President

[Signature Page to Equity Commitment Letter]


Insight Venture Partners (Delaware) VII, L.P.
  by:   Insight Venture Associates VII, L.P., its general partner
  by:   Insight Venture Associates VII, Ltd., its general partner
By:    

/s/ Blair M. Flicker

    Name:   Blair M. Flicker
    Title:   Vice President
Insight Venture Partners Coinvestment Fund II, L.P.
  by:   Insight Venture Associates Coinvestment II, L.P., its general partner
  by:   Insight Holdings Group, LLC, its general partner
By:    

/s/ Blair M. Flicker

    Name:   Blair M. Flicker
    Title:   Vice President

[Signature Page to Equity Commitment Letter]


Agreed to and accepted:

 

EXPEDITION HOLDING COMPANY, INC.
By:  

/s/ Michael Triplett

Name:   Michael Triplett
Title:   President

[Signature Page to Equity Commitment Letter]

EX-99.6 6 d318396dex996.htm DEBT COMMITMENT LETTER, DATED AS OF MARCH 8, 2012, BY AND AMONG JP MORGAN CHASE Debt Commitment Letter, dated as of March 8, 2012, by and among JP Morgan Chase

Exhibit 99.6

EXECUTION VERSION

 

J.P. MORGAN SECURITIES LLC

383 Madison Avenue

New York, New York 10179

 

JPMORGAN CHASE BANK, N.A.

270 Park Avenue

New York, New York 10017

 

ROYAL BANK OF CANADA

Three World Financial Center

200 Vesey Street, 9th Floor

New York, New York 10281

 

BARCLAYS CAPITAL

745 Seventh Avenue
New York, NY 10019

CONFIDENTIAL

March 8, 2012

Expedition Holding Company, Inc.

In care of:

Insight Venture Management, LLC

680 Fifth Avenue, 8th Floor

New York, NY 10019

Attention: Mr. Michael Triplett

Project Expedition

Commitment Letter

Ladies and Gentlemen:

You have advised JPMorgan Chase Bank, N.A. (acting through such of its affiliates or branches as it deems appropriate) (“JPMCB”), J.P. Morgan Securities LLC (acting through such of its affiliates or branches as it deems appropriate) (“JPMorgan”), Royal Bank of Canada (acting through such of its affiliates or branches as it deems appropriate) (“Royal Bank”), RBC Capital Markets (acting through such of its affiliates or branches as it deems appropriate) (“RBCCM”), Barclays Capital (“Barclays Capital”), the investment banking division of Barclays Bank PLC (“Barclays Bank” and, together with Barclays Capital, “Barclays”; Barclays Bank, together with JPMCB and Royal Bank, the “Commitment Lenders”; and Barclays Capital, together with RBCCM and JPMorgan, the “Lead Arrangers”; the Lead Arrangers, together with any Additional Arrangers (as defined below) appointed pursuant to paragraph 2 below, the Commitment Lenders and any other Initial Lender or Additional Arranger that becomes a party hereto with your consent in accordance with the terms hereof after the date hereof and the respective affiliates of each of the foregoing, “we,” “us” or the “Commitment Parties”) that a newly created entity (“Holdings” or “you”) formed at the direction of certain funds affiliated with Insight Venture Management, LLC (collectively, the “Sponsor”) intends to acquire (the “Acquisition”), directly or indirectly, all of the equity interests in an entity previously identified to us by you as “Expedition” (collectively, the “Company”). You have further advised us that, in connection with the foregoing, you intend to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description or the Summaries of Principal Terms and Conditions attached hereto as


Exhibits B and C (collectively, the “Term Sheets”; this commitment letter, the Transaction Description, the Term Sheets and the Summary of Additional Conditions attached hereto as Exhibit D, collectively, the “Commitment Letter”).

1. Commitments.

In connection with the Transactions, (i) JPMCB is pleased to advise you of its several commitment to provide 45% of the entire aggregate principal amount of each Credit Facility, (ii) Royal Bank is pleased to advise you of its several commitment to provide 45% of the entire aggregate principal amount of each Credit Facility and (iii) Barclays Bank is pleased to advise you of its several commitment to provide 10% of the entire aggregate principal amount of each Credit Facility (each of JPMCB, Royal Bank and Barclays Bank, together with any Additional Arrangers appointed pursuant to Section 2 below, each in such capacity, collectively, the “Initial Lenders”), in each case, subject only to the satisfaction of the conditions set forth in Section 6 below, the sections entitled “Conditions to All Borrowings” in Exhibit B hereto and “Conditions to Borrowing” in Exhibit C hereto (limited on the Closing Date (as defined below) as indicated therein) and in Exhibit D hereto.

2. Titles and Roles.

It is agreed that (a) each of the Lead Arrangers will act as a lead arranger and bookrunner for each of the Credit Facilities (the Lead Arrangers, together with any Additional Arrangers appointed pursuant to this paragraph, each in such capacity, collectively, the “Arrangers”), (b) JPMCB will act as administrative agent and collateral agent (in each such capacity, the “Administrative Agent”) for the Senior Secured Credit Facilities and (c) JPMCB will act as administrative agent (in such capacity, the “Bridge Administrative Agent”; and together with the Administrative Agent, the “Administrative Agents”) for the Bridge Facility, all upon the terms and subject to the conditions set forth or referred to in this Commitment Letter. Except as set forth below, you agree that no other agents, co-agents, arrangers or bookrunners will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid to any Arranger or any Lender (as defined below) in order to obtain its commitment to participate in the Credit Facilities unless you and we shall so agree; provided that you may appoint additional arrangers (each an “Additional Arranger”) (it being understood that, to the extent you appoint Additional Arrangers in respect of the Credit Facilities, the respective commitments of JPMCB, Royal Bank and Barclays Bank in respect of each Credit Facility will be reduced ratably by the amount of the commitment of any Additional Arranger upon the execution by such Additional Arranger of customary joinder documentation in form and substance satisfactory to us and you) and, thereafter, each such Additional Arranger shall constitute an “Arranger” hereunder and it or its relevant affiliate providing such commitment shall constitute an “Initial Lender” hereunder; provided further that (i) any such Additional Arranger shall be reasonably acceptable to the Lead Arrangers, (ii) any such Additional Arranger shall be appointed no later than the date which is 5 days after the date of your acceptance of this Commitment Letter and such Additional Arrangers shall not in the aggregate represent greater than 10% of the economics of any of the Credit Facilities and (ii) any such Additional Arranger must commit to provide a percentage of the Credit Facilities which shall be at least equal to the percentage of the fees payable and economics applicable to such Additional Arranger; provided further that JPMorgan will have “left” placement in any marketing materials or other documentation used in connection with the Credit Facilities. The commitments of the Lead Arrangers and any Additional Arranger hereunder will be allocated ratably among the Credit Facilities and are several and not joint.

 

   2    [Commitment Letter]


3. Syndication.

The Lead Arrangers reserve the right, prior to or after the Closing Date, to syndicate all or a portion of the Initial Lenders’ commitments hereunder to a group of banks, financial institutions and other institutional lenders and investors (together with the Initial Lenders, the “Lenders”) identified by the Lead Arrangers in consultation with you and reasonably acceptable to the Lead Arrangers and you (our and your consent not to be unreasonably withheld or delayed) (it being understood and agreed that nothing in this Section 3 shall prevent or limit assignments or participations of the Credit Facilities after the Closing Date in accordance with, and as permitted by, the provisions contained in the Term Sheets); provided that (a) we agree not to syndicate our commitments to certain banks, financial institutions and other institutional lenders and competitors of the Company and its subsidiaries (collectively, “Disqualified Lenders”) that have been specified to us by you in writing at any time prior to the date hereof and (b) notwithstanding our right to syndicate the Credit Facilities and receive commitments with respect thereto, (i) we shall not be relieved, released or novated from our obligations hereunder (including our obligation to fund the Credit Facilities on the date of the consummation of the Acquisition with the proceeds of the initial funding under the Credit Facilities (the date of such funding, the “Closing Date”)) in connection with or as a result of any difficulties regarding any syndication, assignment or participation of the Credit Facilities, including our commitments in respect thereof, until after the Closing Date has occurred, (ii) no assignment or novation (other than in respect of Additional Arrangers) shall become effective with respect to all or any portion of our commitments in respect of the Credit Facilities until the initial funding of the Credit Facilities and (iii) unless you otherwise agree in writing, each Initial Lender shall retain exclusive control over (and shall not directly or indirectly accept, or agree to accept, direction from any third party with respect to) all rights and obligations with respect to its commitments in respect of the Credit Facilities and this Commitment Letter, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred.

Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that our commitments hereunder are not conditioned upon the syndication of, or receipt of commitments in respect of, all or any portion of the Credit Facilities and in no event shall the commencement or successful completion of syndication of the Credit Facilities constitute a condition to the availability of the Credit Facilities on the Closing Date. We may commence syndication efforts promptly upon the execution of this Commitment Letter, and as part of our syndication efforts, it is our intent to have Lenders commit to the Credit Facilities prior to the Closing Date (subject to the limitations set forth in the preceding paragraph). Until the earlier of (a) the date upon which a Successful Syndication (as defined in the Fee Letter referred to below) of the Credit Facilities is achieved and (b) the 90th day following the Closing Date (the “Syndication Date”), you agree to actively assist (and use your commercially reasonable efforts to cause the Company to actively assist) us in completing a timely syndication that is reasonably satisfactory to us. Such assistance shall include, without limitation, (a) your using commercially reasonable efforts to ensure that any syndication efforts benefit materially from your existing lending and investment banking relationships and the existing lending and investment banking relationships of the Sponsor and to the extent practical and appropriate, the Company’s existing lending and investment banking relationships, (b) direct contact between senior management, certain representatives and certain advisors of you and the Sponsor, on the one hand, and the proposed Lenders, on the other hand (and your using commercially reasonable efforts to ensure such contact between senior management of the Company, on the one hand, and the proposed Lenders, on the other hand), in all such cases at times mutually and reasonably agreed upon, (c) your and the Sponsor’s assistance (including the use of commercially reasonable efforts to cause the Company to assist) in the preparation of the Information Materials and other customary offering and marketing materials to be used in connection with the syndication (including, without limitation, the Sponsor Model (as defined below)) no later than 15 business days prior to the Closing Date), (d) using your commercially reasonable efforts to procure, at your expense, at least 15 business days prior to the Closing Date, ratings for each of the Credit Facilities from each of S&P (as defined in Exhibit B) and Moody’s (as defined in Exhibit B), and a public corporate credit rating and a public corporate family rating in respect of the Borrower (as defined in Exhibit B) after

 

   3    [Commitment Letter]


giving effect to the Transactions from each of S&P and Moody’s, respectively, (e) the hosting, with us, of a reasonable number of meetings with prospective Lenders at times and locations to be mutually and reasonably agreed upon (and your using commercially reasonable efforts to cause certain officers of the Company to be available for such meetings) and (f) until the later of the Closing Date and the Syndication Date, there being no competing issues, offerings, placements or arrangements of debt securities or commercial bank or other credit facilities by or on behalf of you, the Company or any of your or its subsidiaries being offered, placed or arranged (other than the Credit Facilities and the Notes or any indebtedness of the Company and its subsidiaries permitted to be outstanding under the Merger Agreement) without our consent (such consent not to be unreasonably withheld, delayed or conditioned), if such issuance, offering, placement or arrangement would have, in the reasonable judgment of the Lead Arrangers, a detrimental effect upon the primary syndication of the Credit Facilities, in any material respect. Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, the obtaining of the ratings referenced above shall not constitute a condition to the commitments hereunder or the funding of the Credit Facilities on the Closing Date. As used herein the term “Sponsor Model” means the Sponsor model provided in the Information Memorandum, which model shall be the model delivered to the Commitment Parties on March 6, 2012 (together with any updates or modifications thereto mutually and reasonably agreed among the Sponsor and the Commitment Parties or as necessary to reflect any exercise of “market flex” pursuant to the Fee Letter).

The Lead Arrangers, in their capacities as such, will manage, in consultation with you, all aspects of any syndication of the Credit Facilities, including decisions as to the selection of institutions reasonably acceptable to you (your consent not to be unreasonably withheld or delayed) to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate (subject to your consent rights set forth in the second preceding paragraph and excluding in any event Disqualified Lenders), the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist the Lead Arrangers in their syndication efforts, you agree to promptly prepare and provide (and to cause the Sponsor to provide and to use commercially reasonable efforts to cause the Company to provide) to us all customary information with respect to you, the Company and each of your and its respective subsidiaries and the Transactions, including all customary financial information and projections prepared by the Borrower (including financial estimates, forecasts and other forward-looking information, the “Projections”), as any Lead Arranger may reasonably request in connection with the structuring, arrangement and syndication of the Credit Facilities. For the avoidance of doubt, you will not be required to provide any information to the extent that the provision thereof would violate any law, rule or regulation, or any obligation of confidentiality binding upon you, the Company or any of your respective affiliates. Notwithstanding anything herein to the contrary, the only financial statements that shall be required to be provided to the Commitment Parties in connection with the syndication of the Credit Facilities shall be those required to be delivered pursuant to Exhibit D hereto.

You hereby acknowledge that (a) the Arrangers will make available Information (as defined below), Projections and other offering and marketing material and presentations, including confidential information memoranda to be used in connection with the syndication of the Credit Facilities (and including the Sponsor Model) (the “Information Memorandum”) (such Information, Projections, other offering and marketing material and the Information Memorandum, collectively, with the Term Sheets, the “Information Materials”) on a confidential basis to the proposed syndicate of Lenders by posting the Information Materials on Intralinks, Debt X, SyndTrak Online or by similar electronic means and (b) certain of the Lenders may be “public side” Lenders (i.e., Lenders that do not wish to receive information that is (i) not of the type that would be publicly available if the Borrower and the Company were public reporting companies and (ii) material non-public information within the meaning of any foreign, United States federal and state securities laws (such information, “MNPI”) with respect to you, Holdings, the

 

   4    [Commitment Letter]


Borrower, the Company or your or their respective subsidiaries or any of your or their respective securities and who may be engaged in investment and other market related activities with respect to you or the Company or your or the Company’s respective securities) (each, a “Public Sider” and each Lender that is not a Public Sider, a “Private Sider”).

You agree to assist (and to cause the Sponsor to assist and to use commercially reasonable efforts to cause the Company to assist) the Lead Arrangers in preparing an additional version of the Information Materials to be used in connection with the syndication of the Credit Facilities that consists exclusively of information of a type that is publicly available and/or does not include MNPI with respect to the Borrower or the Company or any of their respective subsidiaries for the purpose of United States federal and state securities laws to be used by Public Siders. It is understood that in connection with your assistance described above, the Borrower shall provide the Lead Arrangers with customary authorization letters (including customary representations with respect to accuracy of information) for inclusion in any Information Materials that authorize the distribution thereof to prospective Lenders, represent that the additional version of the Information Materials does not include any MNPI and exculpate you, the Investors, the Company and the Arrangers with respect to any liability related to the use or misuse of the contents of the Information Materials or related offering and marketing materials by the recipients thereof. Before distribution of any Information Materials, you agree to use commercially reasonable efforts to identify that portion of the Information Materials that may be distributed to the Public Siders as “Public Information,” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof. By marking Information Materials as “PUBLIC,” you shall be deemed to have authorized the Commitment Parties and the proposed Lenders to treat such Information Materials as not containing any MNPI (it being understood that you shall not be under any obligation to mark the Information Materials “PUBLIC”).

You acknowledge and agree that the following documents, without limitation, may be distributed to both Private Siders and Public Siders: (a) administrative materials prepared by the Arrangers for prospective Lenders (such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda), (b) term sheets and notification of changes in the Credit Facilities’ terms and conditions, (c) drafts and final versions of the Facilities Documentation and (d) publicly filed financial statements, if any, of the Company and its subsidiaries.

4. Information.

You hereby represent and warrant that, (a) all written information and written data, other than the Projections and other than information of a general economic or industry specific nature (the “Information”), that has been or will be made available to any Commitment Party directly or indirectly by you, the Company or by any of your or their respective representatives (including the Sponsor) on your behalf in connection with the Transactions (which information shall be to the best of your knowledge to the extent it relates to the Company or its subsidiaries and businesses), when taken as a whole, is or will be, when furnished, correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (giving effect to all supplements and updates provided thereto) and (b) the Projections that have been or will be made available to any Commitment Party by you, the Company or by any of your or their respective representatives on your behalf in connection with the transactions contemplated hereby have been, or will be, prepared in good faith based upon assumptions that are believed by you to be reasonable at the time prepared and at the time the related Projections are so furnished; it being understood that the Projections are as to future events and are not to be viewed as facts, the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any particular Projections will be realized and that actual

 

   5    [Commitment Letter]


results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the later of (a) the Closing Date and (b) the earlier of (i) the date upon which a Successful Syndication of the Credit Facilities is achieved and (ii) the 90th day following the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information and the Projections were being furnished, and such representations were being made, at such time, then you will (or, with respect to the Information and Projections relating to the Company, will use commercially reasonable efforts to) promptly supplement the Information and the Projections such that (with respect to the Information relating to the Company and its subsidiaries, to the best of your knowledge) such representations and warranties are correct in all material respects under those circumstances. In arranging and syndicating the Credit Facilities, each of the Commitment Parties (a) will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent verification thereof and (b) does not assume responsibility for the accuracy or completeness of the Information or the Projections.

5. Fees.

As consideration for the commitments of the Initial Lenders hereunder and for the agreement of the Arrangers to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheets and in the fee letter or fee letters dated the date hereof and delivered herewith with respect to the Credit Facilities (such fee letter or fee letters collectively, the “Fee Letter”). Once paid, such fees shall not be refundable under any circumstances.

6. Conditions.

The commitments of the Initial Lenders hereunder to fund the Credit Facilities on the Closing Date and the agreement of the Arrangers to perform the services described herein are subject solely to (a) the conditions set forth in this Section (6), (b) the conditions set forth in the sections entitled “Conditions to All Borrowings” in Exhibit B hereto and “Conditions to Borrowing” in Exhibit C hereto and (c) the conditions set forth in Exhibit D hereto, and upon satisfaction (or waiver by the requisite Commitment Parties) of such conditions, the initial funding of the Credit Facilities shall occur.

Notwithstanding anything in this Commitment Letter (including each of the exhibits attached hereto), the Fee Letter, the Facilities Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (a) the only representations relating to you, the Borrower, the Guarantors, the Company, the Investors, your and their respective subsidiaries and your and their respective businesses the accuracy of which shall be a condition to the availability of the Credit Facilities on the Closing Date shall be (i) such of the representations made by the Seller with respect to the Company and its subsidiaries in the Merger Agreement as are material to the interests of the Lenders, but only to the extent that Holdings has the right to terminate its obligations under the Merger Agreement as a result of a breach of such representations in the Merger Agreement (to such extent, the “Specified Merger Agreement Representations”) and (ii) the Specified Representations (as defined below) made by the Borrower and the Guarantors in the Facilities Documentation and (b) the terms of the Facilities Documentation shall be in a form such that they do not impair the availability of the Credit Facilities on the Closing Date if the conditions set forth in the sections entitled “Conditions to All Borrowings” in Exhibit B hereto and “Conditions to Borrowing” in Exhibit C hereto and in Exhibit D hereto are satisfied (it being understood that, (i) to the extent any security interest in any Collateral (as defined in Exhibits B and C) is not or cannot be provided and/or perfected on the Closing Date (other than the pledge and perfection of the security interests (1) in the equity securities of the Borrower and any domestic subsidiaries of the Borrower (to the extent required by Exhibits B and C) and (2) in other assets with respect to which a lien may be perfected by the filing of a financing statement under the Uniform

 

   6    [Commitment Letter]


Commercial Code) after your use of commercially reasonable efforts to do so, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date and (ii) notwithstanding anything to the contrary above, to the extent that the holder of any security interest in any equity security of the Borrower held by the plurality shareholder in the Company (the “Plurality Shareholder”, which term shall include the Plurality Shareholder’s Annuity Trust 2010-1, Annuity Trust 2010-2 and Annuity Trust 2011-1) or any of its Affiliates and required to be pledged to Holdings as collateral under the Shareholder Loan shall not have released such security interest on or before the Closing Date, then provided that the Administrative Agent shall have received on or prior to the Closing Date a payoff letter in respect of the obligation secured by such security interest, the provision or filing of such release shall not constitute a condition precedent to the availability of the Credit Facilities on the Closing Date, but instead, in the case of each of (i) and (ii) above, such security interest or release, as applicable, shall be required to be delivered after the Closing Date pursuant to arrangements and timing to be mutually and reasonably agreed by the Administrative Agent and each of the Borrower and Holdings acting reasonably but in any event no later than 60 days following the Closing Date (or such later date as may be mutually and reasonably agreed between the Administrative Agent and each of the Borrower and Holdings)). For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower and the Guarantors set forth in the Facilities Documentation relating to corporate or other organizational existence, power and authority, due authorization, execution and delivery and enforceability, in each case, related to the entering into and performance of the Facilities Documentation; solvency as of the Closing Date (after giving effect to the Transactions) of Holdings, the Borrower and their respective subsidiaries on a consolidated basis; no conflicts with or violations of organizational documents related to the entering into and performance of the Facilities Documentation; no conflicts with material laws related to the entering into and performance of the Facilities Documentation, in each case, except to the extent such conflicts would not reasonably be expected to result in a Material Adverse Effect; status of the Credit Facilities and the guarantees thereof as “senior debt”; Federal Reserve margin regulations; the Investment Company Act; the PATRIOT Act (as defined below); and, subject to the parenthetical in the immediately preceding sentence, creation, validity and perfection of security interests in the Collateral. This paragraph, and the provisions herein, shall be referred to as the “Limited Conditionality Provisions.”

7. Indemnity.

To induce the Commitment Parties to enter into this Commitment Letter and the Fee Letter and to proceed with the Facilities Documentation, you agree (a) to indemnify and hold harmless each Commitment Party, their respective affiliates and the respective officers, directors, employees, agents, controlling persons, advisors and other representatives and their successors and permitted assigns of each of the foregoing (each, an “Indemnified Person”), from and against any and all losses, claims, damages and liabilities of any kind or nature and reasonable and documented and invoiced out-of-pocket fees and expenses to which any such Indemnified Person may become subject to the extent arising out of, resulting from or in connection with, this Commitment Letter (including the Term Sheets), the Fee Letter, the Transactions or any related transaction contemplated hereby, the Credit Facilities or any use of the proceeds thereof or any claim, litigation, investigation or proceeding (including any inquiry or investigation) relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any such Indemnified Person is a party thereto, whether or not such Proceedings are brought by you, your equity holders, affiliates, creditors or any other third person, and to reimburse each such Indemnified Person upon demand for any reasonable and documented and invoiced out-of-pocket legal expenses of one firm of counsel for all such Indemnified Persons, taken as a whole, one firm of regulatory counsel for all such Indemnified Persons, taken as a whole, and, if necessary, of a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for all such Indemnified Persons, taken as a whole (and, in the case of an actual or perceived conflict of interest where the Indemnified Person affected by such conflict informs you of such conflict and

 

   7    [Commitment Letter]


thereafter retains its own counsel, of another firm of counsel for such affected Indemnified Person) or other reasonable and documented and invoiced out-of-pocket fees and expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent that they have resulted from (i) the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s affiliates or any of its or their respective officers, directors, employees, agents or controlling persons (as determined by a court of competent jurisdiction in a final and non-appealable decision), (ii) a material breach of the obligations of such Indemnified Person or any of such Indemnified Person’s affiliates under this Commitment Letter, the Term Sheets or the Fee Letter (as determined by a court of competent jurisdiction in a final and non-appealable decision) or (iii) any Proceeding that does not involve an act or omission by you or any of your affiliates and that is brought by an Indemnified Person against any other Indemnified Person (other than an agent or arranger under a Credit Facility acting in its capacity as such) and (b) to the extent that the Closing Date occurs, to reimburse each Commitment Party from time to time, upon presentation of a summary statement, for all reasonable and documented and invoiced out-of-pocket expenses (including but not limited to expenses of the Commitment Parties’ consultants’ fees (to the extent any such consultant has been retained with your prior written consent (such consent not to be unreasonably withheld or delayed)), syndication expenses, travel expenses and reasonable fees, disbursements and other charges of counsel to the Commitment Parties identified in the Term Sheets, a single regulatory counsel and a single local counsel to the Commitment Parties in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) and of such other counsel retained with your prior written consent (such consent not to be unreasonably withheld or delayed)), in each case incurred in connection with the Credit Facilities and the preparation, negotiation and enforcement of this Commitment Letter, the Fee Letter, the Facilities Documentation and any security arrangements in connection therewith (collectively, the “Expenses”); provided that you shall be required to reimburse Expenses related to enforcement by the Commitment Parties of this Commitment Letter or the Fee Letter regardless of whether the Closing Date occurs. The foregoing provisions in this paragraph shall be superseded in each case, to the extent covered thereby, by the applicable provisions contained in the Facilities Documentation upon execution thereof and thereafter shall have no further force and effect.

Notwithstanding any other provision of this Commitment Letter, (a) no Indemnified Person shall be liable for any damages arising from the use by others of information or other materials obtained through internet, electronic, telecommunications or other information transmission systems, except to the extent that such damages have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of such Indemnified Person’s affiliates or any of its or their respective officers, directors, employees or agents (as determined by a court of competent jurisdiction in a final and non-appealable decision) and (b) none of we, you, the Sponsor, the Company or any affiliate of any of the foregoing, any officer, director, employee, agent, controlling person, advisor or other representative of the foregoing or any successor or permitted assign of any of the foregoing shall be liable for any indirect, special, punitive or consequential damages (including, without limitation, any loss of profits, business or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Transactions (including the Credit Facilities and the use of proceeds thereunder), or with respect to any activities related to the Credit Facilities, including the preparation of this Commitment Letter, the Fee Letter and the Facilities Documentation; provided that nothing contained in this paragraph shall limit your indemnity and reimbursement obligations to the extent set forth in the immediately preceding paragraph.

You shall not be liable for any settlement of any Proceeding effected without your consent (which consent shall not be unreasonably withheld, conditioned or delayed), but if settled with your written consent or if there is a final and non-appealable judgment by a court of competent jurisdiction for the plaintiff in any such Proceeding, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or

 

   8    [Commitment Letter]


judgment in accordance with the other provisions of this Section 7. Notwithstanding the immediately preceding sentence, if at any time an Indemnified Person shall have requested in accordance with this Commitment Letter that you reimburse such Indemnified Person for legal or other expenses in connection with investigating, responding to or defending any Proceeding, which legal or other expenses are reimbursable pursuant to this Commitment Letter, you shall be liable for any settlement of any Proceeding effected without your written consent if (a) such settlement is entered into more than 45 days after such request for reimbursement is sent to you and (b) you shall not have reimbursed such Indemnified Person in accordance with such request prior to the date of such settlement (unless such reimbursement request is subject to a good faith dispute).

You shall not, without the prior written consent of any Indemnified Person (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (a) includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability or claims that are the subject matter of such proceedings, (b ) includes confidentiality provisions reasonably satisfactory to such Indemnified Person, (c) prohibits the making of disparaging statements or communications about such Indemnified Person on terms reasonably acceptable to such Indemnified Person and (d) does not include any statement as to or any admission of fault, culpability, wrong doing or a failure to act by or on behalf of any Indemnified Person. It is further agreed that the Commitment Parties shall be severally liable in respect of their respective commitments to the Credit Facilities, on a several, and not joint, basis with any other Lender; provided that the Initial Lenders shall not be relieved, released or novated from their obligations hereunder (including their obligations to fund their respective portions of each of the Credit Facilities on the date of the consummation of the Acquisition) in connection with any syndication, assignment or participation of any or all of the Credit Facilities, including its commitment in respect thereof, until after the Closing Date has occurred.

8. Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.

You acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, the Company and your and their respective affiliates may have conflicting interests regarding the transactions described herein and otherwise. None of the Commitment Parties or their affiliates will use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or their other relationships with you in connection with the performance by them or their affiliates of services for other persons, and none of the Commitment Parties or their affiliates will furnish any such information to other persons, except to the extent permitted below. You also acknowledge that none of the Commitment Parties or their affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.

You acknowledge that each of the Commitment Parties may be a full service securities firm engaged, either directly or through its affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, certain of the Commitment Parties and their respective affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of the Company and other companies which may be the subject of the arrangements contemplated by this letter for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities. Certain of the Commitment Parties or their respective affiliates may also co-invest with, make direct investments in, and

 

   9    [Commitment Letter]


invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, the Company or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof.

The Commitment Parties and their respective affiliates may have economic interests that conflict with those of the Company and you. You agree that the Commitment Parties will act under this letter as independent contractors and that nothing in this Commitment Letter or the Fee Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you and the Company, your and their respective equity holders or your and their respective affiliates. You acknowledge and agree that (a) the transactions contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial transactions between the Commitment Parties and their affiliates, on the one hand, and you and the Company, on the other, (b) in connection therewith and with the process leading to such transaction each Commitment Party and its applicable affiliates (as the case may be) is acting solely as a principal and not as agents or fiduciaries of you, the Company, your and their management, stockholders, creditors, affiliates or any other person, (c) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Commitment Parties or any of their respective affiliates have advised or are currently advising you or the Company on other matters) except the obligations expressly set forth in this Commitment Letter and the Fee Letter, and (d) you have consulted your own legal, accounting, regulatory, tax and financial advisors to the extent you deemed appropriate. You further acknowledge and agree that you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto. You agree that you will not claim that the Commitment Parties or their applicable affiliates, as the case may be, have (i) rendered advisory services of any nature or respect or (ii) owe a fiduciary or similar duty to you or your affiliates, in each case in connection with such transaction or the process leading thereto, except, with respect to clause (i) above, as may be expressly provided in a separate engagement letter for financial advisory services with any of the Commitment Parties or their affiliates.

9. Confidentiality.

You agree that you will not disclose, directly or indirectly, the Fee Letter and the contents thereof or, prior to your acceptance hereof, this Commitment Letter, the Term Sheets, the other exhibits and attachments hereto and the contents of each thereof, or the activities of the Commitment Parties pursuant hereto or thereto, to any person or entity without the prior written approval of the Arrangers (such approval not to be unreasonably withheld or delayed), except (a) to the Sponsor and the Plurality Shareholder, and to your and any of the Sponsor’s and Plurality Shareholder’s respective officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders on a confidential and need-to-know basis, (b) if the Commitment Parties consent in writing to such proposed disclosure or (c) pursuant to the order of any court or administrative agency in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities, in each case based on the reasonable advice of your legal counsel (in which case you agree, to the extent practicable and not prohibited by applicable law, to inform us promptly thereof prior to disclosure); provided that (i) you may disclose this Commitment Letter (but not the Fee Letter) and the contents hereof to the Company, their respective subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders, on a confidential and need-to-know basis, (ii) you may disclose the Commitment Letter and its contents (but not the Fee Letter) in any syndication or other marketing materials in connection with the Credit Facilities or in connection with any public filing relating to the Transactions, (iii) you may disclose the Term Sheets and the contents thereof, to potential

 

   10    [Commitment Letter]


Lenders and to rating agencies in connection with obtaining ratings for the Borrower and the Credit Facilities and the Notes, (iv) you may disclose the aggregate fee amounts contained in the Fee Letter as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts related to the Transactions to the extent customary or required in offering and marketing materials for the Credit Facilities and/or the Notes or in any public filing relating to the Transactions, (v) to the extent portions thereof have been redacted in a manner to be reasonably agreed by us (including the portions thereof addressing fees payable to the Commitment Parties and/or the Lenders), you may disclose the Fee Letter and the contents thereof to the Company, its subsidiaries and their respective officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders, on a confidential and need-to-know basis and (vi) you may, to the extent required pursuant to United States federal and state securities law, disclose the existence and terms of this Commitment Letter in any proxy statement or other public filing in connection with the Acquisition.

The Commitment Parties and their affiliates will use all confidential information provided to them or such affiliates by or on behalf of you hereunder or in connection with the Acquisition and the related Transactions solely for the purpose of providing the services which are the subject of this Commitment Letter and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge, such information; provided that nothing herein shall prevent the Commitment Parties and their affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial or administrative proceeding, or otherwise as required by applicable law or compulsory legal process based on the advice of counsel (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (b) upon the request or demand of any regulatory authority having jurisdiction over the Commitment Parties or any of their respective affiliates (in which case the Commitment Parties agree (except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), to the extent practicable and not prohibited by applicable law, to inform you promptly thereof prior to disclosure), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by the Commitment Parties or any of their affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, the Investors, the Company or any of your or their respective affiliates (including those set forth in this paragraph), (d) to the extent that such information is received by any Commitment Party from a third party that is not, to such Commitment Party’s knowledge, subject to contractual or fiduciary confidentiality obligations owing to you, the Sponsor, the Company or any of your or their respective affiliates or related parties, (e) to the extent that such information is independently developed by the Commitment Parties, (f) to the Commitment Parties’ affiliates and to their and such affiliates’ respective employees, directors, legal counsel, independent auditors, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential (but not, in any event, to include any affiliate that has been engaged by the Seller or the Company in connection with the Transactions or any of such affiliate’s employees, directors, legal counsel, independent auditors, professionals and other experts or agents), (g) to potential or prospective Lenders, participants or assignees and to any direct or indirect contractual counterparty to any swap or derivative transaction relating to the Borrower or any of its subsidiaries, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), (h) to rating agencies in consultation and coordination with you or (i) for purposes of establishing a “due diligence” defense; provided that the disclosure of any such information to any Lenders or prospective Lenders or participants or prospective participants referred to above shall be made subject to the acknowledgment and acceptance by such Lender or prospective Lender or participant or prospective participant that such information is being disseminated on a confidential basis (on

 

   11    [Commitment Letter]


substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and each Commitment Party, including, without limitation, as agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes of such Commitment Party or customary market standards for dissemination of such type of information. The Commitment Parties’ and their affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the definitive documentation relating to the Credit Facilities upon the initial funding thereunder; provided that if the Closing Date does not occur, this paragraph shall automatically terminate on the second anniversary hereof.

10. Miscellaneous.

This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (other than by you, to the Borrower, the Company or another U.S. domestic newly-formed entity, so long as the Borrower, the Company or such other entity is, or substantially simultaneously with such assignment will be, controlled by the Investors and after giving effect to the Transactions shall (directly or through a wholly owned subsidiary) own the Company or be the successor to the Company) without the prior written consent of each other party hereto (such consent not to be unreasonably withheld, conditioned or delayed) (and any attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended to be solely for the benefit of the parties hereto (and Indemnified Persons) and are not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons to the extent expressly set forth herein). Subject to the limitations set forth in Section 3 above, the Commitment Parties reserve the right to employ the services of their affiliates or branches in providing services contemplated hereby and to allocate, in whole or in part, to their affiliates or branches certain fees payable to the Commitment Parties in such manner as the Commitment Parties and their affiliates or branches may agree in their sole discretion and, to the extent so employed, such affiliates and branches shall be entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of the Commitment Parties hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by the Initial Lenders, the Arrangers and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter (including the exhibits hereto), together with the Fee Letter dated the date hereof, (a) are the only agreements that have been entered into among the parties hereto with respect to the Credit Facilities and (b) supersede all prior understandings, whether written or oral, among us with respect to the Credit Facilities and sets forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT WHETHER THERE SHALL HAVE BEEN ANY EFFECT, CHANGE, EVENT OR OCCURRENCE THAT HAS HAD OR WOULD REASONABLE BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT (AS DEFINED IN EXHIBIT D) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN SAID STATE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER ANY APPLICABLE CONFLICT OF LAWS PRINCIPLES.

Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Facilities Documentation by the parties hereto in a manner consistent with this

 

   12    [Commitment Letter]


Commitment Letter, it being acknowledged and agreed that the commitment provided hereunder is subject to conditions precedent expressly described in Section 1 of this Commitment Letter. Reasonably promptly after the execution of this Commitment Letter, the parties hereto shall proceed with the negotiation of the Facilities Documentation as soon as reasonably possible for the purpose of executing and delivering the Facilities Documentation in no event later than the consummation of the Acquisition.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER OR THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting, in each case, in New York County, and any appellate court from any thereof, in any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby and agrees that all claims in respect of any such suit, action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby in any New York State or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other matter provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action or proceeding brought in any such court.

We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each of us and each of the Lenders may be required to obtain, verify and record information that identifies the Borrower and the Guarantors, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower and the Guarantors in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for each of us and the Lenders.

The indemnification, compensation (if applicable), reimbursement (if applicable), jurisdiction, governing law, venue, waiver of jury trial, syndication and confidentiality provisions contained herein and in the Fee Letter and the provisions of Section 8 of this Commitment Letter shall remain in full force and effect regardless of whether Facilities Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Initial Lenders’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) assistance to be provided in connection with the syndication thereof prior to the Syndication Date (or, with respect to obligations to supplement and/or correct Information and Projections, prior to the later of (i) the Closing Date and (ii) the earlier of (x) the date upon which a Successful Syndication of the Credit Facilities is achieved and (y) the 90th day following the Closing Date), and (b) confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facilities Documentation upon the initial funding thereunder, and you shall automatically be released from all liability in connection therewith at such time. You may terminate this Commitment Letter and/or, on a pro rata basis, the Initial Lenders’ commitments with respect to the Credit Facilities (or a portion thereof pro rata across the Credit Facilities) hereunder at any time subject to the provisions of the preceding sentence.

 

   13    [Commitment Letter]


Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning to the Lead Arrangers on behalf of the Commitment Parties executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City time, on March 8, 2012. The Initial Lenders’ commitments and the obligations of the Arrangers hereunder will expire at such time in the event that we have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, we agree to hold our commitment available for you until the earliest of (a) after execution of the Merger Agreement and prior to the consummation of the Transactions, the termination of the Merger Agreement in accordance with its terms, (b) the consummation of the Acquisition with or without the funding of the Credit Facilities, (c) 5:00 p.m., New York City time, on September 8, 2012 and (d) any public announcement by you or any of your affiliates that you do not intend to proceed with the Acquisition or the financings therefor (such earliest time, the “Expiration Date”). Upon the occurrence of any of the events referred to in the preceding sentence, this Commitment Letter and the commitments of each of the Commitment Parties hereunder and the agreement of the Arrangers to provide the services described herein shall automatically terminate unless the Commitment Parties shall, in their discretion, agree to an extension in writing.

[Remainder of this page intentionally left blank]

 

   14    [Commitment Letter]


We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

 

Very truly yours,
JPMORGAN CHASE BANK, N.A.
By  

/s/ Paul Finger

  Name:  
  Title:  
J.P. MORGAN SECURITIES LLC
By  

/s/ Paul Finger

  Name:   Paul Finger
  Title:   Managing Director

[Signature Page to Commitment Letter]


ROYAL BANK OF CANADA
By  

/s/ James S. Wolfe

  Name:   James S. Wolfe
  Title:   Managing Director

[Signature Page to Commitment Letter]


BARCLAYS BANK PLC
By  

/s/ Peter J. Toal

  Name:   Peter J. Toal
  Title:   Managing Director

[Signature Page to Commitment Letter]


Accepted and agreed to as of the date first above written:

 

EXPEDITION HOLDING COMPANY, INC.
By  

/s/ Michael Triplett

  Name:   Michael Triplett
  Title:   President

In care of:

Insight Venture Management, LLC

680 Fifth Avenue, 8th Floor

New York, NY 10019

Attention: Mr. Michael Triplett

 

[Signature Page to Commitment Letter]