0001193125-18-003072.txt : 20180104 0001193125-18-003072.hdr.sgml : 20180104 20180104172955 ACCESSION NUMBER: 0001193125-18-003072 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20180104 DATE AS OF CHANGE: 20180104 GROUP MEMBERS: FRANCISCO PARTNERS GP IV MANAGEMENT LTD GROUP MEMBERS: FRANCISCO PARTNERS GP IV, L.P. GROUP MEMBERS: FRANCISCO PARTNERS IV-A, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTURE INC CENTRAL INDEX KEY: 0001211759 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-88454 FILM NUMBER: 18511155 BUSINESS ADDRESS: STREET 1: 18500 W. CORPORATE DRIVE STREET 2: SUITE 250 CITY: BROOKFIELD STATE: WI ZIP: 53045 BUSINESS PHONE: 262-432-8282 MAIL ADDRESS: STREET 1: 18500 W. CORPORATE DRIVE STREET 2: SUITE 250 CITY: BROOKFIELD STATE: WI ZIP: 53045 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FRANCISCO PARTNERS IV, L.P. CENTRAL INDEX KEY: 0001622902 IRS NUMBER: 981184642 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: ONE LETTERMAN DR., BUILDING C, SUITE 410 CITY: SAN FRANCISCO STATE: CA ZIP: 94129 BUSINESS PHONE: 415-418-2900 MAIL ADDRESS: STREET 1: ONE LETTERMAN DR., BUILDING C, SUITE 410 CITY: SAN FRANCISCO STATE: CA ZIP: 94129 SC 13D/A 1 d509262dsc13da.htm SC 13D/A SC 13D/A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 6) *

 

 

CONNECTURE, INC.

(Name of Issuer)

Common Stock, $0.001 par value

(Title of Class of Securities)

20786J106

(CUSIP Number)

Francisco Partners IV, L.P.

Francisco Partners IV-A, L.P.

Francisco Partners GP IV, L.P.

Francisco Partners GP IV Management Limited

c/o Francisco Partners Management, L.P.

One Letterman Drive

Building C – Suite 410

San Francisco, CA 94129

Telephone: (415) 418-2900

with copies to:

Adam D. Phillips, Esq.

Ross M. Leff, Esq.

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

(212) 446-4947

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

January 4, 2018

(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 contain 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).

 

 

 


CUSIP No. 20786J106    Page 2

 

  1   

Names of reporting persons:

 

Francisco Partners IV, L.P.

  2  

Check the appropriate box if a member of a group (see instructions)

(a)  ☐        (b)  ☒

 

Not Applicable

  3  

SEC use only

 

  4  

Source of funds (see instructions):

 

OO, WC

  5  

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)  ☐

 

Not Applicable

  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:

 

18,440,049*

     9   

Sole dispositive power:

 

0

   10   

Shared dispositive power:

 

18,440,049*

11  

Aggregate amount beneficially owned by each reporting person:

 

18,440,049*

12  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

13  

Percent of class represented by amount in Row (11):

 

39.0%†

14  

Type of reporting person:

 

PN

 

* The aggregate number and percentage of Common Stock of the Issuer beneficially owned consists of 2,414,050 shares of Common Stock of the Issuer, 33,306 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 10,991 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock” and collectively with the Series A Preferred Stock, the “Preferred Stock”) held directly by Francisco Partners IV, L.P., convertible into Common Stock of the Issuer, subject to certain conditions and adjustments.
The calculation of the foregoing percentage is based on 23,216,019 shares of Common Stock outstanding as of January 4, 2018, as disclosed in the Merger Agreement, plus the shares of Common Stock issuable upon the conversion of the Preferred Stock beneficially owned by the Reporting Persons.


CUSIP No. 20786J106    Page 3

 

  1   

Names of reporting persons:

 

Francisco Partners IV-A, L.P.

  2  

Check the appropriate box if a member of a group (see instructions)

(a)  ☐        (b)  ☒

 

Not Applicable

  3  

SEC use only

 

  4  

Source of funds (see instructions):

 

OO, WC

  5  

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)  ☐

 

Not Applicable

  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:

 

9,242,682*

     9   

Sole dispositive power:

 

0

   10   

Shared dispositive power:

 

9,242,682*

11  

Aggregate amount beneficially owned by each reporting person:

 

9,242,682*

12  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

13  

Percent of class represented by amount in Row (11):

 

19.6%†

14  

Type of reporting person:

 

PN

 

* The aggregate number and percentage of Common Stock of the Issuer beneficially owned consists of 1,209,972 shares of Common Stock of the Issuer, 16,694 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 5,509 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”) held directly by Francisco Partners IV-A, L.P., convertible into Common Stock of the Issuer, subject to certain conditions and adjustments.
The calculation of the foregoing percentage is based on 23,216,019 shares of Common Stock outstanding as of January 4, 2018, as disclosed in the Merger Agreement, plus the shares of Common Stock issuable upon the conversion of the Preferred Stock beneficially owned by the Reporting Persons.


CUSIP No. 20786J106    Page 4

 

  1   

Names of reporting persons:

 

Francisco Partners GP IV, L.P.

  2  

Check the appropriate box if a member of a group (see instructions)

(a)  ☐        (b)  ☒

 

Not Applicable

  3  

SEC use only

 

  4  

Source of funds (see instructions):

 

AF

  5  

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)  ☐

 

Not Applicable

  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:

 

27,682,731*

     9   

Sole dispositive power:

 

0

   10   

Shared dispositive power:

 

27,682,731*

11  

Aggregate amount beneficially owned by each reporting person:

 

27,682,731*

12  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

13  

Percent of class represented by amount in Row (11):

 

58.6%†

14  

Type of reporting person:

 

PN

 

* The aggregate number and percentage of Common Stock of the Issuer beneficially owned consists of 3,624,022 shares of Common Stock of the Issuer, 50,000 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 16,500 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”) held directly by Francisco Partners IV, L.P. and Francisco Partners IV-A, L.P., convertible into Common Stock of the Issuer, subject to certain conditions and adjustments.
The calculation of the foregoing percentage is based on 23,216,019 shares of Common Stock outstanding as of January 4, 2018, as disclosed in the Merger Agreement, plus the shares of Common Stock issuable upon the conversion of the Preferred Stock beneficially owned by the Reporting Persons.


CUSIP No. 20786J106    Page 5

 

  1   

Names of reporting persons:

 

Francisco Partners GP IV Management Limited

  2  

Check the appropriate box if a member of a group (see instructions)

(a)  ☐        (b)  ☒

 

Not Applicable

  3  

SEC use only

 

  4  

Source of funds (see instructions):

 

AF

  5  

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)  ☐

 

Not Applicable

  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:

 

27,682,731*

     9   

Sole dispositive power:

 

0

   10   

Shared dispositive power:

 

27,682,731*

11  

Aggregate amount beneficially owned by each reporting person:

 

27,682,731*

12  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

13  

Percent of class represented by amount in Row (11):

 

58.6%†

14  

Type of reporting person:

 

PN

 

* The aggregate number and percentage of Common Stock of the Issuer beneficially owned consists of 3,624,022 shares of Common Stock of the Issuer, 50,000 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) and 16,500 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock” and together with the Series A Preferred Stock, the “Preferred Stock”) held directly by Francisco Partners IV, L.P. and Francisco Partners IV-A, L.P., convertible into Common Stock of the Issuer, subject to certain conditions and adjustments.
The calculation of the foregoing percentage is based on 23,216,019 shares of Common Stock outstanding as of January 4, 2018, as disclosed in the Merger Agreement, plus the shares of Common Stock issuable upon the conversion of the Preferred Stock beneficially owned by the Reporting Persons.


CUSIP No. 20786J106    Page 6

 

This Amendment No. 6 to Schedule 13D is being filed jointly on behalf of the following persons (collectively, the “Reporting Persons”): (i) Francisco Partners IV, L.P., a Cayman Islands exempted limited partnership (“FP IV”), (ii) Francisco Partners IV-A, L.P., a Cayman Islands exempted limited partnership (“FP IV-A”), (iii) Francisco Partners GP IV, L.P., a Cayman Islands exempted limited partnership (“FP GP IV”), and (iv) Francisco Partners GP IV Management Limited, a Cayman Islands exempted company (“FP GP Management” and collectively with FP IV, FP IV-A, FP GP IV and their affiliates, “Francisco Partners”), to supplement and amend the Schedule 13D filed on behalf of the Reporting Persons on May 9, 2016, as amended on June 14, 2016, August 15, 2016, August 26, 2016, September 14, 2016 and March 15, 2017. Each item below amends and supplements the information disclosed under the corresponding item of Schedule 13D. Capitalized terms defined in the Schedule 13D are used herein with their defined meaning.

 

Item 3. Source and Amount of Funds or Other Consideration

The response set forth in Item 3 of the Schedule 13D is hereby amended and supplemented by the following:

The information set forth in Item 4 of this Schedule 13D is hereby incorporated by reference into this Item 3.

 

Item 4. Purpose of Transaction

The response set forth in Item 4 of the Schedule 13D is hereby amended and supplemented by the following:

On January 4, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with FP Healthcare Holdings, Inc. (“Parent”), and FP Healthcare Merger Sub Corporation, a wholly owned subsidiary of Parent (“Merger Subsidiary”), providing for the merger of Merger Subsidiary with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Subsidiary are owned by affiliates of the Reporting Persons. Capitalized terms used in this Item 4 which are not otherwise defined have the meanings set forth in the Merger Agreement.

The Merger and the Merger Agreement were unanimously approved by the Company’s Board of Directors upon the recommendation of a special committee consisting solely of independent, outside directors (the “Special Committee”)

At the Effective Time of the Merger, each share of Common Stock issued and outstanding as of immediately prior to the Effective Time, other than shares held by FP IV, FP IV-A and Chrysalis Ventures II, L.P. and certain of their affiliates (collectively, the “Rollover Investors”), will be canceled and cease to exist and automatically converted into the right to receive cash in an amount equal to $0.35, without interest (the “Per Share Price”). The Rollover Investors have entered into a Rollover Agreement pursuant to which the Rollover Investors have agreed to contribute shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock to Parent.

Parent and Merger Subsidiary have secured committed financing, consisting of a combination of equity to be provided by investment funds affiliated with the Reporting Persons (the “Equity Financing”) and the third party debt financing described below, the aggregate proceeds of which will be sufficient for Parent and Merger Subsidiary to pay the aggregate merger consideration and all related fees and expenses. In addition, FP IV and FP IV-A have provided the Company with a guarantee in favor of the Company (the “Guarantee”). The Guarantee guarantees the payment of Merger Consideration owed by Parent to the holders of Common Stock pursuant to the Merger Agreement.

PNC Bank, National Association (together with any other banks, financial institutions and institutional lenders from time to time party to the Debt Commitment Letter described below, the “Lenders”) has committed to provide debt financing (the “Debt Financing”) consisting of a term loan facility of up to $42.0 million and a revolving credit facility of up to $5.0 million, in each case, on the terms and subject to the conditions set forth in that certain debt commitment letter, dated as of January 4, 2018 and delivered to FP IV substantially concurrently with the execution of the Merger Agreement (the “Debt Commitment Letter”). The obligations of the Lenders to provide the Debt Financing under the Debt Commitment Letter are subject to a number of conditions, including the receipt of executed loan documentation, accuracy of representations and warranties, consummation of the transactions contemplated in the Merger Agreement, contribution of the Equity Financing and other customary closing conditions for financings of this type. Following the consummation of the Merger, available Debt Financing may be used by the company for working capital or general corporate purposes.

Stockholders of the Company will be asked to vote on the adoption of the Merger Agreement and the Merger at a special stockholders’ meeting that will be held on a date to be announced. The closing of the Merger is subject to a condition that the Merger Agreement be adopted by the affirmative vote of the holders a majority of the outstanding shares of Company capital stock, voting together as a single class, entitled to vote on such matter (the “Company Stockholder Approval”). Consummation of the Merger is also subject to other customary closing conditions, including, without limitation, the absence of certain legal impediments, the expiration


CUSIP No. 20786J106    Page 7

 

or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Merger Agreement does not contain a financing condition. The Company has also made customary representations and warranties in the Merger Agreement and has agreed to customary covenants regarding the operation of the business of the Company and the Company Subsidiaries prior to the Effective Time.

Pursuant to the terms of a “go-shop” provision in the Merger Agreement, during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. (Central time) on the 45th calendar day thereafter (the “Go-Shop Period End Date”), the Company and its subsidiaries and their respective representatives may initiate, solicit and encourage any alternative acquisition proposals from third parties, provide nonpublic information to such third parties, and participate in discussions and negotiations with such third parties regarding alternative acquisition proposals. Beginning on the Go-Shop Period End Date, the Company will become subject to customary “no-shop” restrictions on its, its subsidiaries’ and their respective representatives’ ability to initiate, solicit or encourage alternative acquisition proposals from third parties and to provide nonpublic information to or participate in discussions or negotiations with third parties regarding alternative acquisition proposals, except as otherwise permitted by the Merger Agreement, including in connection with the compliance by the Board with its fiduciary duties under applicable law.

The Merger Agreement contains certain termination rights for the Company and Parent. Upon termination of the Merger Agreement by the Company if, before the Company Stockholder Approval, the Special Committee authorizes the Company to enter into a definitive agreement with respect to a Superior Proposal, the Company will be required to pay Parent a termination fee of reasonable and documented out-of-pocket fees and expenses (including legal fees and expenses) up to $2.0 million. In addition to the foregoing termination right, and subject to certain limitations, (i) the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by June 4, 2018, and (ii) the Company and Parent may mutually agree to terminate the Merger Agreement.

Concurrently with the execution and delivery of the Merger Agreement, the Rollover Investors entered into a Voting and Support Agreement with the Company (the “Voting Agreement”). Pursuant to the Voting Agreement, the Rollover Investors have agreed, unless the Board or Special Committee has made a Change of Recommendation, to vote all shares of the Company’s capital stock owned by them in favor of the adoption of the Merger Agreement and the approval of the transactions contemplated thereby and against any other action or agreement that would reasonably be expected to (1) result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement, (2) result in any of the conditions to the consummation of the Merger under the Merger Agreement not being fulfilled or (3) impede, frustrate, interfere with, delay, postpone or adversely affect the Merger and the other transactions contemplated by the Merger Agreement.

In addition, pursuant to the Voting Agreement, if the Company enters into a definitive agreement with respect to a Superior Proposal that will result in the Company’s preferred stock being redeemed, among other conditions, the Rollover Investors have agreed to vote their shares in favor of such Superior Proposal.

Finally, pursuant to the Voting Agreement, the Rollover Investors have agreed, if requested to do so by the Board or the Special Committee, to explore in good faith the possibility of working with any third parties regarding alternative acquisition proposals to the extent the Company is permitted to do so under the Merger Agreement, including by reviewing and responding to proposals and taking part in meetings and negotiations with respect thereto, and have represented that they are not subject to any agreement that would prevent them from doing so. The Voting Agreement will terminate at the Effective Time or, if earlier, the date of the termination of the Merger Agreement, unless there is a Superior Proposal, in which case the termination will occur upon the earliest of (1) the consummation of the Superior Proposal, (2) the termination of the definitive agreement relating to the Superior Proposal, and (3) the date that is five months after the termination of the Merger Agreement by the Company in order to pursue a Superior Proposal.

The descriptions of the Merger Agreement, the Rollover Agreement, the Voting Agreement and the Guarantee in this Item 4 are not intended to be complete and are qualified in their entirety by the text of such documents, each of which is filed as an exhibit hereto and is incorporated by reference herein.

 

Item 5. Interest in Securities of the Issuer

The response set forth in Item 5 of the Schedule 13D is hereby amended and supplemented by the following:

Based on the information set forth in the Merger Agreement, there were 23,216,019 shares of the Common Stock issued and outstanding as of January 4, 2018.

FP IV directly owns 2,414,050 shares of Common Stock, 33,306 shares of Series A Preferred Stock, convertible at any time at FP IV’s option into 9,527,616 shares of Common Stock, and 10,991 shares of Series B Preferred Stock, convertible at any time at FP IV’s option into 6,498,383 shares of Common Stock. FP IV-A directly owns 1,209,972 shares of Common Stock and 16,694 shares of Series A Preferred Stock, convertible at any time at FP IV’s option into 4,775,537 shares of Common Stock and 5,509 shares of Series B Preferred Stock, convertible at any time at FP IV-A’s option into 3,257,173 shares of Common Stock.


CUSIP No. 20786J106    Page 8

 

As a result, (i) FP IV beneficially owns 18,440,049 shares of Common Stock, or 39.0% of the Common Stock deemed issued and outstanding as of the Filing Date, (ii) FP IV-A beneficially owns 9,242,682 shares of Common Stock, or 19.6% of the Common Stock deemed issued and outstanding as of the Filing Date, (iii) FP GP IV beneficially owns 27,682,731 shares of Common Stock, or 58.6% of the Common Stock deemed issued and outstanding as of the Filing Date, and (iv) FP GP Management owns 27,682,731 shares of Common Stock, or 58.6% of the Common Stock deemed issued and outstanding as of the Filing Date.

 

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

The response set forth in Item 6 of the Schedule 13D is hereby amended and supplemented by the following:

The information set forth in Items 3, 4 and 5 of this Schedule 13D is hereby incorporated by reference into this Item 6.

Based on the transactions and relationships described herein, the Reporting Persons may be deemed to constitute a “group” for purposes of Section 13(d)(3) of the Exchange Act. The filing of this statement shall not be construed as an admission that the Reporting Persons are a group, or have agreed to act as a group.

 

Item 7. Material to be Filed as Exhibits

1. Agreement and Plan of Merger, by and among FP Healthcare Holdings, Inc., FP Healthcare Merger Sub Corporation, and the Company, dated as of January 4, 2018, incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed with the Commission on January 4, 2018.

2. Voting and Support Agreement, by and among the Company, Francisco Partners IV, L.P., Francisco Partners IV-A, L.P. and Chrysalis Ventures II, L.P., dated as of January 4, 2018, incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K of the Company filed with the Commission on January 4, 2018.

3. Rollover Agreement, by and among Francisco Partners IV, L.P., Francisco Partners IV-A, L.P. and the other parties thereto, dated as of January 4, 2018, incorporated herein by reference to Exhibit 99.2 to the Current Report on Form 8-K of the Company filed with the Commission on January 4, 2018.

4. Guarantee, by and among the Company, Francisco Partners IV, L.P. and Francisco Partners IV-A, L.P., dated as of January 4, 2018.


SIGNATURES

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

Dated: January 4, 2018

 

FRANCISCO PARTNERS IV, L.P.

By: Francisco Partners GP IV, L.P., its General Partner

By: Francisco Partners GP IV Management Limited, its General Partner

By:  

/s/ Ezra Perlman

  Name: Ezra Perlman
  Title: Co-President

FRANCISCO PARTNERS IV-A, L.P.

By: Francisco Partners GP IV, L.P., its General Partner

By: Francisco Partners GP IV Management Limited, its General Partner

By:  

/s/ Ezra Perlman

  Name: Ezra Perlman
  Title: Co-President

FRANCISCO PARTNERS GP IV, L.P.

By: Francisco Partners GP IV Management Limited, its General Partner

By:  

/s/ Ezra Perlman

  Name: Ezra Perlman
  Title: Co-President

FRANCISCO PARTNERS GP IV MANAGEMENT

LIMITED

By:  

/s/ Ezra Perlman

  Name: Ezra Perlman
  Title: Co-President
EX-99.4 2 d509262dex994.htm EX-99.4 EX-99.4

Exhibit 99.4

EXECUTION VERSION

GUARANTEE

GUARANTEE, dated as of January 4, 2018 (this “Guarantee”), by Francisco Partners IV, L.P., and Francisco Partners IV-A, L.P. (each a “Guarantor” and together, the “Guarantors”), in favor of Connecture, Inc., a Delaware corporation (the “Guaranteed Party”).

1. GUARANTEE. To induce the Guaranteed Party to enter into the Agreement and Plan of Merger, dated on or about the date hereof, by and among FP Healthcare Merger Sub Corporation, a newly-formed Delaware corporation (“Merger Sub”), FP Healthcare Holdings, Inc., a Delaware corporation (“Parent” and, together with Merger Sub, the “Buyer Parties”) and the Guaranteed Party (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), each Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees (as a primary obligor and not merely as a surety) to the Guaranteed Party the due and punctual performance and discharge by Parent and Merger Sub of the payment obligations of Parent and Merger Sub to the Guaranteed Party that may become due or payable under the Merger Agreement (the foregoing obligation being referred to herein as the “Guaranteed Obligations”); provided, that in no event shall the Guarantors’ aggregate liability for any amount that becomes payable hereunder exceed the aggregate Merger Consideration plus any amount that becomes payable to the Guaranteed Party pursuant to Section 8.6 of the Merger Agreement (such amounts, the “Total Cap”). This Guarantee may be enforced only for the payment of money in satisfaction of the Guaranteed Obligations by the Guarantors up to the Total Cap; provided, that this Guarantee will expire and will have no further force or effect, and the Guaranteed Party will not have any rights hereunder, upon termination of the obligations and liabilities of the Guarantors hereunder in accordance with Section 12. Notwithstanding the foregoing, if on or prior to the date of termination of this Guarantee any written claim has been made asserting that any of the Guaranteed Obligations are owing to the Guaranteed Party or any proceeding to enforce this Guarantee has been commenced, then this Guarantee shall not terminate until such matters are finally settled or otherwise resolved either in a final non-appealable judicial determination or by written agreement of the Guaranteed Party and the Guarantors. All payments hereunder shall be made in lawful money of the United States, in immediately available funds. If Parent or Merger Sub is in default of the Guaranteed Obligations, then at the Guaranteed Party’s option, the Guarantors’ liability to the Guaranteed Party hereunder in respect of such Guaranteed Obligations shall become immediately enforceable against, or due and payable by, the Guarantors, and the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s option, and so long as the Guaranteed Obligations remain in default, take any and all actions available under applicable Law to collect the Guarantors’ liabilities or enforce the Guarantors’ obligations hereunder in respect of such Guaranteed Obligations, subject to the Total Cap. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement (to the extent such terms are defined therein).

2. NATURE OF GUARANTEE. Subject to the Total Cap, the Guarantors’ liability hereunder is absolute, unconditional, irrevocable and continuing irrespective of any modification, amendment or waiver of the Merger Agreement. Each Guarantor hereby irrevocably and unconditionally accepts joint and several liability under this Guarantee; it being the intention of the parties hereto that all obligations of each Guarantor hereunder be the joint and several obligations of each Guarantor, without preference or distinction among them. In furtherance of the foregoing, the Guaranteed Party may, in its sole discretion, bring and prosecute an action against any or all of the Guarantors without bringing any action against Parent, Merger Sub or any other Guarantor or joining Parent, Merger Sub or any other Guarantor to such action. The Guaranteed Party shall not be obligated to file any claim relating to the Guaranteed Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantors’ obligations hereunder. A separate action may be brought and prosecuted against any Guarantor to enforce this Guarantee, irrespective of whether any action is brought against a Buyer Party


or whether any Buyer Party is joined in any such action or actions. In the event of any default by any Buyer Party in the performance of any of the Guaranteed Obligations, the Guaranteed Party shall have the right in its sole discretion to proceed first and directly against any Guarantor under this Guarantee (subject to the Total Cap) without proceeding against either Buyer Party under the Merger Agreement.

3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. Each Guarantor agrees that its obligations hereunder shall not be released or discharged, in whole or in part, and shall be absolute and unconditional to the fullest extent permitted by applicable Law, or otherwise affected by: (a) the failure or delay on the part of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against a Buyer Party or any Guarantor; (b) any change in the time, place, manner or terms of performance, satisfaction and/or payment of any of the Guaranteed Obligations, or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement or any other agreement entered into in connection with the transactions contemplated by the Merger Agreement and made in accordance with the terms thereof; (c) any change in the legal existence, structure or ownership of Parent or Merger Sub or any other Person now or hereafter liable with respect to the Guaranteed Obligations; (d) any insolvency, bankruptcy, reorganization, composition, adjustment, dissolution or liquidation, or other similar proceeding instituted by or against a Buyer Party or any other Person now or hereafter liable with respect to the Guaranteed Obligations, or any action taken with respect to this Guarantee or the Guaranteed Obligations by any trustee or receiver, or by any court or judicial authority, in any such proceeding; (e) the adequacy or potential adequacy of any alternative means the Guaranteed Party may have of obtaining payment, satisfaction or performance related to the Guaranteed Obligations; (f) any other act, omission or defense that may vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity; (g) the existence of any claim, set-off or other right to which any Guarantor may have at any time against a Buyer Party or the Guaranteed Party, whether in connection with the Guaranteed Obligations or otherwise; (h) the addition, substitution or release of any Person now or hereafter liable with respect to the Guaranteed Obligations or otherwise interested in the transactions contemplated by the Merger Agreement; (i) any action by any Governmental Authority or court amending, varying, reducing or otherwise affecting any of the obligations of Parent or Merger Sub under the Merger Agreement or of any Guarantor under this Guarantee or (j) any absence of any notice to, or knowledge by, any Guarantor, of the existence or occurrence of any of the matters or events set forth in the foregoing clauses (a) through (j) of this sentence. Each Guarantor waives notice of the creation, renewal, extension, incurrence or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Guaranteed Party upon this Guarantee or acceptance of this Guarantee (other than notices required to be delivered by the Guaranteed Party to Parent or Merger Sub pursuant to the Merger Agreement).

Each Guarantor hereby waives promptness, diligence, notice of the acceptance of this Guarantee and of the Guaranteed Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, and all other notices of any kind hereunder that would otherwise, for purposes of any applicable Law, be a condition precedent to the obligations of each Guarantor under this Guarantee, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of the assets of a Buyer Party, and all suretyship defenses generally, other than defenses that are available to Parent and Merger Sub (a) under the Merger Agreement, (b) in respect of a breach by the Guaranteed Party of this Guarantee, and (c) in respect of fraud or willful misconduct of the Guaranteed Party or any of its Affiliates in connection with the Merger Agreement or the transactions contemplated thereby. Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Guarantee are knowingly made in contemplation of such benefits.

 

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Notwithstanding anything to the contrary contained in this Guarantee or otherwise, the Guaranteed Party hereby agrees that the Guarantors shall have all defenses to the payment of a Guaranteed Obligation under this Guarantee that are available to Parent and/or Merger Sub under the Merger Agreement with respect to such Guaranteed Obligation (other than capacity or insolvency, bankruptcy, or reorganization of Parent and/or Merger Sub or other similar proceeding). Each Guarantor agrees that this Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment, performance or satisfaction (in whole or in part) of any of the Guaranteed Obligations is rescinded or must otherwise be restored by the Guaranteed Party, upon the insolvency, bankruptcy or reorganization of a Buyer Party or otherwise, all as though such payment had not been made.

4. REPRESENTATIONS AND WARRANTIES; AGREEMENT. Each Guarantor hereby represents and warrants that: (i) it has all requisite limited partnership power and authority to execute, deliver and perform this Guarantee and the execution, delivery and performance of this Guarantee have been duly authorized by all necessary action and do not contravene any provision of such Guarantor’s organizational documents or any applicable Law or contractual restriction binding on such Guarantor or its assets; (ii) all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority necessary for the due execution, delivery and performance of this Guarantee by such Guarantor (collectively, the “Required Approvals”) have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required in connection with the execution, delivery or performance of this Guarantee; (iii) this Guarantee constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms; (iv) such Guarantor has, and will continue to have throughout the term of this Guarantee, the financial capacity and available funds or uncalled capital to pay and perform its obligations under this Guarantee; and (v) the execution, delivery and performance by such Guarantor of this Guarantee do not and will not (a) violate such Guarantor’s organizational documents or (b) violate any applicable Law. Each Guarantor agrees and covenants that it shall (a) maintain in full force and effect all Required Approvals, (b) obtain any such consents, approvals, authorizations or permits, or make any filings with or notifications that may become necessary in the future and will comply in all respects with all applicable Laws and Orders to which it may be subject if failure to so comply would impair its ability to perform its obligations under this Guarantee, and (c) not institute, and shall cause each of its Affiliates not to institute, directly or indirectly, any action or bring any other claim asserting that this Guarantee is illegal, invalid or unenforceable in accordance with its terms.

5. NO ASSIGNMENT. Neither the Guarantors, nor the Guaranteed Party may assign, transfer or delegate its rights, interests or obligations under or in connection with this Guarantee to any other Person (except by operation of law) without the prior written consent of the Guaranteed Party (in the case of an assignment, transfer or delegation by any Guarantor) or the Guarantors (in the case of an assignment, transfer or delegation by the Guaranteed Party) and any purported assignment, transfer or delegation without such consent shall be null and void ab initio.

6. CONTINUING GUARANTEE. This Guarantee may not be revoked or terminated and shall continue and remain in full force and effect until the payment, performance and/or satisfaction in full, or the waiver thereof by the Guaranteed Party, of the Guaranteed Obligations (up to the Total Cap), and shall be binding upon and inure to the benefit of the Guaranteed Party, the Guarantors, and their successors and permitted assigns.

7. SUBROGATION WAIVER. Each Guarantor agrees that it shall not assert any rights (direct or indirect) of subrogation, contribution, reimbursement or other rights of payment or recovery from any Buyer Party for any payments made by the Guarantors hereunder until the Guaranteed Obligations have been indefeasibly paid in full. If any amount shall be paid to any Guarantor in violation

 

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of the immediately preceding sentence at any time prior to the indefeasible payment in full to the Guaranteed Party of the Guaranteed Obligations, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of such Guarantor and shall forthwith be indefeasibly paid or delivered to the Guaranteed Party in the same amount as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations, in accordance with the terms hereof and of the Merger Agreement, whether matured or unmatured, or to be held as collateral for the Guaranteed Obligations or other amounts payable under this Guarantee thereafter arising.

8. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. Section 8.5 of the Merger Agreement is hereby incorporated herein by reference, mutatis mutandis.

9. NOTICES. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Guarantee shall be in writing and shall be deemed to have been given (i) when delivered or sent if delivered in person or sent by facsimile transmission (provided confirmation of facsimile transmission is obtained), (ii) on the fifth Business Day after dispatch by registered or certified mail, (iii) on the next Business Day if transmitted by national overnight courier or (iv) on the date delivered if sent by e-mail (provided confirmation of e-mail receipt is obtained), in each case as follows. Notices, demands and communications, in each case to the respective parties, shall be sent to the applicable address set forth below, unless another address has been previously specified in writing by such party:

Notices to the Guarantors:

c/o Francisco Partners Management, L.P.

One Letterman Drive

Building C - Suite 140

San Francisco, CA 94129

Attention:         Ezra Perlman, Leonid Rozkin, and Tom Ludwig

Facsimile No.: (415) 418-2999

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

3300 Hillview Ave.

Palo Alto, CA 94304

Attention:        Adam Phillips, P.C.

                         Robert Goedert

Facsimile No.: (650) 859-7500

Notices to the Guaranteed Party:

Connecture, Inc.,

18500 West Corporate Drive, Suite 250

Brookfield, WI 53045

Attention: Special Committee Chair

with a copy to (which shall not constitute notice):

 

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DLA Piper LLP (US)

401 Congress Ave., Suite 2500

Austin, TX 78701

Attention: Joseph G. Silver and Samer M. Zabaneh

Potter Anderson & Corroon LLP

1313 North Market Street

P.O. Box 951

Wilmington, DE 19899-0951

Attention: T. Brad Davey

10. COUNTERPARTS. This Guarantee may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Delivery of an executed counterpart of a signature page to this Guarantee by facsimile transmission or by e-mail of a .pdf attachment shall be effective as delivery of a manually executed counterpart of this Guarantee.

11. THIRD PARTY BENEFICIARIES. This Guarantee shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns, and nothing express or implied in this Guarantee is intended to, or shall, confer upon any other Person any benefits, rights or remedies under or by reason of, or any rights to enforce or cause the Guaranteed Party to enforce, the obligations set forth herein.

12. TERMINATION.

(a) The Guarantors shall not have any further liability or obligation under this Guarantee from and after the earliest of (i) the Closing, and (ii) the 90th day following termination of the Merger Agreement in accordance with its terms.

(b) In the event that the Guaranteed Party institutes any Legal Proceeding or makes any claim (i) asserting that any of the provisions of this Section 12 or Sections 1, 2, 3, 4, 6, 8, and 11 are illegal, invalid or unenforceable in whole or in part or that any Guarantor is liable in excess of or to a greater extent than the Total Cap, or (ii) arising under, or in connection with, this Guarantee, the Merger Agreement, or the transactions contemplated hereby or thereby, then (x) the obligations of the Guarantors under this Guarantee shall terminate ab initio and be null and void, (y) if the Guarantors have previously made any payments under this Guarantee, the Guarantors shall be entitled to recover such payments from the Guaranteed Party, and (z) the Guarantors and their Affiliates shall not have any liability to the Guaranteed Party under this Guarantee or with respect to the transactions contemplated by the Merger Agreement. Upon the request of the Guarantors after any termination of the obligations and liabilities of the Guarantors pursuant to the provisions of this Section 12, the Guaranteed Party shall provide such Guarantors with written confirmation of such termination.

13. MISCELLANEOUS.

(a) This Guarantee (together with the Confidentiality Agreement, the Merger Agreement and any other agreement or instrument delivered in connection with the foregoing) constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among the Guarantors or any of their Affiliates, on the one hand, and the

 

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Guaranteed Party or any of its Affiliates, on the other hand. Except as set forth in Section 5, no amendment, supplementation, modification or waiver of this Guarantee or any provision hereof, nor any consent to any departure by the Guarantors therefrom, shall be effective or enforceable unless approved in a writing signed by the Guaranteed Party and the Guarantors.

(b) Any term or provision of this Guarantee that is invalid or unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective solely to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided, however, that this Guarantee may not be enforced without giving effect to the limitation of the amount payable by the Guarantors hereunder to the Total Cap as provided in Section 1 hereof. Each party hereto covenants and agrees that it shall not assert, and shall cause its respective Affiliates and representatives not to assert, that this Guarantee or any part hereof is invalid, illegal or unenforceable in accordance with its terms.

(c) All parties acknowledge that each party and its counsel have reviewed this Guarantee and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Guarantee.

(d) No failure or delay on the part of the Guaranteed Party in exercising any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies provided in this Guarantee are cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Guarantee shall be effective only in the specific instance and for the specific purpose for which given.

[signature page follows]

 

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IN WITNESS WHEREOF, the Guarantors and the Guaranteed Party have caused this Guarantee to be executed and delivered as of the date first written above by its officer or representative thereunto duly authorized.

 

GUARANTORS:
FRANCISCO PARTNERS IV, L.P.
By: FRANCISCO PARTNERS GP IV, L.P.
  its General Partner
By: FRANCISCO PARTNERS GP IV
MANAGEMENT LIMITED
  its General Partner
By:  

/s/ Ezra Perlman

Name:        Ezra Perlman
Title:        Co-President
FRANCISCO PARTNERS IV-A, L.P.
By: FRANCISCO PARTNERS GP IV, L.P.
  its General Partner
By: FRANCISCO PARTNERS GP IV
MANAGEMENT LIMITED
  its General Partner
By:  

/s/ Ezra Perlman

Name:        Ezra Perlman
Title:        Co-President

[Signature page to guarantee]


IN WITNESS WHEREOF, the Guarantors and the Guaranteed Party have caused this Guarantee to be executed and delivered as of the date first written above by its officer or representative thereunto duly authorized.

 

GUARANTEED PARTY:
CONNECTURE, INC.
By:  

/s/ Jeffrey A. Surges

Name:   Jeffrey A. Surges
Title:   Chief Executive Officer and President

[Signature page to guarantee]