SC TO-T

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE TO

TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

PAYA HOLDINGS INC.

(Name of Subject Company (Issuer))

PINNACLE MERGER SUB, INC.

(Name of Filing Persons (Offeror))

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

(Name of Filing Persons (Parent of Offeror))

Common Stock, Par Value $0.001 Per Share

(Title of Class of Securities)

70434P103

(Cusip Number of Class of Securities)

Lindsay Matthews

General Counsel and Corporate Secretary

1100 René-Lévesque Boulevard West, Suite 900

Montreal, Quebec H3B 4N4

(514) 313-1190

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)

 

 

Copy to:

Evan Rosen

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

212-450-4000

 

 

 

☐ 

Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

Amount Previously Paid:    None    Filing Party:    Not applicable
Form or Registration No.:    Not applicable    Date Filed:    Not applicable

 

☐ 

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

  ☒ 

third-party tender offer subject to Rule 14d-1.

 

  ☐ 

issuer tender offer subject to Rule 13e-4.

 

  ☐ 

going-private transaction subject to Rule 13e-3.

 

  ☐ 

amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer.  ☐

If applicable, check the appropriate box(es) below to designate the appropriate rule provision

 

  ☐ 

Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

 

  ☐ 

Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

 

 

 


This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the offer by Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”), and Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”), to purchase any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest, net to the holder in cash, less any applicable withholding taxes, upon the terms and subject to the conditions described in the Offer to Purchase dated January 24, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”) and in the accompanying Letter of Transmittal (together with any amendments or supplements thereto the “Letter of Transmittal” and with the Offer to Purchase, the “Offer”), which are annexed to and filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively. Purchaser is an indirect, wholly owned subsidiary of Parent. This Schedule TO is being filed on behalf of Parent and Purchaser. Unless otherwise indicated, references to sections in this Schedule TO are references to sections of the Offer to Purchase. A copy of the Agreement and Plan of Merger, dated as of January 8, 2023, by and among the Company, Parent and Purchaser is attached as Exhibit (d)(1) hereto and incorporated herein by reference with respect to Items 4 through 11 of this Schedule TO.

 

ITEM 1.

SUMMARY TERM SHEET.

The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet” is incorporated herein by reference.

 

ITEM 2.

SUBJECT COMPANY INFORMATION.

(a) The subject company and the issuer of the securities subject to the Offer is Paya Holdings Inc. Its principal executive office is located at 303 Perimeter Center North, Suite 600, Atlanta, Georgia 30346 and its telephone number is (800) 261-0240.

(b) This Schedule TO relates to Shares. According to the Company, as of the close of business on January 23, 2023, there were (i) 132,424,929 Shares issued and outstanding, (ii) 1,627,832 Shares subject to issuance pursuant to outstanding options to acquire Shares, and (iii) 2,011,699 Shares subject to issuance pursuant to outstanding restricted stock units.

(c) The information concerning the principal market in which the Shares are traded and certain high and low sales prices for the Shares in the principal market in which the Shares are traded set forth in Section 6—“Price Range of Shares; Dividends” of the Offer to Purchase is incorporated herein by reference.

 

ITEM 3.

IDENTITY AND BACKGROUND OF FILING PERSON.

(a)—(c) The filing companies of this Schedule TO are (i) Parent and (ii) Purchaser. The information set forth in Section 8—“Certain Information Concerning Parent, Purchaser and Certain Related Parties” and Schedule I of the Offer to Purchase is incorporated herein by reference.

 

ITEM 4.

TERMS OF THE TRANSACTION.

The information set forth in the Offer to Purchase is incorporated herein by reference.

 

ITEM 5.

PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

(a), (b) The information set forth in Section 7—“Certain Information Concerning the Company,” Section 8—“Certain Information Concerning Parent, Purchaser and Certain Related Parties,” Section 10—“Background of the Offer; Past Contacts or Negotiations with the Company,” Section 11—“The Merger Agreement; Other Agreements,” Section 12—“Purpose of the Offer; Plans for the Company” and Schedule I of the Offer to Purchase is incorporated herein by reference.

 

1


ITEM 6.

PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

(a), (c)(1)—(7) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet” and “Introduction” and in Section 6 —“Price Range of Shares; Dividends,” Section 11—“The Merger Agreement; Other Agreements,” Section 12—“Purpose of the Offer; Plans for the Company” and Section 13—“Certain Effects of the Offer” of the Offer to Purchase is incorporated herein by reference.

 

ITEM 7.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a), (b) and (d) The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet” and in Section 9—“Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.

 

ITEM 8.

INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

The information set forth in Section 8—“Certain Information Concerning Parent, Purchaser and Certain Related Parties,” Section 11—“The Merger Agreement; Other Agreements,” Section 12—“Purpose of the Offer; Plans for the Company” and Schedule I of the Offer to Purchase is incorporated herein by reference.

 

ITEM 9.

PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.

(a) The information set forth in Section 3—“Procedures for Tendering Shares,” Section 10—“Background of the Offer; Past Contacts or Negotiations with the Company” and Section 17—“Fees and Expenses” of the Offer to Purchase is incorporated herein by reference.

 

ITEM 10.

FINANCIAL STATEMENTS.

Not applicable. In accordance with the instructions to Item 10 of the Schedule TO, the financial statements are not considered material because:

(a) the consideration offered consists solely of cash;

(b) the Offer is not subject to any financing condition; and

(c) the Offer is for all outstanding securities of the subject class.

 

ITEM 11.

ADDITIONAL INFORMATION.

(a) The information set forth in Section 10—“Background of the Offer; Past Contacts or Negotiations with the Company,” Section 11—“The Merger Agreement; Other Agreements,” Section 12—“Purpose of the Offer; Plans for the Company,” Section 13—“Certain Effects of the Offer” and Section 16—“Certain Legal Matters; Regulatory Approvals” of the Offer to Purchase is incorporated herein by reference.

(c) The information set forth in the Offer to Purchase is incorporated herein by reference.

ITEM 12. EXHIBITS.

 

Index

    No.    

    
(a)(1)(A)*    Offer to Purchase, dated January 24, 2023.
(a)(1)(B)*    Form of Letter of Transmittal.
(a)(1)(C)*    Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

 

2


Index

    No.    

    

(a)(1)(D)*

   Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

(a)(1)(E)*

   Form of Summary Advertisement, published January 24, 2023 in The New York Times.

(a)(5)(A)

   Joint Press Release of Nuvei Corporation and Paya Holdings Inc., dated January 9, 2023 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 6-K filed by Parent with the Securities and Exchange Commission on January 9, 2023).

(a)(5)(B)

   Investor Presentation by Nuvei to Nuvei’s investors, dated as of January 9, 2023 (incorporated by reference to the Tender Offer Statement on Schedule TO-C of Parent and Purchaser filed with the Securities and Exchange Commission on January 10, 2023).

(a)(5)(C)

   Transcript of Investor Presentation by Nuvei to Nuvei’s investors, dated as of January 9, 2023 (incorporated by reference to the Tender Offer Statement on Schedule TO-C of Parent and Purchaser filed with the Securities and Exchange Commission on January 10, 2023).

(a)(5)(D)

   E-mail from Philip Fayer, Chief Executive Officer of Nuvei, to employees of Nuvei on January 9, 2023 (incorporated by reference to the Tender Offer Statement on Schedule TO-C of Parent and Purchaser filed with the Securities and Exchange Commission on January 10, 2023).

(a)(5)(E)

   Transcript of Interview by Philip Fayer, CEO of Nuvei Corporation, with BNN Bloomberg, dated as of January 9, 2023 (incorporated by reference to the Tender Offer Statement on Schedule TO-C of Parent and Purchaser filed with the Securities and Exchange Commission on January 10, 2023).

(a)(5)(F)

   Social media posts by Nuvei Corporation on January 10, 2023 (incorporated by reference to the Tender Offer Statement on Schedule TO-C of Parent and Purchaser filed with the Securities and Exchange Commission on January 10, 2023).

(b)(1)*†

   Commitment Letter, dated as of January 8, 2023, by and among Parent and certain other parties.

(b)(2)*†

   Amended and Restated Credit Agreement, dated as of June 18, 2021 (as further amended from time to time prior to the date hereof), by and among Parent and certain other parties thereto.

(d)(1)

   Agreement and Plan of Merger, dated January 8, 2023, by and among the Company, Parent and Purchaser (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 9, 2023).

(d)(2)*

   Confidentiality Agreement, dated November 22, 2022, by and between the Company and Parent.

(d)(3)*

   Letter Agreement, dated December 17, 2022, by and between the Company and Parent.

(d)(4)

   Tender and Support Agreement, dated January 8, 2023, by and among the Company, Parent and GTCR Ultra-Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 9, 2023).

(d)(5)

   Termination Agreement, dated as of January 8, 2023, by and between the Company and GTCR Ultra-Holdings, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on January 9, 2023).

(g)

   Not applicable.

(h)

   Not applicable.

107*

   Filing fee table.

 

*

Filed herewith.

Confidential portions of this exhibit have been omitted.

 

ITEM 13.

INFORMATION REQUIRED BY SCHEDULE 13E-3.

Not applicable.

 

3


SIGNATURE

After due 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: January 24, 2023

 

PINNACLE MERGER SUB, INC.
By:  

/s/ David Schwartz

  Name:   David Schwartz
  Title:   Chief Financial Officer

 

NUVEI CORPORATION
By:  

/s/ Lindsay Matthews

  Name:   Lindsay Matthews
  Title:   General Counsel

 

4

EX-99.(a)(1)(A)

Exhibit (a)(1)(A)

Offer to Purchase for Cash

Any and All Issued and Outstanding Shares of Common Stock

of

PAYA HOLDINGS INC.

at

$9.75 Per Share

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT

ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME,

ON TUESDAY, FEBRUARY 21, 2023, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

Pinnacle Merger Sub, Inc. (“Purchaser” or “we”), a Delaware corporation and an indirect, wholly owned subsidiary of Nuvei Corporation (“Parent”), a corporation incorporated pursuant to the laws of Canada, is offering to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition (as defined below), any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (“Paya” or the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” and which, together with this Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”).

We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of January 8, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent.

As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clause (i) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above, which we refer to as “Dissenting Shares,” will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.


Under no circumstances will interest be paid on the Offer Price for the Shares, regardless of any extension of the Offer or any delay in making payment for the Shares.

The board of directors of the Company (the “Company Board”) has unanimously (i) determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interest of the Company and the Company’s stockholders, (ii) determined that it is in the best interests of the Company and the Company’s stockholders, and declared it advisable, to enter into the Merger Agreement and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the Merger Agreement by the Company (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and other obligations thereunder, and the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and conditions set forth therein, in accordance with the requirements of the DGCL, (iv) approved the execution and delivery of the Tender and Support Agreement (as defined below) by the parties thereto (and the consummation of the transactions contemplated thereby), (v) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, and (vi) resolved to recommend that the Company’s stockholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to the Purchaser in the Offer (such recommendation the “Company Board Recommendation”).

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition, and the satisfaction or waiver by Parent or Purchaser of the Inside Date Condition and the HSR Condition (each as defined below and to the extent waiver is permitted under applicable law). The “Minimum Condition” requires that the number of Shares validly tendered (and not properly withdrawn) prior to the Offer Expiration Time (as defined below), together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the consummation of the Offer at one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023 (the “Offer Expiration Time,” unless Purchaser extended the period during which the Offer is open in accordance with the Merger Agreement, in which event “Offer Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire). The “Inside Date Condition” requires that, unless such condition is waived by Parent and Purchaser, the Acceptance Time (as defined below) will not occur prior to February 22, 2023. Except as described in Section 11 — “The Merger Agreement; Other Agreements,” if at the otherwise scheduled Offer Expiration Time, all of the Offer conditions (other than the Minimum Condition, Termination Condition (as defined below) and any other Offer Conditions that by their terms are to be satisfied at the expiration of the Offer) have not been satisfied or waived (to the extent waiver is permitted under applicable law), Parent will cause Purchaser to and Purchaser will extend the Offer for one or more occasions in consecutive increments of up to ten business days each as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree in order to permit satisfaction of such Offer Conditions. The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.”

A summary of the principal terms of the Offer appears under the heading “Summary Term Sheet.” You should read this entire Offer to Purchase, the Letter of Transmittal and the other documents to which this Offer to Purchase refers carefully before deciding whether to tender your Shares in the Offer.

January 24, 2023

 

ii


IMPORTANT

If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (i) complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, with any required signature guarantees if the Letter of Transmittal so requires, and mail or deliver the Letter of Transmittal and any other required documents to Continental Stock Transfer & Trust Company, in its capacity as depositary for the Offer (the “Depositary”), and deliver the certificates for your Shares to the Depositary along with the Letter of Transmittal, or tender your Shares by book-entry transfer by following the procedures described in Section 3 — “Procedures for Tendering Shares,” or (ii) request that your broker, dealer, commercial bank, trust company or other nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact that institution in order to tender your Shares pursuant to the Offer.

We are not providing for guaranteed delivery procedures. Therefore, stockholders of the Company must allow sufficient time for the necessary tender procedures to be completed during normal business hours of the Depositary.

* * * * *

Questions and requests for assistance regarding the Offer or any of the terms thereof may be directed to MacKenzie Partners, Inc., as information agent for the Offer (the “Information Agent”), at the address and telephone number set forth for the Information Agent below and on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer may also be obtained for free from the Information Agent. Additionally, copies of this Offer to Purchase, the related Letter of Transmittal and any other materials related to the Offer may be obtained at the website maintained by the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.

This Offer to Purchase and the Letter of Transmittal contain important information, and you should read both carefully and in their entirety before making a decision with respect to the Offer.

This transaction has not been approved or disapproved by the SEC or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of such transaction or upon the accuracy or adequacy of the information contained in this Offer to Purchase or the Letter of Transmittal. Any representation to the contrary is unlawful.

The Information Agent for the Offer is:

 

LOGO

1407 Broadway

New York, New York 10018

(212) 929-5500

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

 

iii


TABLE OF CONTENTS

 

 

 

         PAGE  

SUMMARY TERM SHEET

     5  

INTRODUCTION

     13  

THE TENDER OFFER

     16  

1.

 

Terms of the Offer

     16  

2.

 

Acceptance for Payment and Payment for Shares

     18  

3.

 

Procedures for Tendering Shares

     19  

4.

 

Withdrawal Rights

     21  

5.

 

Certain United States Federal Income Tax Consequences

     22  

6.

 

Price Range of Shares; Dividends

     25  

7.

 

Certain Information Concerning the Company

     26  

8.

 

Certain Information Concerning Parent, Purchaser and Certain Related Parties

     27  

9.

 

Source and Amount of Funds

     28  

10.

 

Background of the Offer; Past Contacts or Negotiations with the Company

     31  

11.

 

The Merger Agreement; Other Agreements

     34  

12.

 

Purpose of the Offer; Plans for the Company

     68  

13.

 

Certain Effects of the Offer

     70  

14.

 

Dividends and Distributions

     70  

15.

 

Conditions of the Offer

     71  

16.

 

Certain Legal Matters; Regulatory Approvals

     72  

17.

 

Fees and Expenses

     76  

18.

 

Miscellaneous

     76  

SCHEDULE I — INFORMATION RELATING TO PARENT AND PURCHASER

     77  

 

iv


SUMMARY TERM SHEET

The following are some key Offer terms and questions that you, as a stockholder of the Company, may have and answers to those questions. This summary term sheet highlights selected information from this Offer to Purchase and may not contain all of the information that is important to you and is qualified in its entirety by the more detailed descriptions and explanations contained in this Offer to Purchase, the Letter of Transmittal and other related materials. To better understand the Offer and for a complete description of the legal terms of the Offer, you should read this Offer to Purchase, the Letter of Transmittal and other related materials carefully and in their entirety. The information concerning the Company contained herein and elsewhere in the Offer to Purchase has been provided to Parent and Purchaser by the Company or has been taken from, or is based upon, publicly available documents or records of the Company on file with the U.S. Securities and Exchange Commission (the “SEC”) or other public sources at the time of the Offer. Parent and Purchaser have not independently verified the accuracy and completeness of such information. Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth for the Information Agent on the back cover of this Offer to Purchase. Unless otherwise indicated in this Offer to Purchase or the context otherwise requires, all references in this Offer to Purchase to “we,” “our” or “us” refer to Purchaser.

 

Securities Sought:    Subject to certain conditions, including the satisfaction of the Minimum Condition (as described below), any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of the Company (the “Shares”). See Section 1 — “Terms of the Offer.”
Price Offered Per Share:    $9.75 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes. See Section 1 — “Terms of the Offer.”
Offer Expiration Time:    One minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023 (as it may be extended in accordance with the terms of the Merger Agreement, the “Offer Expiration Time”). See Section 1 — “Terms of the Offer.”
Withdrawal Rights:    You can withdraw your Shares at any time prior to one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023, unless the Offer is extended, in which case you can withdraw your Shares by the then extended expiration time and date. You can also withdraw your Shares at any time after Saturday, March 25, 2023, which is the 60th day after the date of commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn. See Section 4 — “Withdrawal Rights.”
Purchaser:    Pinnacle Merger Sub, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of Parent, a corporation incorporated pursuant to the laws of Canada. See Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.”

Who is offering to buy my Shares?

Pinnacle Merger Sub, Inc., or “Purchaser” or “we”, a Delaware corporation and an indirect, wholly owned subsidiary of Nuvei Corporation (“Parent”), a corporation incorporated pursuant to the laws of Canada, is offering to purchase any and all of the issued and outstanding Shares upon the terms and subject to the conditions contained in this Offer to Purchase. Purchaser was formed for the sole purpose of making the Offer and completing the process by which Purchaser will be merged with and into the Company. See “Introduction” and Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.”

 

5


What securities are you offering to purchase?

We are making an offer to purchase any and all of the issued and outstanding Shares on the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal. See “Introduction” and Section 1 — “Terms of the Offer.”

How much are you offering to pay and what is the form of payment?

We are offering to pay $9.75 per Share, without interest, net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions contained in this Offer to Purchase and the Letter of Transmittal. See “Introduction” and Section 1 — “Terms of the Offer.”

Will I have to pay any fees or commissions?

If you are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your Shares through a broker or other nominee and your broker or other nominee tenders your Shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See “Introduction” and Section 1 — “Terms of the Offer.”

Why are you making the Offer?

We are making the Offer because we and Parent want to acquire the entire equity interest in the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of any and all issued and outstanding Shares. We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of January 8, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent. Following the Merger, the Company will cease to be a publicly traded company. See “Introduction” and Section 12 — “Purpose of the Offer; Plans for the Company.”

Is there an agreement governing the Offer?

Yes. The Company, Parent and Purchaser have entered into the Merger Agreement, which provides, among other things, for the terms and conditions of the Offer and the Merger. See “Introduction” and Section 11 — “The Merger Agreement; Other Agreements.”

What does the Company Board think of the Offer?

Under the Merger Agreement, the Company Board has unanimously (i) determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interest of the Company and the Company’s stockholders, (ii) determined that it is in the best interests of the Company and the Company’s stockholders, and declared it advisable, to enter into the Merger Agreement and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the Merger Agreement by the Company (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and other obligations thereunder, and the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and conditions set forth therein, in accordance with the requirements of the DGCL, (iv) approved the execution and delivery of the Tender and Support Agreement by the parties thereto (and the consummation of the transactions contemplated thereby), (v) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, and (vi) resolved to recommend that the Company’s stockholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to the Purchaser in the Offer (such recommendation the “Company Board Recommendation”).

 

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See “Introduction,” Section 10 — “Background of the Offer; Past Contacts or Negotiations with the Company” and Section 11 — “The Merger Agreement; Other Agreements.” A more complete description of the reasons for the Company Board’s approval of the Offer and the Merger is set forth in a Solicitation/Recommendation Statement on Schedule 14D-9 (which, together with any exhibits and annexes attached thereto, we refer to as the “Schedule 14D-9”) that is being mailed to all the Company stockholders together with this Offer to Purchase.

What are the most significant conditions to the Offer?

The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent waiver is permitted under applicable law) by Parent or Purchaser of the following conditions (except that the Minimum Condition and the Termination Condition (as defined below) may not be waived):

 

   

the number of Shares validly tendered (and not validly withdrawn) prior to the Offer Expiration Time but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been “received,” as such terms are defined by Section 251(h) of the DGCL, together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time (the “Minimum Condition”);

 

   

the accuracy of the Company’s representations and warranties (subject to customary materiality qualifiers);

 

   

the Company’s performance and compliance in all material respects of all covenants, obligations and agreements required to be performed or complied with by it under the Merger Agreement at or prior to the Offer Expiration Time;

 

   

the receipt by Parent and Purchaser by the Company of a certificate signed by an executive officer of the Company, dated as of the date of the Offer Expiration Time, certifying that certain conditions have been satisfied;

 

   

the expiration or termination of any waiting period (and any extension thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (such Act the “HSR Act” and such condition the “HSR Condition”);

 

   

the absence of any federal, state, local, foreign or multinational law, judgment, rule or regulation or order, judgment, or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent) by any governmental authority of competent jurisdiction that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger;

 

   

the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement);

 

   

the Acceptance Time not occurring prior to February 22, 2023 (the “Inside Date Condition”); and

 

   

the Merger Agreement shall not have been terminated in accordance with its terms (the “Termination Condition”).

Except as described in Section 11 — “The Merger Agreement; Other Agreements,” if at the otherwise scheduled Offer Expiration Time, all of the Offer conditions (other than the Minimum Condition, the Termination Condition and the other Offer conditions that by their terms are to be satisfied at the expiration of the Offer) will have been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under applicable law), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions in consecutive increments of up to ten business days each as determined by Purchaser, (or such longer period as may be agreed by the Company, Purchaser and Parent).

Subject to the applicable rules and regulations of the SEC and the terms of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition or

 

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the Termination Condition. See Section 1 — “Terms of the Offer,” Section 11 — “The Merger Agreement; Other Agreements — Terms and Conditions of the Offer” and Section 15 — “Conditions of the Offer.”

Is the Offer subject to any financing condition?

No. There is no financing condition to the Offer. See “Introduction,” Section 1 — “Terms of the Offer” and Section 9 — “Source and Amount of Funds.”

Do you have the financial resources to pay for all of the Shares that you are offering to purchase in the Offer?

Yes. We estimate that the maximum amount of funds needed to (i) complete the Offer, the Merger and the transactions contemplated by the Merger Agreement, including the funds needed to purchase all Shares tendered in the Offer and to pay the Company stockholders whose Shares are converted into the right to receive a cash amount equal to the Offer Price in the Merger, (ii) pay for fees and expenses incurred by Parent related to the Offer and the Merger, (iii) pay for the amounts in respect of outstanding in-the-money vested Company options and other vested equity awards and (iv) refinance certain existing indebtedness of the Company and its subsidiaries will be approximately $300 million.

Parent and Purchaser expect to fund such cash requirements from (a) a commitment from certain lenders to provide a $600 million senior secured first lien revolving credit facility (the “New Credit Facility”) contemplated by a debt commitment letter, dated January 8, 2023, that was entered into in connection with the execution of the Merger Agreement (the “Debt Commitment Letter”), and (b) approximately $385 million of undrawn revolving commitments (the “Existing Revolving Borrowings”) under the Amended and Restated Credit Agreement dated as of June 18, 2021 (as further amended from time to time prior to the Closing Date, the “Existing Credit Facility” and together with the New Credit Facility, the “Credit Facilities”), in each case available for, among other things, the purposes of financing in part the transactions and paying transaction-related fees, costs and expenses and repaying certain of the Company’s and its subsidiaries’ existing indebtedness (the financing available under the Credit Facilities, the “Debt Financing”).

Is your financial condition relevant to my decision to tender in the Offer?

No, we do not think that the financial condition of Purchaser, Parent or their respective affiliates is relevant to your decision whether to tender Shares and accept the Offer because:

 

   

the Offer is being made for any and all issued and outstanding Shares solely for cash;

 

   

the consummation of the Offer (or the Merger) is not subject to any financing condition; and

 

   

if Purchaser consummates the Offer, Purchaser will acquire all remaining Shares for the same cash price in the Merger (i.e., the Offer Price).

See Section 9 — “Source and Amount of Funds.”

Can the Offer be extended and under what circumstances can or will the Offer be extended?

We have agreed in the Merger Agreement that Purchaser will extend the Offer (i) for any minimum period required by any applicable law or any rule, regulation, interpretation or position of the SEC or its staff or of the Nasdaq Capital Market (“Nasdaq”) or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions (other than the Minimum Condition, the Termination Condition and any such conditions that by their terms are to be satisfied at the expiration of the Offer) has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (as

 

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determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree); and (iii) if, at the then-scheduled Offer Expiration Time, each condition to the Offer (other than the Minimum Condition and any such conditions that by their nature are to be satisfied at the expiration of the Offer) has been satisfied or waived by Parent or Purchaser (to the extent permitted pursuant to the Merger Agreement) and the Minimum Condition has not been satisfied, Purchaser will (and Parent will cause Purchaser to) extend the Offer for one or more occasions, in consecutive periods of ten business days (as determined by Purchaser in its discretion, or for such longer duration as the parties may agree); except that Purchaser will not be required to extend the Offer for successive extension periods in excess of twenty business days in the aggregate (so long as Parent and Purchaser are not in material breach of their covenants and obligations set forth in the Merger Agreement) and without the Company’s prior written consent, the Purchaser will not extend the Offer for successive extension periods in excess of thirty business days in the aggregate. In each case described above, Purchaser is not required to (and is not permitted to, without the Company’s prior written consent) extend the offer beyond the earlier of (a) September 8, 2023 and (b) the termination of the Merger Agreement in accordance with its terms. See “Introduction,” Section 1 — “Terms of the Offer” and Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — The Offer” for more details on our ability to extend the Offer.

How will I be notified if the Offer is extended?

If we extend the Offer, we will inform Continental Stock Transfer & Trust Company (the “Depositary”) of that fact and will make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day of the previously scheduled Offer Expiration Time. See Section 1 — “Terms of the Offer.”

Will there be a subsequent offering period?

No. Pursuant to Section 251(h) of the DGCL, we expect the Merger to occur as promptly as practicable following the consummation of the Offer without a subsequent offering period.

How long do I have to decide whether to tender in the Offer?

You will have until the Offer Expiration Time to decide whether to tender your Shares in the Offer, unless we extend the Offer pursuant to the terms of the Merger Agreement or the Offer is earlier terminated. We are not providing for guaranteed delivery procedures. You are encouraged to deliver your Shares and other required documents to make a valid tender by the Offer Expiration Time. Please give your broker, dealer, commercial bank, trust company or other nominee instructions in sufficient time to permit such nominee to tender your Shares by the Offer Expiration Time. See Section 2 — “Acceptance for Payment and Payment of Shares” and Section 3 — “Procedures for Tendering Shares.”

How do I tender my Shares?

If you hold your Shares directly as the registered owner, you can (i) tender your Shares in the Offer by delivering the certificates representing your Shares, together with a completed and signed Letter of Transmittal, with any required signature guarantees, and any other documents required by the Letter of Transmittal, to the Depositary or (ii) tender your Shares by following the procedure for book-entry transfer set forth in Section 3 of this Offer to Purchase, no later than the Offer Expiration Time. We are not providing for guaranteed delivery procedures. Therefore, stockholders of the Company must allow sufficient time for the necessary tender procedures to be completed during normal business hours of the Depositary.

If you hold your Shares in street name through a broker, dealer, commercial bank, trust company or other nominee, you must contact the institution that holds your Shares and give instructions that your Shares be tendered. You should contact the institution that holds your Shares for more details. See “Introduction” and Section 3 — “Procedures for Tendering Shares.”

 

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Until what time may I withdraw previously tendered Shares?

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Offer Expiration Time. Thereafter, tenders of Shares are irrevocable, except that, pursuant to Section 14(d)(5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), they may also be withdrawn after Saturday, March 25, 2023, which is the 60th day after the date of the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct that nominee to arrange for the withdrawal of your Shares. See “Introduction” and Section 4 — “Withdrawal Rights.”

How do I withdraw previously tendered Shares?

To withdraw any of your previously tendered Shares, you must deliver a written (or, with respect to Eligible Institutions (as defined below), a facsimile transmission) notice of withdrawal, with the required information to the Depositary while you still have the right to withdraw such Shares. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct that nominee to arrange for the withdrawal of your Shares. See “Introduction” and Section 4 — “Withdrawal Rights.”

If I tender my Shares, when and how will I get paid?

If the conditions to the Offer as set forth in Section 15 — “Conditions of the Offer” are satisfied or waived (to the extent waiver is permitted under applicable law) and Purchaser accepts your Shares validly tendered in the Offer for payment, we will pay you the Offer Price, which is an amount equal to the number of Shares you validly tendered in the Offer multiplied by $9.75 in cash, without interest, less any applicable withholding taxes, promptly (and in any event within two business days) following the Acceptance Time (as defined below). See Section 2 — “Acceptance for Payment and Payment of Shares.”

If I decide not to tender, how will the Offer affect my Shares?

If you decide not to tender your Shares pursuant to the Offer and the Merger occurs as described herein, you will receive as a result of the Merger the right to receive the same amount of cash per Share as if you had tendered your Shares pursuant to the Offer, without interest and less any applicable withholding taxes.

Subject to certain conditions, if we purchase Shares in the Offer, we are obligated under the Merger Agreement to cause the Merger to occur.

Because the Merger will be governed by Section 251(h) of the DGCL, assuming the requirements of Section 251(h) of the DGCL are met, no stockholder vote by the stockholders of the Company will be required in connection with the consummation of the Merger. We do not expect there to be significant time between the consummation of the Offer and the consummation of the Merger. See Section 13 — “Certain Effects of the Offer.”

Will the Offer be followed by a Merger if all the Shares are not tendered?

If the Offer is consummated and Purchaser acquires a majority of the outstanding Shares, then, in accordance with the terms of the Merger Agreement, the Company will complete the Merger without a vote of the stockholders to adopt the Merger Agreement and consummate the Merger pursuant to Section 251(h) of the DGCL. Pursuant to the Merger Agreement, if the Minimum Condition is not satisfied, Purchaser is not required to pay for and may delay the acceptance for payment of any Shares tendered pursuant to the Merger Agreement.

Pursuant to the Merger Agreement, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation in the Merger and thereby becoming a wholly owned subsidiary of Parent. At the effective time of the Merger

 

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(the “effective time”), each Share issued and outstanding immediately prior to the effective time of the Merger (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clause (i) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above, which we refer to as “Dissenting Shares,” will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company. See “Introduction” and Section 11 — “The Merger Agreement; Other Agreements.”

Upon the successful consummation of the Offer, will the Company continue as a public company?

If the Offer is consummated, Purchaser will complete the Merger as soon as practicable after, and in any event on the same date as, the Acceptance Time, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, the Shares will no longer meet the requirements for continued listing on Nasdaq because the only stockholder will be Parent. Parent intends to cause the Company to delist the Shares from Nasdaq as promptly as practicable after the effective time. In addition, Parent intends and will cause the Company to terminate the registration of the Shares under the Exchange Act as soon as practicable after consummation of the Merger as the requirements for termination of registration are met. See Section 12 — “Purpose of the Offer; Plans for the Company” and Section 13 — “Certain Effects of the Offer.”

Are appraisal rights available in either the Offer or the Merger?

No appraisal rights will be available to you in connection with the Offer. However, if we accept Shares in the Offer and the Merger is completed, stockholders or beneficial owners who have demanded appraisal of such person’s Shares will be entitled to appraisal rights in connection with the Merger with respect to Shares not tendered in the Offer if such stockholders or beneficial owners properly perfect their right to seek appraisal under the DGCL. See Section 16 — “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights.”

What is the market value of my Shares as of a recent date?

The Offer Price of $9.75 per Share represents a premium of approximately 25% to the unaffected closing price of the Company’s stock on January 6, 2023, the last full trading day prior to the public announcement of the execution of the Merger Agreement. On January 23, 2023, the last full trading day before Purchaser commenced the Offer, the closing price of the Shares reported on Nasdaq was $9.70 per Share. See Section 6—“Price Range of Shares; Dividends.”

What will happen to my stock options in the Offer?

The Offer is made only for Shares and is not being made for any outstanding options to acquire Shares (each, an “Option”). Pursuant to the Merger Agreement, at the effective time, the portion of each Option that is outstanding and vested as of immediately prior to the effective time and that has an exercise price per Share less than the Offer Price will be cancelled and converted into the right to receive a lump sum cash payment, without interest, in an amount equal to the product of (x) the total number of Shares subject to such vested Option,

 

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multiplied by (y) the excess of (a) the Offer Price over (b) the exercise price per share of such Option and (ii) the portion of each Option that is outstanding and unvested as of immediately prior to the effective time and that has an exercise price less than the Offer Price will be converted into a stock option (a “Parent Option”) to purchase a number of subordinate voting shares of Parent (“Parent Shares”) equal to the product (rounded down to the nearest share) of (x) the number of Shares subject to such unvested Option multiplied by (y) the exchange ratio set forth in the Merger Agreement (which is based on the ratio of the Offer Price to the trading price of Parent Shares) (the “exchange ratio”), with an exercise price per Parent Share (rounded up to the nearest cent) equal to (a) the per share exercise price of such unvested Option divided by (b) the exchange ratio. The Parent Options will be governed by the same vesting and exercisability terms, and other terms and conditions no less favorable than those that applied to the unvested Options immediately prior to the effective time. Each Option, whether vested or unvested, that has an exercise price per Share that is equal to or greater than the Offer Price will be canceled for no consideration. See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Treatment of the Company Equity Awards.”

What will happen to my restricted stock units in the Offer?

The Offer is made only for Shares and is not being made for any restricted stock units with respect to Shares (each, an “RSU Award”). Pursuant to the Merger Agreement, at the effective time, the portion of each RSU Award that is outstanding and vested as of immediately prior to the effective time will be cancelled and converted into the right to receive a lump sum cash payment, without interest, in an amount equal to (i) the total number of Shares subject to such vested RSU Award as of immediately prior to the effective time multiplied by (ii) the Offer Price (plus the value of any accrued but unpaid dividend equivalent rights relating to such vested RSU Award). The portion of each RSU Award that is outstanding and unvested as of immediately prior to the effective time will be converted into a restricted stock unit award (a “Parent RSU”) with respect to a number of Parent Shares equal to the product of (x) the number of Shares underlying such unvested RSU Award as of immediately prior to the effective time multiplied by (y) the exchange ratio. The Parent RSUs will be governed by the same vesting and dividend equivalent rights terms, and other terms and conditions no less favorable than those that applied to the unvested RSU Awards immediately prior to the effective time. See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Treatment of the Company Equity Awards.”

What are the United States federal income tax consequences of the Offer and the Merger?

In general, the receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. If you are a United States Holder (as defined below), who receives cash for Shares pursuant to the Offer or pursuant to the Merger you will recognize gain or loss, if any, equal to the difference between the amount of cash received and your adjusted tax basis in the Shares tendered or exchanged therefor. A non-United States Holder (as defined below) generally will not be subject to U.S. federal income tax with respect to Shares tendered for cash in the Offer or exchanged for cash pursuant to the Merger unless such non-United States Holder has certain connections to the United States.

You are urged to consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or non-U.S. laws). See Section 5 — “Certain United States Federal Income Tax Consequences” for a discussion of certain United States federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the Merger.

Who should I talk to if I have additional questions about the Offer?

You can call MacKenzie Partners, Inc., the Information Agent, toll free, at (800) 322-2885 (or (212) 929-5500 (collect) if you are located outside of the United States or Canada). See the back cover of this Offer to Purchase.

 

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INTRODUCTION

To the Holders of Paya Holdings Inc. Shares of Common Stock:

Pinnacle Merger Sub, Inc. (“Purchaser” or “we”), a Delaware corporation and an indirect, wholly owned subsidiary of Nuvei Corporation (“Parent”), a corporation incorporated pursuant to the laws of Canada, is offering to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition, any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest (the “Offer Price”), net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” and which, together with this Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”). The Offer and withdrawal rights will expire at one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023 (the “Offer Expiration Time,” unless the Offer is extended, in which event the term “Offer Expiration Time” means the latest time and date on which the Offer, so extended, expires), unless the Offer is earlier terminated. See Section 1 — “Terms of the Offer.”

Tendering stockholders who are record owners of their Shares and tender directly to Continental Stock Transfer & Trust Company, as depositary for the Offer (the “Depositary”), will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 5 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or nominee should consult such institution as to whether it charges any service fees. Parent or Purchaser will pay all charges and expenses of the Depositary, and MacKenzie Partners, Inc., as information agent for the Offer (the “Information Agent”), incurred in connection with the Offer. See Section 17 — “Fees and Expenses.”

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition, and the satisfaction or waiver by Parent or Purchaser of the Inside Date Condition and the HSR Condition (each to the extent waiver is permitted under applicable law). The “Minimum Condition” requires that the number of Shares validly tendered (and not properly withdrawn) prior to the Offer Expiration Time, together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the consummation of the Offer at one minute following the Offer Expiration Time. The “Inside Date Condition” requires that, unless such condition is waived by Parent and Purchaser, the Acceptance Time will not occur prior to February 22, 2023. “Acceptance Time” means the latest time and date at which the Purchaser will consummate the Offer and irrevocably accept for payment all Shares validly tendered and not validly withdrawn pursuant to the Offer promptly after the Offer Expiration Time. If at the otherwise scheduled Offer Expiration Time, all of the Offer conditions (other than the Minimum Condition, Termination Condition and any other Offer Conditions that by their terms are to be satisfied at the expiration of the Offer) have not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement), Parent will cause Purchaser to and Purchaser will extend the Offer for one or more occasions in consecutive increments of up to ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree) in order to permit satisfaction of such Offer Conditions. The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the “HSR Act”) will have expired or been terminated. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.”

Subject to the applicable rules and regulations of the SEC and the terms of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition or the condition that the Merger Agreement has not been terminated in accordance with its terms (the “Termination Condition”). See Section 1 — “Terms of the Offer” and Section 15 — “Conditions of the Offer.”

 

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We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of January 8, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) under the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation in the Merger and thereby becoming a wholly owned subsidiary of Parent. See “Introduction” and Section 1 — “Terms of the Offer.”

Section 251(h) of the DGCL provides that, subject to certain statutory requirements, if following consummation of a tender offer for a publicly listed Delaware corporation, the stock irrevocably accepted for purchase pursuant to such tender offer and “received” (as defined in Section 251(h) of the DGCL) by the depositary prior to the expiration of such tender offer, plus the stock otherwise owned by the consummating corporation or its affiliates equals at least the percentage of the stock, and of each class or series thereof, of the target corporation that would otherwise be required to adopt a merger agreement under the DGCL and the target corporation’s certificate of incorporation, the corporation consummating such tender offer merges with or into such target corporation, and each outstanding share of each class or series of stock (other than “excluded stock” as defined in Section 251(h) of the DGCL) that is the subject of such tender offer and is not irrevocably accepted for purchase in the offer is to be converted in such merger into the right to receive the same amount and kind of consideration to be paid for shares of such class or series of stock irrevocably accepted for purchase in such tender offer, the consummating corporation may effect a merger without a vote of the stockholders of the target corporation. Accordingly, if the Offer is consummated and the number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn prior to the Offer Expiration Time, together with any Shares owned by Purchaser or its affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time, the Company does not anticipate seeking the approval of its remaining public stockholders before effecting the Merger. Section 251(h) also requires that the merger agreement provide that such merger be effected as soon as practicable following the consummation of the tender offer. Therefore, the parties have agreed that, subject to the conditions specified in the Merger Agreement, the Merger will become effective as soon as practicable after (and on the same day as) the consummation of the Offer after the satisfaction or waiver of the conditions to the Merger set forth in the Merger Agreement, without a vote of the stockholders of the Company, in accordance with Section 251(h) of the DGCL. See Section 11 — “The Merger Agreement; Other Agreements.”

As a result of the Merger, each Share issued and outstanding immediately prior to the effective time (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clause (i) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above, which we refer to as “Dissenting Shares,” will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company. See Section 11 — “The Merger Agreement; Other Agreements” and Section 12 — “Purpose of the Offer; Plans for the Company.”

Under the Merger Agreement, the Company Board has unanimously (i) determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interest of the Company and the Company’s stockholders, (ii) determined that it is in the best

 

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interests of the Company and the Company’s stockholders, and declared it advisable, to enter into the Merger Agreement and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the Merger Agreement by the Company (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and other obligations thereunder, and the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and conditions set forth therein, in accordance with the requirements of the DGCL, (iv) approved the execution and delivery of the Tender and Support Agreement by the parties thereto (and the consummation of the transactions contemplated thereby), (v) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, and (vi) resolved to recommend that the Company’s stockholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to the Purchaser in the Offer (such recommendation the “Company Board Recommendation”).

A more complete description of the Company Board’s reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is set forth in the Solicitation/Recommendation Statement on the Schedule 14D-9 that is being furnished by the Company to stockholders in connection with the Offer together with this Offer to Purchase. The Company’s stockholders should carefully read the information set forth in the Schedule 14D-9, including the information set forth under the sub-headings “Background of the Offer and Merger” and “Reasons for Recommendation.” See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Company Board Recommendation; Company Board Recommendation Change; Intervening Event Fiduciary Exception.”

The Company has informed Purchaser that 132,424,929 Shares were issued and outstanding as of January 23, 2023.

The Merger is subject to the satisfaction or waiver of certain conditions, including there being no court or other governmental authority of competent jurisdiction having enacted, issued, promulgated, enforced or entered (and continuing in effect) any federal, state, local, foreign or multinational law, judgment, rule or regulation or order, or injunction, whether civil or administrative (whether temporary, preliminary or permanent) that would prohibit, restrict, enjoin or otherwise make illegal the consummation of the Offer or the Merger. In addition, Purchaser must have irrevocably accepted for payment all Shares validly tendered and not properly withdrawn pursuant to the Offer.

Pursuant to the Merger Agreement, as of the effective time, the directors of Purchaser as of immediately prior to the effective time will become the directors of the surviving corporation, and the officers of the Purchaser as of immediately prior to the effective time will become the officers of the surviving corporation. See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers.”

No appraisal rights are available in connection with the Offer. However, if we accept Shares in the Offer and the Merger is completed, stockholders and beneficial owners who have demanded appraisal of such person’s Shares may be entitled to appraisal rights in connection with the Merger if they do not tender Shares in the Offer and comply with the applicable procedures described under Section 262 of the DGCL. Such stockholders or beneficial owners will not be entitled to receive the Offer Price, but instead will be entitled to only those rights provided under Section 262 of the DGCL. Stockholders or beneficial owners must properly perfect their right to seek appraisal under the DGCL in connection with the Merger in order to exercise appraisal rights. See Section 16 — “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights.”

Certain United States federal income tax consequences of the tender of Shares in the Offer and the exchange of Shares pursuant to the Merger are described in Section 5 — “Certain United States Federal Income Tax Consequences.”

This Offer to Purchase, the Letter of Transmittal and other documents to which this Offer to Purchase refers contain important information that should be read carefully before any decision is made with respect to the Offer.

 

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THE TENDER OFFER

 

1.

Terms of the Offer.

The Offer and withdrawal rights will expire at one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023, unless the Offer is extended or earlier terminated in accordance with the terms of the Merger Agreement.

Upon the terms and subject to the satisfaction, or to the extent permitted, waiver of the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), Purchaser will promptly after (in any event, no later than one business day immediately after) the Offer Expiration Time, irrevocably accept for payment all Shares validly tendered and not validly withdrawn prior to the Offer Expiration Time (as permitted under Section 4 — “Withdrawal Rights”), and will pay for such Shares promptly (and in any event within two business days) after the Acceptance Time (as defined below).

The date and time of Purchaser’s acceptance for payment of all Shares validly tendered and not validly withdrawn pursuant to the Offer is referred to as the “Acceptance Time.”

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the waiver by Parent and Purchaser or the satisfaction of the Inside Date Condition and the HSR Condition. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.” Subject to the applicable rules and regulations of the SEC and the terms and conditions of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition or the Termination Condition. See Section 15 — “Conditions of the Offer.”

We expressly reserve the right, in our sole discretion, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC, not to accept for payment any Shares if, at the Offer Expiration Time, any of the conditions to the Offer have not been satisfied. See Section 15 — “Conditions of the Offer.” Under certain circumstances, we may terminate the Merger Agreement and the Offer. See Section 11 — “The Merger Agreement; Other Agreements — Termination.”

Pursuant to the Merger Agreement, we may extend the Offer beyond its initial Offer Expiration Time. We have agreed in the Merger Agreement that Purchaser will extend the Offer (i) for any minimum period required by any applicable law or any rule, regulation, interpretation or position of the SEC or its staff or of Nasdaq or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions (other than the Minimum Condition, the Termination Condition and any such conditions that by their terms are to be satisfied at the expiration of the Offer) has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree); and (iii) if, at the then-scheduled Offer Expiration Time, each condition to the Offer (other than the Minimum Condition and any such conditions that by their nature are to be satisfied at the expiration of the Offer) has been satisfied or waived by Parent or Purchaser (to the extent permitted pursuant to the Merger Agreement) and the Minimum Condition has not been satisfied, Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree); except that Purchaser will not be required to extend the Offer for successive extension periods in excess of twenty business days in the aggregate (so long as Parent and Purchaser are not in material breach of their covenants and obligations set forth in the Merger Agreement) and without the Company’s prior written consent,

 

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the Purchaser will not extend the Offer for successive extension periods in excess of thirty business days in the aggregate. In each case described above, Purchaser is not required to (and is not permitted to, without the Company’s prior written consent) extend the offer beyond the earlier of (a) September 8, 2023 and (b) the termination of the Merger Agreement in accordance with its terms. See “Introduction,” Section 1 — “Terms of the Offer” and Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — The Offer” for more details on our ability to extend the Offer.

Pursuant to the Merger Agreement, Parent and Purchaser expressly reserve the right, at any time to waive, in whole or in part, any Offer condition (other than the Minimum Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares sought to be purchased in the Offer, (ii) reduce the Offer Price, (iii) amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer Condition, (v) amend, modify or supplement any other term of the Offer in any manner that is or would reasonably be expected to be adverse to the holders of Shares, (vi) amend, modify or supplement any term of the Offer in any individual case that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent or Purchaser or the Company to consummate the Offer or the Merger, (vii) terminate the Offer (unless the Merger Agreement is terminated in accordance with the terms thereof), accelerate, extend or otherwise change the Offer Expiration Time (in each case, except as expressly required or permitted by the Merger Agreement), (viii) change the form of consideration payable in the Offer or (ix) provide for any “subsequent offering period” (or any extension of any thereof) within the meaning of Rule 14d-11 promulgated under the Exchange Act. The Offer may not be terminated prior to its scheduled Offer Expiration Time (as extended and re-extended in accordance with the Merger Agreement), unless the Merger Agreement is terminated in accordance with the terms thereof.

If, subject to the terms of the Merger Agreement, we make a material change in the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. In the SEC’s view, an offer to purchase should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and with respect to a change in price or a change in percentage of securities sought, a minimum ten business day period generally is required to allow for adequate dissemination to stockholders and investor response. Accordingly, if, prior to the Offer Expiration Time, Purchaser decreases the number of Shares being sought or changes the Offer Price, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such tenth business day.

If, on or before the Offer Expiration Time, we increase the consideration being paid for Shares accepted for payment in the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.

If we extend the Offer, are delayed in our acceptance for payment of or payment (whether before or after our acceptance for payment for Shares) for Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described herein under Section 4 — “Withdrawal Rights” or the Offer is withdrawn or terminated or the Merger Agreement is terminated pursuant to its terms. However, our ability to delay the payment for Shares that we have accepted for payment is limited by Rule 14e-1(c) under the Exchange

 

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Act, which requires us to promptly pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Offer Expiration Time. Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Purchaser may choose to make any public announcement, Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service. As used in this Offer to Purchase, “business day” means any day other than Saturday or Sunday or a day on which commercial banks are authorized or required by law to be closed in New York, New York.

Under no circumstances will interest be paid on the Offer Price for the Shares, regardless of any extension of the Offer or any delay in making payment for the Shares.

As soon as practicable following the consummation of the Offer and subject to the satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement) of certain conditions as described herein under Section 15 — “Conditions of the Offer,” Purchaser will complete the Merger without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the DGCL.

The Company has provided Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating the Offer to Purchase, Letter of Transmittal and other Offer related materials to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

 

2.

Acceptance for Payment and Payment for Shares.

Subject to the satisfaction or waiver (to the extent waiver is permitted under applicable law) of all the conditions to the Offer set forth in Section 15—“Conditions of the Offer,” we will, promptly after (in any event, no later than one business day immediately after) the Offer Expiration Time irrevocably accept for payment all Shares tendered (and not properly withdrawn) pursuant to the Offer and, promptly after the Acceptance Time (and in any event within two business days), pay for such Shares.

In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Shares or confirmation of the book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3—“Procedures for Tendering Shares,” (ii) a Letter of Transmittal, duly completed and validly executed in accordance with the instructions thereto, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined below) in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary documents required by the Depositary. See Section 3—“Procedures for Tendering Shares.”

For purposes of the Offer, if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer, then Purchaser has accepted for payment and thereby purchased Shares validly tendered and not properly withdrawn pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from us and transmitting such payments to the tendering

 

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stockholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned (or new certificates for the Shares not tendered will be sent), without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at DTC pursuant to the procedures set forth in Section 3—“Procedures for Tendering Shares,” such Shares will be credited to an account maintained with DTC) promptly following the expiration or termination of the Offer.

 

3.

Procedures for Tendering Shares.

Valid Tender of Shares

Except as set forth below, to validly tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, or an Agent’s Message in connection with a book-entry delivery of Shares, and any other documents required by the Letter of Transmittal and any other customary documents required by the Depositary, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Offer Expiration Time and either (a) certificates representing Shares tendered must be delivered to the Depositary or (b) such Shares must be properly delivered pursuant to the procedures for book-entry transfer described below and a confirmation of such delivery received by the Depositary (which confirmation must include an Agent’s Message if the tendering stockholder has not delivered a Letter of Transmittal), in each case, prior to the Offer Expiration Time. The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation (as defined below), which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant.

Book-Entry Transfer

The Depositary will take steps to establish and maintain an account with respect to the Shares at DTC for purposes of the Offer. Any financial institution that is a participant in DTC’s systems may make a book-entry transfer of Shares by causing DTC to transfer such Shares into the Depositary’s account in accordance with DTC’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Offer Expiration Time. The confirmation of a book-entry transfer of Shares into the Depositary’s account at DTC as described above is referred to herein as a “Book-Entry Confirmation.”

Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary.

Signature Guarantees and Stock Powers

Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on a Letter of Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this section, includes any participant in any of DTC’s systems

 

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whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered owner has not completed the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 4 of the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered owner of the certificates surrendered, then the tendered certificates must be registered or accompanied by appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1 and 4 of the Letter of Transmittal.

If certificates representing Shares are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal must accompany each delivery of certificates.

Guaranteed Delivery

We are not providing for guaranteed delivery procedures. Therefore, stockholders of the Company must allow sufficient time for the necessary tender procedures to be completed during normal business hours of the Depositary.

THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

Other Requirements

Notwithstanding any provision of the Merger Agreement to the contrary, Purchaser will pay for Shares tendered (and not validly withdrawn) pursuant to the Offer only after timely receipt by the Depositary of (i) certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary documents required by the Depositary. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will Purchaser pay interest on the purchase price of Shares, regardless of any extension of the Offer or any delay in making such payment. If your Shares are held in street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee), your Shares can be tendered by your nominee by book-entry transfer through the Depositary.

Binding Agreement

Purchaser’s acceptance for payment of Shares tendered pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and Purchaser upon the terms and subject to the conditions of the Offer.

Appointment as Proxy

By executing and delivering a Letter of Transmittal as set forth above (or, in the case of a book-entry transfer, by delivery of an Agent’s Message in lieu of a Letter of Transmittal), the tendering stockholder

 

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irrevocably appoints Purchaser’s designees as such stockholder’s proxies, each with full power of substitution, to the full extent of such stockholder’s rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of the Merger Agreement. All such proxies and powers of attorney will be considered coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such stockholder will be revoked, and no subsequent powers of attorney, proxies and consents may be given (and, if given, will not be deemed effective). Our designees will, with respect to the Shares or other securities and rights for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the stockholders of the Company, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser’s payment for such Shares, Purchaser must be able to exercise full voting, consent and other rights to the extent permitted under applicable law with respect to such Shares and other securities, including voting at any meeting of stockholders or executing a written consent concerning any matter.

Determination of Validity.

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by Purchaser in its sole and absolute discretion, which determination will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction. Purchaser reserves the absolute right to reject any and all tenders determined by Purchaser not to be in proper form or the acceptance for payment of or payment for which may, in Purchaser’s opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction.

Information Reporting and Backup Withholding. Payments made to stockholders of the Company in the Offer or the Merger generally will be subject to information reporting and may be subject to backup withholding. To avoid backup withholding, U.S. stockholders that do not otherwise establish an exemption should complete and return the U.S. Internal Revenue Service (the “IRS”) Form W-9 included in the Letter of Transmittal, certifying that (i) such stockholder is a United States person, (ii) the taxpayer identification number provided by such stockholder is correct, and (iii) such stockholder is not subject to backup withholding. Foreign stockholders should submit a properly completed and signed appropriate IRS Form W-8, a copy of which may be obtained from the Depositary or the IRS website at www.irs.gov, to avoid backup withholding. Such stockholders are urged to consult their own tax advisors to determine which Form W-8 is appropriate.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a stockholder’s United States federal income tax liability, provided the required information is timely furnished in the appropriate manner to the IRS.

 

4.

Withdrawal Rights.

Shares tendered pursuant to the Offer may be withdrawn at any time prior to one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023, unless the Offer is extended, in which case you can

 

21


withdraw your Shares at any time by the then extended date. You can also withdraw your Shares at any time after Saturday, March 25, 2023, which is the 60th day after the date of commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn.

For a withdrawal of Shares to be effective, a written (or, with respect to Eligible Institutions, a facsimile transmission) notice of withdrawal must be timely received by the Depositary at the address set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares.

Withdrawals of Shares may not be rescinded. Any Shares validly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in Section 3 — “Procedures for Tendering Shares” at any time prior to the Offer Expiration Time.

We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal and our determination will be final and binding. None of Parent, Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

 

5.

Certain United States Federal Income Tax Consequences.

The following is a summary of certain United States federal income tax consequences to beneficial owners of Shares upon the tender of Shares for cash pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger. This summary is general in nature and does not discuss all aspects of United States federal income taxation that may be relevant to a holder of Shares in light of its particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction, does not consider the tax on “net investment income” under Section 1411 of the United States Internal Revenue Code of 1986, as amended (the “Code”) or the alternative minimum tax provisions of the Code, and does not consider any aspects of United States federal tax law other than income taxation. This summary deals only with Shares held as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address tax considerations applicable to any owner of Shares that may be subject to special treatment under the United States federal income tax laws, including:

 

   

a bank or other financial institution;

 

   

a tax-exempt organization;

 

   

a retirement plan or other tax-deferred account;

 

   

a partnership, an S corporation or other pass-through entity for United States federal income tax purposes (or an investor in a partnership, S corporation or other pass-through entity for United States federal income tax purposes);

 

   

an insurance company;

 

   

a mutual fund;

 

   

a real estate investment trust;

 

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a dealer or broker in stocks and securities;

 

   

a trader in securities that elects to apply a mark-to-market method of tax accounting;

 

   

a holder of Shares that received the Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

 

   

a person that has a functional currency other than the United States dollar;

 

   

a person that holds the Shares as part of a straddle, constructive sale, conversion or other integrated transaction;

 

   

a person subject to special tax accounting rules (including rules requiring recognition of gross income based on a taxpayer’s applicable financial statement);

 

   

dissenting stockholders;

 

   

a United States expatriate, including former citizens or residents of the United States;

 

   

controlled foreign corporations;

 

   

passive foreign investment companies;

 

   

corporations that accumulate earnings to avoid United States federal income tax;

 

   

holders that own an equity interest in Parent following the Merger; or

 

   

a person that holds or has held, directly or pursuant to attribution rules, more than 5 percent of the Shares at any time during the five-year period ending on the date of the consummation of the Offer or the Merger, as applicable.

If a partnership (including any entity or arrangement treated as a partnership) for United States federal income tax purposes holds Shares, the tax treatment of an owner that is a partner (including any owner of an interest in an entity or arrangement treated as a partnership for United States federal income tax purposes) in the partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. Such owners are urged to consult their own tax advisors regarding the tax consequences of tendering the Shares in the Offer or exchanging their Shares pursuant to the Merger.

This summary is based on the Code, the U.S. Department of Treasury regulations promulgated under the Code (the “Treasury Regulations”), and rulings and judicial decisions, all as in effect as of the date of this Offer to Purchase, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

The discussion set out in this Offer to Purchase is intended only as a summary of the material United States federal income tax consequences to an owner of Shares. We urge you to consult your own tax advisor with respect to the specific tax consequences to you in connection with the Offer and the Merger in light of your own particular circumstances, including federal estate, gift and other non-income tax consequences, and tax consequences under state, local or non-U.S. tax laws.

United States Holders

For purposes of this discussion, the term “United States Holder” means a beneficial owner of Shares that is, for United States federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation (or any other entity or arrangement treated as a corporation for United States federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;

 

23


   

an estate or trust the income of which is subject to United States federal income taxation regardless of its source; or

 

   

a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Payments with Respect to Shares

The tender of Shares in the Offer for cash or the exchange of Shares pursuant to the Merger for cash will be a taxable transaction for United States federal income tax purposes, and a United States Holder who receives cash for Shares pursuant to the Offer or pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Shares tendered or exchanged therefor. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction). Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such United States Holder’s holding period for the Shares is more than one year at the time of the exchange. Long-term capital gain recognized by a non-corporate United States Holder generally is subject to tax at a lower rate than short-term capital gain or ordinary income. The deductibility of capital losses is subject to limitations.

Backup Withholding Tax

Proceeds from the tender of Shares in the Offer or the exchange of Shares pursuant to the Merger generally will be subject to backup withholding tax at the applicable rate (currently, 24%) unless the applicable United States Holder or other payee provides a valid taxpayer identification number and complies with certain certification procedures (generally, by providing a properly completed IRS Form W-9) or otherwise establishes an exemption from backup withholding tax. Any amounts withheld under the backup withholding tax rules from a payment to a United States Holder will be allowed as a credit against the United States Holder’s United States federal income tax liability and may entitle the United States Holder to a refund, provided that the required information is timely furnished to the IRS. Each United States Holder should complete and sign the IRS Form W-9, which will be included with the Letter of Transmittal to be returned to the Depositary, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the Depositary.

Non-United States Holders

The following is a summary of the material United States federal income tax consequences that will apply to a non-United States Holder of Shares. The term “non-United States Holder” means a beneficial owner of Shares that is neither a United States Holder nor a partnership for United States federal income tax purposes (including any entity or arrangement treated as a partnership for United States federal income tax purposes).

Payments with Respect to Shares

Payments made to a non-United States Holder with respect to Shares tendered for cash in the Offer or exchanged for cash pursuant to the Merger generally will be exempt from United States federal income tax, with the following exceptions:

 

   

If the non-United States Holder is an individual who was present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met, such non-United States Holder will be subject to tax at a flat rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on any gain from the exchange of the Shares, net of applicable United States-source losses from sales or exchanges of other capital assets recognized by the holder during the year.

 

   

If the gain is “effectively connected” with the non-United States Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-United States Holder), the non-United States Holder will generally be subject to tax on the net gain derived from the sale as if it were a United States Holder. In addition, if such non-United States Holder is a non-U.S. corporation for United States federal income tax purposes, it may

 

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be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if such non-United States Holder is eligible for the benefits of an income tax treaty that provides for a lower rate).

 

   

If the Shares constitute a United States real property interest (“USRPI”) by reason of Paya’s status as a United States real property holding corporation (“USRPHC”) for U.S. federal income tax purposes and one or more other conditions are satisfied, the non-United States Holder may be subject to tax on any gain from the exchange of the Shares under the Foreign Investment in Real Property Tax Act (FIRPTA) regime. We believe that Paya is not currently, has not been during the preceding five years and prior to or at the time of the Merger does not expect to become, a USRPHC. Because the determination of whether Paya is a USRPHC depends on the fair market value of Paya’s USRPIs relative to the fair market value of Paya’s non-USRPIs and other business assets, there can be no assurance that Paya is not or will not become a USRPHC. A non-United States holder should consult its own tax advisor about the consequences that could result if Paya is or were to become a USRPHC.

Backup Withholding Tax

A non-United States Holder may be subject to backup withholding tax with respect to the proceeds from the disposition of Shares pursuant to the Offer or pursuant to the Merger, unless, generally, the non-United States Holder certifies under penalties of perjury on an appropriate IRS Form W-8 that such non-United States Holder is not a United States person, or the non-United States Holder otherwise establishes an exemption in a manner satisfactory to the Depositary.

Any amounts withheld under the backup withholding tax rules will be allowed as a refund or a credit against the non-United States Holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS. Each non-United States Holder should complete and sign the appropriate IRS Form W-8, which will be requested in the Letter of Transmittal to be returned to the Depositary, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the Depositary. The foregoing summary does not discuss all aspects of United States federal income taxation that may be relevant to particular holders of Shares. You are urged to consult your own tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares pursuant to the Merger under any federal, state, local, non-U.S. or other laws.

 

6.

Price Range of Shares; Dividends.

The Shares are listed on Nasdaq, under the symbol “PAYA.” The Company has informed Purchaser that 132,424.929 Shares were issued and outstanding as of January 23, 2023. The Shares have been listed on Nasdaq since October 19, 2020.

The following table sets forth the high and low sales prices per Share since the Company’s initial public offering as reported on Nasdaq for the fiscal quarters indicated:

 

     High      Low  

Year Ended December 31, 2020:

     

First Quarter

   $ N/A      $ N/A  

Second Quarter

   $ N/A      $ N/A  

Third Quarter

   $ N/A      $ N/A  

Fourth Quarter

   $ 15.00      $ 10.38  

Year Ended December 31, 2021:

     

First Quarter

   $ 14.42      $ 10.60  

Second Quarter

   $ 11.92      $ 8.99  

Third Quarter

   $ 11.99      $ 9.28  

Fourth Quarter

   $ 11.08      $ 5.83  

 

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     High      Low  

Year Ended December 31, 2022:

     

First Quarter

   $ 7.15      $ 4.83  

Second Quarter

   $ 6.95      $ 4.51  

Third Quarter

   $ 7.68      $ 5.42  

Fourth Quarter

   $ 9.50      $ 5.60  

The Offer Price of $9.75 per share represents a premium of approximately 25% to the unaffected closing price of the Shares on January 6, 2023, the last full trading day prior to the public announcement of the execution of the Merger Agreement. On January 23, 2023, the last full trading day before Purchaser commenced the Offer, the closing price of the Shares reported on Nasdaq was $9.70 per Share. Stockholders are urged to obtain current market quotations for Shares before making a decision with respect to the Offer.

The Merger Agreement provides that from the date of the Merger Agreement until the effective time, except as required or contemplated by the Merger Agreement, required by law or order or with the written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company will not accept, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests other than with respect to dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its direct or indirect parent.

 

7.

Certain Information Concerning the Company.

Except as specifically set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from, or is based upon, information furnished by the Company or its representatives or upon publicly available documents and records on file with the SEC and other public sources. The summary information set forth below is qualified in its entirety by reference to the Company’s public filings with the SEC (which may be obtained and inspected as described below) and should be considered in conjunction with the more comprehensive financial and other information in such reports and other publicly available information.

General. The following description of the Company and its business has been taken from the Company’s Annual Report on Form 10-K for the annual period ended December 31, 2021, and is qualified in its entirety by reference to such Annual Report on Form 10-K.

The Company is an integrated payments and commerce platform providing card, Automated Clearing House (“ACH”), and check payment processing solutions via software to middle-market businesses in the United States. The Company concentrates on strategic vertical markets defined by strong secular growth and low penetration of electronic payments that are non-cyclical in nature such as B2B goods & services, healthcare, faith-based & non-profit, government & utilities, and education. The Company’s technology, distribution, and support are tailored to the specific and complex payment needs of customers in these verticals. The Company’s payment technology is centered around Paya Connect, a proprietary, API-driven and service-oriented payments platform which integrates with customers’ front-end customer relationship management and back-end accounting software and acts as a universal gateway which connects to multiple card processors as well as the Company’s proprietary ACH processing platform. Paya Connect also serves as the foundation for modular value-added solutions including digital boarding, flexible funding, e-invoicing, auto-billing and recurring payments, tokenized and secure transactions, and robust customer and partner reporting, which are differentiators in the Company’s key end markets.

The Company generates revenue from fees paid by customers which principally include a processing fee that is charged as a percentage of total payment volume, as well as fixed interchange fees and convenience-based fees. In some cases, including card processing in the Company’s government and utilities end-market and in ACH and check processing, fees are charged in the form of a fixed fee per transaction. A portion of the Company’s revenue is also generated from monthly and annual fees for customers to use the Company’s Paya Connect platform and other value-added services.

 

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The Company’s principal executive offices are located at 303 Perimeter Center North, Suite 600, Atlanta, Georgia 30346. The telephone number of the Company at its principal executive offices is (800) 261-0240.

Available Information. The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the information reporting requirements of the Exchange Act and is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Information as of particular dates concerning the Company’s directors and officers, their remuneration, stock options and other equity awards granted to them, the principal holders of the Company’s securities, any material interests of such persons in transactions with the Company and other matters is required to be disclosed in proxy statements. Such reports, proxy statements and other information are available on www.sec.gov.

The Company’s Financial Projections. The Company provided Parent with certain internal financial projections as described in the Company’s Schedule 14D-9, which will be filed with the SEC and is being mailed to the Company’s stockholders contemporaneously with this Offer to Purchase.

 

8.

Certain Information Concerning Parent, Purchaser and Certain Related Parties.

Purchaser. Pinnacle Merger Sub, Inc., a Delaware corporation, is an indirect, wholly owned subsidiary of Parent and was formed solely for the purpose of facilitating the acquisition of the Company by Parent. To date, Purchaser has not carried on any activities other than those related to its formation, the Offer and the Merger. Upon consummation of the proposed Merger, Purchaser will merge with and into the Company and will cease to exist, with the Company continuing as the surviving corporation. The business address for Purchaser is: 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The business telephone number for Purchaser is (514) 313-1190.

Parent. Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada, is a global provider of payment technology solutions to merchants and partners in North America, Europe, Asia Pacific and Latin America. The business address for Parent is: 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The business telephone number for Parent is (514) 313-1190.

Parent is the Canadian fintech company accelerating the business of clients around the world. Parent’s modular, flexible and scalable technology allows leading companies to accept next-gen payments, offer all payout options and benefit from card issuing, banking, risk and fraud management services. Connecting businesses to their customers in more than 200 markets, with local acquiring in 47 markets, 150 currencies and 586 alternative payment methods, Parent provides the technology and insights for customers and partners to succeed locally and globally with one integration.

Additional Information. The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Parent and Purchaser are listed in Schedule I to this Offer to Purchase.

During the last five years, none of Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws.

As of January 23, 2023, Timothy Dent, a director on the board of directors of Parent, beneficially owns 45 Shares.

Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, (i) none of Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Parent or Purchaser, or any of the persons so listed, beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Parent,

 

27


Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons or entities referred to in Schedule I hereto nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in respect of any Shares during the past two years. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent or Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any material contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company (including, but not limited to, any material contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations).

Except as set forth in this Offer to Purchase, none of Parent or Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer.

Except as set forth in this Offer to Purchase, there have been no negotiations, transactions or material contracts between Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation, acquisition, tender offer or other acquisition of securities of the Company, an election of directors or a sale or other transfer of a material amount of assets of the Company during the past two years.

Available Information. Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on Schedule TO (as amended, the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by Parent and Purchaser with the SEC, are available on the SEC website at www.sec.gov. Additional copies of this Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer may also be obtained for free from the Information Agent.

 

9.

Source and Amount of Funds.

We estimate that the maximum amount of funds needed to (i) complete the Offer, the Merger and the transactions contemplated in the Merger Agreement, including the funds needed to purchase all Shares tendered in the Offer and to pay the Company stockholders whose Shares are converted into the right to receive a cash amount equal to the Offer Price in the Merger, (ii) pay for fees and expenses incurred by Parent related to the Offer and the Merger, (iii) pay for the amounts in respect of outstanding in-the-money vested Company Options and other vested equity awards and (iv) refinance certain existing indebtedness of the Company and its subsidiaries will be approximately $300 million.

Parent has (i) received a commitment from certain lenders to provide a $600 million senior secured first lien revolving credit facility (the “New Credit Facility”) contemplated by a debt commitment letter, dated January 8, 2023, that was entered into in connection with the execution of the Merger Agreement (the “Debt Commitment Letter”); and (ii) approximately $385 million of undrawn revolving commitments (the “Existing Revolving Borrowings”) under the Amended and Restated Credit Agreement dated as of June 18, 2021 (as further amended from time to time prior to the Closing Date, the “Existing Credit Facility” and together with the New Credit Facility, the “Credit Facilities”), in each case available for, among other things, the purposes of financing in part the transactions and paying transaction-related fees, costs and expenses and repaying certain of the Company’s and its subsidiaries’ existing indebtedness (the financing available under the Credit Facilities, the “Debt Financing”). Parent will contribute or otherwise cause to be contributed to Purchaser cash on hand of the Parent in an amount of not less than the remaining cash consideration balance required to be paid under the Merger Agreement and to consummate the transactions and to pay all fees and expenses reasonably expected to be incurred in connection therewith and with the Debt Financing. Funding of the New Credit Facility contemplated by the Debt Commitment Letter is subject to the satisfaction of various customary conditions.

 

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We do not believe our financial condition is material to your decision whether to tender your Shares and accept the Offer because (a) the Offer is not subject to any financing condition, (b) if we consummate the Offer, subject to the satisfaction or waiver of certain conditions, we have agreed to acquire all remaining Shares (other than Shares (i) owned by the Company or any of its wholly owned subsidiaries (including Shares held as treasury stock), or (ii) owned by Parent or any of its wholly owned subsidiaries, including Purchaser, in each case, both at the commencement of the Offer and immediately prior to the effective time) for cash at the same price per share in the Merger as the Offer Price and (c) we have all of the financial resources, including committed debt financing, sufficient to finance the Offer and the Merger.

Debt Financing

Parent has received the Debt Commitment Letter from certain lenders to provide a $600 million senior secured first lien revolving credit facility under the New Credit Facility. Parent has approximately $385 million of undrawn commitments available under the Existing Credit Facility.

It is anticipated that the proceeds of the Credit Facilities will be used to partially finance the Offer and the Merger, refinance certain of the Company’s and its subsidiaries’ existing indebtedness, pay related fees, costs and expenses incurred in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement and to provide for ongoing working capital and for other general corporate purposes of the Company and its subsidiaries.

The New Credit Facility will be available on a revolving basis commencing on the Closing Date (as defined in the Debt Commitment Letter) and ending on September 28, 2025. The definitive documentation for the New Credit Facility as contemplated by the Debt Commitment Letter will contain covenants, events of default and other terms and provisions that have been agreed with the debt financing sources and are set forth on an annex to the Debt Commitment Letter.

Interest under the New Credit Facility contemplated by the Debt Commitment Letter will be payable, at the option of the borrower, either at (i) a base rate plus an applicable margin or (ii) a SOFR-based rate plus an applicable margin. A commitment fee of 0.50% per annum will be payable on the unused commitments under the New Credit Facility. During the continuation of a bankruptcy or payment event of default under the New Credit Facility, the applicable interest rate on overdue amounts may be increased by 2.00% per annum.

The commitments under the Existing Credit Facility will terminate on September 28, 2024. The definitive documentation for the Existing Credit Facility contains certain covenants, events of default and other terms and provisions as set forth therein.

Interest on borrowings under the Existing Credit Facility is payable at the option of the borrower, either at (i) a base rate plus an applicable margin or (ii) a LIBOR rate plus an applicable margin. A commitment fee ranging from 0.25% to 0.40% per annum (based on the borrower’s total leverage ratio) is payable on the undrawn revolving commitments under the Existing Credit Facility. During the continuation of a bankruptcy or payment event of default under the Existing Credit Facility, the applicable interest rate on overdue amounts may be increased by 2.00% per annum.

The obligations under the Credit Facilities are or will be (i) guaranteed by Parent and certain of its subsidiaries and each of the existing and future direct and indirect, material wholly owned subsidiaries of Parent (subject to customary exceptions) and (ii) will be secured, subject to permitted liens, applicable intercreditor

agreements and other agreed upon exceptions, by a perfected security interest in substantially all current and future assets of Parent and its existing and future subsidiaries.

The availability of the financing contemplated by the Debt Commitment Letter is subject to, in summary:

 

   

the substantially concurrent consummation of the Merger in accordance with the Merger Agreement in all material respects;

 

29


   

the execution and delivery of definitive documentation with respect to the New Credit Facility and customary closing documents consistent with the Debt Commitment Letter;

 

   

since December 31, 2021, there shall not have been any effect that has had, or would reasonably be expected to have, a “Company Material Adverse Effect” (which, for purposes of the Debt Commitment Letter, is defined as in the Merger Agreement) that is continuing at the scheduled Debt Commitment Letter Expiration Time (as defined below) and that results in a failure of a condition precedent to the Company’s (or its affiliates’) obligations to consummate the Merger pursuant to the terms of the Merger Agreement;

 

   

the delivery of certain audited and unaudited financial statements of the Company;

 

   

the New Credit Facility shall have been executed and delivered by the Parent and each subsidiary of Parent, including the Company in a manner consistent with (i) the Debt Commitment Letter and (ii) terms and provision set forth on an annex to the Debt Commitment Letter;

 

   

receipt by the lenders of documentation and other information required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT ACT) at least five business days prior to the Closing Date; or

 

   

prior to or substantially concurrently with the initial funding of the debt financing, the refinancing of certain existing indebtedness of the Company shall have been consummated.

The availability of the revolving commitments available under the Existing Credit Facility is subject to, in summary:

 

   

the representations and warranties as set forth in the Existing Credit Facility are true and correct in all material respects on and as of the date of the borrowing; and

 

   

at the time of and immediately after giving effect to the applicable borrowing, no default or event of default under the Existing Credit Facility has occurred and is continuing.

However, at the borrower’s option, such conditions may be tested as of the date of the Merger Agreement.

If any portion of the debt financing necessary to fund amounts contemplated to be paid by Parent pursuant to the Merger Agreement at the closing becomes unavailable on the terms and conditions (including any applicable “market flex” provisions) contemplated by the Debt Commitment Letter, then Parent will promptly notify the Company in writing and Parent and Purchaser will use their reasonable best efforts to arrange and obtain in replacement thereof, and negotiate and enter into definitive agreements with respect to, alternative financing from alternative sources (so long as the terms thereof are of the type that would not constitute a Prohibited Amendment (as defined in the Debt Commitment Letter) in an amount sufficient to consummate the Offer and the Merger with terms and conditions (including “market flex” provisions) not materially less favorable, in the aggregate, to Parent and Purchaser (or their respective affiliates) than the terms and conditions set forth in the original Debt Commitment Letter, as promptly as practicable following the occurrence of such event.

Parent and Purchaser may invite other banks, financial institutions and institutional lenders to participate in the debt financing contemplated by the Debt Commitment Letter.

Although the debt financing contemplated by the Debt Commitment Letter is not subject to a due diligence or “market out” condition, such financing may not be considered assured. The commitments of the financing sources under the Debt Commitment Letter will automatically terminate (unless such financing sources, in their discretion, agree to an extension) upon the earliest to occur of (the “Debt Commitment Letter Expiration Time”) (A) the earlier of (x) the termination date set forth in Merger Agreement and (y) September 8, 2023, (B) the date on which the Merger Agreement terminates in accordance with its terms prior to the closing of the Merger (the “Closing”) and (C) the date the Merger is consummated without the funding of the New Credit Facility and (D) the “Closing Date” (as defined in the Debt Commitment Letter) and initial funding of the debt financing.

 

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The documentation governing the New Credit Facility contemplated by the Debt Commitment Letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described herein.

The foregoing summary of the Debt Commitment Letter and the New Credit Facility is qualified in its entirety by reference to the copy of such letter attached as Exhibit (b)(1) to the Schedule TO and which is incorporated herein by reference.

The foregoing summary of the Existing Credit Facility is qualified in its entirety by reference to the copy of such credit agreement attached as Exhibit (b)(2) to the Schedule TO and which is incorporated herein by reference.

10.    Background of the Offer; Past Contacts or Negotiations with the Company.

The information set forth below regarding the Company was provided by the Company, and none of Parent, Purchaser nor any of their respective affiliates take any responsibility for the accuracy or completeness of any information regarding meetings or discussions in which Parent, Purchaser or their respective affiliates or representatives did not participate.

Background of the Offer

The following is a description of significant contacts between representatives of Parent, on the one hand, and representatives of the Company, on the other hand, that resulted in the execution of the Merger Agreement and commencement of the Offer. For a review of the Company’s activities relating to the contacts leading to the Merger Agreement, please refer to the Schedule 14D-9, which has been filed with the SEC and is being mailed to its stockholders with this Offer to Purchase.

On September 24, 2022, Mr. Aaron Cohen, the Chairman of the Company Board, and Mr. Philip Fayer, the Chairman and Chief Executive Officer of Parent, met telephonically, at Mr. Fayer’s request, to discuss Parent’s interest in evaluating a potential strategic transaction with the Company. In the course of that discussion, Mr. Fayer informed Mr. Cohen that Parent intended to propose a strategic transaction with the Company, and, in response, Mr. Cohen stated that the Company Board would consider any credible proposal received by the Company. Following that discussion, on September 29, 2022, Parent submitted a letter setting forth a non-binding indication of interest to acquire the Company for a price of $8.25 per Share in cash (the “September 29 Proposal”). Parent’s proposed purchase price per Share represented a premium of approximately 35% to the closing price of the Company’s common stock on September 29, 2022. The September 29 Proposal also described Parent’s plans for financing the transaction contemplated by the September 29 Proposal and attached a highly confident letter from Barclays Bank PLC.

On October 6, 2022, upon instruction from the Company Board, the potential financial advisor contacted a representative of Barclays Capital (“Barclays”), financial advisor to Parent, and conveyed the Company Board’s response. Parent responded that it would seek to improve its proposal.

On October 27, 2022, representatives of Barclays, on behalf of Parent, delivered to the Company a commitment letter from the Bank of Montreal (“BMO”), in respect of financing a strategic transaction between the Company and Parent (the “October 27 Commitment Letter”). In connection with delivering the October 27 Commitment Letter, representatives of Barclays indicated that Parent desired to enter into a nondisclosure agreement with the Company and engage in high-priority business diligence to support an increase in the offer price.

On October 31, 2022, representatives of Kirkland & Ellis LLP (“Kirkland”), counsel to the Company, and the potential financial advisor to the Company provided feedback on behalf of the Company to Barclays on the October 27 Commitment Letter, emphasizing the Company Board’s focus on confirming financing certainty before providing Parent access to nonpublic due diligence materials.

 

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On November 11, 2022, representatives of Barclays provided responses to the Company’s feedback regarding the October 27 Commitment Letter and provided additional materials from BMO related to the October 27 Commitment Letter (the “November 11 Financing Materials”). Representatives of Barclays reiterated Parent’s desire to engage in high-priority due diligence to support an increase in the offer price.

On November 22, 2022, following receipt of the November 11 Financing Materials, the Company and Parent executed the Confidentiality Agreement (as defined below), substantially on the same terms as the confidentiality agreement entered into between the Company and Parent in 2021. Between late November and early December, the Company provided Parent with access to certain high priority diligence materials and representatives of Parent attended presentations by the Company’s senior management.

On November 28, 2022, to facilitate the Company Board’s consideration of any new proposal made by Parent, representatives of the Company provided a merger agreement term sheet prepared by Kirkland (the “Merger Agreement Term Sheet”) to representatives of Parent and requested that Parent confirm it was willing to enter into a definitive agreement substantially on the terms reflected in the Merger Agreement Term Sheet. The Merger Agreement Term Sheet contemplated, among other things, a two-step merger governed by Section 251(h) of the DGCL, provided for an unspecified termination fee payable by the Company under certain circumstances, including if the Company terminated the merger agreement in order to accept a superior proposal, set forth limited customary closing conditions (including no financing condition) and termination rights, and provided that each party would have the right to specifically enforce the terms of the merger agreement.

On December 9, 2022, Parent delivered a letter to the Company setting forth a revised non-binding indication of interest to acquire the Company for a price of $9.15 per Share in cash (the “December 9 Proposal”). The proposed purchase price per Share set forth in the December 9 Proposal represented a premium of approximately 11% to the closing price of the Company’s common stock on December 9, 2022. The December 9 Proposal indicated that Parent would require confirmatory due diligence and requested an exclusivity period to complete that diligence. The December 9 Proposal also noted Parent’s expectation that significant stockholders of the Company would enter into tender and support agreements. Included with the December 9 Proposal was a markup of the Merger Agreement Term Sheet (the “December 9 Markup”) prepared by Davis Polk & Wardwell LLP (“Davis Polk”), counsel to Parent. The December 9 Markup included enhanced termination rights to Parent’s benefit and provided for a termination fee equal to 4.5% of transaction equity value.

On December 13, 2022, at the direction of the Company Board, representatives of J.P. Morgan Securities LLC (“J.P. Morgan”), financial advisor to the Company, informed representatives of Barclays that the Company Board would require an additional price increase to engage further.

On December 14, 2022, representatives of Barclays, on behalf of Parent, communicated to representatives of J.P. Morgan that Parent was willing to increase its offer to $9.50 per Share or, if the early termination payment otherwise payable pursuant to the contractual terms of the Tax Receivable Agreement (as defined below) were waived by the Tax Receivable Agreement parties, $9.70 per Share, and reiterated Parent’s previous request for exclusivity (the “December 14 Proposal”).

On December 15, 2022, at the direction of the Company Board, representatives of J.P. Morgan conveyed to the representatives of Barclays that the Company Board would be supportive of a transaction with Parent at a price of $9.75 per Share in cash, without any conditions related to waiver of contractual rights under the Tax Receivable Agreement and that, if Parent agreed to a price of $9.75 per Share in cash, the Company and its advisors should move forward with negotiation of transaction documentation and confirmatory due diligence on an expedited timeline and target announcing the transaction on January 9, 2023. J.P. Morgan further conveyed that the Company Board would not grant exclusivity at such time (the “December 15 Counterproposal”).

Over the course of December 17, 2022, representatives of the Company and representatives of Parent discussed Parent’s request for exclusivity and the timeline for Parent to complete diligence and for the parties to

 

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negotiate definitive documentation. In lieu of an exclusivity period, representatives of Parent and the Company agreed to enter into a letter agreement providing that the Company would notify Parent if it provided non-public information to any other potential counterparty (the “Confidential Information Letter Agreement”).

On December 17, 2022, representatives of Barclays, on behalf of Parent, delivered a revised letter to the Company setting forth a revised non-binding indication of interest to acquire the Company for a price of $9.75 per Share in cash (the “December 17 Proposal”). The proposed purchase price per Share set forth in the December 17 Proposal represented a premium of approximately 17% to the closing price of the Company’s common stock on December 16, 2022. The December 17 Proposal indicated that the proposal was subject to the satisfactory completion of confirmatory diligence, requested tender and support agreements from significant stockholders of the Company and indicated that Parent was prepared to work over the following 30 days to complete diligence and negotiate definitive transaction documentation. Later that same day, representatives of J.P. Morgan confirmed to Parent that the Company would proceed with confirmatory due diligence and negotiation of the Merger Agreement and other transaction documentation and the parties agreed to work toward publicly announcing the transaction on January 9, 2023.

Later on December 17, 2022, Kirkland sent an initial draft of the Merger Agreement to Davis Polk and Kirkland and Davis Polk discussed the draft Merger Agreement and expected timing and process for negotiating the draft Merger Agreement. Also on December 17, 2022, the Company and Parent executed the Confidential Information Letter Agreement.

On December 18, 2022, following discussions between representatives of the Company and representatives of Parent, representatives of Barclays, on behalf of Parent, delivered a revised offer letter to the Company, reflecting substantially similar terms to the December 17 Proposal, clarifying that Parent was seeking a tender and support agreement only from affiliates of GTCR LLC and confirming the parties’ alignment on expected timing for the completion of negotiation of definitive transaction documentation.

Throughout the remainder of December and until the execution of the Merger Agreement on January 8, 2023, representatives of Parent engaged in confirmatory due diligence of the Company, which included the review of numerous documents and participation in numerous calls and meetings with the Company’s senior management and representatives of the Company’s legal counsel.

From December 21, 2022 through January 8, 2023, representatives of Kirkland, Davis Polk and Simpson Thacher & Bartlett LLP (“Simpson Thacher”), counsel to GTCR-Ultra Holdings, LLC, negotiated and finalized the Tender and Support Agreement.

On December 26, 2022, Davis Polk, on behalf of Parent, sent a revised draft of the Merger Agreement to Kirkland, which draft included enhanced termination rights to Parent’s benefit and a termination fee equal to 4.5% of transaction equity value.

On December 29, 2022, Kirkland, on behalf of the Company, sent Davis Polk a revised draft of the Merger Agreement. The revised draft, among other things, included a termination fee equal to 2.75% of transaction equity value and numerous revisions to the terms of Merger Agreement that would enhance closing certainty, including with respect to Parent’s termination rights and the termination date.

Also on December 29, 2022, representatives of the Company and Mr. Fayer met telephonically to discuss the status of due diligence and the status of negotiation of the Merger Agreement.

On December 30, 2022, representatives of Kirkland and Davis Polk held a videoconference in which they discussed open issues in the Merger Agreement.

On January 2, 2023, Mr. Jeff Hack, the Chief Executive Officer of the Company, and Mr. Fayer held a call to discuss the status of the potential transaction and remaining open due diligence requests and related items.

 

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Also on January 2, 2023, Davis Polk sent a revised draft of the Merger Agreement to Kirkland, which, among other terms, provided for a termination fee equal to 3.5% of transaction equity value and made changes to the terms of the Merger Agreement providing for Parent’s termination rights.

Between January 2, 2023 and January 8, 2023, representatives of Kirkland, representatives of Davis Polk and members of management and the Board of each of the Company and Parent and representatives of their respective financial advisors had multiple conversations to resolve outstanding issues under the Merger Agreement and exchanged multiple drafts. As part of those discussions, on January 6, 2023, at the direction of the Company Board and senior management of the Company, representatives of the Company proposed to set the termination fee at 3.0% of transaction equity value, which proposal Parent accepted.

On January 4, 2023, Davis Polk circulated a draft of an agreement to confirm that the Tax Receivable Agreement would be terminated in accordance with its existing terms in connection with the closing of the transactions contemplated by the draft Merger Agreement (the “Termination Agreement”). Between January 4, 2023 and January 8, 2023, Kirkland, Simpson Thacher and Davis Polk finalized the Termination Agreement.

On January 8, 2023, each of the Company, Parent and Purchaser executed and delivered the Merger Agreement.

On the morning of January 9, 2023, prior to market open, the Company and Parent issued a joint press release announcing the proposed transaction.

On January 24, 2023, Purchaser commenced the Offer.

Past Contacts, Transactions, Negotiations and Agreements.

For information on the Merger Agreement and the other agreements between the Company and Purchaser and their respective related parties, see Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties” and Section 11 — “The Merger Agreement, Other Agreements — Other Agreements.”

11.    The Merger Agreement; Other Agreements.

The Merger Agreement

The following is a summary of certain provisions of the Merger Agreement. This summary of the Merger Agreement has been included to provide stockholders with information regarding its terms. It is not intended to provide any other factual disclosures about Parent, Purchaser, the Company or their respective affiliates, and it is not intended to modify or supplement any rights or obligations of the parties under the Merger Agreement or any factual disclosures about the Company or the transactions contemplated in the Merger Agreement contained in public reports filed by the Company with the SEC. This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit (d)(1) to the Schedule TO, which is incorporated herein by reference. Copies of the Merger Agreement and the Schedule TO, and any other filings that we make with the SEC with respect to the Offer or the Merger, may be obtained in the manner set forth in Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.” Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below. Capitalized terms used in this section and not otherwise defined have the respective meanings set forth in the Merger Agreement.

The assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in a confidential disclosure schedule delivered by the Company to Parent in connection with the Merger Agreement (which we refer to as the “Company Disclosure Letter”) and a confidential disclosure schedule delivered by Parent to the Company, in each case in connection with the signing of the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were made as of

 

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a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the parties to the Merger Agreement. Accordingly, the representations and warranties contained in the Merger Agreement and summarized in this Section 11 should not be relied on by any persons as characterizations of the actual state of facts and circumstances of the Company, Parent or Purchaser at the time they were made and the information in the Merger Agreement should be considered in conjunction with the entirety of the factual disclosure about the Company in the Company’s public reports filed with the SEC. Information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Offer, the Merger, the Company, Parent, Purchaser, their respective affiliates and their respective businesses that are contained in, or incorporated by reference into the Schedule TO and related exhibits, including this Offer to Purchase, and the Schedule 14D-9 filed by the Company on January 24, 2023, as well as in the Company’s other public filings.

The Offer

The Merger Agreement provides that Purchaser will commence the Offer on or before January 24, 2023, and that, subject to the satisfaction of the Minimum Condition and the satisfaction or waiver (to the extent waiver is permitted under applicable law) of the Inside Date Condition, the HSR Condition and the other conditions that are described in Section 15 — “Conditions of the Offer,” Purchaser will, and Parent will cause Purchaser to, accept for payment, and pay for, all Shares validly tendered and not properly withdrawn promptly following the applicable Offer Expiration Time. The initial Offer Expiration Time will be one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023.

Terms and Conditions of the Offer. The obligations of Purchaser to, and of Parent to cause Purchaser to, accept for purchase and pay for any Shares validly tendered (and not validly withdrawn) pursuant to the Offer are subject to the prior satisfaction or waiver (to the extent waiver is permitted under applicable law) of the conditions set forth in Section 15 — “Conditions of the Offer.” The conditions to the Offer will be in addition to, and not a limitation of, the rights of Parent and Purchaser to extend, terminate or modify the Offer in accordance with the Merger Agreement and applicable law. The conditions to the Offer are for the sole benefit of Parent and Purchaser, and Parent and Purchaser may waive, in whole or in part, any condition to the Offer at any time and from time to time, in their sole discretion, other than the Minimum Condition or the Termination Condition, which, in each case, may be waived by Parent and Purchaser with the prior written consent of the Company. Parent and Purchaser expressly reserve the right, at any time to waive, in whole or in part, any Offer Condition (other than the Minimum Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares sought to be purchased in the Offer (other than an adjustment made pursuant to the terms of the Merger Agreement), (ii) reduce the Offer Price (other than an adjustment made pursuant to the terms of the Merger Agreement), (iii) amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer Condition, (v) amend, modify or supplement any other term of the Offer in any manner that is or would reasonably be expected to be adverse to the holders of Shares in their capacities as such, (vi) amend, modify or supplement any term of the Offer in any individual case that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent or Purchaser or the Company to consummate the Offer or the Merger, (vii) terminate the Offer (unless the Merger Agreement is terminated in accordance with its terms), accelerate, extend or otherwise change the Offer Expiration Time (in each case, except as expressly required or permitted by the terms of the Merger Agreement), (viii) change the form of consideration payable in the Offer or (ix) provide for any “subsequent offering period” (or any extension of any thereof) within the meaning of Rule 14d-11 promulgated under the Exchange Act.

 

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Extensions of the Offer. The Merger Agreement requires that Purchaser will, and Parent will cause Purchaser to, extend the Offer (i) for any period required by any applicable rule, regulation, interpretation or position of the SEC or the staff thereof or Nasdaq (including in order to comply with Rule 14e-1(b) promulgated under the Exchange Act in respect of any change in the Offer Price) or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, in each case, as applicable to the Offer, the Schedule 14D-9 or the Offer Documents, (ii) subject to clause (iii) of this paragraph, if, as of any then-scheduled Offer Expiration Time, any Offer Condition (other than the Minimum Condition, the Termination Condition and any such conditions that by their nature are to be satisfied at the expiration of the Offer and, in each case, irrespective of if any such condition is satisfied) is not satisfied and has not been waived by Parent or Purchaser (to the extent permitted under the Merger Agreement) as of any then-scheduled Offer Expiration Time, Purchaser will, and Parent will cause Purchaser to, extend the Offer (x) on one or more occasions in consecutive increments of up to ten business days each (as determined by Purchaser in its discretion, subject to applicable law, or such longer period as the parties to the Merger Agreement may agree), (y) if any then-scheduled Offer Expiration Time is ten or less business days before the Termination Date, until 11:59 p.m., New York City time, on the business day before the Termination Date (unless Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, in which case this clause (y) will not apply) or (z) such other date and time as the parties to the Merger Agreement may agree; except that, without the Company’s written consent, Purchaser will not extend the Offer, and without Parent’s prior written consent, Purchaser will not be required to (and Parent will not be required to cause Purchaser to) extend the Offer, in each case, beyond the earlier of (1) the Termination Date, and (2) the valid termination of the Merger Agreement in accordance with its terms; except, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser will be required to (and Parent will cause Purchaser to) extend the Offer beyond the Termination Date and (iii) if as of any then-scheduled Offer Expiration Time, each condition to the Offer (other than the Minimum Condition, and any such conditions that by their nature are to be satisfied at the expiration of the Offer) has been satisfied or waived by Parent or Purchaser (to the extent permitted under the Merger Agreement) and the Minimum Condition has not been satisfied, Purchaser will (and Parent will cause Purchaser to) extend the Offer (x) on one or more occasions in consecutive increments of up to ten business days each (as determined by Purchaser in its discretion, subject to applicable law, or such longer period as the parties to the Merger Agreement may agree), (y) if any then-scheduled Offer Expiration Time is ten or less business days before the Termination Date, until 11:59 p.m., New York City time, on the business day before the Termination Date (unless Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, in which case this clause (y) will not apply) or (z) such other date and time as the parties to the Merger Agreement may agree; except, that (A) so long as Parent and Purchaser are not in material breach of their covenants and obligations set forth in the Merger Agreement, Purchaser will not be required to (and Parent will not be required to cause Purchaser to) extend the Offer in the circumstances described in this clause (iii) for successive extension periods in excess of twenty business days in the aggregate and (B) without the Company’s prior written consent, Purchaser will not extend the Offer in the circumstances described in this clause (iii) for successive extension periods in excess of thirty business days in the aggregate; except, that, without the Company’s prior written consent, Purchaser will not extend the Offer, and Purchaser will not be required to extend the Offer, in each case, beyond the earlier of (1) the Termination Date and (2) the valid termination of the Merger Agreement in accordance with its terms; except, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser will be required to (and Parent will cause Purchaser to) extend the Offer beyond the Termination Date, and except, that, notwithstanding anything to the contrary in the Merger Agreement, any such extension under the Merger Agreement will not be deemed to impair, limit, or otherwise restrict in any manner the right of Parent or the Company to terminate the Merger Agreement pursuant to its terms.

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

The Closing of the Merger will take place as promptly as practicable following (but in any event on the same date as) the Offer Acceptance Time (as defined in the Merger Agreement), except if certain conditions set forth in the Merger Agreement will not be satisfied or, to the extent permitted under the Merger Agreement and

 

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by applicable law, waived as of such date, in which case the Closing will take place no later than the first business day on which all such conditions are satisfied or, to the extent permitted under the Merger Agreement and by applicable law, waived, unless (a) the Merger Agreement has been terminated pursuant to its terms prior to such time or date or (b) another time or date is agreed to in writing by the parties to the Merger Agreement. At the effective time, the Company, Parent and Purchaser will consummate the Merger, whereby Purchaser will be merged with and into the Company, and the Company will survive the Merger as a wholly owned subsidiary of Parent. At the effective time, all of the property, rights, privileges, immunities, powers and franchises of the Company and Purchaser will vest in the surviving corporation, and all debts, liabilities, restrictions and duties of the Company and Purchaser will become the debts, liabilities and duties of the surviving corporation, all as provided under the DGCL, including Section 251(h) thereof.

As of the effective time, the certificate of incorporation and the bylaws of the surviving corporation will be amended and restated as a result of the Merger to be the same as the certificate of incorporation and bylaws of Purchaser in effect immediately before the effective time (except that references to Purchaser’s name will be automatically amended and will become references to “Paya”), and the provisions with respect to indemnification, exculpation and the advancement of expenses to the current or former directors, members, manager or officers in such certificate of incorporation and bylaws will not be repealed, amended or otherwise modified in any manner that would adversely affect the rights or protections of any such current or former director, member, manager or officer of the Company or any subsidiary of the Company.

The directors and officers of Purchaser immediately prior to the effective time will be the directors and officers of the surviving corporation. Such directors and officers will hold office until their respective successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal, in each case as provided in the organizational documents of the surviving corporation.

The Merger Agreement provides the Merger will be effected pursuant to Section 251(h) of the DGCL and will be effected without a vote on the adoption of the Merger Agreement by the stockholders of the Company.

Effect of the Merger on the Shares

At the effective time, each share of common stock of Purchaser that is issued and outstanding as of immediately prior to the effective time will automatically be canceled and converted into one validly issued, fully paid and nonassessable share of common stock of the surviving corporation with the same rights, powers and privileges as the shares so converted and will constitute the only outstanding shares of capital stock of the surviving corporation (except for any such shares resulting from the conversion of Owned Company Shares (defined below)).

At the effective time, each Share issued and outstanding immediately prior to the effective time (other than any such Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL), will be automatically cancelled, extinguished and converted into the right to receive the Merger Consideration in accordance with terms of the Merger Agreement. Excluded Shares will be cancelled at the effective time and will not be exchangeable for Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. We refer to Shares described in clauses (i) and (ii) above as “Owned Company Shares.” Dissenting Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL (as further described in Section 16— “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights”).

 

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Appraisal Rights

Notwithstanding anything to the contrary in the Merger Agreement, if required by the DGCL (but only to the extent required thereby), any Dissenting Shares will not be converted into, or represent the right to receive the Merger Consideration pursuant to the Merger Agreement, and instead, holders of the Dissenting Shares will be entitled only to receive payment of the appraised value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL subject to any required withholding unless and until any such holder fails to perfect or effectively withdraws or loses their rights to appraisal and payment under the DGCL; except, that, if, after the effective time, any such holder fails to perfect, effectively withdraws or loses such holder’s right to appraisal pursuant to Section 262 of the DGCL, such holder’s Dissenting Shares will thereupon be treated as if they had been converted into, at the effective time, and will represent only the right to receive the Merger Consideration in accordance with the Merger Agreement, without interest thereon, subject to any required withholding, and the surviving corporation will remain liable for payment of the Merger Consideration for such holder’s Dissenting Shares in accordance with the Merger Agreement. At the effective time, all of the Dissenting Shares will automatically be cancelled and extinguished and any holder of the Dissenting Shares will cease to have any rights with respect thereto, except for the rights provided in Section 262 of the DGCL and as provided in the previous sentence. Prior to the effective time, the Company will give Parent (i) prompt notice of any demands received by the Company for appraisal of Shares and any withdrawals of such demands and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the effective time, the Company will not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or voluntarily settle or offer to settle, or otherwise negotiate, any such demands or agree to do any of the foregoing.

Treatment of the Company Equity Awards

At the effective time, the portion of each Option that is outstanding and vested as of immediately prior to the effective time will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be cancelled and converted into the right to receive a lump sum cash payment, without interest, in an amount equal to the product obtained by multiplying (i) the excess, if any, of (A) the Offer Price over (B) the per Share exercise price of such vested Option by (ii) the total number of Shares subject to such vested Option. At the effective time, the portion of each Option that is outstanding and unvested and that has an exercise price per share that is less than the Offer Price as of immediately prior to the effective time will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be converted into a stock option to purchase a number of shares of Parent Stock equal to the product of (rounded down to the nearest whole share) (x) the number of Shares underlying such unvested Option as of immediately prior to the effective time by (y) the exchange ratio, and the exercise price per share of Parent Stock (rounded up to the nearest whole cent) will equal the quotient obtained by dividing (a) the per Share exercise price of such unvested Option by (b) the exchange ratio (each, a “Parent Option”). Following the effective time, each Parent Option will be governed by the same vesting and exercisability terms, and other terms and conditions no less favorable than those that were applicable to such unvested Option immediately prior to the effective time. Each Option, whether vested or unvested, that has an exercise price per share that is equal to or greater than the Offer Price will be canceled for no consideration.

At the effective time, the portion of each RSU Award that is outstanding and vested as of immediately prior to the effective time (including each RSU Award held by a non-employee director of the Company that vests pursuant to its terms) will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be cancelled and converted into the right to receive a lump sum cash payment, without interest, in an amount equal to the sum of (i) the product obtained by multiplying (A) the Offer Price by (B) the total number of Shares subject to such vested RSU Award plus (ii) the value of any accrued but unpaid dividend equivalent rights relating to such vested RSU Award. At the effective time, the portion of each RSU Award that is outstanding and unvested as of immediately prior to the effective time will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be converted into an RSU Award with respect to a number of shares of Parent Stock equal to the product obtained by multiplying (x) the number of Shares

 

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underlying such unvested RSU Award as of immediately prior to the effective time by (y) the exchange ratio (each, a “Parent RSU Award”). Following the effective time, each Parent RSU Award will be governed by same vesting and dividend equivalent rights terms, and other terms and conditions no less favorable than those that were applicable to such unvested RSU Award immediately prior to the effective time.

Exchange of Certificates

Prior to the Offer Acceptance Time, Parent will (i) select a nationally recognized bank or trust company reasonably acceptable to the Company to act as agent (the “Depository Agent”) for the holders of Shares to receive the Offer Price to which such holders will become entitled pursuant to the Merger Agreement and to act as an agent (the “Payment Agent”) for the holders of Shares to receive the Merger Consideration to which such holders will become entitled pursuant to Merger Consideration; (ii) enter into a payment agent agreement with the Payment Agent in form and substance reasonably acceptable to the Company and (iii) promptly after (and in any event no later than the earlier of (A) the effective time and (B) the second business day after the Offer Acceptance Time) the Offer Acceptance Time, deposit, or cause to be deposited, by wire transfer of immediately available funds, with the Payment Agent cash amounts sufficient to enable the Payment Agent to make all payments pursuant to the Merger Agreement to holders of Shares outstanding immediately prior to the effective time (such amount, the “Payment Fund”). To the extent that (A) there are any losses with respect to any investments of the Payment Fund; (B) the Payment Fund diminishes for any reason below the level required for the Payment Agent to promptly pay the cash amounts contemplated by the Merger Agreement; or (C) all or any portion of the Payment Fund is unavailable for Purchaser or Parent (or the Payment Agent on behalf of Purchaser or Parent), as applicable, to promptly pay the cash amounts contemplated by the Merger Agreement for any reason, Parent will, or, after the effective time will cause the surviving corporation to, promptly replace or restore the amount of cash in the Payment Fund so as to ensure that the Payment Fund is at all times fully available for distribution and maintained at a level sufficient for the Payment Agent to make the payments contemplated by the Merger Agreement. The Payment Fund will not be used for any purpose other than the payment to holders of Shares as contemplated by the Merger Agreement.

Promptly following the effective time (and in any event within three business days thereafter), Parent and the surviving corporation will cause the Payment Agent to mail to each holder of record as of immediately prior to the effective time (other than Owned Company Shares) of one or more certificates that immediately prior to the effective time represented issued and outstanding Shares (other than Owned Company Shares) (the “Certificates” (if any)) (i) a letter of transmittal in customary form (which will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon delivery of the Certificates to the Payment Agent), and (ii) instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration payable with respect to the Shares formerly represented thereby pursuant to the Merger Agreement. Upon surrender of Certificates for cancellation to the Payment Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates will be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Shares represented by such Certificates by (y) the Merger Consideration, and the Certificates so surrendered will forthwith be cancelled. Notwithstanding anything to the contrary in the Merger Agreement, no record holder of uncertificated Shares (the “Uncertificated Shares”) will be required to deliver a Certificate or an executed letter of transmittal to the Payment Agent in order to receive the payment that such holder is entitled to receive pursuant to the Merger Agreement with respect of such Uncertificated Shares. In lieu thereof, such record holder of Uncertificated Shares, upon receipt of an Agent’s Message by the Payment Agent (or such other evidence, if any, of transfer as the Payment Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, will be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (1) the aggregate number of Shares represented by such holder’s transferred Uncertificated Shares by (2) the Merger Consideration, and the transferred Uncertificated Shares will be cancelled. The Payment Agent will accept such Certificates and transferred Uncertificated Shares upon compliance with such reasonable terms and conditions as the Payment Agent may impose to cause an orderly exchange thereof in accordance with normal exchange practices. No interest will be paid or accrued for the

 

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benefit of holders of the Certificates and Uncertificated Shares on the Merger Consideration payable upon the surrender of such Certificates and transfer of Uncertificated Shares pursuant to the Merger Agreement. Until so surrendered or transferred, outstanding Certificates and Uncertificated Shares will be deemed from and after the effective time to evidence only the right to receive the Merger Consideration payable in respect thereof pursuant to the Merger Agreement.

Prior to the effective time, Parent and the Company will cooperate to establish procedures with the Payment Agent and DTC with the objective that the Payment Agent will transmit to DTC or its nominee on the Closing Date (or if the Closing does not occur at such time that permits same day transmission, the first business day after the Closing Date) an amount in cash, by wire transfer of immediately available funds, equal to (i) the number of Shares (other than Owned Company Shares and Dissenting Shares) held of record by DTC or such nominee immediately prior to the effective time multiplied by (ii) the Merger Consideration.

If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate or transferred Uncertificated Share in exchange therefor is registered, it will be a condition of payment that (i) the person requesting such exchange present proper evidence of transfer or will otherwise be in proper form for transfer, and (ii) the person requesting such payment will have paid any transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of such Certificate or Uncertificated Share surrendered or will have established to the reasonable satisfaction of the Payment Agent that such tax either has been paid or is not applicable.

Notwithstanding anything to the contrary set forth in the Merger Agreement, none of the Payment Agent, Parent, the surviving corporation or any other party to the Merger Agreement will be liable to a holder of Shares for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

Any portion of the Payment Fund that remains undistributed to the holders of the Certificates or Uncertificated Shares on the date that is one year after the effective time will be returned to Parent (or delivered to the surviving corporation as directed by Parent) upon demand, and any holders of Shares that were issued and outstanding immediately prior to the Merger who have not theretofore surrendered or transferred their Certificates or Uncertificated Shares representing such Shares for exchange pursuant to the Merger Agreement will thereafter look for payment of the Merger Consideration payable in respect of the Shares represented by such Certificates or Uncertificated Shares solely to Parent (subject to abandoned property, escheat or similar law), as general creditors thereof, for any claim to the Merger Consideration to which such holders may be entitled pursuant to the Merger Agreement. Any amounts remaining unclaimed by holders of any such Certificates or Uncertificated Shares two years after the effective time, or at such earlier date as is immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any governmental authority, will, to the extent permitted by applicable law, become the property of the surviving corporation free and clear of any claims or interest of any such holders (and their successors, assigns or personal representatives) previously entitled thereto.

Company, Parent, Purchaser, the surviving corporation, any of their subsidiaries, the Payment Agent and any other applicable withholding agent will be entitled to deduct and withhold from any amounts otherwise payable under the Merger Agreement as are required to be withheld or deducted with respect to such payment under the Code, or any other applicable tax law. To the extent that amounts are so deducted or withheld, and timely remitted to the appropriate governmental authority, such amounts will be treated for all purposes under the Merger Agreement as having been paid to the person in respect of whom such deduction or withholding was made. Except with respect to withholding with respect to (i) amounts payable to employees of the Company or its subsidiaries that constitute compensation for services (including payments in respect of Options or Restricted Stock Units), (ii) U.S. backup withholding due to failure of a holder of Shares to provide a properly completed and duly executed IRS Form W-9 or applicable IRS Form W-8 and (iii) withholding under Section 1445 of the

 

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Code (solely to the extent Treasury Regulations Section 1.1445-2(c)(2) does not apply), any party that intends to deduct and withhold from amounts otherwise payable pursuant to the Merger Agreement will use commercially reasonable efforts to provide the party in respect of which such deduction or withholding would be made with written notice at least five business days or, if later, as soon as reasonably practicable prior to making any withholding with respect to the payment of any consideration otherwise payable pursuant to the Merger Agreement and will use commercially reasonable efforts to cooperate in good faith with the party in respect of which such deduction or withholding would be made to reduce or eliminate the amount of such withholding.

Representations and Warranties; Material Adverse Effect

The Merger Agreement contains representations and warranties of the Company and of Parent and Purchaser.

Subject to certain exceptions in the Merger Agreement, in the Company Disclosure Letter and as disclosed in the reports, schedules, forms, statements and other documents filed by the Company with the SEC or furnished by the Company to the SEC as publicly available, in each case, on or after January 1, 2021 and at least one day prior to January 8, 2023, the Merger Agreement contains representations and warranties of the Company as to, among other things:

 

   

organization, requisite power and authority to carry on its business and good standing and qualification to do business;

 

   

corporate authority to execute and deliver the Merger Agreement, perform its covenants and obligations and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

 

   

enforceability of the Merger Agreement;

 

   

Company board approval, fairness opinion of the Company’s financial advisor and applicable anti-takeover statutes or regulations;

 

   

absence of conflicts and required consents or notices;

 

   

requisite governmental approvals;

 

   

authorized share capital of the Company, issued and outstanding equity of the Company and other matters regarding capitalization;

 

   

the Company’s subsidiaries;

 

   

reports, forms, documents and financial statements of the Company required to be filed or furnished with the SEC by the Company since October 16, 2020 and the design, establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting;

 

   

absence of liabilities required to be reflected on the Company’s balance sheet;

 

   

absence of certain events or changes in the business of the Company from December 31, 2021 to January 8, 2023, including an absence of a Company Material Adverse Effect (as defined below);

 

   

material contracts and validity thereof;

 

   

real estate leased by the Company;

 

   

compliance with environmental laws, permits issued pursuant to such environmental laws and absence of lawsuits against the Company pertaining to such environmental laws;

 

   

ownership and use of intellectual property;

 

   

cybersecurity and data privacy matters;

 

 

41


   

tax returns, filings and other tax matters;

 

   

employee benefit plans, employee relations and related labor matters;

 

   

compliance with applicable laws and permits;

 

   

litigation against or involving the Company;

 

   

insurance matters;

 

   

the Company’s top partners, merchants and suppliers;

 

   

compliance with anti-money laundering, anti-corruption or similar laws;

 

   

compliance with economic sanctions and export controls;

 

   

independent service organization registration and card association compliance;

 

   

absence of affiliate transactions; and

 

   

broker’s fees and expenses.

Subject to certain exceptions in the Merger Agreement, the Merger Agreement also contains representations and warranties of Parent and Purchaser as to, among other things:

 

   

organization, requisite power and authority to carry on its business and good standing and qualification to do business;

 

   

corporate authority to execute and deliver the Merger Agreement, perform its covenants and obligations and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

 

   

absence of conflicts and required consents or notices;

 

   

requisite governmental approvals;

 

   

litigation against or involving Parent or Purchaser;

 

   

ownership of any Shares;

 

   

broker’s fees and expenses;

 

   

capitalization and operations of Purchaser;

 

   

absence of Parent vote or approval;

 

   

available funds;

 

   

that Parent has provided the Company true, correct and complete copies of the Debt Commitment Letter (including the Fee Letter (as defined in the Merger Agreement)) and the Amended and Restated Credit Agreement, pursuant to which the debt financing sources party to the Debt Commitment Letter have committed to provide, subject to the terms and conditions contained therein, the amounts set forth therein; and

 

   

solvency.

Some of the representations and warranties in the Merger Agreement are qualified by materiality qualifications or a “Company Material Adverse Effect” qualification with respect to the Company or a “Parent Material Adverse Effect” with respect to Parent or Purchaser.

For purposes of the Merger Agreement, a “Company Material Adverse Effect” means any change, event, effect, condition, development or circumstance that, individually or in the aggregate, (1) has a material adverse effect on the business, assets, liabilities, financial condition or results of operations of the Company and its subsidiaries, taken as a whole or (2) prevents the Company’s ability to consummate the Merger prior to the Termination Date.

 

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For purposes of the foregoing clause (1), no change, event, effect, condition, development or circumstance that, individually or in the aggregate to the extent arising out of, relating to or resulting from the following (in each case, by itself or when aggregated) will be deemed to be or constitute a Company Material Adverse Effect or will be taken into account when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur (subject to the limitations set forth below):

 

   

changes in general economic conditions, or changes in conditions in the global, international or regional economy generally;

 

   

changes in conditions in the financial markets, credit markets or capital markets, including (A) changes in interest rates or credit ratings; (B) changes in monetary policy or exchange rates for the currencies of any country; (C) inflation; or (D) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market;

 

   

general changes in conditions in the industries in which the Company and its subsidiaries conduct business (including supply chain delays, increases in raw material prices and import or export restrictions);

 

   

changes after January 8, 2023 in regulatory, legislative or political conditions (including civil unrest, protests and public demonstrations (in each case, whether or not violent), any government responses thereto (e.g., curfews) and any escalation or worsening thereof);

 

   

any geopolitical conditions, outbreak of hostilities, acts of war (whether or not declared), broad-based cyber attacks, cyberterrorism, terrorism or military actions (including any escalation or general worsening of, or any law or sanction, mandate, directive, pronouncement, guideline or recommendation issued by a governmental authority in response to, any such hostilities, acts of war, cyberterrorism, terrorism or military actions);

 

   

earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, naturally occurring floods, mudslides, wild fires or other natural disasters, weather conditions and other natural force majeure events;

 

   

any (A) epidemic, pandemic or disease outbreak (including the COVID-19 pandemic), human health crises or other force majeure events, in each case, including any worsening thereof, or (B) law or mandate, directive, pronouncement, guideline or recommendation issued by a governmental authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, “sheltering-in-place,” curfews or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such law or directive, pronouncement or guideline or interpretation thereof or any material worsening of such conditions (including any COVID-19 measures);

 

   

the negotiation, execution, or delivery of the Merger Agreement, or performance of the requirements of the Merger Agreement or the public announcement of the Merger Agreement or the pendency of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including the impact thereof on the relationships, contractual or otherwise, of the Company and its subsidiaries with customers, suppliers, lenders, lessors, business partners, employees, regulators, governmental authorities, vendors or any other person (it being understood that this bullet point will not apply with respect to any representation or warranty that is intended to address the consequences of the negotiation, execution or delivery of the Merger Agreement, the performance of the requirements of the Merger Agreement, the public announcement of the Merger Agreement or the pendency of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, or the purposes of certain Offer Conditions set forth in the Merger Agreement solely as it relates to such representations and warranties);

 

   

the compliance by any party with the terms of the Merger Agreement, including any action taken or refrained from being taken pursuant to or in accordance with the Merger Agreement (it being understood that this bullet point will not apply with respect to any representation or warranty that is intended to address the consequences of the performance of the requirements of the Merger Agreement, or the purposes of certain Offer Conditions set forth in the Merger Agreement solely as it relates to such representations and warranties);

 

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any action taken or refrained from being taken, in each case to which Parent has expressly consented in writing following January 8, 2023 (it being understood that this bullet point will not apply with respect to any representation or warranty that is intended to address the consequences of the performance of the requirements of the Merger Agreement, or the purposes of certain Offer Conditions set forth in the Merger Agreement solely as it relates to such representations and warranties);

 

   

changes after January 8, 2023 in GAAP or other accounting standards or in any applicable laws (or the enforcement, implementation or interpretation of any of the foregoing by governmental authorities, including the SEC and the Financial Accounting Standards Board);

 

   

changes in the price or trading volume of the Shares, in and of itself (it being understood that the underlying cause of such change may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, unless otherwise excluded by the exceptions to this definition);

 

   

any failure, in and of itself, by the Company and its subsidiaries to meet (A) any internal or published estimates or guidance of the Company’s revenue, earnings or other financial performance or results of operations for any period; or (B) any budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that the underlying cause of any such failure described in the foregoing clauses (A) or (B) may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, unless otherwise excluded by the exceptions to this definition);

 

   

any government shutdown or slowdown by or involving any governmental authority affecting a national or federal government as a whole;

 

   

any Transaction Litigation (as defined below) (except that the underlying facts or causes of such Transaction Litigation may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, unless otherwise excluded by the exceptions to this definition); or

 

   

the identity of Parent or Purchaser as the acquiror of the Company;

except, in each case of the first, second, third, fourth, fifth, sixth, seventh, eleventh and fourteenth bullet point above to the extent (and only to the extent) that such change, event, effect, condition, development or circumstance has a disproportionate adverse change, event, effect, condition, development or circumstance on the Company and its subsidiaries relative to other companies operating in the same industries in which the Company and its subsidiaries conduct business, in which case only the incremental disproportionate adverse change, event, effect, condition, development or circumstance may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur.

For the purpose of the Merger Agreement, a “Parent Material Adverse Effect” means any violation, conflict, breach, default, termination, acceleration or lien that would not, individually or in the aggregate, prevent, materially impair or materially delay the ability of Parent or Purchaser to consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement.

Conduct of Business Pending the Merger

The Merger Agreement provides that, except (a) as expressly permitted by the Merger Agreement, (b) for the execution and performance of the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement, (c) as set forth in the Company Disclosure Letter, (d) as required by applicable law, including any COVID-19 measures, (e) for any COVID-19 reasonable response (except, that the Company will use reasonable best efforts to provide advance notice to, and consult in good faith with, Parent prior to taking such actions), or (f) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed), during the period from January 8, 2023 until the earlier to occur of the

 

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termination of the Merger Agreement pursuant to its terms and the effective time (the “Pre-Closing Period”), the Company will, and will cause each of its subsidiaries to, use its reasonable best efforts to (i) conduct its business in all material respects in accordance with applicable law and in all material respects in the ordinary course of business (taking into account COVID-19 reasonable responses (except, that the Company will use reasonable best efforts to provide advance notice to, and consult in good faith with, Parent prior to taking such actions)), and (ii) preserve intact in all material respects its current business organizations, ongoing businesses and significant relationships with governmental authorities, key employees and other persons with whom the Company or its subsidiaries have material business dealings; except, that no action or inaction by the Company or its subsidiaries with respect to matters specifically permitted or prohibited by any provision in the following paragraph, including with reference to the Company Disclosure Letter, will be deemed a breach of this sentence solely due to it being outside of the ordinary course of business.

Further, the Merger Agreement also provides that, during the Pre-Closing Period, except (i) as expressly permitted by the Merger Agreement, (ii) as set forth in the Company Disclosure Letter, (iii) as required by applicable law, including any COVID-19 measures, or (iv) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed), the Company will not, and will not permit any of its subsidiaries, to:

 

   

amend the organizational documents of the Company or any of its subsidiaries (other than immaterial amendments to the organizational documents of any subsidiary of the Company that would not and would not reasonably be expected to prevent, materially delay or materially impair the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement);

 

   

propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization;

 

   

except for transactions solely among the Company and its wholly owned subsidiaries or solely among the Company’s wholly owned subsidiaries, issue, sell, deliver, pledge or agree or commit to issue, sell, deliver, encumber or subject to a lien, or pledge any Company securities or subsidiary securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), including any Options or RSU Awards, except upon the exercise or settlement of Options or RSU Awards, in each case, in accordance with their existing terms in effect on January 8, 2023;

 

   

except for transactions solely among the Company and its wholly owned subsidiaries or solely among the Company’s wholly owned subsidiaries, adjust, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any Company securities or subsidiary securities, other than (i) the withholding of Shares to satisfy the exercise price or tax obligations incurred in connection with the exercise or settlement of Options or RSUs Awards or (ii) the acquisition by the Company of Shares in connection with the forfeiture of Options or RSU Awards, in each case, in accordance with their existing terms in effect on January 8, 2023;

 

   

enter into any new line of business outside the existing business of the Company and its subsidiaries as of January 8, 2023;

 

   

declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, Company securities or subsidiary securities, or make any other distribution in respect of the shares of capital stock or other equity or voting interest, Company securities or subsidiary securities, except for cash dividends or distributions made by any direct or indirect wholly owned subsidiary of the Company to the Company or one of its other wholly owned subsidiaries;

 

   

(i) incur, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise), or suffer to exist any indebtedness for borrowed money (including any long-term or short-term debt) or issue any debt securities in excess of $1,000,000, except (A) for trade

 

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payables incurred in the ordinary course of business; or (B) for intercompany loans, advances or capital contributions to, or investments in the Company or any direct or indirect wholly owned subsidiaries of the Company; (ii) make any loans, advances or capital contributions to, or investments in, any other person, except for loans, advances or capital contributions to, or investments in any direct or indirect wholly owned subsidiary of the Company; (iii) mortgage or pledge any assets, tangible or intangible, of the Company or any of its subsidiaries or create or suffer to exist any lien thereupon, except for any permitted liens; (iv) amend, supplement or otherwise modify the Company Credit Agreement (as defined in the Merger Agreement) in any manner that would increase the cost to Parent, or otherwise impede the ability of Parent, to effectuate the payoff and release at Closing or (v) cancel any material indebtedness or material claim or intentionally waive any material claim or rights of the Company or any of its subsidiaries;

 

   

except as required by the terms of an applicable Company employee benefit plan or other employment or compensatory plan, policy, program, agreement or arrangement (an “Employee Plan”), (i) enter into, adopt, amend, modify or terminate any Employee Plan (or any such plan that would be an Employee Plan if in effect as of January 8, 2023), other than de minimis administrative amendments in the ordinary course of business consistent with past practice to the Employee Plans that provide health or other welfare benefits that do not materially increase the cost or expense of maintaining, or increase the benefits payable under, such Employee Plans; (ii) increase the compensation, bonus, severance, termination pay or other benefits payable to any employee, officer, director or independent contractor, or pay any benefit not provided under any Employee Plan as in effect as of January 8, 2023; (iii) pay, grant or award, or commit to pay, grant or award, any bonuses or incentive compensation (equity- or cash-based) (except that annual cash bonuses with respect to the 2022 fiscal year may be paid based on actual performance upon the earlier of (A) when bonuses in respect of such fiscal year would ordinarily be paid or (B) at any time prior to the effective time, but in no event earlier than February 10, 2023); (iv) accelerate the vesting of, or otherwise deviate from the terms provided in the applicable award agreement with respect to the vesting, payment, settlement or exercisability of, any Option or RSU Award or other equity-based awards or other compensation; (v) enter into any collective bargaining agreement or similar agreement or arrangement or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any Company employees; (vi) fund or provide any funding for any rabbi trust or similar arrangement; (vii) terminate the employment or services of any employee, independent contractor or consultant whose annual base salary or annual base fee is or would be in excess of $200,000 or, in the case of an employee, is at or above the level of Vice President; or (viii) hire or engage any employee, independent contractor or consultant whose annual base salary or annual base fee is or would be in excess of $200,000 or, in the case of any employee, is or would be at or above the level of Vice President;

 

   

settle any pending or threatened legal proceeding, except for the settlement of any legal proceeding against the Company or its subsidiaries (i) that is for solely monetary payments of no more than $100,000 individually and $250,000 in the aggregate and that does not impose any material non-monetary obligations or equitable relief on, or the admission of wrongdoing by, the Company or its subsidiaries or, after the effective time, Parent or its subsidiaries or (ii) that is settled in compliance with the Merger Agreement;

 

   

change the Company’s or its subsidiaries’ methods, procedures, principles or practices of financial accounting or annual accounting period or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or Regulation S-X of the Exchange Act (or any interpretation thereof);

 

   

make, authorize, incur or commit to incur any capital expenditures in excess of $200,000, individually or in the aggregate, other than consistent with the 2023 Company forecast and key initiatives document in the Excel file entitled “Project Platinum Data Pack_11.27.22” previously made available to Parent;

 

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enter into, modify in any material respect, amend in any material respect or terminate (other than any contract that has expired in accordance with its terms) or waive any material rights under any material contract except, but in all cases subject to the other limitations set forth in the Merger Agreement (including the other bullet points in this section), for the entry into contracts in the ordinary course of business or renewals of any material contract in the ordinary course of business on substantially similar terms (in each case, other than with respect to any contract that is or would be if in effect on January 8, 2023 a material contract of certain types described in the Merger Agreement);

 

   

other than with respect to the matters set forth in the eighth bullet point in this section, (1) engage in any transaction with, or enter into any agreement, arrangement or understanding with, or modify, amend or terminate any of the foregoing with, (i) any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404 or (ii) GTCR-Ultra Holdings, LLC, a Delaware limited liability company, GTCR-Ultra Holdings II, LLC, a Delaware limited liability company, GTCR/Ultra Blocker, Inc., a Delaware corporation and GTCR Fund XI/C LP, a Delaware limited partnership (collectively, the “GTCR Entities”) or any affiliate thereof (excluding any agreement, arrangement or understanding on arm’s-length terms with any portfolio companies (as such term is commonly understood in the private equity industry) of any investment funds or investment vehicles affiliated with or under common management with the GTCR Entities) or FinTech Investor Holdings III, LLC, FinTech Masala Advisors, LLC and 3FIII, LLC (collectively, the “Sponsors”) or any affiliate thereof (excluding any agreement, arrangement or understanding on arm’s-length terms with any portfolio companies (as such term is commonly understood in the private equity industry)) or (2) amend, supplement or otherwise modify that certain (x) Sponsor Support Agreement, by and among FinTech Acquisition Corp. III, a Delaware corporation, GTCR-Ultra Holdings II, LLC, a Delaware limited liability company, FinTech Acquisition Corp. III Parent Corp., a Delaware corporation and GTCR-Ultra Holdings, LLC, a Delaware limited liability company, Daniel Cohen, Betsy Cohen and the other parties named therein, dated as of August 3, 2020 or (y) Termination Agreement, by and between GTCR Ultra Holdings, LLC and the Company, dated as of January 8, 2023;

 

   

acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any other person, any material equity interest therein or enter into any joint venture, partnership, strategic alliance, limited liability company or similar arrangement with any third person in any one transaction or series of related transactions, other than acquisitions of immaterial assets from vendors or suppliers under contracts in existence as of January 8, 2023 in the ordinary course of business;

 

   

sell, assign, license, lease, transfer, abandon, permit to lapse, or create any lien on (other than certain permitted liens), or otherwise dispose of, any of the Company’s or its subsidiaries’ assets, other than such sales, assignments, licenses, leases, transfers, liens or other dispositions that are (i) expirations in the ordinary course of business in accordance with the expiration of the applicable statutory period or (ii) non-exclusive licenses of intellectual property owned by the Company or its subsidiaries granted in the ordinary course of business;

 

   

enter into or adopt any “poison pill” or similar stockholder rights plan, in each case, applicable to the Merger and the other transactions contemplated by the Merger Agreement;

 

   

make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, amend any material tax return, settle or compromise any material liability for taxes or any tax audit, claim or other proceeding relating to a material amount of taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. law), surrender any right to claim a material refund, offset or other reduction of taxes, except as specifically set forth herein, make any amendment to that certain Tax Receivable Agreement, by and among FinTech Acquisition Corp. Ill Parent Corp., GTCR-Ultra Holdings, LLC, GTCR Ultra-Holdings II, LLC, GTCR/Ultra Blocker, Inc., and GTCR Fund XI/C LP, dated as of October 16, 2020 (the “Tax Receivable Agreement”), make any payment pursuant to the

 

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Tax Receivable Agreement (except as set forth in the Tax Benefit Schedule (as defined in the Tax Receivable Agreement)), amend or modify the Early Termination Schedule, request any ruling from any governmental authority with respect to taxes or, except in the ordinary course of business consistent with past practice and for a period of no longer than nine months, agree to an extension or waiver of the statute of limitations with respect to a tax return; or

 

   

agree, resolve or commit to take any of the actions prohibited by this paragraph.

No Solicitation; Acquisition Proposal

Except as expressly permitted by the Merger Agreement, during the Pre-Closing Period, the Company and its subsidiaries will not, and will cause their representatives not to, directly or indirectly, (i) continue any solicitation, inducement, knowing encouragement, discussions or negotiations with any persons that may be ongoing with respect to an Acquisition Proposal as of January 8, 2023, (ii) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any inquiries, proposal or offer that constitutes or could reasonably be expected to lead to, an Acquisition Proposal (including by approving any transaction, or approving any person becoming an “Interested Stockholder,” for purposes of Article 9 of the Amended and Restated Certificate of Incorporation of the Company); (iii) enter into, engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person (other than Parent, Purchaser or any representative of Parent or Purchaser) any non-public information relating to the Company or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its subsidiaries, in any such case in connection with any Acquisition Proposal or with the intent to or expectation to or that would reasonably be expected to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an Acquisition Proposal or any inquiries or the making of an Acquisition Proposal or any inquiries, proposal or offer that could reasonably be expected to lead to, an Acquisition Proposal; (iv) participate or engage in discussions or negotiations with any person with respect to an Acquisition Proposal (or inquiries, proposals or offers or other efforts that could reasonably be expected to lead to an Acquisition Proposal), in each case, other than solely informing such persons of the existence of the provisions contained in the Merger Agreement; (v) approve, endorse or recommend an Acquisition Proposal; (vi) enter into or negotiate any letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, option agreement, share exchange agreement, expense reimbursement agreement, joint venture agreement, other contract or other similar instrument with respect to an Acquisition Proposal or that could reasonably be expected to lead to, an Acquisition Proposal, other than, in each case, an Acceptable Confidentiality Agreement (as defined below) entered into in accordance with the Merger Agreement (any such letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, option agreement, share exchange agreement, expense reimbursement agreement, joint venture agreement, other Contract or other similar instrument with respect to an Acquisition Proposal, an “Alternative Acquisition Agreement”); (vii) grant any waiver or release under or fail to enforce any standstill, confidentiality or similar agreement of the Company or any of its subsidiaries or (viii) authorize or commit to do any of the foregoing. Except as expressly permitted by the Merger Agreement, the Company and its subsidiaries will, and will cause their respective representatives to, (x) immediately following the execution of the Merger Agreement, cease any solicitations, discussions, communications or negotiations with any person in connection with an Acquisition Proposal or potential Acquisition Proposal, (y) immediately following the execution of the Merger Agreement, terminate all access of any person and its representatives to any physical or electronic data room maintained by or on behalf of the Company or any of its subsidiaries in connection with its consideration of an Acquisition Proposal or potential Acquisition Proposal and (z) immediately following the execution of the Merger Agreement, request in writing that each person that has executed a confidentiality agreement in connection with its consideration of an Acquisition Proposal or potential Acquisition Proposal promptly return or destroy, in accordance with the terms of such confidentiality agreement, all non-public information furnished to such person or its representatives by or on behalf of the Company or any of its representatives prior to January 8, 2023 (to the extent not previously requested). The Company will enforce, and not waive, terminate or modify without Parent’s prior written consent, any confidentiality, standstill or similar

 

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provision in any agreement. For purposes of this section, the term person means any person or “group,” as defined in Section 13(d) of the Exchange Act, other than, with respect to the Company, Parent or its subsidiaries or representatives. The Company agrees that any breach of the terms of the Merger Agreement by any of its representatives will be deemed to be a breach of the Merger Agreement by the Company.

Under the Merger Agreement an “Acquisition Proposal” means any offer or proposal from any person (other than an offer or proposal by Parent or Purchaser) or group, relating to any (i) direct or indirect issuance, exchange, purchase or other acquisition (in each case, whether in a single transaction or a series of related transactions) by any person or group, whether from the Company or any other person(s), of Shares or other voting or equity securities of the Company representing more than 20% of the Shares or other voting or equity securities of the Company outstanding after giving effect to the consummation of such issuance, exchange, purchase or other acquisition, including pursuant to a tender offer or exchange offer by any person or group that, if consummated in accordance with its terms, would result in such person or group beneficially owning more than 20% of the Shares outstanding after giving effect to the consummation of such tender or exchange offer; (ii) direct or indirect purchase, exchange, transfer or other acquisition (including by exclusive license) (in each case, whether in a single transaction or a series of related transactions) by any person or group, or stockholders of any such person or group, of more than 20% of the consolidated assets or assets to which more than 20% of the Company’s revenues or earnings on a consolidated basis are attributable (including stock in subsidiaries) of the Company and its subsidiaries taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or (iii) merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction (in each case, whether in a single transaction or a series of related transactions) involving the Company or any of its subsidiaries pursuant to which any person or group, or stockholders of any such person or group (other than the Company), would hold Shares or other voting or equity securities of the Company representing more than 20% of the Shares or other voting or equity securities of the Company outstanding after giving effect to the consummation of such transaction.

Receipt of Acquisition Proposal

Notwithstanding anything to the contrary in the Merger Agreement, if the Company receives, at any time after January 8, 2023 and prior to the Offer Acceptance Time, an unsolicited Acquisition Proposal that did not result from a material breach of the Merger Agreement, which the Company Board determines in good faith after consultation with the Company’s outside legal counsel and, in the case of financial matters, financial advisors (i) constitutes a Superior Proposal or (ii) would reasonably be expected to result in a Superior Proposal and, in each case, that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law, then the Company and the Company Board may, after providing written notice to Parent of the same, directly or indirectly through one or more of their representatives, participate or engage in discussions or negotiations with respect to such Acquisition Proposal with, furnish any non-public information relating to the Company or any of its subsidiaries to, or afford access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its subsidiaries pursuant to an Acceptable Confidentiality Agreement to, any person making such Acquisition Proposal or its representatives; except, that, the Company will provide to Parent and Purchaser any non-public information or data that is provided to any person or its representatives given such access that was not previously made available to Parent or Purchaser prior to or promptly following the time it is provided to such person or its representatives. It is understood and agreed that any contacts, disclosures, discussions or negotiations to the extent expressly permitted under the Merger Agreement, in and of itself will not, unless a Company Board Recommendation Change (as defined below) has otherwise occurred, constitute a Company Board Recommendation Change or otherwise, unless a material breach of the Merger Agreement has occurred, subject to its terms, constitute a basis for Parent to terminate the Merger Agreement pursuant to its terms.

Under the Merger Agreement, a “Superior Proposal” means any bona fide written Acquisition Proposal (with all references to “20%” in the definition of Acquisition Proposal being deemed to be references to “50%”)

 

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received after January 8, 2023, on terms that the Company Board has determined in good faith (after consultation with its financial advisors (in the case of financial matters) and outside legal counsel) (i) would be more favorable, from a financial point of view, to the Company stockholders than the Offer, the Merger and the other transactions contemplated by the Merger Agreement (taking into account all legal, regulatory, financial, timing, due diligence, conditionality, certainty, financing and other aspects of such proposal that the Company Board (or a committee thereof) considers relevant and any revisions to the Merger Agreement made or proposed in writing by Parent) and (ii) is reasonably likely to be consummated in accordance with its terms.

Under the Merger Agreement, an “Acceptable Confidentiality Agreement” means a customary confidentiality agreement with the Company that is either (i) in effect as of the execution and delivery of the Merger Agreement or (ii) executed, delivered and effective after the execution and delivery of the Merger Agreement, in either case, containing substantive terms that are not less favorable in any material respect to the Company than those contained in the Confidentiality Agreement (as defined below) and that does not prohibit the Company from complying with the Merger Agreement (except that for the avoidance of doubt, any such confidentiality agreement need not contain any “standstill” or similar provision or otherwise prohibit the making of any Acquisition Proposal); except that an Acceptable Confidentiality Agreement may not (x) include any provision calling for an exclusive right to negotiate with the Company or (y) provide for the reimbursement by the Company or any of its subsidiaries of any of the counterparty’s costs or expenses.

Notice of Acquisition Proposal

During the Pre-Closing Period, the Company will, as promptly as reasonably practicable (and, in any event, within 24 hours, notify Parent if any Acquisition Proposal (or any material amendment or modification to the material terms of any Acquisition Proposal) is (or if any inquiry, indication of interest, proposal or offer that could reasonably be expected to lead to an Acquisition Proposal is) received by the Company or its controlled affiliates or any of its or their respective representatives or if any non-public information is requested from, or any discussions or negotiations are sought to be initiated or continued with, the Company, its controlled affiliates or its representatives. Such notice must include (x) the identity of the person or group making such Acquisition Proposal or inquiry, indication of interest, proposal or request, and (y) a summary of the material terms and conditions of such Acquisition Proposal or inquiry, indication of interest, proposal and the nature of the information requested pursuant to such inquiry or request, including unredacted copies of all proposals or offers, including proposed agreements received by the Company relating to such Acquisition Proposal. During the Pre-Closing Period, the Company will keep Parent reasonably informed, on a reasonably prompt and timely basis, of the status and material terms of any such Acquisition Proposal (including unredacted copies of any amendments, modifications or proposed amendments or modifications thereto). Without limiting the foregoing, the Company will promptly (and in any event within 24 hours after such determination) inform Parent in writing if the Company determines to begin providing information or to engage in discussions or negotiations concerning an Acquisition Proposal pursuant to the Merger Agreement. Unless the Merger Agreement has been validly terminated pursuant to its terms, the Company will not take any action to exempt any person other than Parent or Purchaser from any “anti-takeover” law or restrictions on business combinations or similar provisions in the organizational documents of the Company, or otherwise cause such restrictions or provisions not to apply to such person. The Company agrees that it will not, directly or indirectly, enter into any agreement with any person which directly or indirectly prohibits the Company from providing any information to Parent in accordance with the Merger Agreement.

Company Board Recommendation; Company Board Recommendation Change; Intervening Event Fiduciary Exception

Under the Merger Agreement, the Company Board has unanimously (i) determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interest of the Company and the Company’s stockholders, (ii) determined that it is in the best interests of the Company and the Company’s stockholders, and declared it advisable, to enter into the Merger Agreement and

 

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consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the Merger Agreement by the Company (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and other obligations thereunder, and the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and conditions set forth therein, in accordance with the requirements of the DGCL, (iv) approved the execution and delivery of the Tender and Support Agreement by the parties thereto (and the consummation of the transactions contemplated thereby), (v) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, and (vi) resolved to recommend that the Company’s stockholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to the Purchaser in the Offer (such recommendation the “Company Board Recommendation”).

Except as permitted under the Merger Agreement, during the Pre-Closing Period, the Company Board will not (i) (A) withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the Company Board Recommendation in a manner adverse to Parent, or resolve or agree to take any such action; (B) adopt, approve, endorse, recommend or otherwise declare advisable to the Company stockholders an Acquisition Proposal, or resolve or agree to take any such action; (C) if an Acquisition Proposal has been publicly disclosed, fail to publicly and without qualification recommend against any such Acquisition Proposal within ten business days after the public disclosure of such Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Parent, such rejection of such Acquisition Proposal) and reaffirm the Company Board Recommendation within such ten business day period (or, if earlier, by the second business day prior to the then-scheduled Offer Expiration Time, if an Acquisition Proposal has been publicly disclosed at least three business days prior to the then-scheduled Offer Expiration Time); (D) fail to include the Company Board Recommendation in the Schedule 14D-9; (E) fail to publicly and without qualification reaffirm the Company Board Recommendation within ten business days after any request by Parent to do so (or, if earlier, by the second business day prior to the then-scheduled Offer Expiration Time, if an Acquisition Proposal has been publicly disclosed at least three business days prior to the then-scheduled Offer Expiration Time); except, that Parent may only make such request twice with respect to any particular Acquisition Proposal or any material publicly announced or disclosed amendment or modification thereto or (F) publicly propose or agree to do any of the foregoing (any action described in clauses (A), (B), (C), (D), (E) or (F) a “Company Board Recommendation Change”); or (ii) cause or permit the Company or any of its subsidiaries to enter into an Alternative Acquisition Agreement.

Notwithstanding anything to the contrary set forth in the Merger Agreement, at any time prior to the Offer Acceptance Time:

 

   

Intervening Event. The Company Board may effect a Company Board Recommendation Change (only of the type contemplated by clauses (A) and (D) of previous paragraph in response to an Intervening Event if the Company Board determines in good faith (after consultation with its financial advisors (in the case of financial matters) and outside legal counsel) that the failure to do so would be inconsistent with its fiduciary duties under applicable law; except that, the Company Board will not effect such a Company Board Recommendation Change unless:

 

   

the Company has provided prior written notice to Parent at least four business days in advance to the effect that the Company Board intends to effect a Company Board Recommendation Change, which notice will specify the basis for such Company Board Recommendation Change, including a reasonably detailed description of the facts and circumstances relating to such Intervening Event; and

 

   

during such four business day period, the Company will and will cause its representatives to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the Merger Agreement; and

 

   

at the end of such four business day period the Company Board again makes the determination under the Merger Agreement (after in good faith taking into account any

 

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proposals for amendments in a form that is binding to Parent subject only to execution by the Company proposed by Parent), it being understood that any material change to the facts and circumstances giving rise to such Intervening Event will require a new notice to Parent as provided above, but with an additional minimum of three business days (instead of at least four business days) notice and negotiation period from the date of such notice; or

 

   

Superior Proposal. If the Company receives an unsolicited Acquisition Proposal that did not result from a material breach of the Merger Agreement and that the Company Board has determined in good faith (after consultation with its financial advisors (in the case of financial matters) and outside legal counsel) constitutes a Superior Proposal, then the Company Board may (A) effect a Company Board Recommendation Change with respect to such Superior Proposal or (B) cause the Company to terminate the Merger Agreement pursuant to its terms in order to substantially simultaneously enter into a definitive agreement with respect to such Superior Proposal; except that, notwithstanding anything to the contrary therein, neither the Company nor any of its subsidiaries will enter into any Alternative Acquisition Agreement unless the Merger Agreement has been validly terminated in accordance with the Merger Agreement; except the Company Board will not take any action described in the foregoing clauses (A) and (B) unless:

 

   

the Company Board determines in good faith (after consultation with its financial advisors (in the case of financial matters) and outside legal counsel) that the failure to do so would be inconsistent with its fiduciary duties under applicable law (which determination together with the Determination Notice described below, to the extent expressly permitted by the Merger Agreement, in and of itself will not, unless a Company Board Recommendation Change has otherwise occurred, constitute a Company Board Recommendation Change or otherwise, unless a material breach of the Merger Agreement has occurred and subject to its terms, constitute a basis for Parent to terminate the Merger Agreement pursuant to its terms; except that any public statement or disclosure made in connection with the foregoing includes an express reaffirmation of the Company Board Recommendation, without any amendment, withdrawal, alteration, modification or qualification thereof) (it being further understood and agreed that the foregoing will not limit any rights or remedies of Parent under the Merger Agreement upon the occurrence of a Company Board Recommendation Change or, subject to the terms of the Merger Agreement, material breach of the Merger Agreement, including any Company Board Recommendation Change that occurs following the conclusion of the Notice Period); and

 

   

the Company has provided prior written notice (the “Determination Notice”) to Parent at least four business days in advance (it being understood that any material revision, amendment, update or supplement to the terms or conditions of such Superior Proposal will be deemed to constitute a new Superior Proposal and will require a new notice but with an additional minimum of three business days (instead of at least four business days) notice and negotiation period from the date of such notice) (any such notice period, as extended, the “Notice Period”) to the effect that the Company Board intends to take the actions described in foregoing clauses (A) or (B), including the identity of the person or group making such Acquisition Proposal, the material terms thereof and copies of all material relevant agreements relating to such Acquisition Proposal, and during such Notice Period, the Company will and will cause its representatives to negotiate in good faith (to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of the Merger Agreement such that such Acquisition Proposal would cease to constitute a Superior Proposal; and (ii) at the end of such Notice Period (as extended) the Company Board again determines in good faith (after consultation with its financial advisors (in the case of financial matters) and outside

 

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legal counsel) that such Acquisition Proposal continues to constitute a Superior Proposal and again makes the determination under the previous bullet point (in each case after in good faith taking into account the proposals for amendments in a form that is binding to Parent subject only to execution by the Company proposed by Parent).

Under the Merger Agreement, an “Intervening Event” means any change, event, effect, condition, development or circumstance (including any change in probability or magnitude of circumstances) that materially improves the business, assets, operations or prospects of the Company and its subsidiaries, taken as a whole, and that (i) was not known by or reasonably foreseeable to the Company Board on January 8, 2023 (or if known to the Company Board, the consequences of which were not known by or reasonably foreseeable to the Company Board as of January 8, 2023), (ii) does not relate to any Acquisition Proposal or consequence thereof, (iii) does not relate to the fact, in and of itself, that the Company meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics or any budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations for any period, or any changes after January 8, 2023 in the price or trading volume of the Shares (it being understood that the change, event, effect, condition, development or circumstance underlying any of the foregoing in this clause (iii) may be taken into consideration, unless otherwise excluded by the exceptions to this definition); (iv) does not relate to the timing of any consents, registrations, approvals, permits, clearances or authorizations required to be obtained prior to the Closing in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement; (v) does not relate to performance of the Merger Agreement or any action required to be taken or refrained from being taken by the Merger Agreement; and (vi) does not relate to changes in general economic or geopolitical conditions, or changes in conditions in the global, international or U.S. economy generally.

Additional Covenants

Efforts to Complete the Merger; Regulatory Approvals

Each of Parent and Purchaser (and will cause their respective affiliates, if applicable), on the one hand, and the Company (and will cause its subsidiaries, if applicable), on the other hand, will, to the extent required, file with the FTC and the Antitrust Division of the DOJ a Notification and Report Form relating to the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement as required by the HSR Act within ten business days following January 8, 2023. Each of Parent and the Company will (A) cooperate and coordinate (and will cause their respective subsidiaries to cooperate and coordinate) with the other in the making of such filings; (B) supply the other (or cause the other to be supplied) with any information that may be required in order to make such filings; (C) subject to the Merger Agreement, make (or cause to be made) an appropriate response to any request or requirement for additional information by the FTC, the DOJ or the governmental authorities of any other applicable jurisdiction; and (D) use reasonable best efforts to take (and cause their affiliates to take) all action necessary, proper or advisable to (1) cause the expiration or termination of the applicable waiting periods pursuant to the HSR Act and any other antitrust laws applicable to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement; and (2) obtain any required consents pursuant to the HSR Act and any antitrust laws applicable to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement, in the case of each of clauses (1) and (2), as promptly as reasonably practicable and in any event prior to the Termination Date. Each of Parent and Purchaser (and their respective affiliates, if applicable), on the one hand, and the Company (and its affiliates, if applicable), on the other hand, will promptly inform the other of any material communication from any governmental authority regarding the Offer, the Merger and the other transactions contemplated by the Merger Agreement in connection with such filings. If any party to the Merger Agreement or affiliate thereof receives any comments or a request for additional information or documentary material from any governmental authority with respect to the Offer, the Merger and the other transactions contemplated by the Merger Agreement pursuant to the HSR Act or any other antitrust laws applicable to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, then such party will make (or cause to be made), as promptly as practicable and after consultation and cooperation with the other parties in

 

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accordance with the Merger Agreement, an appropriate response to such request. Neither party will pull and refile under the HSR Act, or enter into any timing or other agreement with any governmental authority with respect to the HSR Act or any other antitrust laws applicable to the Offer, the Merger and the other transactions contemplated by the Merger Agreement without the consent of the other party, which will not be unreasonably conditioned or withheld.

Each party will (and will cause its respective subsidiaries and affiliates to, if applicable) use reasonable best efforts to cause the expiration or termination of any applicable waiting periods pursuant to the HSR Act and any other applicable antitrust laws as promptly as practicable and in any event prior to the Termination Date. Notwithstanding the foregoing, nothing in the Merger Agreement will require the Company or any of its subsidiaries or affiliates to enter into any agreement or consent decree with the DOJ, FTC or any other governmental authority that is unrelated to the Offer, the Merger and the other transactions contemplated by the Merger Agreement or is not conditioned on the Closing. The Company will not settle or compromise or offer to settle or compromise any request, inquiry, investigation, action or other legal proceeding by or before any governmental authority with respect to the Offer, the Merger or the other transactions contemplated by the Merger Agreement without the prior written consent of Parent and, at the written request of Parent, the Company and its subsidiaries will take (or agree to take) any such action (so long as such action is conditioned upon the occurrence of the Closing). Parent will, through appropriate litigation (including by exhausting all avenues of appeal), (x) oppose any request for the entry of, and (y) seek to have vacated or terminated, any order sought, issued, entered or enforced by any governmental authority under any applicable law that seeks to restrain, prevent or materially delay the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement or the receipt of any required consents applicable to the Offer, the Merger and the other transactions contemplated by the Merger Agreement.

In furtherance and not in limitation of the foregoing, the Company, Parent and Purchaser will (and will cause their respective affiliates to), subject to any restrictions under applicable laws, (i) promptly notify the other parties to the Merger Agreement of, and, if in writing, furnish the others with copies of (or, in the case of oral communications, advise the others of the contents of) any substantive communication received by such person from a governmental authority or intervening party in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement and permit the other parties to review and discuss in advance (and to consider in good faith any comments made by the other parties in relation to) any proposed draft notifications, formal notifications, filing, submission (except the parties’ HSR filings) or other written communication (and any analyses, memoranda, white papers, presentations, correspondence or other documents submitted therewith) made in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement to a governmental authority; (ii) keep the other parties informed with respect to the status of any such submissions and filings to any governmental authority in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement and any developments, meetings or discussions with any governmental authority or intervening party in respect thereof, including with respect to (A) the receipt of any non-action, action, clearance, consent, approval or waiver, (B) the expiration of any waiting period, (C) the commencement or proposed or threatened commencement of any investigation, litigation or administrative or judicial action or legal proceeding under applicable laws, including any proceeding initiated by a private party, and (D) the nature and status of any objections raised or proposed or threatened to be raised by any governmental authority or intervening party with respect to the Offer, the Merger and the other transactions contemplated by the Merger Agreement; and (iii) not independently participate in any substantive meeting, hearing, proceeding or discussions (whether in person, by telephone, videoconference or otherwise) with or before any governmental authority or intervening party in respect of the Offer, the Merger and the other transactions contemplated by the Merger Agreement without giving the other parties reasonable prior notice of such substantive meeting or substantive discussions and, unless prohibited by such governmental authority, the opportunity to attend or participate. Notwithstanding the foregoing, the materials required to be provided pursuant to this paragraph may be redacted (A) to remove references concerning the valuation of the Company, (B) as necessary to comply with any contracts, (C) as necessary to comply with applicable law, and (D) as necessary to address reasonable attorney-client, work product or other privilege or confidentiality concerns.

 

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Additionally, a party may reasonably designate any competitively sensitive material provided to another party pursuant to this paragraph as “Outside Counsel Only.” The foregoing obligations in this paragraph will be subject to the Confidentiality Agreement and any attorney-client, work product or other privilege.

Section 16 Matters

Prior to the effective time, the Company will take all necessary actions to cause the transactions contemplated by the Merger Agreement, and any dispositions of equity securities of the Company (including derivative securities) (including the disposition, cancellation or deemed disposition and cancellation of Shares, Options or RSU Awards) in connection with the transactions contemplated by the Merger Agreement by each individual who is a director or executive officer of the Company, to be exempt pursuant to Rule 16b-3 under the Exchange Act.

Indemnification and Insurance

During the period commencing at the effective time and ending on the sixth anniversary of the effective time (except to the extent that the indemnification agreement provides for an earlier termination), Parent will cause the surviving corporation and its subsidiaries to honor and fulfill, in all respects, the obligations of the Company and its subsidiaries pursuant to any indemnification agreements in effect prior to January 8, 2023, between the Company and any of its subsidiaries, on the one hand, and any of their respective current or former directors, members, managers or officers (and any person who becomes a director, member, manager or officer of the Company or any of its subsidiaries prior to the effective time), on the other hand (each, together with such person’s heirs, executors and administrators, an “Indemnified Person” and, collectively, the “Indemnified Persons”); except that such indemnification will be subject to any limitations imposed from time to time by applicable law. In addition, during the period commencing at the effective time and ending on the sixth anniversary of the effective time, Parent will cause the surviving corporation’s and its subsidiaries’ respective organizational documents to contain provisions with respect to indemnification, exculpation and the advancement of expenses of the Indemnified Persons that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the organizational documents of the Company, as of January 8, 2023. During such six-year period, such provisions may not be repealed, amended or otherwise modified in any manner that would adversely affect the rights or protections thereunder of any such Indemnified Person in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time except as required by applicable law.

Without limiting the generality of the previous paragraph, during the period commencing at the effective time and ending on the sixth anniversary of the effective time, Parent and its subsidiaries will, and Parent will cause the surviving corporation to indemnify and hold harmless, to the fullest extent permitted by applicable law, each Indemnified Person from and against any costs, fees and expenses (including reasonable attorneys’ fees and investigation expenses), judgments, fines, penalties, losses, claims, damages, liabilities and amounts paid in settlement or compromise in connection with any legal proceeding, whether civil, criminal, administrative or investigative, whenever asserted, to the extent that such legal proceeding arises, directly or indirectly, out of or pertains, directly or indirectly (including reasonable attorneys’ fees and investigation expenses in advance of the final disposition of such legal proceeding; except that such Indemnified Person agrees in advance to return any such funds to which a court of competent jurisdiction determines in a final, nonappealable judgment that such Indemnified Person is not ultimately entitled to indemnification), to (i) the fact that an Indemnified Person is or was a director, member, manager, officer, employee or agent of the Company or such subsidiary; or (ii) any action or omission, or alleged action or omission, in such Indemnified Person’s capacity as a director, member, manager, officer, employee or agent of the Company or any of its subsidiaries or as a director, manager, officer, member, manager, employee, agent or other fiduciary of any other person if taken at the request of the Company or such subsidiary (including in connection with serving at the request of the Company or such subsidiary as a director, member, manager, officer, employee, agent or other fiduciary of another person (including any employee benefit plan) regardless of whether such action or omission, or alleged action or omission, occurred

 

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prior to or at the effective time); except that if, at any time prior to the sixth anniversary of the effective time, any Indemnified Person delivers to Parent a written notice asserting in good faith a claim for indemnification pursuant to this paragraph, then the claim asserted in such notice will survive the sixth anniversary of the effective time until such claim is fully and finally resolved. In the event of any such legal proceeding, Parent and its subsidiaries will, and Parent will cause the surviving corporation to, advance all reasonable fees and expenses (including reasonable fees and expenses of any counsel) as incurred by an Indemnified Person in the defense of such legal proceeding; except that such Indemnified Person agrees in advance to return any such funds to which a court of competent jurisdiction determines in a final, nonappealable judgment that such Indemnified Person is not ultimately entitled to indemnification. Notwithstanding anything to the contrary in the Merger Agreement, none of Parent, the surviving corporation nor any of their respective affiliates will settle or otherwise compromise or consent to the entry of any judgment with respect to, or otherwise seek the termination of, any legal proceeding for which indemnification may be sought by an Indemnified Person pursuant to the Merger Agreement unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnified Persons from all liability arising out of such legal proceeding. Any determination required to be made with respect to whether the conduct of any Indemnified Person complies or complied with any applicable standard will be made by independent legal counsel selected by the surviving corporation (which counsel will be reasonably acceptable to such Indemnified Person), the fees and expenses of which will be paid by the surviving corporation.

The surviving corporation will (and Parent will cause the surviving corporation to), at its option, (i) during the period commencing at the effective time and ending on the sixth anniversary of the effective time, maintain in effect the Company’s current directors’ and officers’ liability insurance (“D&O Insurance”) in respect of acts or omissions occurring at or prior to the effective time on terms (including with respect to coverage, conditions, retentions, limits and amounts) that are equivalent to or more favorable than those of the D&O Insurance or (ii) purchase a six-year prepaid “tail” policy with respect to the D&O Insurance from an insurance carrier with a comparable credit rating as the Company’s current directors’ and officers’ liability insurance carrier (the “Tail Policy”). In satisfying its obligations pursuant to the first sentence of this paragraph, the surviving corporation will not be obligated to (A) pay annual premiums in excess of 350% of the amount paid by the Company for coverage for its last full fiscal year prior to January 8, 2023, for the D&O Insurance (such 350% amount, the “Maximum Premium”) or (B) an aggregate cost for the Tail Policy in excess of the Maximum Premium. If the annual premiums of such insurance coverage for the six-year period exceed the Maximum Premium or the aggregate cost for such Tail Policy exceeds the Maximum Premium, then the surviving corporation will only be obligated to obtain a policy with the greatest coverage available for an annual premium not exceeding the Maximum Premium or an aggregate cost for such Tail Policy not exceeding the Maximum Premium from an insurance carrier with the same or better credit rating as the Company’s current directors’ and officers’ liability insurance carrier. In lieu of the foregoing obligations, prior to the effective time the Company may and, at Parent’s request, will use reasonable best efforts to, purchase the Tail Policy; except, that the aggregate cost for such Tail Policy will not exceed the Maximum Premium. If the Company purchases the Tail Policy prior to the effective time, the surviving corporation will (and Parent will cause the surviving corporation to) maintain such Tail Policy in full force and effect for a period of no less than six years after the effective time and continue to honor its obligations thereunder.

Employee Matters

Under the Merger Agreement, Parent acknowledges that a “change in control,” “change of control” or “sale of the company” within the meaning of each applicable Employee Plan will occur as of the effective time. From and after the effective time, the surviving corporation will (and Parent will cause the surviving corporation to) honor all of the Employee Plans in accordance with their terms as in effect immediately prior to the effective time, except that nothing in the Merger Agreement prohibits Parent or the surviving corporation from amending or terminating any such Employee Plans or compensation or severance arrangements in accordance with their terms or pursuant to applicable law.

 

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For a period of one year following the effective time (the “continuation period”), Parent will, or will cause the surviving corporation and its subsidiaries to, provide to each continuing Company employee, for so long as they are employed during the continuation period (i) a total base salary and target annual cash incentive compensation opportunity that are no less favorable in the aggregate than that provided to such continuing employee immediately prior to the effective time, (ii) target long-term incentive opportunity that is substantially comparable to that provided to similarly situated employees of Parent and its subsidiaries, (iii) severance benefits no less favorable than those set forth on a schedule agreed between the Company and Parent, subject to such employee’s timely execution and non-revocation of a release of claims, and (iv) employee benefits (excluding severance, change in control and other transaction bonuses and compensation retention bonuses and other non-recurring compensation and benefits) that are substantially comparable in the aggregate to those provided to such continuing employee immediately prior to the effective time.

To the extent that an Employee Plan or any employee benefit plan sponsored by the surviving corporation and its subsidiaries is made available to any continuing Company employee at or after the effective time (the “New Plans”), each continuing Company employee will receive credit for all service with the Company and its subsidiaries before the effective time for purposes of eligibility to participate, vesting and entitlement to benefits where length of service is relevant (including for purposes of vacation accrual and severance entitlement), except that such service need not be credited to the extent that it would result in duplication of coverage or benefits for the same period of service, for purposes of any defined benefit pension plans, Employee Plan or employee benefit plan that is a frozen plan or provides grandfathered benefits, or for purposes of any equity incentive awards granted by Parent. In addition, (i) each such continuing employee will be immediately eligible to participate, without any waiting period, in any and all New Plans to the extent that such waiting period was satisfied under a similar or comparable Company employee benefit plan in which such continuing employee participated immediately before the effective time (such plans, collectively, the “Old Plans”), (ii) all waiting periods, pre-existing condition exclusions, evidence of insurability requirements and actively-at-work or similar requirements of each New Plan providing life insurance, medical, dental, pharmaceutical, vision or disability benefits to be waived for each such continuing employee and his or her covered dependents, and (iii) Parent will use commercially reasonable efforts to cause any eligible expenses incurred by each such continuing employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date on which such continuing employee’s participation in the corresponding New Plan begins to be given full credit under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such continuing employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.

With respect to the Company’s annual cash incentive plans in effect for the fiscal year ending immediately prior to the fiscal year in which the effective time occurs, if annual bonuses in respect of such prior fiscal year have not been paid as of the effective time, Parent will cause the surviving corporation to pay to each continuing employee who remains employed with Parent, the surviving corporation or their respective affiliates through the applicable payment date, at the same time or times that Parent or the surviving corporation pays annual bonuses in respect of such fiscal year to other similarly situated employees of Parent or its subsidiaries, but in no event later than March 15 immediately after the end of such fiscal year, a bonus for such fiscal year that is equal to the annual bonus that such continuing employee would have been entitled to receive under such applicable Company annual cash incentive plan for such fiscal year based on actual performance, determined in accordance with the terms and performance criteria set forth in such plan as in effect for such fiscal year.

On and after January 8, 2023, any broad-based written employee notices or communication materials (including any website posting) to be provided or communicated by the Company with respect to employment, compensation or benefits matters addressed in the Merger Agreement or related, directly or indirectly, to the transactions contemplated by the Merger Agreement will be subject to the prior prompt review and comment of Parent, and the Company will consider in good faith revising such notice or communication to reflect any comments or advice that Parent timely provides.

 

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Transaction Litigation

During the period from January 8, 2023 until the earlier to occur of the termination of the Merger Agreement pursuant to terms thereof and the effective time, the Company will provide Parent with prompt notice of any legal proceeding commenced or threatened against a party to the Merger Agreement or any of its subsidiaries or affiliates (or their respective directors, members, managers, partners or officers) or otherwise relating to, involving or affecting such party or any of its subsidiaries or affiliates, in each case in connection with, arising from or otherwise relating to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, other than any legal proceeding that is (i) solely among all or some of the parties to the Merger Agreement and (ii) related to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement (collectively, the “Transaction Litigation”) (including by providing copies of all pleadings with respect thereto) and keep Parent reasonably informed with respect to the status thereof. The Company will (a) give Parent the opportunity to participate in (but not control) the defense, settlement or prosecution of any Transaction Litigation; (b) consult with Parent with respect to the defense, settlement and prosecution of any Transaction Litigation; and (c) give due consideration, and consider in good faith, Parent’s view with respect to any Transaction Litigation. The Company may not compromise, settle or come to an arrangement regarding, or agree or offer to compromise, settle or come to an arrangement regarding, any Transaction Litigation unless Parent has consented thereto in writing (which consent will not be unreasonably withheld, conditioned or delayed).

Stock Exchange Delisting

Prior to the effective time, the Company will cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable on its part pursuant to applicable law and the rules and regulations of Nasdaq to cause (a) the delisting of the Shares from Nasdaq as promptly as practicable after the effective time and (b) the suspension of the duty to file reports under Section 13 and 15(d) of the Exchange Act as promptly as practicable after such delisting.

Repayment of the Company Credit Agreement

The Company will, and will cause its subsidiaries to, deliver all notices and take all other actions necessary, appropriate or reasonably requested by Parent to facilitate the termination at or prior to the effective time of all commitments in respect of the Company Credit Agreement, the repayment in full on the Closing Date of all obligations thereunder, and the release on the Closing Date of any liens securing the obligations thereunder and guarantees in connection therewith (collectively, the “Payoff and Release”). In furtherance and not in limitation of the foregoing, the Company and its subsidiaries will, (i) at least two business days prior to the Closing Date, deliver, or cause to be delivered, to Parent drafts of the Payoff Documents (as defined below) and (ii) prior to the Closing Date, deliver, or cause to be delivered, to Parent an executed payoff letter with respect to the Company Credit Agreement (the “Payoff Letter”) in form and substance reasonably acceptable to Parent from the applicable agent on behalf of the persons to whom such indebtedness is owed, which Payoff Letter will, among other things, set forth the amount required to effectuate the Payoff and Release (the “Payoff Amount”) and provide that all obligations outstanding under, and all liens and guarantees granted in connection with, the Company Credit Agreement will, upon the payment of the Payoff Amount, be released and terminated (the Payoff Letter and other documents contemplated therein, collectively, the “Payoff Documents”).

At or prior to the effective time and subject to the satisfaction of the Company’s obligations set forth in the Merger Agreement, Parent will repay (or cause the Company and its subsidiaries to repay or otherwise cause to be repaid) on behalf of the Company and its subsidiaries the Payoff Amount in the manner set forth in the Payoff Letter.

Financing

 

 

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Under the Merger Agreement, Parent has agreed to use, and has agreed to cause its affiliates, and its and their officers, directors, employees, agents and representatives to use, their reasonable best efforts to arrange, consummate and obtain the financing provided under the Debt Commitment Letter and the Existing Credit Agreement on the terms set forth therein, including:

 

   

maintaining in full force and effect at all times prior to Closing, the Debt Commitment Letter (and any definitive documents entered into in connection therewith) and the Existing Credit Agreement;

 

   

at or prior to Closing, negotiating or entering into definitive agreements to consummate the financing contemplated by the Debt Commitment Letter on terms not less favorable to Parent, taken as a whole (including with respect to the conditionality thereof), than the terms and conditions contained in, and as of the date of, the Debt Commitment Letter (including as to any “flex” provisions contained in the Fee Letter);

 

   

satisfying on a timely basis at or prior to Closing all representations, warranties and conditions applicable to Parent set forth in the Debt Commitment Letter and the definitive financing agreements or the Existing Credit Agreement, or obtaining a waiver of such conditions, and complying with Parent’s and its affiliates’, as applicable, obligations thereunder;

 

   

at all times prior to Closing, (i) maintaining availability to borrow revolving loans under the Existing Credit Agreement needed to consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement (the “Transactions”) (taking into account the aggregate amount of the financing to be provided under the Debt Financing and other funds available to Parent to consummate the Transactions) and (ii) ensure that no default or event of default occurs under the Existing Credit Agreement;

 

   

notifying the Company of (i) any material breach or material default under the Debt Commitment Letter or the Existing Credit Agreement of which Parent becomes aware and (ii) any receipt by Parent or any of its affiliates or their representatives of any notice with respect to any material failure to comply with, material breach of, any actual or threatened termination or repudiation of, or material dispute or disagreement relating to (to the extent such dispute or disagreement relates to the availability of financing or the obligation of the parties to fund their share of the commitments) the Debt Commitment Letter (or any definitive agreements relating thereto) or the Existing Credit Agreement; and

 

   

to the extent that any financing contemplated by the Debt Commitment Letter or the Existing Credit Agreement becomes unavailable for any or no reason, (i) promptly notifying the Company of such unavailability, and (ii) using, and causing its affiliates and representatives to use, reasonable best efforts to obtain alternative financing from other sources (which alternative financing will be in an amount at least equal to the Debt Financing or such unavailable portion thereof) on terms and conditions to funding and availability that are not materially less favorable, in the aggregate, to Parent than those in the Debt Commitment Letter or Existing Credit Agreement, as applicable.

Consummation of the financing contemplated in the Debt Commitment Letter or the Existing Credit Facility is not a condition to the Offer.

Between January 8, 2023 and the earlier of the Closing or termination of the Merger Agreement, the Company will, and will cause its subsidiaries to, use reasonable best efforts (at Parent’s sole cost and upon such reasonable request) to cooperate with Parent or Purchaser in connection with the Debt Financing, including assisting with the marketing of, and the satisfaction of certain customary conditions precedent to, the Debt Financing (except, that such requested assistance and cooperation is not required to the extent it would, among other things (i) interfere unreasonably with the businesses and operations of the Company or its affiliates, (ii) cause the Company to breach the Merger Agreement or cause any of the conditions to Closing to fail to be satisfied, or (iii) require the Company or any of its affiliates to breach an applicable law, its organizational documents or a material contract).

 

 

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Parent (i) will promptly, upon request by the Company, reimburse the Company for all reasonable and documented out-of-pocket expenses (including fees, costs and expenses of counsel, accountants and other advisors) incurred by any of their cooperation or assistance with respect to the Debt Financing or the provision of any information utilized in connection with the Debt Financing, and (ii) will indemnify and hold harmless each member of the Company and their respective affiliates, its subsidiaries and their respective representatives from and against any and all losses suffered or incurred by any of them in connection with the Debt Financing or the provision of any information utilized in connection therewith except (i) to the extent such losses, damages, claims, costs or expenses result from the gross negligence, bad faith or willful misconduct of the Company, any of its subsidiaries or their respective representatives or affiliates, and (ii) with respect to any losses arising from any material misstatement or omission of a material fact in information provided hereunder in writing by any of the foregoing persons.

Conditions of the Offer

See “Section 15—Conditions of the Offer.”

Conditions to the Merger

The respective obligations of Parent, Purchaser and the Company to consummate the Merger are subject to the satisfaction or waiver (to the extent permissible pursuant to the Merger Agreement) in writing at or prior to the effective time of each of the following conditions:

 

   

Purchaser (or Parent on Purchaser’s behalf) will have accepted for payment all of the Shares validly tendered pursuant to the Offer and not validly withdrawn; and

 

   

no governmental authority of competent jurisdiction will have enacted, issued, promulgated, enforced or entered (and continuing in effect) any federal, state, local, foreign or multinational law, judgment, rule or regulation or order, or injunction, whether civil or administrative (whether temporary, preliminary or permanent) that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger.

Termination

The Merger Agreement may be validly terminated prior to the effective time only as follows:

 

   

at any time prior to the Offer Acceptance Time by mutual written agreement of Parent and the Company;

 

   

by either Parent or the Company, if any governmental authority of competent jurisdiction will have enacted a law or issued a final, non-appealable order, in each case permanently restraining, enjoining or otherwise prohibiting the Offer or Merger or making the consummation of the Offer or Merger illegal; except that the right to terminate the Merger Agreement pursuant to this bullet point will not be available to any party to the Merger Agreement (it being understood that Parent and Purchaser will be deemed a single party for such purposes) seeking to terminate if the material breach by such party of its representations, warranties, covenants or obligations set forth in the Merger Agreement has been a principal cause of the issuance of any such enacted law or final, non-appealable order;

 

   

by either Parent or the Company, at any time prior to the Offer Acceptance Time, if the Closing has not occurred by 11:59 p.m., New York City time, on the Termination Date; except that the right to terminate the Merger Agreement pursuant to this bullet point will not be available to any party to the Merger Agreement (it being understood that Parent and Purchaser will be deemed to be a single party for such purposes) seeking to terminate if the material breach by such party of its representations, warranties, covenants or obligations set forth in the Merger Agreement has been a principal cause of the failure of the Closing to have occurred prior to the Termination Date;

 

   

by Parent, at any time prior to the Offer Acceptance Time, if the Company or the Company Board (i) has failed to include the Company Board Recommendation in the Schedule 14D-9 or (ii) has effected a Company Board Recommendation Change;

 

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by Parent, at any time prior to the Offer Acceptance Time, if the Company has breached or failed to perform in any material respect any of its representations, warranties (or any such representations or warranties have become inaccurate), covenants or other agreements contained in the Merger Agreement, which breach, inaccuracy or failure to perform (i) would result in a failure of the Company Representations Condition (as defined below) or the Obligations Condition (as defined below) of the Merger Agreement (assuming such time were the Offer Expiration Time) and (ii) is incapable of being cured by the Termination Date, or if capable of being cured by the Termination Date, has not been cured before the earlier of (A) the Termination Date and (B) thirty days (five days in the case of a breach of the non-solicitation and Superior Proposal obligations set forth in the Merger Agreement) following the Company’s actual receipt of written notice of such breach, inaccuracy or failure to perform from Parent; except, that Parent will not have the right to terminate the Merger Agreement pursuant to this bullet point if it is then in material breach of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the Company has the right to terminate the Merger Agreement pursuant to the eighth bullet point in this section (disregarding the notice and cure rights set forth therein);

 

   

by Parent upon prior written notice to the Company in the case of a knowing and intentional material breach of its non-solicitation obligations in the Merger Agreement by a director or officer of the Company or any individual set forth on that certain section of the Company Disclosure Letter;

 

   

by either Parent or the Company if (x) each condition to the Offer (other than the Minimum Condition, and any such conditions that by their nature are to be satisfied at the expiration of the Offer) has been satisfied or waived by Parent or Purchaser (to the extent permitted under the Merger Agreement) and the Minimum Condition has not been satisfied, and (y) the Offer will have terminated or expired in accordance with its terms (subject to the rights and obligations of Parent or Purchaser to extend the Offer pursuant to the Merger Agreement), without Parent or Purchaser having accepted for payment all Shares validly tendered (and not validly withdrawn) pursuant to the Offer within the period specified in the Merger Agreement; except that (A) the right to terminate the Merger Agreement pursuant to this bullet point will not be available to Parent if Parent or Purchaser will have failed to comply in any material respect with its respective obligations under the Merger Agreement and (B) the right to terminate the Merger Agreement pursuant to this bullet point will not be available to the Company if the Company will have failed to comply in any material respect with its obligations under the Merger Agreement;

 

   

by the Company, at any time prior to the Offer Acceptance Time, if Parent or Purchaser has breached or failed to perform in any material respect any of its respective representations, warranties (or any such representations or warranties have become inaccurate), covenants or other agreements contained in the Merger Agreement, which breach, inaccuracy or failure to perform (i) would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement by the Termination Date and (ii) is incapable of being cured by the Termination Date, or if capable of being cured by the Termination Date, has not been cured before the earlier of (A) the Termination Date and (B) thirty days following Parent’s actual receipt of written notice of such breach, inaccuracy or failure to perform from the Company; except that the Company will not have the right to terminate the Merger Agreement pursuant to this bullet point if it is then in material breach of its representations, warranties, covenants or agreements set forth in the Merger Agreement which would result in a failure of the Company Representations Condition or the Obligations Condition (assuming such time were the Offer Expiration Time) (disregarding the notice and cure rights set forth therein);

 

   

by the Company, if Purchaser fails to commence the Offer by within eleven business days of January 8, 2023; except that the Company may not terminate the Merger Agreement pursuant to this bullet point if such failure to commence the Offer is principally caused by the material breach by the Company of any

 

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representation, warranty, covenant, obligation or agreement of the Company set forth in the Merger Agreement; except that the Company will not have the right to terminate the Merger Agreement pursuant to this bullet point until (1) the Company has provided written notice to Parent of the failure of Purchaser to commence the Offer on the eleventh business day following January 8, 2023 and (2) the earlier of (A) the Termination Date and (B) two business days following Parent’s actual receipt of such written notice;

 

   

by the Company, at any time prior to the Offer Acceptance Time, in order to enter into a definitive agreement providing for a Superior Proposal in accordance with the Merger Agreement substantially concurrently with such termination; except that the Company will pay, or cause to be paid, to Parent in immediately available funds the Company Termination Fee (as defined below) in accordance with the Merger Agreement prior to or concurrently with such termination; or

 

   

by the Company if the Offer Conditions have been satisfied or waived and (i) if following the expiration of the Offer, Parent or Purchaser will have failed to accept for payment all Shares validly tendered (and not validly withdrawn) pursuant to the Offer within the period specified in the Merger Agreement or (ii) if, following the Offer Acceptance Time, Parent or Purchaser will have failed to purchase all Shares validly tendered (and not validly withdrawn) pursuant to the Offer within the period specified in the Merger Agreement; except, that the Company will not have the right to terminate the Merger Agreement pursuant to this bullet point until (A) the Company has provided to Parent written notice of the failure of Parent or Purchaser to take the actions described in clauses (1) and (2) of the ninth bullet point and (B) the earlier of (1) the Termination Date and (2) two business days following Parent’s actual receipt of such written notice.

Expenses

Except as set forth in the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees and expenses whether or not the Offer, the Merger and the other transactions contemplated by the Merger Agreement are consummated. For the avoidance of doubt, Parent or the surviving corporation will be responsible for all fees and expenses of the Payment Agent.

Company Payment

If (i) (x) the Merger Agreement is validly terminated by either the Company or Parent pursuant to the third bullet point in the Termination section (but in the case of a termination by the Company, only if at such time Parent would not be prohibited from terminating the Merger Agreement pursuant to such bullet point), (y) Parent validly terminates the Merger Agreement pursuant to the fifth bullet point in the Termination section or (z) the Merger Agreement is validly terminated by either the Company or Parent pursuant to the seventh bullet point in the Termination section as a result of the failure to satisfy the Minimum Condition; (ii) following the execution and delivery of the Merger Agreement and prior to such termination of the Merger Agreement, an Acquisition Proposal will have been publicly announced (or become known to the general public) and has not been publicly withdrawn (or which withdrawal has become known to the general public) at least three business days prior to the earlier of the date of the Offer Expiration Time and the date of such termination; and (iii) within twelve months following such termination of the Merger Agreement, either an Acquisition Proposal is consummated or the Company enters into a definitive agreement providing for the consummation of an Acquisition Proposal and such Acquisition Proposal is subsequently consummated, then the Company will pay, or cause to be paid, to Parent $37,876,852 (the “Company Termination Fee”) prior to or substantially concurrently with such event by wire transfer of immediately available funds to an account or accounts designated in writing by Parent. For purposes of this paragraph, all references to “20%” in the definition of “Acquisition Proposal” will be deemed to be references to “50%.”

If the Merger Agreement is validly terminated pursuant to the fourth and sixth bullet points in the Termination section, then the Company must promptly (and in any event within three business days) following such termination pay, or cause to be paid, to Parent the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.

 

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If the Merger Agreement is validly terminated pursuant to the tenth bullet point in the Termination section, then the Company must prior to or concurrently with such termination pay, or cause to be paid, to Parent the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.

The parties to the Merger Agreement acknowledge and agree that in no event will the Company be required to pay the Company Termination Fee on more than one occasion, whether or not the Company Termination Fee may be payable pursuant to more than one provision of the Merger Agreement at the same or at different times and upon the occurrence of different events.

Amendment; Extension; Waiver

Subject to applicable law and subject to the other provisions of the Merger Agreement, the Merger Agreement may be amended by Parent, Purchaser, and the Company at any time prior to the Offer Acceptance Time by execution of an instrument in writing signed on behalf of each of Parent, Purchaser and the Company (pursuant to authorized action by the Company Board).

At any time and from time to time prior to the Offer Acceptance Time, Parent and the Company may, to the extent legally allowed and except as otherwise set forth:

 

   

extend the time for the performance of any of the obligations or other acts of the other party or parties, as applicable;

 

   

waive any inaccuracies in the representations and warranties of the other party or parties contained herein or in any document delivered pursuant to the Merger Agreement; and

 

   

subject to the requirements of applicable law, waive compliance by the other party or parties to the Merger Agreement with any of the agreements or conditions contained therein applicable to such party (it being understood that Parent and Purchaser will be deemed to be a single party solely for purposes of this section).

Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing signed by such party. Any delay in exercising any right pursuant to the Merger Agreement will not constitute a waiver of such right. No waiver of any provision under the Merger Agreement or any breach or default thereof will extend to or affect in any way any other provision thereunder or prior or subsequent breach or default.

Limitations on Remedies

If the Merger Agreement is validly terminated pursuant to its terms in a circumstance in which the Company Termination Fee is owed to Parent and is so paid in accordance with the Merger Agreement (and without limiting the rights to specific performance described in the following section prior to such valid termination), except in the case of fraud or a willful breach, Parent’s right to receive the Company Termination Fee to the extent owed pursuant to the Merger Agreement (and any amounts owed pursuant to the Merger Agreement) will be the sole and exclusive remedy of Parent and Purchaser and each of their respective affiliates against (A) the Company, its subsidiaries and each of their respective affiliates; and (B) the former, current and future holders of any equity, controlling persons, directors, officers, employees, agents, attorneys, affiliates, members, managers, general or limited partners, stockholders and assignees of each of the Company, its subsidiaries and each of their respective affiliates (collectively, the “Company Related Parties”) in respect of the Merger Agreement, any agreement executed in connection with the transactions contemplated thereby, and upon payment of such amount (to the extent owed), none of the Company Related Parties will have any further liability or obligation to Parent or Purchaser relating to or arising out of the Merger Agreement or the transactions contemplated thereby (except that the parties (or their affiliates) will remain obligated with respect to the Confidentiality Agreement and the Merger Agreement, as applicable).

 

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Specific Performance

The parties to the Merger Agreement acknowledge and agree that (i) irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties do not perform the provisions of the Merger Agreement (including any party failing to take such actions as are required of it thereunder in order to consummate the Merger Agreement) in accordance with its specified terms or otherwise breach such provisions; (ii) the parties will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of the Merger Agreement and to enforce specifically the terms and provisions thereof; (iii) certain provisions of the Merger Agreement are not intended to and do not adequately compensate the Company, on the one hand, or Parent and Purchaser, on the other hand, for the harm that would result from a breach of the Merger Agreement, and will not be construed to diminish or otherwise impair in any respect any party’s right to an injunction, specific performance and other equitable relief; and (iv) the right of specific enforcement is an integral part of the Offer, the Merger and the other transactions contemplated by the Merger Agreement and without that right, neither the Company nor Parent would have entered into the Merger Agreement.

The parties to the Merger Agreement agree not to raise any objections to (i) the granting of an injunction, specific performance or other equitable relief to prevent or restrain breaches or threatened breaches of the Merger Agreement by the Company, on the one hand, or Parent and Purchaser, on the other hand; and (ii) the specific performance of the terms and provisions of the Merger Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants, obligations and agreements of Parent and Purchaser pursuant to the Merger Agreement, in each case based upon the availability of the equitable remedy of specific performance due to the adequacy of remedies available at law. Any party seeking an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each party irrevocably waives any right that it may have to require or request the obtaining, furnishing or posting of any such bond or other security. The parties further agree that (x) by seeking the remedies provided for in the Merger Agreement, a party will not in any respect waive its right to seek any other form of relief that may be available to a party under the Merger Agreement, and (y) nothing set forth in this section will require any party to institute any legal proceeding for (or limit any party’s right to institute any legal proceeding for) specific performance under this section prior or as a condition to exercising any termination right under Article VIII of the Merger Agreement (or prevent a party from pursuing damages concurrently with or after such termination), nor will the commencement of any legal proceeding pursuant to this section or anything set forth in this section restrict or limit any party’s right to terminate the Merger Agreement in accordance with the terms of Article VIII of the Merger Agreement or pursue any other remedies under the Merger Agreement that may be available then or thereafter; except, that in no event will any party be entitled to receive both an award of damages and a grant of specific performance of equitable relief which results in the consummation of the Closing.

Governing Law

The Merger Agreement, all issues and questions concerning the construction, validity, interpretation and enforceability of the Merger Agreement, and all actions, proceedings or counterclaims (whether based on contract, tort or otherwise) based on, arising out of or relating to the Merger Agreement or the actions of Parent, Purchaser or the Company in the negotiation, administration, performance and enforcement thereof, will be governed by, and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Jurisdiction

Each of the parties to the Merger Agreement (i) irrevocably consents to the service of the summons and

 

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complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts) in any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement, for and on behalf of itself or any of its properties or assets, in accordance with the notice requirements of the Merger Agreement or in such other manner as may be permitted by applicable law, and nothing in this section will affect the right of any party to serve legal process in any other manner permitted by applicable law; (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any legal proceeding to the exclusive general and specific jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept subject-matter jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arises out of or relating to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement; (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request from any court, including the Chosen Courts; (iv) agrees that any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger or any other transaction contemplated by the Merger Agreement will be brought, tried and determined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such legal proceeding in the Chosen Courts or that such legal proceeding was brought in an inconvenient or otherwise improper court and agrees not to plead or argue the same; and (vi) agrees that it will not bring any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger or any other transaction contemplated by the Merger Agreement in any court other than the Chosen Courts. Each of Parent, Purchaser and the Company agrees that a final judgment in any legal proceeding in the Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

Other Agreements

Confidentiality Agreement

On November 22, 2022, the Company and Parent entered into a confidentiality agreement (the “Confidentiality Agreement”). Under the terms of the Confidentiality Agreement, Parent and its representatives agreed not to (i) use any confidential information other than for the purpose of evaluating, proposing, negotiating or, if applicable, consummating a potential negotiated strategic transaction or transactions between or involving the Company and Parent (a “Transaction”), (ii) disclose such confidential information to any third party (other than to certain representatives of Parent solely for the purpose of evaluating, proposing, negotiating or, if applicable, consummating any possible Transaction), (iii) disclose to any person (a) the fact that investigations, discussions or negotiations are taking place or have taken place concerning a possible Transaction, (b) any of the terms, conditions or other facts with respect to any such possible Transaction, including the status thereof, (c) that the Company or any of its affiliates are or have been considering or reviewing the Transaction or (d) that confidential information has been requested or made available to Parent or its representatives, in each case, subject to certain exceptions.

Under the Confidentiality Agreement, Parent also agreed, among other things, to certain “standstill” provisions for the benefit of the Company that expire twelve months from the date of the Confidentiality Agreement, including restrictions that provide that Parent and its affiliates will not, directly or indirectly, without the prior written invitation of the Company, (i) acquire or agree, offer, seek or propose to acquire, or cause to be acquired, directly or indirectly, ownership of any securities or indebtedness of the Company or any of its subsidiaries, or any option, forward contract, swap or other position with a value derived from securities or indebtedness of the Company or any of its subsidiaries or conveying the right to acquire or vote securities or indebtedness of the Company or any of its subsidiaries or any rights or options to acquire any such ownership (including from a third party), (ii) make, or in any way participate in, any “solicitation” (as such term is used in the Exchange Act) to vote or seek to advise or influence in any manner whatsoever any person with respect to the voting of any securities of the Company or any of its subsidiaries, or seek the consent of

 

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any person with respect to any voting securities or interests of the Company, or call or seek to call a meeting of the Company’s shareholders or initiate any shareholder proposal for action by the Company’s shareholders or seek election to or to place a representative on the Company Board (or other similar governing body) or seek the removal of any director from the Company Board (iii) form, join, or participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Company or its subsidiaries or any voting securities of the Company or any of its subsidiaries, (iv) arrange, or in any way participate in, any financing for the purchase of any securities or assets or securities convertible or exchangeable into or exercisable for any securities or assets of the Company or any of its subsidiaries, (v) otherwise act, whether alone or with others, to seek to propose to the Company or any of its stockholders (in their capacity as such) any merger, amalgamation, plan of arrangement, business combination, tender or exchange offer, restructuring, recapitalization, liquidation of or other similar transaction or otherwise act, whether alone or with others, to seek to control, change, advise or influence the management, board of directors, governing bodies, or policies of the Company, or nominate any person as a director of the Company, or propose any matter to be voted upon by the stockholders of the Company, (vi) advise, assist or knowingly encourage any other person in connection with any of the foregoing, (vii) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, (viii) take any action which would reasonably be expected to legally require the Company to make a public announcement regarding the types of matters set forth in this paragraph, or (ix) publicly disclose any intention, plan or arrangement inconsistent with the Confidentiality Agreement. The Confidentiality Agreement provided that the standstill provisions would terminate upon, among other events, the Company’s entry into a definitive agreement providing for a transaction involving 50% or more of the voting securities of the Company, including by tender offer. Thus, the standstill provision terminated upon the parties’ execution of the Merger Agreement.

This summary and description of the Confidentiality Agreement does not purport to be complete and is qualified in its entirety by reference to the Confidentiality Agreement, which is filed as Exhibit (d)(2) to the Schedule TO, which is incorporated herein by reference.

Tender and Support Agreement

Concurrently with the execution of the Merger Agreement, the Company and Parent entered into the Tender and Support Agreement with GTCR-Ultra Holdings, LLC (the “Stockholder”). The Stockholder beneficially owned approximately 34% of the outstanding Shares as of January 8, 2023. Pursuant to the Tender and Support Agreement, the Stockholder agrees it will not Transfer (as defined below) (or cause, consent to or commit to the Transfer of) any of the Shares, or enter into any agreement relating thereto (subject to certain exceptions).

Subject to the terms of the Tender and Support Agreement, the Stockholder agrees to validly tender or cause to be tendered in the Offer all of the Shares pursuant to and in accordance with the terms of the Offer, free and clear of any liens, claims, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances or restrictions whatsoever (including on title, transfer or exercise of any rights of the Stockholder) in respect of such Shares, except for permitted encumbrances as provided thereunder. The Stockholder agrees that, once any of the Shares are tendered, the Stockholder will not withdraw any of such Shares from the Offer, unless and until the Tender and Support Agreement will have been validly terminated in accordance its terms. Prior to the Expiration Date (as defined below), the Stockholder will not tender (or permit the tender of) the Shares into any exchange or tender offer commenced by a third party other than Parent or Purchaser. The Stockholder will notify Parent as promptly as practicable (and in any event within 48 hours after receipt) in writing of the number of any additional Shares of which the Stockholder acquires beneficial or record ownership on or after the date hereof. If the Offer is terminated or withdrawn by Purchaser or the Merger Agreement is terminated prior to the purchase of the Shares in the Offer, Parent and Purchaser will promptly return, and will instruct any depository or paying agent, acting on behalf of Parent and Purchaser, to promptly return all tendered Shares to the Stockholder.

 

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From January 8, 2023 until the Expiration Date, at every meeting of the stockholders of the Company, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of the Company, the Stockholder (in the Stockholder’s capacity as such) agrees to (x) appear at each such meeting or otherwise cause all such Shares to be counted as present thereat for purpose of determining a quorum, and (y) be present (in person or by proxy) and, unconditionally and irrevocably, vote, or to direct the holder of record on any applicable record date to vote, all Shares to the fullest extent that such Shares are entitled to vote, or act by written consent:

 

   

in favor of the adoption of the Merger Agreement, and in favor of any other matters expressly contemplated by the Merger Agreement and necessary for the consummation of the Offer, the Merger or any other transactions contemplated by the Merger Agreement;

 

   

against any (A) Acquisition Proposal, other than the Merger, (B) Contract that would reasonably be expected to (1) result in a breach of any covenant, representation or warranty or any other obligation of the Stockholder contained in the Tender and Support Agreement or (2) result in any of the conditions set forth in the Merger Agreement not being satisfied on or before the Termination Date, or (C) replacement of existing directors comprising, or appointment of new directors to, the Company Board (except as expressly permitted by Parent); and

 

   

against any amendment to the Company’s certificate of incorporation or bylaws or other corporate action, contract or transaction the consummation of which would, or would reasonably be expected, to impede, hinder, interfere with, prevent, delay or adversely affect the Offer, the Merger or any other transactions contemplated by the Merger Agreement or that is intended, or would reasonably be expected, to facilitate an Acquisition Proposal, including (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company (other than the Merger), and (B) any sale, lease, license or transfer of a material amount of assets of the Company or any reorganization, recapitalization, liquidation or winding up of the Company. Until the earlier of (A) the Expiration Date and (B) the acceptance of the Shares for purchase in the Offer, the Stockholder will retain at all times the right to vote the Shares in its sole discretion and without any other limitation on any matters other than those set forth in the first and second bullet point above and this bullet point, that are at any time or from time to time presented for consideration to the Company’s stockholders generally.

The Tender and Support Agreement terminates upon the first to occur of: (i) such date and time of the valid termination of the Merger Agreement; (ii) the effective time; (iii) the date of any modification, waiver or amendment to any provision of the Merger Agreement that reduces the Offer Price or changes the form of consideration thereof to be paid in respect of the Shares; (iv) a Company Board Recommendation Change; and (v) the mutual written consent of the Company, Stockholder, Parent and Purchaser (collectively, the “Expiration Date”).

For purposes of the Tender and Support Agreement, a person will be deemed to have effected a “Transfer” of a Share if such person directly or indirectly (i) sells (including any short sale), pledges, encumbers, hypothecates, assigns, exchanges, grants an option with respect to (or otherwise enters into any derivative or hedging arrangement with respect to), transfers, tenders, gifts or disposes (by merger, by testamentary disposition, by operation of law or otherwise) of such Share or any interest in or right to such Share, (ii) deposits any Share into a voting trust or enters into a voting agreement or arrangement or grants any proxy or power of attorney with respect thereto that is inconsistent with the Tender and Support Agreement, or (iii) agrees or commits (whether or not in writing) to take any of the actions referred to in the foregoing clause (i) or (ii).

This summary and description of the Tender and Support Agreement does not purport to be complete and is qualified in its entirety by reference to the Tender and Support Agreement, which is filed as Exhibit (d)(4) to the Schedule TO, which is incorporated herein by reference.

 

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Termination Agreement

Concurrently with the execution of the Merger Agreement, the Company and the Stockholder entered into a termination agreement (the “Termination Agreement”) with respect to the termination of the Tax Receivable Agreement, effective as of immediately prior to the Offer Expiration Time.

The Company and the Stockholder agreed that, upon the Offer Acceptance Time, a Change of Control (as defined in the Tax Receivable Agreement) will have occurred, and the aggregate amount required to be paid by the Company and its subsidiaries pursuant to the Tax Receivable Agreement equals $19,520,607.90 (the “Early Termination Payment”), and that all amounts due by the Company under the Tax Receivable Agreement will be paid by the Company on or substantially concurrently with the Offer Acceptance Time to the Stockholder.

In consideration for the Early Termination Payment and in accordance with the terms of the Tax Receivable Agreement, effective as of immediately prior to the Offer Acceptance Time, the Company and the Stockholder absolutely, irrevocably and unconditionally terminate and release the Tax Receivable Agreement, and rescind, annul, cancel, repeal and eliminate any and all clauses, provisions, covenants, agreements, rights, obligations, responsibilities or liabilities contained in or existing under the Tax Receivable Agreement with respect to the parties, without any continuing liability of the Company, the Stockholder or any of their respective affiliates to any other person, subject to the terms of the Termination Agreement; except, (1) notwithstanding anything to the contrary contained in the Termination Agreement, any such termination, release, rescindment, annulment, cancellation, repeal or elimination will occur following, but not prior to, the payment of the Early Termination Payment in full satisfaction of all amounts due by the Company under the Tax Receivable Agreement; and (2) that the indemnification provisions of the Tax Receivable Agreement will survive the termination of the Tax Receivable Agreement pursuant to the Termination Agreement but the Company and its affiliates will have no liability or obligation thereunder.

This summary and description of the Termination Agreement does not purport to be complete and is qualified in its entirety by reference to the Termination Agreement, which is filed as Exhibit (d)(5) to the Schedule TO, which is incorporated herein by reference.

 

12.

Purpose of the Offer; Plans for the Company.

Purpose of the Offer. We are making the Offer because we want to acquire the entire equity interest in the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of any and all issued and outstanding Shares.

Purchaser intends to consummate the Merger as soon as practicable after consummation of the Offer. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. Following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company. Following the effective time, the separate corporate existence of Purchaser will cease and the Company will continue as the surviving corporation.

All Shares acquired by Purchaser pursuant to the Offer will be retained by Purchaser pending the Merger. If you sell your Shares in the Offer, you will cease to have any equity interest in the Company or any right to participate in its earnings and future growth. If you do not tender your Shares, but the Merger is consummated, you will also no longer have an equity interest in the Company. Similarly, after selling your Shares in the Offer or upon consummation of the Merger, you will not bear the risk of any decrease in the value of the Company.

Stockholder Approval. If the Offer is consummated and as a result the Shares irrevocably accepted for purchase in the Offer, together with the Shares otherwise owned by Purchaser and its affiliates represent a majority of the outstanding Shares, the Company does not anticipate seeking the approval of its remaining public

 

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stockholders before effecting the Merger. Section 251(h) of the DGCL provides that, subject to certain statutory requirements, if following consummation of a successful tender offer for a public corporation, the stock irrevocably accepted for purchase in the offer and “received” (as defined in Section 251(h) of the DGCL) by the depository for the offer prior to the expiration of such offer, together with the stock otherwise owned by the acquirer or its affiliates, equals at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the Merger as was payable in the tender offer, the acquirer can effect a merger without the action of the other stockholders of the target corporation. Therefore, the parties have agreed that, subject to the conditions specified in the Merger Agreement, the Merger will become effective as soon as practicable after (but on the same day as) the consummation of the Offer after the satisfaction or waiver of the conditions to the Merger set forth in the Merger Agreement, without a vote of the Company’s stockholders, in accordance with Section 251(h) of the DGCL.

Plans for the Company. If we accept Shares for payment pursuant to the Offer, we will obtain control over the management of the Company and the Company Board shortly thereafter.

As of the effective time, the certificate of incorporation of the surviving corporation will be amended and restated as a result of the Merger so as to be the same as the certificate of incorporation of Purchaser as in effect immediately prior to the effective time, and the bylaws of the surviving corporation will be amended and restated to be the same as the bylaws of Purchaser in effect immediately before the effective time of the Merger, and the provisions with respect to limitation of liabilities to directors and officers and indemnification in such certificate of incorporation and bylaws will not be amended, repealed or otherwise modified in any manner that would adversely in any respect affect the rights of individuals who were directors, officers, employees or agents of the Company or any subsidiary of the Company. The directors of Purchaser immediately prior to the effective time will be the directors of the surviving corporation and the officers of the Purchaser immediately prior to the effective time will be the officers of the surviving corporation. Such directors and officers will hold office until their respective successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal in accordance with the certificate of incorporation and bylaws of the surviving corporation.

Immediately following the consummation of the Merger, Parent intends to cause the Company to delist the Shares from Nasdaq. Parent intends to cause the Company to terminate the registration of the Shares under the Exchange Act as soon as practicable after consummation of the Merger as the requirements for termination of registration are met.

Parent and Purchaser are conducting a detailed review of the Company and its assets, corporate structure, capitalization, indebtedness, operations, properties, policies, management and personnel, and will consider which changes would be desirable in light of the circumstances that exist upon completion of the Offer and the Merger. Parent and Purchaser will continue to evaluate the business and operations of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such actions as they deem appropriate under the circumstances then existing. Thereafter, Parent intends to review such information as part of a comprehensive review of the Company’s business, operations, capitalization, indebtedness and management. Possible changes could include changes in the Company’s business, corporate structure, certificate of incorporation, bylaws, capitalization and management or changes to the Company Board. Plans may change based on further analysis and Parent, Purchaser and, after completion of the Offer and the Merger, the reconstituted Company Board, reserve the right to change their plans and intentions at any time, as deemed appropriate.

Except as disclosed in this Offer to Purchase, Parent and Purchaser do not have any present plan or proposal that would result in the acquisition by any person of additional securities of the Company, the disposition of securities of the Company, an extraordinary corporate transaction, such as a merger, reorganization or

 

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liquidation, involving the Company or the purchase, sale or transfer of a material amount of assets of the Company.

To the best knowledge of Parent and Purchaser, except for certain pre-existing agreements described in the Schedule 14D-9, no material employment, equity contribution, or other agreement, arrangement or understanding between any executive officer or director of the Company, on the one hand, and Parent, Purchaser or the Company, on the other hand, existed as of the date of the Merger Agreement, and neither the Offer nor the Merger is conditioned upon any executive officer or director of the Company entering into any such agreement, arrangement or understanding.

 

13.

Certain Effects of the Offer.

Market for the Shares. If the Offer is consummated, Purchaser will complete the Merger as soon as practicable after (but in any event on the same date as) the Offer Acceptance Time, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, there will be no market for the Shares following consummation of the Offer.

Nasdaq Listing. If the Offer is consummated, Purchaser will complete the Merger as soon as practicable after the consummation of the Offer, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, the Shares will no longer meet the requirements for continued listing on Nasdaq because there will only be a single holder of the Shares, which will be Parent. Immediately following the consummation of the Merger, Parent intends to cause the Company to delist the Shares from Nasdaq.

Exchange Act Registration. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders’ meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions. In addition, the ability of “affiliates” of the Company and persons holding “restricted securities” of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. We intend and will cause the Company to terminate the registration of the Shares under the Exchange Act as soon after consummation of the Merger as the requirements for termination of registration are met.

Margin Regulations. The Shares are currently “margin securities” under the Regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is possible that, following the Offer, the Shares would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.

 

14.

Dividends and Distributions.

As discussed in Section 11 — “The Merger Agreement; Other Agreements,” the Merger Agreement provides that from the date of the Merger Agreement until the earlier of the effective time or the termination of the Merger Agreement in accordance with its terms, except as required by the Merger Agreement, required by law or order or consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company will not declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any Shares or other equity or voting interests other than with respect to dividends and

 

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distributions by a direct or indirect wholly owned subsidiary of the Company to its direct or indirect parent.

 

15.

Conditions of the Offer.

The Offer is not subject to any financing condition. Notwithstanding any other provisions of the Offer but subject to the terms of the Merger Agreement, Purchaser is not required to accept for purchase or, subject to any applicable rules and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act), pay for any Shares validly tendered (and not validly withdrawn) in the Offer, if any of the conditions set forth below have not been satisfied or waived in writing by Parent:

 

   

the Minimum Condition has been satisfied;

 

   

the HSR Condition has been satisfied;

 

   

no governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered (and continuing in effect) any federal, state, local, foreign or multinational law, judgment, rule or regulation or order, or injunction, whether civil or administrative (whether temporary, preliminary or permanent) that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger;

 

   

(i) the representations and warranties set forth in Section 3.11(b) of the Merger Agreement shall be true and correct in all respects as of the Offer Expiration Time as if made at and as of the Offer Expiration Time; (ii) the representations and warranties set forth in Section 3.6(a), Section 3.6(b), Section 3.6(d), Section 3.6(e)(iii) and Section 3.6(g) shall be true and correct in all respects, except for any de minimis inaccuracies, as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall be true and correct in all respects, except for any de minimis inaccuracies, as of such earlier date); (iii) the representations and warranties set forth in Section 3.1(a), Section 3.2, Section 3.3, Section 3.4(a)(i), Section 3.6(c), Section 3.6(e)(i), (ii) and (iv), Section 3.7(b) (with respect to any material subsidiaries), Section 3.7(c) (with respect to any material subsidiaries) and Section 3.28 of the Merger Agreement: (A) to the extent not qualified or limited by the word “material,” “materiality” or “Company Material Adverse Effect” as set forth in the Merger Agreement, shall be true and correct in all material respects as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date); and (B) to the extent qualified or limited by the word “material,” “materiality” or “Company Material Adverse Effect” as set forth therein, shall be true and correct in all respects (giving effect to any limitation or qualification that includes the word “material,” “materiality” or “Company Material Adverse Effect” set forth therein) as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall be true and correct in all respects (giving effect to any limitation or qualification that includes the word “material,” “materiality” or “Company Material Adverse Effect” set forth therein) as of such earlier date), and (iv) other than the representations and warranties expressly referenced in the foregoing clauses (i), (ii) and (iii), the other representations and warranties set forth in Article III of the Merger Agreement shall be true and correct (without giving effect to any limitation or qualification that includes the word “material,” “materiality” or “Company Material Adverse Effect” set forth therein) as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly relate to an earlier date, in which case such representation and warranty shall be true and correct (without giving effect to any limitation or qualification that includes the word “material,” “materiality” or “Company Material Adverse Effect” set forth therein) as of such earlier date), except in the case of this clause (iv) to the extent that the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect (the “Company Representations Condition”);

 

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the Company shall have performed and complied in all material respects with the covenants, obligations and agreements in the Merger Agreement required to be performed and complied with by it at or prior to the Offer Expiration Time (the “Obligations Condition”);

 

   

since January 8, 2023, there has not been any fact, change, event, development, occurrence or effect that has had, or would reasonably be expected to have, a Company Material Adverse Effect that is continuing (the “Material Adverse Effect Condition”);

 

   

Parent and Purchaser shall have received a certificate of the Company, validly executed for and on behalf of the Company signed by an authorized executive officer of the Company, dated as of the date on which the Acceptance Time occurs, certifying that the conditions set forth in Company Representation Condition, the Obligation Condition and Material Adverse Effect Condition have been satisfied;

 

   

the Termination Condition has been satisfied; and

 

   

the Inside Date Condition has been satisfied.

The conditions to the Offer must be satisfied or waived (to the extent waiver is permitted under applicable law) on or prior to the Offer Expiration Time.

The conditions described above are in addition to, and not a limitation of, the rights and obligations of Parent and Purchaser to extend, terminate or modify the Offer pursuant to the terms of the Merger Agreement.

The conditions described above are for the sole benefit of Parent and Purchaser and may be waived by Parent and Purchaser in whole or in part, at any time and from time to time in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition or the Termination Condition, except, in the case of the Minimum Condition, with the prior written consent of the Company. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances and each such right will be deemed an ongoing right that may be asserted at any time and from time to time.

 

16.

Certain Legal Matters; Regulatory Approvals.

General

Except as described in this Section 16, Purchaser is not aware of any pending legal proceeding relating to the Offer. Except as described in this Section 16, based on its examination of publicly available information filed by the Company with the SEC and other publicly available information concerning the Company, Purchaser is not aware of any governmental license or regulatory permit that appears to be material to the Company’s business that might be adversely affected by Purchaser’s acquisition of Shares as contemplated herein or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by Purchaser or Parent as contemplated herein. Should any such approval or other action be required, Purchaser currently contemplates that, except as described below under “State Takeover Statutes,” such approval or other action will be sought. While Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to the Company’s business, or certain parts of the Company’s business might not have to be disposed of, any of which could cause Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 — “Conditions of the Offer.”

 

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State Takeover Statutes

A number of states (including Delaware, where the Company is incorporated) have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, stockholders, principal executive offices or principal places of business therein.

The Company has expressly opted out of Section 203 of the DGCL. However, the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) prevents an “interested stockholder” (generally defined as a person owning 15% or more of a corporation’s voting stock and the affiliates and associates of any such person) from engaging in a “business combination” (as defined in the Charter) with a Delaware corporation for three years following the time such person became an interested stockholder unless: (i) before such person became an interested stockholder, the board of directors of the corporation approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination; (ii) upon consummation of the transaction which resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding for purposes of determining the number of shares of outstanding stock held by directors who are also officers and by employee stock plans that do not allow plan participants to determine confidentially whether to tender shares); or (iii) at or following the transaction in which such person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66 2/3% of the outstanding voting stock of the corporation not owned by the interested stockholder.

Neither we nor any of our respective affiliates is or has been during the past three years an “interested stockholder” of the Company as defined in the Charter. Accordingly, the approval by the Company Board of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is sufficient to render the restrictions on business combinations contained in the Charter inapplicable to the Offer and the Merger.

The Company has represented to us in the Merger Agreement that no other “moratorium,” “control share acquisition,” “fair price,” or other anti-takeover laws and regulations apply or will apply to the Company pursuant to the Merger Agreement or the Merger or the Offer. Purchaser has not attempted to comply with any other state takeover statutes in connection with the Offer or the Merger. Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer, the Merger, the Merger Agreement or the transactions contemplated thereby, and nothing in this Offer to Purchase or any action taken in connection herewith is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that such statute or statutes do not apply or are invalid as applied to the Offer, the Merger, or the Merger Agreement, as applicable, Purchaser may be required to file certain documents with, or receive approvals from, the relevant state authorities, and Purchaser might be unable to accept for payment or purchase Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, Purchaser may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 15—“Conditions of the Offer.”

The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Company has opted out of Section 203 of the DGCL and therefore the restrictions on business combinations contained therein are inapplicable to the Offer and the Merger and we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger and have not attempted to comply with any state anti-takeover laws or regulations other than as described above. Should any person seek to apply any state takeover law, we will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event any person asserts that the takeover laws of any state are applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, we

 

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may be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, we may be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, we may not be obligated to accept for payment any Shares tendered in the Offer. See Section 15 — “Conditions of the Offer.”

Dissenters’ Rights.

No appraisal rights are available to the holders of Shares in connection with the Offer. However, if the Merger takes place pursuant to Section 251(h) of the DGCL, stockholders whose Shares are not accepted for purchase pursuant to the Offer and who properly demand appraisal of their Shares pursuant to, and who comply in all respects with, Section 262 of the DGCL will have appraisal rights under Section 262 of the DGCL. If you choose to exercise your appraisal rights in connection with the Merger, you comply with the applicable legal requirements under the DGCL and you neither waive, withdraw nor otherwise lose your rights to appraisal under the DGCL, you will be entitled to payment in cash in an amount equal to the “fair value” of your Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) as determined by the Delaware Court of Chancery (the “Delaware Court”), together with interest, if any, to be paid upon the amount determined to be the fair value. This value may be the same as or more or less than the price that Purchaser is offering to pay you in the Offer and the Merger. Moreover, the surviving corporation may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of such Shares is less than the price paid in the Offer and the Merger.

Under Section 262 of the DGCL, where a merger is approved under Section 251(h) of the DGCL, either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, will notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and will include in such notice a copy of Section 262. The Schedule 14D-9 constitutes the formal notice of appraisal rights under Section 262 of the DGCL. Any holder of Shares who wishes to exercise such appraisal rights or who wishes to preserve his, her or its right to do so should review the discussion of appraisal rights in the Schedule 14D-9 as well as Section 262 of the DGCL, carefully because failure to timely and properly comply with the procedures of Section 262 of the DGCL may result in the loss of appraisal rights under the DGCL.

Because of the complexity of the procedures for exercising appraisal rights, any stockholder or beneficial owner wishing to exercise appraisal rights or to preserve the right to do so is urged to consult legal counsel.

As described more fully in the Schedule 14D-9, if a stockholder or beneficial owner elects to exercise appraisal rights under Section 262 of the DGCL with respect to Shares held immediately prior to the effective time, such stockholder or beneficial owner must do all of the following:

 

   

within the later of the consummation of the Offer, which will occur on the date on which Purchaser irrevocably accepts for purchase the Shares validly tendered in the Offer, and twenty days after the date of mailing of the notice of appraisal rights in the Schedule 14D-9 (which date of mailing is January 24, 2023), demand in writing the appraisal of such stockholder’s Shares, which demand must be sent to the Company at the address indicated in the Schedule 14D-9 and reasonably inform the Company of the identity of the stockholder and that the stockholder is demanding appraisal for such Shares;

 

   

not tender (or, if tendered, not fail to withdraw prior to the Offer Expiration Time) such Shares in the Offer;

 

   

continuously hold of record such Shares from the date on which the written demand for appraisal is made through the date of the Merger; and

 

   

comply with the procedures of Section 262 of the DGCL.

 

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In addition, one of the ownership thresholds must be met and a stockholder or beneficial owner or the surviving corporation must file a petition in the Delaware Court demanding a determination of the value of the stock of all persons entitled to appraisal within 120 days after the effective time. The surviving corporation is under no obligation to file any such petition and has no intention of doing so. If the Merger is consummated pursuant to Section 251(h) of the DGCL, Parent will cause the surviving corporation to deliver an additional notice of the effective date of the Merger within ten days after the closing of the Merger to all the Company’s stockholders who demanded appraisal in writing (in accordance with the first bullet above), as required by Section 262(d)(2) of the DGCL. However, only stockholders who have made a written demand in accordance with the first bullet above will receive such notice of the effective date of the Merger. If the Merger is consummated pursuant to Section 251(h) of the DGCL, a failure to make a written demand for appraisal in accordance with the time periods specified in the first bullet above (or to take any of the other steps specified in the above bullets or summarized below) may result in a loss of appraisal rights.

The foregoing summary of the rights of the Company’s stockholders to seek appraisal rights under Delaware law does not purport to be a complete statement of the procedures to be followed by stockholders desiring to exercise appraisal rights and is qualified in its entirety by reference to Section 262 of the DGCL. The preservation and proper exercise of appraisal rights requires adherence to the applicable provisions of the DGCL. Failure to timely and properly comply with the procedures of Section 262 of the DGCL may result in the loss of appraisal rights. The Schedule 14D-9 constitutes the formal notice by the Company to its stockholders of appraisal rights in connection with the Merger under Section 262.

Appraisal rights cannot be exercised at this time. The information provided above is for informational purposes only with respect to your alternatives if the Merger is completed. If you tender (and do not validly withdraw prior to the Offer Expiration Time) your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares but, instead, upon the terms and subject to the conditions to the Offer, you will receive the Offer Price for your Shares.

Antitrust Compliance

U.S. Antitrust Laws

Parent and the Company filed Premerger Notification and Report Forms with the FTC and the DOJ relating to Parent’s proposed acquisition of the Company on January 20, 2023. Consequently, the required waiting period with respect to the Offer will expire at 11:59 p.m., New York City time, on February 4, 2023, unless early termination of the waiting period is granted or the waiting period is extended.

Under the provisions of the HSR Act, applicable to the Offer, the acquisition of Shares pursuant to the Offer may be consummated following the expiration of a 15-day waiting period following the filing by Parent of its Premerger Notification and Report Form with respect to the Offer, unless Parent receives a request for additional information or documentary material from the DOJ or the FTC or unless early termination of the waiting period is granted. Parent may also withdraw its Premerger Notification and Report Form on or before the last day of the 15-day waiting period and refile the Form within two business days of withdrawal, which would initiate a new 15-day waiting period. If, within the applicable waiting period, either the DOJ or the FTC requests additional information or documentary material concerning the Offer, the waiting period will be extended through the 10th day after the date of substantial compliance by Parent with such request. Complying with a request for additional information or documentary material may take a significant amount of time.

At any time before or after Parent’s acquisition of Shares pursuant to the Offer, the DOJ Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, or seeking the divestiture of Shares acquired by Parent or the divestiture of substantial assets of the Company or its subsidiaries or Parent or

 

75


its subsidiaries. State attorneys general may also bring legal action under both state and federal antitrust laws, as applicable. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, the result thereof.

Legal Proceedings Relating to the Tender Offer. None.

 

17.

Fees and Expenses.

We have retained the Depositary, the Paying Agent and the Information Agent in connection with the Offer. Each of the Depositary, the Paying Agent and the Information Agent will receive customary compensation, reimbursement for reasonable out-of-pocket expenses and indemnification against certain liabilities in connection with the Offer, including liabilities under the United States federal securities laws.

As part of the services included in such retention, the Information Agent may contact holders of Shares by personal interview, mail, electronic mail, telephone, and other methods of electronic communication, and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer materials to beneficial holders of Shares.

Except as set forth above, we will not pay any fees or commissions to any broker or dealer or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will upon request be reimbursed by us for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers.

 

18.

Miscellaneous.

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other applicable laws of such jurisdiction. However, Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer comply with the laws of any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction in compliance with applicable laws. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

Purchaser and Parent have filed with the SEC the Schedule TO (including exhibits) in accordance with the Exchange Act, furnishing certain additional information with respect to the Offer and may file amendments thereto. If the Offer is completed, Purchaser will file a final amendment to the Schedule TO reporting promptly the results of the Offer pursuant to Rule 14d-3 under the Exchange Act. A copy of the Schedule TO and any amendments thereto (including exhibits) may be examined and copies may be obtained from the SEC in the manner set forth in Section 7 — “Certain Information Concerning the Company — Available Information.”

No person has been authorized to give any information or make any representation on behalf of Parent or Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, that information or representation must not be relied upon as having been authorized. Neither delivery of this Offer to Purchase nor any purchase pursuant to the Offer will, under any circumstances, create any implication that there has been no change in the affairs of Parent, Purchaser, the Company or any of their respective subsidiaries since the date as of which information is furnished or the date of this Offer to Purchase.

 

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SCHEDULE I

INFORMATION RELATING TO PARENT AND PURCHASER

1. Purchaser

Purchaser, a Delaware corporation, was formed on January 5, 2023, solely for the purpose of completing the proposed Offer and Merger and has conducted no business activities other than those related to the structuring and negotiation of the Offer and the Merger and arranging financing therefor. Purchaser is an indirect, wholly owned subsidiary of Parent and has not engaged in any business except as contemplated by the Merger Agreement. The principal office address of Purchaser is 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The telephone number at the principal office is (514) 313-1190.

Directors and Executive Officers of Purchaser

The name, position, business address, citizenship, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Purchaser are set forth below. The principal office address of each such director and executive officer of Purchaser is 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The telephone number at the principal office is (514) 313-1190.

 

Name, Country of Citizenship, Position

  

Present Principal Occupation or Employment; Material Positions Held During the Past
Five Years; Certain Other Information

Philip Fayer

Canada

Chief Executive Officer and President

 

   Philip Fayer is the founder of Parent and serves as its Chairman and Chief Executive Officer. Mr. Fayer founded Parent (formerly Pivotal Payments) in 2003.

David Schwartz

Canada

Chief Financial Officer

  

David Schwartz is the Chief Financial Officer of Parent. Prior to joining Parent, Mr. Schwartz served as Chief Financial Officer at ALDO Group from 2015 through November 2018.

 

Lindsay Matthews

Canada

Secretary

  

Lindsay Matthews serves as General Counsel and Corporate Secretary at Parent. Prior to joining Parent, Ms. Matthews served as Vice President, General Counsel and Corporate Secretary of Gildan Activewear Inc. from January 2010 until July 2021.

 

Vicky Bindra

United States

Vice President and Director

   Vicky Bindra is Parent’s Chief Operating Officer and joined Parent in November 2022. Prior to joining Parent, Mr. Bindra was Chief Product Officer at FIS from May 2020 until October 2022. From April 2018 until March 2020, he served as Chief Executive Officer of Pine Labs (P) Ltd., and from January 2016 until March 2018, he served as Chief Product Officer at VISA.

2. Parent

Parent, a corporation incorporated pursuant to the laws of Canada, is a global provider of payment technology solutions to merchants and partners in North America, Europe, Asia Pacific and Latin America. The business address for Parent is 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The business telephone number for Parent is (514) 313-1190.

Parent differentiates itself by its proprietary technology platform, which is built for high-growth mobile commerce and eCommerce markets. Parent’s focus on technology, innovation and security enables Parent to design and develop solutions that are tailored for these markets. Parent’s solutions include a fully integrated payments engine with global processing capabilities, a turnkey solution for frictionless checkout experiences and a broad suite of data-driven business intelligence tools and risk management services.

 

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Directors and Executive Officers of Parent

The name, position, business address, citizenship, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Parent are set forth below. The principal office address of each such director and executive officer is 1100 René-Lévesque Boulevard West, Suite 900, Montreal, Quebec H3B 4N4. The telephone number at the principal office is (514) 313-1190.

 

Name, Country of Citizenship, Position

  

Present Principal Occupation or Employment; Material Positions Held During the
Past Five Years; Certain Other Information

Philip Fayer

Canada

Chief Executive Officer and Chairman

   See above.

David Schwartz

Canada

Chief Financial Officer

   See above.

Lindsay Matthews

Canada

General Counsel and Corporate Secretary

   See above.

Vicky Bindra

United States

Chief Operating Officer

   See above.

Max Attias

Israel, France

Group Chief Technology Officer

   Max Attias serves as the Group Chief Technology Officer at Parent. Mr. Attias previously held roles including Chief Information Officer and Chief Operating Officer, Digital Payments at SafeCharge, until SafeCharge was acquired by Parent in 2019. Prior to that, Mr. Attias served as Chief Information Officer and Site Manager at TATA Consulting Services from September 2017 to September 2018.

Nikki Zinman

Canada

Chief People Officer

   Nikki Zinman serves as Chief People Officer at Parent, where she oversees human resources. Prior to joining Parent, Ms. Zinman was Senior Vice President of Human Resources at Pearson PLC from May 2011 until October 2021.

Neil Erlick

Canada

Chief Corporate Development Officer

   Neil Erlick serves as Chief Corporate Development Officer at Parent. Mr. Erlick previously held senior leadership roles at Paysafe Group.

Yuval Ziv

Israel

President

   Yuval Ziv serves as President of Parent. Mr. Ziv previously worked at SafeCharge from December 2007 until its acquisition by Parent in 2019, in roles including Chief Operating Officer, Chief Commercial Officer, Managing Director and Vice President Business Development.

Michael Hanley

Canada

Lead Director

   Michael Hanley serves as the Lead Director at Parent. Mr. Hanley is also a member of the board of directors at Lyondell Basell Industries N.V., ExCellThera Inc. and Equitable Bank. In addition, Mr. Hanley served as a member of the board of directors at BRP Inc. from September 2012 to June 2022 and at ShawCor Ltd. from May 2015 to May 2021.

 

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Name, Country of Citizenship, Position

  

Present Principal Occupation or Employment; Material Positions Held During the
Past Five Years; Certain Other Information

Tim Dent

United States, France

Director

   Tim Dent serves as a Director at Parent. Mr. Dent previously served as the Chief Financial and Chief Compliance Officer at DraftKings, Inc. from January 2013 to May 2022.

Maren Lau

United States

Director

   Maren Lau serves as a Director at Parent. Ms. Lau has also served as Regional Vice President at Meta Brazil since February 2019. From February 2017 to February 2019, Ms. Lau worked at Facebook Argentina SRL, first as Regional Agency Director and then as Regional Vice President.

David Lewin

Canada

Director

   David Lewin serves as a Director at Parent. Mr. Lewin is also a Senior Partner of the TMT Group of Novacap, where he has worked since January 2011. He also serves as a member of the board of directors for Eddyfi NDT Inc.

Daniela Mielke

United States, Germany

Director

   Daniela Mielke serves as a Director at Parent. Ms. Mielke is the Managing Partner of Commerce Technology Advisors, LLC. She previously served as the Chief Executive Officer of RS2 Inc. from 2018 to 2020.

Pascal Tremblay

Canada

Director

   Pascal Tremblay serves as a Director at Parent. Mr. Tremblay is President and Chief Executive Officer of Novacap. Mr. Tremblay also serves as a member of the board of directors for Stingray Group Inc.

Samir Zabaneh

Canada, Jordan

Director

   Samir Zabaneh serves as a Director at Parent. Mr. Zabaneh is also the Chief Executive Officer and Chairman at TouchBistro, Inc. Previously, he served as Executive Vice President at First Data Corporation from July 2018 to March 2020, and as Chief Financial Officer of Element Fleet Management from January 2017 to July 2018. Mr. Zabaneh is also a member of the board of directors at ACI Worldwide, Inc.

The Letter of Transmittal, certificates for Shares and any other required documents should be sent by each stockholder of the Company or such stockholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary as follows:

The Depositary for the Offer is:

 

LOGO

By Mail or Overnight Courier:

Continental Stock Transfer & Trust Company

Attn: Corporate Actions

1 State Street 30th Floor

New York, NY 10004

Any questions or requests for assistance may be directed to the Information Agent at its telephone number and location listed below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its telephone number and location listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.

 

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The Information Agent for the Offer is:

 

LOGO

1407 Broadway

New York, New York 10018

(212) 929-5500

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

EX-99.(a)(1)(B)

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

To Tender Shares of Common Stock

of

PAYA HOLDINGS INC.

a Delaware corporation

at

$9.75 PER SHARE

Pursuant to the Offer to Purchase

dated January 24, 2023

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT

ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME,

ON TUESDAY, FEBRUARY 21, 2023 UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

The Depositary for the Offer is:

 

 

LOGO

By Mail or Overnight Courier:

Continental Stock Transfer & Trust Company

Attn: Corporate Actions

1 State Street 30th Floor

New York, NY 10004

Telephone: 917-262-2378

Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery to the Depositary (as defined below). If you are delivering via mail, you must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and complete the Internal Revenue Service (the “IRS”) Form W-9 included in this Letter of Transmittal, if required. Stockholders who are foreign persons should submit a properly completed and executed IRS Form W-8BEN or other appropriate IRS Form W-8. Failure to provide the information on IRS Form W-9 or an appropriate IRS Form W-8, as applicable, may subject you to United States federal income tax backup withholding on any payments made to you pursuant to the Offer (as defined below). The instructions set forth in this Letter of Transmittal should be read carefully before you tender any of your Shares (as defined below) into the Offer.

DESCRIPTION OF SURRENDERED CERTIFICATES

 

Name(s) and Address(es) of Registered Owner(s)
(Please fill in, if blank, exactly as name(s) appear(s) on certificate(s))
   Certificate(s) Surrendered
(Attach additional list if necessary)
     

    
Certificate
Number(s)

 

 

 

 

Total number

of shares:

       

Total Number of Shares
Represented By
Certificate(s)

 

 

 

 

 


[        ] If any certificate(s) representing shares of stock that you own have been lost or destroyed, check this box and see Instruction 8. Please fill out the remainder of this Letter of Transmittal and indicate here the number of shares of stock represented by the lost or destroyed certificates.                  (Number of Shares)

The Offer is being made to all holders of the Shares. Purchaser is not aware of any jurisdiction in which the making of the Offer or the acceptance thereof would be prohibited by securities, “blue sky” or other valid laws of such jurisdiction. If Purchaser becomes aware of any U.S. state in which the making of the Offer or the acceptance of Shares pursuant thereto would not be in compliance with an administrative or judicial action taken pursuant to a U.S. state statute, Purchaser will make a good faith effort to comply with any such law. If, after such good faith effort, Purchaser cannot comply with any such law, the Offer will not be made to the holders of Shares in such state. In any jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

This Letter of Transmittal is to be used by stockholders of Paya Holdings Inc. (“Paya” or the “Company”) if certificates (“Certificates”) for shares of common stock, par value $0.001 per share, of the Company (the “Shares”) are to be forwarded herewith or, unless an Agent’s Message (as defined in Section 3 of the Offer to Purchase, dated January 24, 2023 (the “Offer to Purchase”)) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by Continental Stock Transfer & Trust Company at The Depositary Trust Company (“DTC”) (as described in Section 2 of the Offer to Purchase and pursuant to the procedures set forth in Section 3 thereof).

Additional Information if Certificates Have Been Lost, Destroyed or Stolen, or are Being Delivered by Book-Entry Transfer.

If Certificates you are tendering with this Letter of Transmittal have been lost, stolen, destroyed or mutilated, please so indicate on the front of the Letter of Transmittal, and additional paperwork will be sent to you to replace the lost, stolen or destroyed certificates. See Instruction 8.

 

CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED HEREWITH.

 

CHECK HERE IF YOU HAVE LOST YOUR CERTIFICATE(S) AND REQUIRE ASSISTANCE IN OBTAINING REPLACEMENT CERTIFICATE(S). BY CHECKING THIS BOX, YOU UNDERSTAND THAT YOU MUST CONTACT CONTINENTAL STOCK TRANSFER & TRUST COMPANY TO OBTAIN INSTRUCTIONS FOR REPLACING LOST CERTIFICATES. SEE INSTRUCTION 8.

 

CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (NOTE THAT ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN THE SYSTEM OF DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

 

Name of Tendering Institution:

    

 

DTC Account Number:

            Transaction Code Number:         


NOTE: SIGNATURES MUST BE PROVIDED BELOW.

PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”), and an indirect, wholly owned subsidiary of Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”), the above described shares of common stock, par value $0.001 per share (the “Shares”), of Paya Holdings Inc., a Delaware corporation (the “Company”), pursuant to Purchaser’s offer to purchase each issued and outstanding Share that is validly tendered and not properly withdrawn, at a price of $9.75 per Share, without interest, net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions (including the Minimum Condition) described in the Offer to Purchase, dated January 24, 2023 (the “Offer to Purchase”), and in this Letter of Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase, as each may be amended and supplemented from time to time, collectively constitute the “Offer”), receipt of which is hereby acknowledged.

Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and effective upon acceptance for payment of the Shares tendered herewith and not validly withdrawn on or prior to the Offer Expiration Time (as defined in the Offer to Purchase) in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Shares or other securities issued or issuable in respect thereof on or after the date hereof (collectively, “Distributions”)) and irrevocably constitutes and appoints Purchaser the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest in the Shares tendered by this Letter of Transmittal), to (i) deliver Certificates for such Shares (and any and all Distributions) or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by The Depositary Trust Company (“DTC”) or otherwise held in book-entry form, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms and subject to the conditions of the Offer.

By executing this Letter of Transmittal (or taking action resulting in the delivery of an Agent’s Message, as defined in Section 3 of the Offer to Purchase), the undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to (i) vote at any annual or special meeting of Company stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, (ii) execute any written consent concerning any matter as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to and (iii) otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by Purchaser. This appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of Company stockholders.


The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any and all of the Shares tendered hereby (and any and all Distributions) and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good and unencumbered title to such Shares (and such Distributions), free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claims. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Certificate(s) have been endorsed to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by Continental Stock Transfer & Trust Company (the “Depositary”) or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any and all Distributions). In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of any and all of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price the amount or value of such Distribution as determined by Purchaser in its sole discretion.

It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until the Certificate(s) owned by the undersigned are received by the Depositary at the address set forth above, together with such additional documents as the Depositary may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary.

IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF THE SHARES, THE CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS (INCLUDING DELIVERY THROUGH DTC) IS AT THE ELECTION AND RISK OF THE OWNER AND THAT THE RISK OF LOSS OF SUCH SHARES, CERTIFICATE(S) AND OTHER DOCUMENTS SHALL PASS ONLY AFTER THE DEPOSITARY HAS ACTUALLY RECEIVED THE SHARES OR MATERIALS (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED IN THE OFFER TO PURCHASE)). IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. DELIVERY WILL BE DEEMED EFFECTIVE AND RISK OF LOSS AND TITLE WILL PASS FROM THE OWNER ONLY WHEN RECEIVED BY THE DEPOSITARY. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer. Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms and conditions of such extension or amendment). The undersigned recognizes that under certain circumstances set forth in the Offer, Purchaser may not be required to accept for payment any Shares tendered hereby.

Unless otherwise indicated under “Special Payment Instructions,” a check will be issued for the purchase price of all Shares purchased in the name(s) of, and, if appropriate, Certificates not tendered or accepted for payment will be returned to, the registered holder(s) appearing above under “Description of Surrendered Certificates.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” the check for the purchase price of all Shares purchased will be mailed to, and, if appropriate, any Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) will be returned to, the address(es) of the registered


holder(s) appearing above under “Description of Surrendered Certificates.” In the event that the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, the check for the purchase price of all Shares purchased will be issued in the name(s) of, and, if appropriate, any Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) will be returned to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled “Special Payment Instructions,” any Shares tendered herewith that are not accepted for payment will be credited by book-entry transfer by crediting the account at DTC designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the “Special Payment Instructions,” to transfer any Shares from the name of the registered holder thereof if Purchaser does not accept for payment any of the Shares so tendered.


SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, and 5)

 

To be completed ONLY if the new shares or payment for surrendered shares is to be issued in the name of someone other than the undersigned. You must obtain a MEDALLION SIGNATURE GUARANTEE. See reverse.

 

Issue payment to:

 

Name:      
  (Please Print)
Address:    
 

(Include Zip Code)

 

(Tax Identification or Social Security No.)

 

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4 and 5)

 

To be completed ONLY if the new shares or check for surrendered shares is to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown above.

 

Deliver check to:

 

Name:      
  (Please Print)
Address:    
 
(Include Zip Code)
 

 

IMPORTANT — STOCKHOLDERS SIGN HERE

(U.S. Holders Also Please Complete Substitute Form W-9 Below)

(Non-U.S. Holders Please Obtain and Complete Form W-8BEN or Other Form W-8)

(Must be signed by former registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) as evidenced by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 4.)

 

Name:

        Signature:     

 

Name:

        Signature:     

 

Telephone Number:

        Email Address:     

Dated:                  , 20        


Mail to: Continental Stock Transfer & Trust Company,

Attn: Corporate Actions,

1 State Street 30th Floor, New York, NY 10004

Telephone: 917-262-2378

 

 

LOGO

MEDALLION SIGNATURE GUARANTEE

(See Instructions 1 and 4)

Complete ONLY if required by Instruction 1.

FOR USE BY FINANCIAL INSTITUTION ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW.

 

Firm:          
By:          
Title:          
Address:            
           


INSTRUCTIONS FOR LETTER OF TRANSMITTAL

1. Guarantee of Signature. Signatures on all Letters of Transmittal must be guaranteed by a financial institution that is a member of a Securities Transfer Association approved medallion program such as STAMP, SEMP or MSP (an “Eligible Institution”), except in cases where securities are surrendered (i) by a registered holder of the securities who has not completed either the box entitled “Special Payment/Issuance Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 4.

2. Delivery of Letter of Transmittal and Certificates. The Letter of Transmittal, properly completed and duly executed, together with the certificate(s) for the securities described should be delivered to Continental Stock Transfer & Trust Company in the envelope enclosed for your convenience.

THE METHOD OF DELIVERY OF CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE OWNER, BUT IF SENT BY MAIL, IT IS RECOMMENDED THAT THEY BE SENT BY REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. DELIVERY OF THE DOCUMENTS WILL BE EFFECTIVE, AND RISK OF LOSS AND TITLE WITH RESPECT THERETO SHALL PASS, ONLY WHEN THE MATERIALS ARE ACTUALLY RECEIVED BY THE PAYING AGENT.

3. Inadequate Space. If the space provided on the Letter of Transmittal is inadequate, the certificate numbers and the number of shares should be listed on a separate schedule to be attached thereto.

4. Signatures of Letter of Transmittal, Stock Powers and Endorsements. When the Letter of Transmittal is signed by the registered owner(s) of the certificate(s) listed and surrendered thereby, no endorsements of certificates or separate stock powers are required.

If the certificate(s) surrendered is (are) owned of record by two or more joint owners, all such owners must sign the Letter of Transmittal.

If any surrendered certificates are registered in different names, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

If the Letter of Transmittal is signed by a person other than the registered owner of the certificate(s) listed, such certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificate(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1.

If the Letter of Transmittal or any certificate or stock power is signed by trustees, executors, administrators, guardians, attorney-in-fact, officers of corporations or others, acting in a fiduciary or representative capacity, such persons should so indicate when signing and proper evidence, satisfactory to Continental Stock Transfer & Trust Company, the Company’s transfer agent, of their authority to do so must be submitted.

5. Special Payment and Delivery Instructions. Indicate the name and address to which new shares or payment for the securities is to be issued and/or sent if different from the name and address of the person(s) signing the Letter of Transmittal.

6. W-9. Please follow instructions contained within the W-9. If you are a foreign person, you must provide a properly completed and executed Internal Revenue Service Form W-8BEN, which you can obtain from Continental Stock Transfer & Trust Company.

7. Additional Copies. Additional copies of the Letter of Transmittal may be obtained from the Reorganization Department of Continental Stock Transfer & Trust Company at the address listed below.


8. Lost, Stolen or Destroyed Certificates. If any stock certificates have been lost, stolen or destroyed, please so indicate on the front of the Letter of Transmittal, and additional paperwork will be sent to you to replace the lost, stolen or destroyed certificates.

All questions as to the validity, form and eligibility of any surrender of certificates will be determined by Continental Stock Transfer & Trust Company and the Company, and such determination shall be final and binding. Continental Stock Transfer & Trust Company and the Company reserve the right to waive any irregularities or defects in the surrender of any certificates. A surrender will not be deemed to have been made until all irregularities have been cured or waived. Neither Continental Stock Transfer & Trust Company nor the Company is under any obligation to waive or to provide any notification of any irregularities or defects in the surrender of any certificates, nor shall Continental Stock Transfer & Trust Company or the Company be liable for any failure to give such notification.


   

Form  W-9

 

(Rev. October 2018)

Department of the Treasury

Internal Revenue Service

 

Request for Taxpayer

Identification Number and Certification

 

u Go to www.irs.gov/FormW9 for instructions and the latest information.

 

Give Form to the

requester. Do not

send to the IRS.

 

Print or type

See

Specific Instructions

on page 3.

 

 

 

 1  Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.

 

    
 

 

 2  Business name/disregarded entity name, if different from above

 

                        
 

 3  Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the
following seven boxes.

 

     

Exemptions (codes apply only to
certain entities, not individuals; see
instructions on page 3):

 

Exempt payee code (if any)                     

 

Exemption from FATCA reporting

code (if any)                                     

 

(Applies to accounts maintained outside the U.S.)

 

    Individual/sole proprietor or
       single-member LLC    

 

    C Corporation         S Corporation         Partnership         Trust/estate        
 

Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) u                                

 

Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check
LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is
another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that
is disregarded from the owner should check the appropriate box for the tax classification of its owner.

 

Other (see instructions) u

 

 

   
 

 

 5  Address (number, street, and apt. or suite no.) See instructions.

 

      

 

  Requester’s name and address (optional)

 

 

 6  City, state, and ZIP code

 

         
    

 

 7  List account number(s) here (optional)

 

                    

 

 

Part I

    

 

 

Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.

 

 

    

 

 

 

Social security number

 

                     
             

-  

          -                  
  or
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter.    

 

Employer identification number

     
                       
               

-  

                             
Part II      Certification

Under penalties of perjury, I certify that:

 

1.   The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

 

2.   I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

 

3.   I am a U.S. citizen or other U.S. person (defined below); and

 

4.   The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.

 

Sign
Here
      Signature of
    U.S. person  
u
     Date   u

 

General Instructions

Section references are to the Internal Revenue Code unless otherwise noted.

Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.

Purpose of Form

An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to

report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.

• Form 1099-INT (interest earned or paid)

• Form 1099-DIV (dividends, including those from stocks or mutual funds)

• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)

• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)

• Form 1099-S (proceeds from real estate transactions)

• Form 1099-K (merchant card and third party network transactions)

 

 

     
           Cat. No. 10231X  

Form W-9 (Rev. 10-2018)


Form W-9 (Rev. 10-2018)

Page 2

 

 

• Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)

• Form 1099-C (canceled debt)

• Form 1099-A (acquisition or abandonment of secured property)

Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.

If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later.

By signing the filled-out form, you:

1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),

2. Certify that you are not subject to backup withholding, or

3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and

4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information.

Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this Form W-9.

Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:

• An individual who is a U.S. citizen or U.S. resident alien;

• A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;

• An estate (other than a foreign estate); or

• A domestic trust (as defined in Regulations section 301.7701-7).

Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.

In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States.

• In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;

• In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and

• In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.

Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).

Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.

If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.

1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.

2. The treaty article addressing the income.

3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.

4. The type and amount of income that qualifies for the exemption from tax.

5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.

Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.

If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.

Backup Withholding

What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.

You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.

Payments you receive will be subject to backup withholding if:

1. You do not furnish your TIN to the requester,

2. You do not certify your TIN when required (see the instructions for Part II for details),

3. The IRS tells the requester that you furnished an incorrect TIN,

4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or

5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).

Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information.

Also see Special rules for partnerships, earlier.

What is FATCA Reporting?

The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information.

Updating Your Information

You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a

 


Form W-9 (Rev. 10-2018)

Page 3

 

 

C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.

Penalties

Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.

Specific Instructions

Line 1

You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.

If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.

a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.

Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.

b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2.

c. Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entity’s name as shown on the entity’s tax return on line 1 and any business, trade, or DBA name on line 2.

d. Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.

e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner’s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner’s name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on line 2, “Business name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.

Line 2

If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.

Line 3

Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3.

 

   

IF the entity/person on line 1 is

a(n) . . .

  THEN check the box for . . .
  • Corporation   Corporation
 

• Individual

 

• Sole proprietorship, or

 

• Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes.

  Individual/sole proprietor or single-member LLC
 

• LLC treated as a partnership for U.S. federal tax purposes,

 

• LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or

 

• LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes.

  Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation; or S= S corporation)
  • Partnership   Partnership
  • Trust/estate   Trust/estate

Line 4, Exemptions

If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.

Exempt payee code.

•  Generally, individuals (including sole proprietors) are not exempt from backup withholding.

•  Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.

•  Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.

•  Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.

The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.

1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)

2—The United States or any of its agencies or instrumentalities

3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities

4—A foreign government or any of its political subdivisions, agencies, or instrumentalities

5—A corporation

6—A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession

7—A futures commission merchant registered with the Commodity Futures Trading Commission

8—A real estate investment trust

9—An entity registered at all times during the tax year under the Investment Company Act of 1940

10—A common trust fund operated by a bank under section 584(a)

11—A financial institution

12—A middleman known in the investment community as a nominee or custodian

13—A trust exempt from tax under section 664 or described in section 4947

 

 


Form W-9 (Rev. 10-2018)

Page 4

 

 

The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.

 

IF the payment is for . . .   THEN the payment is exempt
for . . .
Interest and dividend payments   All exempt payees except for 7
Broker transactions   Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012.
Barter exchange transactions and patronage dividends   Exempt payees 1 through 4
Payments over $600 required to be reported and direct sales over $5,0001   Generally, exempt payees 1 through 52
Payments made in settlement of payment card or third party network transactions   Exempt payees 1 through 4
1 

See Form 1099-MISC, Miscellaneous Income, and its instructions.

2 

However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency.

Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.

A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)

B—The United States or any of its agencies or instrumentalities

C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities

D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)

E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)

F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state

G—A real estate investment trust

H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940

I—A common trust fund as defined in section 584(a)

J—A bank as defined in section 581

K—A broker

L—A trust exempt from tax under section 664 or described in section 4947(a)(1)

M—A tax exempt trust under a section 403(b) plan or section 457(g) plan

Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.

Line 5

Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.

Line 6

Enter your city, state, and ZIP code.

Part I. Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.

If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.

If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.

Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.

How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.

If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.

Note: Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.

Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.

Part II. Certification

To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.

For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.

Signature requirements. Complete the certification as indicated in items 1 through 5 below.

1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.

2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct

 

 


Form W-9 (Rev. 10-2018)

Page 5

 

 

TIN to the requester, you must cross out item 2 in the certification before signing the form.

3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.

4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).

5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.

What Name and Number To Give the Requester

 

   
For this type of account:   Give name and SSN of:
  1.     Individual   The individual
 
  2.     Two or more individuals (joint account) other than an account maintained by an FFI   The actual owner of the account or, if combined funds, the first individual on the account1
 
  3.    

Two or more U.S. persons

(joint account maintained by an FFI)

  Each holder of the account
 
  4.     Custodialaccount of a minor (Uniform Gift to Minors Act)   The minor2
 
  5.     a. The usual revocable savings trust (grantor is also trustee)   The grantor-trustee1
  b. So-called trust account that is not a legal or valid trust under state law   The actual owner1
 
  6.     Sole proprietorship or disregarded entity owned by an individual   The owner3
 
  7.     Grantortrust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A))   The grantor*
   
For this type of account:   Give name and EIN of:
  8.     Disregarded entity not owned by an individual   The owner
 
  9.     A valid trust, estate, or pension trust   Legal entity4
 
  10.     Corporation or LLC electing corporate status on Form 8832 or Form 2553   The corporation
 
  11.     Association, club, religious, charitable, educational, or other tax-exempt organization   The organization
 
  12.     Partnership or multi-member LLC   The partnership
 
  13.     A broker or registered nominee   The broker or nominee
  14.     Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments   The public entity
 
  15.     Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))   The trust

1 List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.

2 Circle the minor’s name and furnish the minor’s SSN.

3 You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity” name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.

4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier.

*Note: The grantor also must provide a Form W-9 to trustee of trust.

Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.

Secure Your Tax Records From Identity Theft

Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.

To reduce your risk:

• Protect your SSN,

• Ensure your employer is protecting your SSN, and

• Be careful when choosing a tax preparer.

If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.

If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.

For more information, see Pub. 5027, Identity Theft Information for Taxpayers.

Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027.

Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.

 

 


Form W-9 (Rev. 10-2018)

Page 6

 

 

Privacy Act Notice

Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and

criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.

 

 


The Depositary for the Offer is:

 

 

LOGO

By Mail or Overnight Courier:

Continental Stock Transfer & Trust Company

Attn: Corporate Actions

1 State Street 30th Floor

New York, NY 10004

Telephone: 917-262-2378

The Information Agent may be contacted at its address and telephone number listed below for questions and/or requests for additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be furnished promptly at Purchaser’s expense.

The Information Agent for the Offer is:

 

 

LOGO

1407 Broadway

New York, New York 10018

(212) 929-5500

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

EX-99.(a)(1)(C)

Exhibit (a)(1)(C)

Offer To Purchase for Cash

Any and All Issued and Outstanding Shares of Common Stock

of

PAYA HOLDINGS INC.

a Delaware corporation

at

$9.75 Per Share

Pursuant to the Offer to Purchase dated January 24, 2023

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT

ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME,

ON TUESDAY, FEBRUARY 21, 2023, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

January 24, 2023

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been engaged by Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”), to act as Information Agent in connection with Purchaser’s offer to purchase any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated January 24, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

The Offer is not subject to any financing condition. The conditions to the Offer are described in Section 15 of the Offer to Purchase.

For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

1. The Offer to Purchase;

2. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients, together with the included Internal Revenue Service Form W-9;

3. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer; and

4. The Company’s Solicitation/Recommendation Statement on Schedule 14D-9, dated January 24, 2023.


We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023, unless the Offer is extended or earlier terminated (such date and time, as it may be extended, the “Offer Expiration Time”).

The Offer is being made in connection with the Agreement and Plan of Merger, dated as of January 8, 2023 (together with any amendments or supplements thereto, the “Merger Agreement”), by and among the Company, Parent and Purchaser, pursuant to which, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”), without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent. As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clause (i) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

For Shares to be properly tendered pursuant to the Offer, the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or, in the case of book-entry transfer, either such Letter of Transmittal or an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of such Letter of Transmittal, and any other documents required in the Letter of Transmittal, must be timely received by Continental Stock Transfer & Trust Company (the “Depositary”), all in accordance with the Offer to Purchase and the Letter of Transmittal.

Except as set forth in the Offer to Purchase, Purchaser will not pay any fees or commissions to any broker or dealer or other person, other than to us, as the information agent, and Continental Stock Transfer & Trust Company, as the depositary, for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 5 of the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the undersigned at the address and telephone numbers set forth below.

Very truly yours,

MacKenzie Partners, Inc.


Nothing contained herein or in the enclosed documents shall render you the agent of Parent, Purchaser, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.

 

The Information Agent for the Offer is:

 

LOGO

1407 Broadway

New York, New York 10018

(212) 929-5500

or

Call Toll-Free (800) 322-2885

Email: tenderoffer@mackenziepartners.com

EX-99.(a)(1)(D)

Exhibit (a)(1)(D)

Offer To Purchase for Cash

Any and All Issued and Outstanding Shares of Common Stock

of

PAYA HOLDINGS INC.

a Delaware corporation

at

$9.75 Per Share

Pursuant to the Offer to Purchase dated January 24, 2023

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT

ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME,

ON TUESDAY, FEBRUARY 21, 2023, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.

January 24, 2023

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated January 24, 2023 (the “Offer to Purchase”), and the related Letter of Transmittal (the “Letter of Transmittal” and which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, constitute, the “Offer”) in connection with the offer by Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”), to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition, as defined in the Offer to Purchase, any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest (the “Offer Price”), to the holder in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT YOU ACCEPT THE OFFER AND TENDER YOUR SHARES IN THE OFFER.

We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish for us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.

Please note carefully the following:

1. The offer price for the Offer is $9.75 per Share, without interest, net to you in cash, less any applicable withholding taxes.

2. The Offer is being made for any and all issued and outstanding Shares.

3. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of January 8, 2023 (together with any amendments or supplements thereto, the “Merger Agreement”), by and among the


Company, Parent and Purchaser, pursuant to which, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”), without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent. As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clause (i) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

4. The Offer and withdrawal rights will expire at one minute following 11:59 p.m., New York City time, on Tuesday, February 21, 2023 (the “Offer Expiration Time,” unless Purchaser shall have extended the period during which the Offer is open in accordance with the Merger Agreement, in which event “Offer Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire).

5. The Offer is not subject to any financing condition. The Offer is subject to the conditions described in Section 15 of the Offer to Purchase. If at the otherwise scheduled Offer Expiration Time, all of the Offer conditions (other than the Minimum Condition, Termination Condition and any other Offer Conditions, each as defined in the Offer to Purchase) that by their terms are to be satisfied at the expiration of the Offer) shall not have been satisfied or waived (to the extent waiver is permitted under applicable law and under the Merger Agreement), Parent will cause Purchaser to and Purchaser will extend the Offer on one or more occasions in consecutive increments of up to ten business days each (as determined by Purchaser in its discretion, or for such longer period as may be agreed by the Company, Purchaser and Parent) in order to permit satisfaction of such Offer Conditions.

6. The Board of Directors of the Company has unanimously recommended that you accept the Offer and tender your shares in the Offer.

7. Tendering stockholders who are record owners of their Shares and who tender directly to Continental Stock Transfer & Trust Company, the depositary for the Offer, will not be obligated to pay brokerage fees, commissions or similar expenses or, except as otherwise provided in Instruction 5 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer.

If you wish to have us tender any or all of your Shares, then please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, then all such Shares will be tendered unless otherwise specified on the Instruction Form.

Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf before the Offer Expiration Time.

The Offer is being made to all holders of Shares. Purchaser is not aware of any jurisdiction in which the making of the Offer or the acceptance thereof would be prohibited by securities, “blue sky” or other valid laws of such


jurisdiction. If Purchaser becomes aware of any U.S. state in which the making of the Offer or the acceptance of Shares pursuant thereto would not be in compliance with an administrative or judicial action taken pursuant to a U.S. state statute, Purchaser will make a good faith effort to comply with any such law. If, after such good faith effort, Purchaser cannot comply with any such law, the Offer will not be made to the holders of Shares in such state. In any jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.


INSTRUCTION FORM

With Respect to the Offer to Purchase for Cash

Any and All Issued and Outstanding Shares of Common Stock

of

PAYA HOLDINGS INC.

a Delaware corporation

at

$9.75 Per Share

Pursuant to the Offer to Purchase dated January 24, 2023

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated January 24, 2023 (“Offer to Purchase”), and the related Letter of Transmittal (“Letter of Transmittal” and which, together with the Offer to Purchase, each as may be amended or supplemented from time to time, constitute, the “Offer”), in connection with the offer by Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”), to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition and the Termination Condition, each as defined in the Offer to Purchase, any and all of the issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest, net to the holder in cash, less any applicable withholding taxes, upon the terms and subject to the conditions of the Offer.

The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The undersigned understands and acknowledges that all questions as to validity, form and eligibility of the surrender of any certificate representing Shares submitted on my behalf will be determined by Purchaser and such determination shall be final and binding.

ACCOUNT NUMBER:

NUMBER OF SHARES BEING TENDERED HEREBY:            SHARES*

The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery by the Offer Expiration Time (as defined in the Offer to Purchase).

 

Dated:      

 

   

 

    Signatures(s)
     

 

      Please Print Name(s)

 

Address(es):

 

 

  (Include Zip Code)

 

Area Code and Telephone No.

 

 

Tax Identification or Social Security No.

 

 

 

*

Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

EX-99.(a)(1)(E)

Exhibit (a)(1)(E)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely pursuant to the Offer to Purchase, dated January 24, 2023, and the related Letter of Transmittal, and any amendments or supplements to such Offer to Purchase or Letter of Transmittal. Purchaser (as defined below) is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, Purchaser will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Purchaser cannot do so, Purchaser will not make the Offer to the holders of Shares in that state. Except as set forth above, the Offer is being made to all holders of Shares. In any jurisdiction where the securities, “blue sky” or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

Notice of Offer to Purchase

Any and All Outstanding Shares of Common Stock

of

PAYA HOLDINGS INC.

at

$9.75 Per Share

Pursuant to the Offer to Purchase dated January 24, 2023

by

PINNACLE MERGER SUB, INC.

an indirect, wholly owned subsidiary of

NUVEI CORPORATION

Pinnacle Merger Sub, Inc., a Delaware corporation (“Purchaser”), is offering to purchase any and all issued and outstanding shares of common stock, par value $0.001 per share, of Paya Holdings Inc., a Delaware corporation (“Paya” or the “Company” and such shares, the “Shares”), at a price of $9.75 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions described in the Offer to Purchase, dated January 24, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), and in the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). Purchaser is an indirect, wholly owned subsidiary of Nuvei Corporation, a corporation incorporated pursuant to the laws of Canada (“Parent”).

The Offer is being made in connection with the Agreement and Plan of Merger, dated as of January 8, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent. As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) (A) held by the Company as treasury stock or otherwise or (B) owned by Purchaser, in each case, as of immediately prior to the effective time, (ii) owned by Parent or any direct or indirect wholly owned subsidiary of Parent (other than Purchaser) or of the Company (in each case, other than any such shares held in a fiduciary, representative or other capacity on behalf of third parties) or (iii) held by a holder who is entitled to demand appraisal and who has properly and validly exercised appraisal rights with respect thereto in accordance with, and who has complied with, Section 262 of the DGCL) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in


clause (i) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Shares described in clause (ii) above will be converted into such number of shares of common stock of the surviving corporation such that the ownership percentage of any such person in the surviving corporation will equal the ownership percentage that such person’s shares represent in the Company immediately prior to the effective time. Shares described in clause (iii) above will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

Tendering stockholders who have Shares registered in their names and who tender directly to Continental Stock Transfer & Trust Company (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult with such institution as to whether it charges any service fees or commissions.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT THAT TIME THAT IS ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 21, 2023, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “OFFER EXPIRATION TIME”).

The Offer is not subject to a financing condition. The Offer is conditioned upon, among other things, (a) the Merger Agreement not having been validly terminated in accordance with its terms (the “Termination Condition”) and (b) the satisfaction of:

(i) the Minimum Condition (as defined below);

(ii) the Inside Date Condition (as defined below);

(iii) the HSR Condition (as defined below); and

(iv) no governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered (and continuing in effect) any federal, state, local, foreign or multinational law, judgment, rule or regulation or order, or injunction, whether civil or administrative (whether temporary, preliminary or permanent) that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger.

The “Minimum Condition” requires that the number of Shares validly tendered (and not properly withdrawn) prior to the Offer Expiration Time (as defined above), together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the consummation of the Offer at the Offer Expiration Time. The “Inside Date Condition” requires that, unless such condition is waived by Parent and Purchaser, the Acceptance Time (as defined in the Offer to Purchase) shall not occur prior to February 22, 2023. If at the otherwise scheduled Offer Expiration Time, all of the Offer conditions (other than the Minimum Condition, Termination Condition and any other Offer conditions that by their terms are to be satisfied at the expiration of the Offer) have not been satisfied or waived (to the extent waiver is permitted under applicable law), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree). The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated. The Offer is also subject to other conditions described in the Offer to Purchase.

The Board of Directors of the Company has unanimously (i) determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, are fair to, and in the best interest of the Company and the Company’s stockholders, (ii) determined that it is in the best interests of the Company and the Company’s stockholders, and declared it advisable, to enter into the Merger Agreement and consummate the Offer, the Merger and the other transactions contemplated by the Merger


Agreement upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the Merger Agreement by the Company (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and other obligations thereunder, and the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement upon the terms and conditions set forth therein, in accordance with the requirements of the DGCL, (iv) approved the execution and delivery of the Tender and Support Agreement by the parties thereto (and the consummation of the transactions contemplated thereby), (v) resolved that the Merger Agreement and the Merger shall be governed by and effected under Section 251(h) of the DGCL, and (vi) resolved to recommend that the Company’s stockholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to the Purchaser in the Offer.

The Company will file a Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) with the United States Securities and Exchange Commission (the “SEC”) and disseminate the Schedule 14D-9 to the Company’s stockholders with the Offer to Purchase. The Schedule 14D-9 will include a description of the Company Board of Directors’ reasons for approving the Merger Agreement and the transactions contemplated thereby and therefore stockholders are encouraged to review the Schedule 14D-9 carefully and in its entirety.

The Merger Agreement contains provisions to govern the circumstances in which Purchaser may extend the Offer beyond its initial Offer Expiration Time, but in no event will Purchaser be required or permitted to extend the Offer beyond September 8, 2023. Purchaser has agreed in the Merger Agreement that Purchaser will extend the Offer (i) for any minimum period required by any applicable law or any rule, regulation, interpretation or position of the SEC or its staff or of Nasdaq or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions (other than the Minimum Condition, the Termination Condition and any such conditions that by their terms are to be satisfied at the expiration of the Offer) has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree); and (iii) if, at the then-scheduled Offer Expiration Time, each condition to the Offer (other than the Minimum Condition and any such conditions that by their nature are to be satisfied at the expiration of the Offer) has been satisfied or waived by Parent or Purchaser (to the extent permitted pursuant to the Merger Agreement) and the Minimum Condition has not been satisfied, Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions, in consecutive periods of ten business days each (as determined by Purchaser in its discretion, or for such longer duration as the Company, Purchaser and Parent may agree); except that Purchaser will not be required to extend the Offer for successive extension periods in excess of twenty business days in the aggregate (so long as Parent and Purchaser are not in material breach of their covenants and obligations set forth in the Merger Agreement) and without the Company’s prior written consent, the Purchaser will not extend the Offer for successive extension periods in excess of thirty business days in the aggregate.

The purpose of the Offer and the Merger is for Purchaser and Parent to acquire the entire equity interest in the Company. Pursuant to the Merger Agreement, as soon as practicable following the consummation of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation in the Merger and thereby becoming a wholly owned subsidiary of Parent. No appraisal rights are available to holders of Shares in connection with the Offer. However, if Purchaser accepts Shares in the Offer and the Merger is completed, stockholders may be entitled to appraisal rights in connection with the Merger if they do not tender Shares in the Offer and comply with the applicable procedures described under Section 262 of the DGCL. Such stockholders will not be entitled to receive the Offer Price, but instead will be entitled only to those rights provided under Section 262 of the DGCL. Stockholders must properly perfect their right to seek appraisal under the DGCL in connection with the Merger in order to exercise appraisal rights as further detailed in the Offer to Purchase.


Pursuant to the Merger Agreement, Parent and Purchaser expressly reserve the right, at any time to waive, in whole or in part, any Offer condition (other than the Minimum Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares sought to be purchased in the Offer, (ii) reduce the Offer Price, (iii) amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer condition, (v) amend, modify or supplement any other term of the Offer in any manner that is or would reasonably be expected to be adverse to the holders of Shares, (vi) amend, modify or supplement any term of the Offer in any individual case that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent or Purchaser or the Company to consummate the Offer or the Merger, (vii) terminate the Offer (unless the Merger Agreement is terminated in accordance with the terms thereof), accelerate, extend or otherwise change the Offer Expiration Time (in each case, except as expressly required or permitted by the Merger Agreement), (viii) change the form of consideration payable in the Offer or (ix) provide for any “subsequent offering period” (or any extension of any thereof) within the meaning of Rule 14d-11 promulgated under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). The Offer may not be terminated or withdrawn prior to its scheduled Offer Expiration Time (as extended and re-extended in accordance with the Merger Agreement), unless the Merger Agreement is terminated in accordance with the terms thereof.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, in accordance with the public announcement requirements of Rules 14d-3(b)(1), 14d-4(d), 14d-6(c) and l4e-1(d) under the Exchange Act.

For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not validly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

Notwithstanding any provision of the Merger Agreement to the contrary, Purchaser will pay for Shares tendered (and not properly withdrawn) pursuant to the Offer only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation of the book-entry transfer of such Shares (“Book-Entry Confirmations”) into the Depository’s account at the Depository Trust Company (“DTC”) pursuant to the procedures set forth in the Offer to Purchase, (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary documents required by the Depositary. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Offer Expiration Time. Thereafter, tenders of Shares are irrevocable, except that, pursuant to Section 14(d)(5) of the Exchange Act, they may also be withdrawn after Saturday, March 25, 2023, which is the 60th day after the date of the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn.

For a withdrawal of Shares to be effective, a written (or, with respect to Eligible Institutions (as defined in the Offer to Purchase), a facsimile transmission) notice of withdrawal must be timely received by the Depositary at the address set forth on the back cover page of the Offer to Purchase. Any such notice of withdrawal must


specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares.

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by Purchaser in its sole and absolute discretion, which determination will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction. Purchaser reserves the absolute right to reject any and all tenders determined by Purchaser not to be in proper form or the acceptance for payment of or payment for which may, in Purchaser’s opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent (listed below), or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction.

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

The Company has provided Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating to the holders of Shares information regarding the Offer. The Offer to Purchase and related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

In general, the receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. You are urged to consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or non-U.S. laws). For a more complete description of the U.S. federal income tax consequences of the Offer and the Merger, see the Offer to Purchase.

The Offer to Purchase, the related Letter of Transmittal and the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 (which contains the recommendation of the Company Board of Directors and the reasons therefor) contain important information and should be read carefully and in their entirety before any decision is made with respect to the Offer.


Questions and requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchaser’s expense. Except as set forth in the Offer to Purchase, neither Purchaser nor Parent will pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

 

LOGO

1407 Broadway

New York, New York 10018

(212) 929-5500

or

Call Toll-Free: (800) 322-2885

Email: tenderoffer@mackenziepartners.com

January 24, 2023

EX-99.(b)(1)

Exhibit (b)(1)

EXECUTION VERSION

[REDACTED] indicates that certain information in this Exhibit has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Bank of Montreal    Royal Bank of Canada
BMO Capital Markets Corp.    RBC Capital Markets
[REDACTED]    [REDACTED]

January 8, 2023

CONFIDENTIAL

Nuvei Corporation

[REDACTED]

Attention: David Schwartz, Chief Financial Officer

Project Pinnacle Commitment Letter

Ladies and Gentlemen:

You have advised us that Nuvei Corporation, a corporation organized under the federal laws of Canada (“Holdings” and, together with the Borrowers (as defined in Annex A), “you”) intends to acquire (the Acquisition”) through one of the Borrowers or its direct or indirect subsidiaries, all of the capital stock or all or substantially all of the assets of the company identified by you to us as “Pinnacle” (the Target and, together with its subsidiaries, the “Acquired Business”) pursuant to the Acquisition Agreement (as defined in Annex B), and to refinance in full (the “Refinancing”) the Acquired Business’s Credit Agreement dated as of June 25, 2021, as amended through the Closing Date, and to pay related transaction fees and expenses. The principal obligors under the Revolving Credit Facility (as defined below), after giving effect to all transactions entered into in connection with the Acquisition, will be the Borrowers.

You have informed us that the Acquisition, the Refinancing and the related transaction fees and expenses will be financed from the following sources:

 

  (a)

Up to $285.0 million of borrowings of revolving loans under the Existing Credit Agreement (as defined below) (the “Existing Revolver Borrowings”).

 

  (b)

$600.0 million under a senior secured pari passu first lien reducing revolving credit facility (the “Revolving Credit Facility”); and

 

  (c)

cash on hand of Holdings and its subsidiaries and of the Target, collectively, in an aggregate amount of not less than the remaining cash consideration balance required to be paid under the Acquisition Agreement (the “Available Cash”).


Project Pinnacle

January 8, 2023

Page 2

 

The Acquisition, the entering into and funding of the Revolving Credit Facility, the funding of the Existing Revolver Borrowings, the application of the Available Cash, the payment of all related fees and expenses and all related transactions are hereinafter collectively referred to as the “Transactions.”

This letter and the Annexes A and B attached hereto (such Annexes are collectively referred to herein as the “Term Sheet”) are collectively referred to as the “Commitment Letter” and, together with the Fee Letter delivered in connection herewith (the “Fee Letter”), the “Commitment Documents.” “Closing Date” shall mean the date on which the final Credit Documentation (as defined in Annex B) is executed by all parties and all conditions to the initial borrowing thereunder have been met. Capitalized terms used but not defined in the Commitment Documents shall have the meanings assigned to them in the Term Sheets.

1. Commitments: Titles and Roles.

We are pleased to advise you that Bank of Montreal (“Bank of Montreal”) agrees to act, and you hereby appoint Bank of Montreal to act as administrative agent and collateral agent (in such capacities, the “Administrative Agent”) for the Lenders (as defined below).

In connection with the foregoing, (i) Bank of Montreal hereby commits to provide on a several, but not joint, basis 50% of the aggregate principal amount of the Revolving Credit Facility and (ii) Royal Bank of Canada (“RBC” and, together with Bank of Montreal, the “Initial Lenders”) hereby commits to provide on a several, but not joint, basis 50% of the aggregate principal amount of the Revolving Credit Facility, in each case upon the terms set forth in this Commitment Letter and subject solely to the conditions set forth in Annex B attached hereto.

BMO Capital Markets Corp. (“BMO Capital Markets” and together with Bank of Montreal, “BMO”), will act, and you hereby appoint BMO Capital Markets to act, as Joint Lead Arranger and Joint Book Runner for the Revolving Credit Facility, along with RBC Capital Markets1 (“RBCCM” and, together with BMOCM, the “Lead Arrangers”; the Lead Arrangers together with the Initial Lenders, the “Commitment Parties”,we” or “us”). In addition, BMO Capital Markets shall have “left side” designation and shall appear on the top left of any Information (as defined below) for the Revolving Credit Facility and all other offering or marketing materials in respect of the Revolving Credit Facility. Except as set forth below, you agree that no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Commitment Documents (as defined below)) will be paid in connection with the Revolving Credit Facility unless you and the Lead Arrangers shall so agree. The Lead Arrangers intend, and reserve the right, to syndicate all or a portion of the Revolving Credit Facility to additional Lenders as more fully described below.

Notwithstanding the foregoing, you may, on or prior to the date which is 20 business days after the date of this Commitment Letter, appoint up to six additional agents, co-agents, lead arrangers, bookrunners, managers or arrangers (any such agent, co-agent, lead arranger, bookrunner, manager or arranger, an “Additional Agent”) or confer other titles in respect of the Revolving Credit Facility in a manner and with economics determined by you in consultation with the Lead Arrangers and reasonably acceptable to you and each Lead Arranger (it being understood that, (x) each such Additional Agent (or its affiliate) shall assume a proportion of the commitments with respect to the Revolving Credit Facility that is equal to the proportion

 

1 

RBC Capital Markets is the brand name for the capital markets activities of Royal Bank of Canada.

 

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of the economics allocated to such Additional Agent (or its affiliates) and (y) to the extent you appoint Additional Agents or confer other titles in respect of the Revolving Credit Facility, the economics allocated to, and the commitment amounts of, the relevant initial lenders in respect of the Revolving Credit Facility will be determined in the manner set forth in the Fee Letter based on the commitment amount of, such Additional Agent (or its affiliate), in each case upon the execution and delivery by such Additional Agent of customary joinder documentation acceptable to you and each Lead Arranger and, thereafter, each such Additional Agent shall constitute a “Commitment Party,” and/or “Lead Arranger”, as applicable, under the Commitment Documents); provided that, after giving effect to any and all such appointments, each Lead Arranger shall retain not less than 33.33% of the aggregate economics in respect of the Revolving Credit Facility under the Fee Letter and no Additional Agent shall receive a percentage of the economics under the Fee Letter greater than that received by such Lead Arranger.

2. Conditions Precedent.

The Commitment Parties’ commitments and agreements and the initial funding of the Revolving Credit Facility on the Closing Date are subject only to the conditions set forth in Annex B. Those matters not covered by the provisions of the Commitment Documents shall be subject to the mutual agreement of the parties.

Notwithstanding anything in this Commitment Letter to the contrary, (a) the only representations the making and accuracy of which will be a condition to the availability of the Revolving Credit Facility on the Closing Date will be (i) the representations made by or on behalf of the Acquired Business in the Acquisition Agreement (but only to the extent that Holdings or its affiliates have the right to terminate their obligations under the Acquisition Agreement or to decline to consummate the Acquisition as a result of a failure of such representations in the Acquisition Agreement to be true and correct) (the “Specified Acquisition Representations”) and (ii) the Specified Representations (as defined below), and (b) the terms of the Credit Documentation (as defined in Annex B) will be such that they do not impair the availability of the Revolving Credit Facility on the Closing Date if the conditions set forth herein and in Annex B hereto are satisfied (it being understood that (I) to the extent any security interest in the intended collateral (other than any collateral the security interest in which may be perfected by (A) the filing of a UCC financing statement or equivalent filings in other jurisdictions, the filing of intellectual property security agreements with the United States Patent and Trademark Office and the United States Copyright Office or (B) the delivery of stock certificates or equivalent instruments, if any, representing equity interests of each of the Acquired Business entities that will be required to become Guarantors under the Term Sheet, together with stock powers or equivalent instruments of transfer executed in blank, to the extent (x) possession of such certificates, powers and instruments perfects a security interest therein and (y) solely to the extent such stock certificates have been received from the Target after your use of commercially reasonable efforts to do so) is not perfected on the Closing Date after your use of commercially reasonable efforts to do so, the perfection of such security interest(s) will not constitute a condition precedent to the availability of the Revolving Credit Facility on the Closing Date but such security interest(s) will be required to be perfected within 90 days (provided that the stock certificates and related powers and equivalent instruments of such Guarantors shall be delivered within ten (10) business days after the Closing Date), or such longer period as the Lead Arrangers may reasonably agree in their discretion, after the Closing Date pursuant to arrangements to be mutually agreed by the Lead Arrangers and the Borrowers and (II) nothing in the preceding clause (a) will be construed to limit the applicability of the individual conditions set forth herein or in Annex B). As used herein, “Specified Representations” means representations and warranties relating to due organization, corporate power and authority as they relate to execution, delivery and performance of

 

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the Credit Documentation, the due authorization, execution, delivery and enforceability of the Credit Documentation, the Credit Documentation not conflicting with charter documents, solvency of Holdings and its subsidiaries on a consolidated basis as of the Closing Date after giving effect to the Transactions (in form and scope consistent with the solvency certificate to be delivered pursuant to paragraph 8 of Annex B), use of proceeds not violating FCPA, OFAC and applicable sanctions, anti-terrorism, anti-corruption and anti-money laundering laws, Federal Reserve margin regulations; the Investment Company Act, and subject to the limitations on perfection of security interests set forth in the preceding sentence, creation, validity, priority and perfection of security interests granted in the proposed collateral. This paragraph is referred to as the “Certain Funds Provision”.

As consideration for the commitments of the Initial Lenders hereunder and the agreement of each Commitment Party to perform the services described herein, you agree to pay or to cause to be paid the fees described in the Commitment Documents.

3. Syndication.

As noted above, we intend to syndicate all or a portion of the Commitment Parties’ commitments hereunder in respect of the Revolving Credit Facility, prior to or after the execution of definitive documentation in respect of such facility, to affiliates of the Commitment Parties and/or a group of banks, financial institutions and other entities identified by the Lead Arrangers in consultation with you (together with the Initial Lenders, the “Lenders”), with respect to both the identity of such Lender and the amount of such Lender’s commitments. You understand and agree that we intend to commence syndication efforts promptly after your execution and delivery of this letter. Notwithstanding the Lead Arrangers’ right to syndicate the Revolving Credit Facility and receive commitments with respect thereto, it is agreed that (a) any syndication of, or receipt of commitments in respect of, all or any portion of a Commitment Party’s commitments hereunder prior to the initial funding under the Revolving Credit Facility shall not be a condition to such Commitment Party’s commitments nor reduce such Commitment Party’s commitments hereunder with respect to the Revolving Credit Facility (provided, however, that, notwithstanding the foregoing, assignments of a Commitment Party’s commitments, which are effective simultaneously with the funding of such commitments by the assignee, shall be permitted), (b) notwithstanding any assignment or other transfer by a Commitment Party, prior to the Closing Date, no Commitment Party shall be relieved, released or novated from its obligations hereunder (including its obligation to fund its applicable percentage of the Revolving Credit Facility) in connection with any syndication, assignment or other transfer except in accordance with this Commitment Letter and (c) unless you otherwise agree in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments, including all rights with respect to consents, modifications and amendments, until the Closing Date. You agree that we will, in consultation with you, manage all aspects of the arrangement and syndication of the Revolving Credit Facility, including decisions as to the selection of institutions to be approached, when they will be approached, when their commitments will be accepted, the allocation of the aggregate commitment among the Lenders, the awarding of titles and the distribution of compensation among the Lenders; provided that we shall not syndicate the Revolving Credit Facility to any person or institution identified by you to us in writing prior to the date hereof. In addition, you agree that each Initial Lender may at any time assign all or any portion of its commitments to one or more of its affiliates, including for purposes hereof funds administered or managed by such Initial Lender or its affiliates (and such Initial Lender shall be released from its obligations under its commitments to the extent of any such assignment).

 

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You agree to actively assist us, and agree to use commercially reasonable efforts to obtain contractual undertakings from the Target to actively assist us, in forming the syndicate of Lenders that is reasonably satisfactory to us and you until the date that is the earlier of (i) a Successful Syndication (as defined in the Fee Letter) and (ii) 30 days after the Closing Date (such period, the “Syndication Period”). During the Syndication Period, such assistance shall include, without limitation: (i) assistance in the preparation of a confidential information memorandum and other marketing materials to be used in the syndication of the Revolving Credit Facility, including the delivery of customary and other reasonably available financial and other information requested by us for inclusion in such memorandum and materials (collectively, the “Marketing Materials”), (ii) providing us with all financial and other information (including financial estimates, financial models, forecasts and other forward-looking information, the “Projections”), prepared by you or your advisors relating to you, the Target, your and their respective subsidiaries and the transactions described herein, all as reasonably requested by us, including a business plan for fiscal years 2023 through 2027, and updated as may be reasonably requested by us through the closing of the Revolving Credit Facility, it being understood by you that we shall be relying on such information and Projections in syndicating and arranging the Revolving Credit Facility, (iii) the presentation of one or more information packages acceptable in format and content to each Lead Arranger (collectively, the “Lender Presentation”) in meetings and other communications with prospective Lenders or agents in connection with the syndication of the Revolving Credit Facility, as applicable, (including, without limitation, direct contact between and meetings with senior management and representatives, with appropriate seniority and expertise, of Holdings and the use of commercially reasonable efforts to ensure direct contact between and meetings with senior management and representatives, with appropriate seniority and expertise, of the Acquired Business), (iv) using commercially reasonable efforts to ensure that the syndication benefits from the existing lending relationships of Holdings and, to the extent practical and appropriate, the Borrowers and the Acquired Business, (v) hosting, with us, one or more meetings with prospective Lenders under each of the Revolving Credit Facility at reasonable times, dates and locations to be mutually agreed upon (and using your commercially reasonable efforts to cause the senior management of the Acquired Business to be available for such meetings), (vi) providing us with copies of all due diligence reports or summaries available to you and prepared in connection with the Acquisition by legal, insurance, tax, accounting or other advisors, each subject to the delivery by us to you of customary non-disclosure agreements as shall be reasonably requested, (vii) prior to the Closing Date, delivering to us for posting to the proposed syndicate of Lenders a copy of the credit agreement in respect of the Revolving Credit Facility in the form agreed by us and the Borrowers and (viii) promptly providing us with any other information reasonably requested by us to successfully complete the syndication. In addition, you will use commercially reasonable efforts to obtain prior to the launch of the primary syndication, at your expense, (i) a public corporate credit rating from S&P Global Ratings, a division of S&P Global Inc. (“S&P”), (ii) a public corporate family rating from Moody’s Investors Service (“Moody’s”) and (ii) a public credit rating from each of S&P and Moody’s for the Revolving Credit Facility. You will be solely responsible for the contents of the Marketing Materials and all other written information, documentation or materials delivered to any Commitment Party in connection therewith (collectively, the “Information”) and acknowledges that each Commitment Party will be using and relying upon the Information without independent verification thereof. For the avoidance of doubt, (1) you will not be required to provide any information (x) to the extent that the provision thereof would violate any attorney-client privilege, fiduciary duty, law, rule or regulation, or any obligation of confidentiality owed to a third party (not created in contemplation hereof) binding on Holdings, the Borrowers or the Acquired Business or respective affiliates (provided that in the case of any confidentiality obligation, you shall notify us if any such information that we have specifically identified and requested is being withheld as a result of any such obligation of confidentiality), or (y) that consists of non-financial trade secrets or non-financial proprietary information of you or the Acquired Business or that the

 

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Acquired Business is not required to provide pursuant to you, and (2) your commercially reasonable efforts to cause the Target or its management to do or assist with any of the provisions of this paragraph shall not include actions or assistance to the extent the same would be in contravention of the Acquisition Agreement. You agree that Information regarding the Revolving Credit Facility and Information provided by Holdings, the Borrowers, the Acquired Business or their respective representatives to a Commitment Party in connection with the Revolving Credit Facility (including, without limitation, draft and execution versions of the Credit Documentation, the Marketing Materials and the Lender Presentation) may be disseminated to potential Lenders and other persons through one or more internet sites (including an IntraLinks, SyndTrak or other electronic workspace (the “Platform”)) created for purposes of syndicating the Revolving Credit Facility or otherwise, in accordance with BMOCM’s standard syndication practices, and you acknowledge that neither Lead Arranger nor any of its affiliates will be responsible or liable to you or any other person or entity for damages arising from the use by others of any Information or other materials obtained on the Platform.

Notwithstanding anything to the contrary contained in the Commitment Documents, (a) none of the assistance set forth in the immediately preceding paragraph shall constitute a condition to the commitments hereunder or the funding of the Revolving Credit Facility on the Closing Date and (b) neither the commencement nor the completion of the syndication of Revolving Credit Facility shall constitute a condition to the availability of the Revolving Credit Facility on the Closing Date or at any time thereafter.

To facilitate an orderly and successful syndication of the Revolving Credit Facility, you agree that during the Syndication Period you and the Borrowers will not, and you will use commercially reasonable efforts to obtain contractual undertakings from the Target that it will not, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions (other than with either or both of BMOCM and RBCCM) concerning the syndication or issuance of, any debt facility or any debt security of the Acquired Business or the Borrowers or any of their respective subsidiaries or affiliates (other than the Revolving Credit Facility, the Existing Credit Agreement, ordinary course working capital and revolving facilities, ordinary course capital lease, purchase money and equipment financings and other indebtedness contemplated hereby to remain outstanding after the Closing Date), including any renewals or refinancings of any existing debt facility or debt security, without the prior written consent of each Lead Arranger. You acknowledge and agree to the disclosure by us, after the execution of the Credit Documentation of information related to the Revolving Credit Facility to “Gold Sheets” and other similar trade publications, and to our publication of tombstones and similar advertising materials relating to the Revolving Credit Facility. The information disclosed shall consist of deal terms and other information customarily found in such publications, tombstones and advertising materials.

You acknowledge that certain of the Lenders may be “public side” Lenders (i.e. Lenders that do not wish to receive material non-public information with respect to Holdings, the Borrowers, the Target or their respective affiliates or any of its or their respective securities) (each, a “Public Lender”). At the request of either Lead Arranger, you agree to prepare an additional version of the Marketing Materials for the Revolving Credit Facility, the Lender Presentation and other information materials to be used by Public Lenders that do not contain material non-public information concerning Holdings, the Borrowers, the Target or their respective affiliates or securities. It is understood that in connection with your assistance described above, you will provide, and cause all other applicable persons to provide, authorization letters to the Lead Arrangers authorizing the distribution of the Information to prospective Lenders, containing a representation to each Lead Arranger that the public-side version does not include material non-public information about Holdings, the Borrowers, the Target or their respective affiliates or its or their respective securities. In

 

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addition, you will clearly designate as such all Information provided to a Commitment Party by or on behalf of Holdings, the Borrowers or the Acquired Business that is suitable to make available to Public Lenders. You acknowledge and agree that the following documents may be distributed to Public Lenders: (a) drafts and final versions of the Credit Documentation; (b) administrative materials prepared by the Lead Arrangers for prospective Lenders (such as a lender meeting invitation, allocations and funding and closing memoranda); and (c) term sheets and notification of changes in the terms of the Revolving Credit Facility. You agree that information materials made available to prospective Public Lenders in accordance with this Commitment Letter shall not contain material non-public information.

The Parties acknowledge that compliance with this paragraph 3 will not be a condition to or restrict funding if not complied with by you.

4. Information.

You represent and warrant that (to your knowledge after reasonable inquiry with respect to any information related to the Acquired Business provided prior to the Closing Date) (i) all Information (other than Projections) provided directly or indirectly by Holdings, the Borrowers or the Acquired Business to the Lead Arrangers or the Lenders in connection with the Transactions when furnished is and will be, when taken as a whole, complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading and (ii) the Projections that have been or will be made available to the Lead Arrangers or the Lenders by or on behalf of Holdings, the Borrowers or the Acquired Business when furnished have been and will be prepared in good faith based upon assumptions that are believed by the preparer thereof to be reasonable at the time such Projections are furnished to the Lead Arrangers or the Lenders, it being understood and agreed that Projections are not a guarantee of financial performance and actual results may differ from Projections and such differences may be material. You agree that if at any time during the Syndication Period, any of the representations and warranties in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will promptly supplement, or cause to be supplemented, the Information and Projections so that such representations and warranties will be true and correct under those circumstances. You agree that upon the written request of either Lead Arranger during the Syndication Period, you will provide updated Projections and will respond to requests for updated information; provided that no information in such updates shall affect the availability of the financing on the Closing Date absent a failure in the conditions set forth in Section 2 or Annex B. In issuing this commitment and in arranging and syndicating each of the Revolving Credit Facility, each Commitment Party is and will be using and relying on the Information and the Projections without independent verification thereof.

5. Indemnification and Related Matters.

You agree, whether or not the transactions contemplated hereby are closed, to indemnify and hold harmless each Commitment Party, its affiliates, and each of their respective directors, officers, shareholders, partners, employees, agents, advisors, legal counsel, consultants, controlling persons and other representatives and the successors and assigns of each of the foregoing (collectively, the Indemnified Parties”) from and against (and will reimburse each Indemnified Party as the same are incurred (or, in the case of expenses of external counsel, within thirty days of demand)) any and all claims and documented out-of-pocket losses, damages, costs, expenses (including, without limitation, the reasonable and documented or invoiced out-of-pocket legal expenses of one firm of external counsel for all such Indemnified Parties, taken

 

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as a whole and, if necessary, of a single local external counsel in each appropriate jurisdiction (which may include a single special external counsel acting in multiple jurisdictions) for all such Indemnified Parties, taken as a whole, and of a single regulatory counsel (and, in the case of an actual conflict of interest where the Indemnified Party affected by such conflict informs you of such conflict and thereafter retains its own counsel, of another firm of counsel for such affected Indemnified Party)) and liabilities (collectively, such losses, claims, damages, costs, expenses and liabilities “indemnified liabilities”) to which any of them may become subject, insofar as such indemnified liabilities (or actions, suits, or proceedings, including any inquiry or investigation or claim, in respect thereof) arise out of, in any way relate to, or result from a claim in respect of, the Commitment Documents, the financing contemplated hereby, or the transactions to be financed (whether or not any Indemnified Party is a party to any action or proceeding out of which any such indemnified liabilities arise and whether or not any action or proceeding out of which any such indemnified liabilities arise are brought by you, your equity holders, affiliates, creditors, the Borrowers, the Target or any other third person), and to reimburse each Indemnified Party upon demand for any legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that you shall not be obligated to indemnify, hold harmless or reimburse any Indemnified Party for any indemnified liabilities to the extent that the same are determined in a final judgment by a court of competent jurisdiction (a) to have resulted from the gross negligence or willful misconduct of such Indemnified Party, (b) to have resulted from any material breach of such Indemnified Party’s obligations under this Commitment Letter (including the Annexes) or (c) to have arisen from any claims solely amongst Indemnified Parties other than (i) claims against a Commitment Party in its capacity as such or in fulfilling its role as an Administrative Agent, Lead Arranger, Bookrunner, Syndication Agent or any other similar role under the Revolving Credit Facility and (ii) claims arising out of any act or omission on the part of you, the Borrowers, the Target or your or their respective subsidiaries. Whether or not the Closing Date occurs, you also agree to reimburse us for all reasonable and documented out-of-pocket costs and expenses (including, without limitation, due diligence expenses, syndication expenses, travel expenses, and reasonable fees, charges and disbursements of one external counsel to the Lead Arrangers, of a single regulatory counsel and of a single local counsel to the Lead Arrangers in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) and of such other external counsel retained with your prior written consent (such consent not to be unreasonably withheld or delayed)) incurred in connection with the Transactions, the Revolving Credit Facility and the syndication and administration thereof (including, without limitation, all such costs and expenses incurred in connection with the preparation, negotiation, execution and delivery of the Commitment Documents and the definitive financing documentation for the Revolving Credit Facility and in performing due diligence related to the Revolving Credit Facility) and the other transactions contemplated hereby. Such costs and expenses shall include, without limitation, costs and expenses incurred in connection with the establishment and maintenance of an internet site to be used in the syndication of the Revolving Credit Facility.

Notwithstanding any other provision of this Commitment Letter, (i) no Commitment Party, its affiliates, or any of their respective directors, officers, shareholders, partners, employees, agents, advisors, legal counsel, consultants, controlling persons and other representatives and the successors and assigns of each of the foregoing (collectively, the “Covered Parties”) 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 are found by a final judgment of a court of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such Covered Party and (ii) without limiting the indemnification and reimbursement obligations set forth above, none of us, you, the Borrowers or any Covered Party shall be liable for any indirect, special, punitive, exemplary or consequential damages (including, without limitation, any loss of

 

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profits, business or anticipated savings) in connection with the Commitment Documents, the Transactions (including the Revolving Credit Facility and the use of proceeds thereunder), or with respect to any activities related to the Revolving Credit Facility, including the preparation of the Commitment Documents and the Credit Documentation; provided that nothing contained in this sentence shall limit your indemnification obligations to the extent set forth hereinabove to the extent such indirect, special, punitive, exemplary or consequential damages are included in any third party claim in connection with which such indemnified person is entitled to indemnification hereunder.

You shall not be liable for any settlement of any proceeding effected without your written 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, in each case, you agree to indemnify and hold harmless each Indemnified Party from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with and to the extent provided in the other provisions of this Section 5.

You shall not, without the prior written consent of any Indemnified Party (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Party unless such settlement (i) includes an unconditional release of such Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from all liability or claims that are the subject matter of such proceedings and (ii) does not include any statement as to or any admission by or on behalf of any Indemnified Party.

6. Confidentiality.

Please note that the Commitment Documents and any written communications provided by, or oral discussions with, any Commitment Party in connection with this arrangement are exclusively for your information and may not be disclosed to any third party or circulated or referred to publicly without our prior written consent except, after providing written notice to the Lead Arrangers, pursuant to a subpoena or order issued by a court of competent jurisdiction or by a judicial, administrative or legislative body or committee; provided that we hereby consent to your disclosure of (i) the Commitment Documents and such communications and discussions to your and the Borrowers’ officers, directors, employees, agents and advisors who are directly involved in the consideration of the Revolving Credit Facility and who have been informed by you of the confidential nature of such advice and the Commitment Documents and who have agreed to treat such information confidentially, (ii) this Commitment Letter or the information contained herein (but not the Fee Letter or the information contained therein, except to the extent that portions thereof have been redacted in a manner reasonably acceptable to the Lead Arrangers) to the Target to the extent you notify the Target of its obligations to keep such material confidential, and to the Target’s respective officers, directors, agents and advisors who are directly involved in the consideration of the Revolving Credit Facility to the extent such persons agree to hold the same in confidence, (iii) the Commitment Documents as required by applicable law or compulsory legal process after written notice to the Lead Arrangers, including to the extent required under applicable securities laws or by the United States Securities and Exchange Commission or the securities commissions or other securities regulatory authorities in the provinces and territories of Canada (collectively, the “Canadian Securities Commissions”), (iv) this Commitment Letter and its contents (but not the Fee Letter), in any syndication or other marketing materials in connection with the Revolving Credit Facility, (v) the aggregate fee amount contained in the Fee Letter as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to the Transactions to the extent

 

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customary or required in offering and marketing materials for the Revolving Credit Facility, (vi) any such confidential information to the extent that such information becomes publicly available other than by reason of disclosure by you in violation of this paragraph, and (vii) the information contained in Annex A and Annex B hereto to Moody’s and S&P in connection with obtaining ratings after your acceptance hereof. The requirements of this paragraph shall terminate on the date that is the earlier of (i) two years after the date of execution of this Commitment Letter and (ii) the Closing Date, at which time any confidentiality undertaking in the Credit Documentation shall supersede the provisions of this paragraph.

Each Commitment Party shall use all confidential information received by it in connection with the Transactions solely for the purposes of providing the services that are the subject of this Commitment Letter and shall treat confidentially all such information; provided, however, that nothing herein shall prevent any Commitment Party from disclosing any such information (a) pursuant to the order of any court or administrative agency or otherwise as required by applicable law or regulation or as requested or demanded by a governmental authority (in which case such Commitment Party, to the extent practicable and permitted by law and except with respect to any audit or examination conducted by bank accountants or any governmental bank authority exercising examination or regulatory authority, agrees to inform you promptly thereof), (b) to the extent that such information becomes publicly available other than by reason of disclosure by such Commitment Party in violation of this paragraph, (c) to the extent that such information is received by such Commitment Party from a third party that is not to such Commitment Party’s knowledge subject to confidentiality obligations to you or the Borrowers, (d) to the extent that such information is independently developed by such Commitment Party, (e) to such Commitment Party’s affiliates and to such Commitment Party’s and its affiliates respective directors, officers, shareholders, partners, employees, legal counsel, consultants, advisors, independent auditors and other experts or agents who need to know such information in connection with the Transactions and are informed of the confidential nature of such information and are bound to maintain the confidentiality of such information, (f) to prospective Lenders, participants or assignees or any potential counterparty (or its advisors) to any swap or derivative transaction relating to Holdings, a Borrower or any of their respective subsidiaries or any of their respective obligations, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), (g) for purposes of establishing a “due diligence” defense or a defense against a claim that a Commitment Party has breached its confidentiality obligations or (h) to ratings agencies. The requirements of this paragraph shall terminate on the date that is the earlier of (i) two years after the date of execution of this Commitment Letter and (ii) the Closing Date, at which time any confidentiality undertaking in the Credit Documentation shall supersede the provisions of this paragraph.

7. Assignments.

This Commitment Letter shall not be assignable by you without the prior written consent of each Commitment Party (and any purported assignment without such consent shall be null and void), except that, upon written notice to us, you may assign any of your rights and delegate any of your obligations hereunder to any Borrower. This Commitment Letter and the commitments and undertakings hereunder are solely for your benefit, and only you may rely thereon. The Commitment Letter is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and any Indemnified Parties). In no event shall any Commitment Party have any obligation to any third party with respect to any provision of the Commitment Documents. Each Commitment Party may assign its commitment hereunder, in whole or in part, to any of its affiliates or to any Lender; provided that such Commitment Party shall not be released from the portion of its commitment hereunder so assigned to the extent such assignee fails to fund the portion of the commitment assigned to it on the Closing Date notwithstanding the satisfaction or waiver of the conditions to such funding set forth herein.

 

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8. Absence of Fiduciary Relationship; Affiliates; Etc.

As you know, each Commitment Party and its affiliates (collectively, the “Arranger Group”) together comprise a full service financial services firm engaged, either directly or through affiliates, in various activities, including securities trading, investment banking and financial advisory, investment management, principal investment, hedging, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, each Arranger Group may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and/or financial instruments (including bank loans) for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and/or instruments. Such investments and other activities may involve securities and instruments of you or a Borrower, as well as of other entities and persons and their affiliates that may (i) be involved in transactions arising from or relating to the engagement contemplated by this Commitment Letter, (ii) be customers or competitors of you or a Borrower, or (iii) have other relationships with you or a Borrower. In addition, any Arranger Group may provide investment banking, underwriting and/or financial advisory services to such other entities and persons. Any Arranger Group may also co-invest with, make direct investments in, and/or 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 Borrowers or such other entities. The transactions contemplated by this Commitment Letter may have a direct or indirect impact on the investments, securities and instruments referred to in this paragraph. Although an Arranger Group in the course of such other activities and relationships may acquire information about the transaction contemplated by this Commitment Letter or other entities and persons that may be the subject of the transactions contemplated by this Commitment Letter, no Arranger Group shall have any obligation to disclose such information, or the fact that such Arranger Group is in possession of such information, to you or the Borrowers or to use such information on your or a Borrower’s behalf.

Consistent with each Arranger Group’s policies to hold in confidence the affairs of its customers, no Arranger Group will furnish confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter to any of its other customers. Furthermore, you acknowledge that no Arranger Group or any of its affiliates has an obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained or that may be obtained by them from any other person.

Each Arranger Group may have economic interests that conflict with those of you, your equity holders and/or your affiliates. You agree that each Commitment Party will act under this Commitment Letter as an independent contractor and that nothing in the Commitment Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between a Commitment Party and you, your equity holders or your affiliates. You acknowledge and agree that the transactions contemplated by the Commitment Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between each applicable Commitment Party, on the one hand, and you and your affiliates, on the other, and in connection therewith and with the process leading thereto, (i) no Commitment Party has assumed any advisory or fiduciary responsibility in favor of you, your equity holders or your affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether

 

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such Commitment Party or any of its affiliates has advised, is currently advising or will advise you, your equity holders or your affiliates on other matters) or any other obligation to you, your equity holders or your affiliates or any other person except the obligations expressly set forth in the Commitment Documents and (ii) each Commitment Party is acting solely as a principal and not as the agent or fiduciary of you, your equity holders, management, affiliates, creditors or any other person. You acknowledge and agree that you have consulted your own legal and financial advisors to the extent you deem appropriate and 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 a Commitment Party has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to you, in connection with such transactions or the process leading thereto. In addition, any Commitment Party may employ the services of their affiliates in providing services and/or performing their obligations hereunder and may exchange with such affiliates information concerning you, the Borrowers, the Acquired Business and other companies that may be the subject of this arrangement, and such affiliates will be entitled to the benefits afforded to such Commitment Party hereunder.    

In addition, you and the Borrowers each acknowledges and agrees that no Commitment Party is advising you or the Borrowers as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. You and the Borrowers shall consult with your and their own advisors concerning such matters and shall be responsible for making your and its own independent investigation and appraisal of the transactions contemplated hereby, and neither Commitment Parties shall have any responsibility or liability to you or the Borrowers with respect thereto. Any review by any Commitment Party of Holdings or the Borrowers, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of such Commitment Party and its affiliates and shall not be on behalf of you or the Borrowers. Notwithstanding anything herein to the contrary, you and the Borrowers (and each employee, representative or other agent of you or a Borrower) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Revolving Credit Facility and all materials of any kind (including opinions or other tax analyses) that are provided to you or a Borrower relating to such tax treatment and tax structure. However, any information relating to the tax treatment or tax structure will remain subject to the confidentiality provisions hereof (and the foregoing sentence will not apply) to the extent reasonably necessary to enable the parties hereto, their respective affiliates, and their respective affiliates’ directors and employees to comply with applicable securities laws. For this purpose, “tax treatment” means U.S. federal or state income tax treatment, and “tax structure” is limited to any facts relevant to the U.S. federal income tax treatment of the transactions contemplated by this Commitment Letter but does not include information relating to the identity of the parties hereto or any of their respective affiliates.

9. Miscellaneous.

By executing this Commitment Letter, you acknowledge that the Commitment Documents, taken together, are the only agreement between you and us with respect to the Revolving Credit Facility and set forth our entire understanding with respect thereto. The Commitment Documents may be changed only by a writing signed by each of the parties thereto. This Commitment Letter may be executed in counterparts and by different parties on separate counterpart signature pages, each of which constitutes an original and all of which taken together constitute one and the same agreement. Delivery of a counterpart hereof by facsimile transmission or electronic transmission (in .pdf format) shall be effective as delivery of a manually executed and delivered counterpart hereof. The Commitment Documents be in the form of an Electronic Record (as defined herein) and may be executed using Electronic Signatures (as defined herein) (including, without

 

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limitation, facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by us of a manually signed paper communication which has been converted into electronic form (such as scanned into .pdf format), or an electronically signed communication converted into another format, for transmission, delivery and/or retention. Notwithstanding anything contained herein to the contrary, no Commitment Party is under any obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by such Commitment Party pursuant to procedures approved by it; provided that, without limiting the foregoing, (a) to the extent such Commitment Party has agreed to accept such Electronic Signature, such Commitment Party shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of the Borrower without further verification and (b) upon the request of such Commitment Party, any Electronic Signature shall be promptly followed by a manually executed, original counterpart. “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

The Commitment Documents set out the entire agreement between you and the parties as to the arranging and underwriting of the Revolving Credit Facility and the managing and syndicating of the Revolving Credit Facility and supersede any prior oral and/or written understanding or arrangement relating to the Revolving Credit Facility.

The provisions set forth under Sections 3 (Syndication), 4 (Information), 6 (Indemnification and Related Matters), 6 (Confidentiality), 7 (Assignments) and 8 (Absence of Fiduciary Relationship; Affiliates; Etc.) hereof and this Section 9 (Miscellaneous) hereof will remain in full force and effect regardless of whether definitive Credit Documentation is executed and delivered; provided that the provisions of Sections 3 and 4 shall automatically terminate on the expiration of the Syndication Period. The provisions set forth under Sections 5, 6, 7 and 8 hereof and this Section 9 will remain in full force and effect notwithstanding the expiration or termination of this Commitment Letter or the Commitment Parties’ commitments and agreements hereunder.

Each of the parties hereto agrees that (i) this Commitment Letter is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein, including an agreement to negotiate in good faith the Credit Documentation by the parties hereto in a manner consistent with this Commitment Letter, it being acknowledged and agreed that the funding of the Revolving Credit Facility is subject only to the conditions precedent as provided herein, and (ii) the Fee Letter is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) of the parties thereto with respect to the subject matter set forth therein.

The Commitment Documents and any claim, controversy or dispute arising thereunder or related thereto (whether based upon contract, tort or otherwise) shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflict of law principles thereof; provided, however, that that (i) the determination of the accuracy of any Specified Acquisition Representation and whether as a result of any inaccuracy thereof you (or your applicable affiliate) have the right to terminate your or its obligations pursuant to the Acquisition Agreement or otherwise decline to consummate the

 

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Acquisition pursuant to the Acquisition Agreement as a result of a breach of such representations and warranties in the Acquisition Agreement, (ii) the interpretation of whether a Company Material Adverse Effect (as defined in the Annex B) has occurred and (iii) the determination of whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement shall, in each case, be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. You consent to the exclusive jurisdiction and venue of any Federal court of the United States of America sitting in the Borough of Manhattan or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York. Each party hereto irrevocably waives, to the fullest extent permitted by applicable law, (a) any right it may have to a trial by jury in any legal proceeding arising out of or relating to the Commitment Documents or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory) and (b) any objection that it may now or hereafter have to the laying of venue of any such legal proceeding in the Federal Court of the United States of America sitting in the Borough of Manhattan or any state court located in the City and County of New York. You and we irrevocably agree to waive 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 the transactions described herein, the Commitment Documents or the performance of services hereunder.

Each Commitment Party hereby notifies you that pursuant to the requirements of the U.S.A. PATRIOT ACT (Title III of Pub. L. 107 56 (signed into law October 26, 2001)) (as amended and reauthorized, the Patriot Act”) and 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), it and each of the Lenders may be required (x) to obtain, verify and record information that identifies you the Borrowers and the Guarantors (as defined in Annex A), which information may include the name, address, tax identification number and other information regarding you, the Borrowers and Guarantors that will allow each Lead Arranger and each of the Lenders to identify such person in accordance with the Patriot Act and (y) obtain a certification regarding beneficial ownership (a “Beneficial Ownership Certification”) from you, the Borrowers and each guarantor, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loans Syndications and Trading Association and Securities Industry and Financial Markets Association. This notice is given in accordance with the requirements of the Patriot Act and is effective for each Lead Arranger and each of the Lenders.

The commitment of each Initial Lender (and any of its affiliates) to extend credit and any undertaking of Bank of Montreal as the Administrative Agent or of each Lead Arranger to perform any services hereunder shall terminate upon the earliest to occur of: (a) the consummation of the Acquisition with or without the funding of the Revolving Credit Facility (but without excusing any breach of this Commitment Letter if any of the Commitment Parties refuse to fund any of the Revolving Credit Facility); (b) the termination of the Acquisition Agreement and (c) the earlier of (x) the termination date set forth in the Acquisition Agreement and (y) September 8, 2023, in each case unless the closing of the Revolving Credit Facility has been consummated on or before such date on the terms and subject to the conditions contained herein.

Please confirm that the foregoing is in accordance with your understanding by signing and returning to us the enclosed copy of this Commitment Letter, together, if not previously executed and delivered, with the Fee Letter on or before 5:00 p.m. (New York time) on January 9, 2023, whereupon the Commitment Documents will become binding agreements between us. If the Commitment Documents have not been signed and returned as described in the preceding sentence by such date, this offer will terminate on such date.

[Remainder of page intentionally left blank]

 

 

14


We are pleased to offer the Revolving Credit Facility to you and are prepared to devote the necessary resources to this transaction to ensure an expeditious closing.

 

Very truly yours,
BANK OF MONTREAL
By:  

/s/ Katie Jones

Name:   Katie Jones
Title:   Managing Director
BMO CAPITAL MARKETS CORP.
By:  

/s/ Katie Jones

Name:   Katie Jones
Title:   Managing Director

[Signature Page to Project Pinnacle Commitment Letter]


ROYAL BANK OF CANADA
By:  

/s/ Christopher Brown

Name:   Christopher Brown
Title:   Head of Syndicated & Leveraged
  Finance Canada

[Signature Page to Project Pinnacle Commitment Letter]


Accepted and agreed to this 8th day of January, 2023
NUVEI CORPORATION
By  

/s/ David Schwartz

Name:   David Schwartz
Title:   Chief Financial Officer

[Signature Page to Project Pinnacle Commitment Letter]


EXECUTION VERSION

ANNEX

A PROJECT PINNACLE

SUMMARY OF THE REVOLVING CREDIT FACILITY

This Summary outlines certain terms of the Revolving Credit Facility referred to in the Commitment Letter, of which this Annex A is a part. Certain capitalized terms used herein are defined in the Commitment Letter or, if not defined therein, in the Existing Credit Agreement (as defined below).

 

TRANSACTION PARTIES   
Borrowers:    Nuvei Technologies Corp., a corporation constituted in accordance with the laws of Canada (the “Canadian Borrower”), Pivotal Refi LP, a Delaware limited partnership (“Nuvei LP”), Nuvei Technologies Inc., a Delaware corporation (“Nuvei Technologies” and together with Nuvei LP, collectively the “U.S. Borrower” and, collectively with the Canadian Borrower, the “Borrowers” and each a “Borrower”).
Guarantors:    All obligations of each Borrower and any Guarantor under the Revolving Credit Facility will be unconditionally guaranteed on a senior secured first lien basis pari passu with the obligations under the Existing Credit Agreement (the “Guaranty”) by Nuvei Corporation, a corporation constituted in accordance with the laws of Canada (“Holdings”) and each of the subsidiaries of Holdings, including, for the avoidance of doubt, MergerCo (as defined in Annex B), that is or is required to become a guarantor under the Existing Credit Agreement as in effect on the Closing Date (collectively the “Guarantors”; the Borrowers and the Guarantors, collectively, the “Loan Parties”).
Lead Arrangers:    BMO Capital Markets (“BMOCM”) and RBC Capital Markets1 (“RBCCM”) will act as joint lead arrangers and joint bookrunners for the Revolving Credit Facility (in such capacities, the “Lead Arrangers”).
Administrative Agent and Collateral Agent:    Bank of Montreal (“Bank of Montreal”) will act as the sole and exclusive administrative agent and collateral agent for the Lenders (in such capacities, the “Administrative Agent”) under the Revolving Credit Facility.
Lenders    A syndicate of financial institutions and other lenders, including Bank of Montreal and Royal Bank of Canada or, in each case, an affiliate thereof (each, a “Lender” and, collectively, the “Lenders”), but excluding Disqualified Institutions (as defined in the Existing Credit Agreement, provided that the reference therein to “July 31, 2018” shall be deemed to refer to the date of the Commitment Letter), selected by the Lead Arrangers and consented to by the Borrowers (which consent shall not be unreasonably withheld, conditioned or delayed).

 

1

RBC Capital Markets is the brand name for the capital markets activities of Royal Bank of Canada.

 

A-1


REVOLVING CREDIT FACILITY
Type and Amount:    A $600.0 million senior secured pari passu reducing revolving credit facility (the “Revolving Credit Facility”, and the commitments thereunder, the “Revolving Commitments”, and the loans issued thereunder, the “Revolving Loans” or the “Loans”) having the terms set forth herein.
   The Revolving Commitments will only be available to the Borrowers in U.S. dollars.
Availability:    The Revolving Credit Facility shall be available on a revolving basis during the period commencing on the Closing Date, subject to the limitations set forth under “Use of Proceeds” below, and ending on September 28, 2025 (the “Revolving Termination Date”).
Maturity and Commitment Reductions:    The Revolving Commitments shall terminate and the Revolving Loans will mature on the Revolving Termination Date.
   Commencing on the last day of the first full fiscal quarter ended after the Closing Date, the Revolving Commitments will automatically be reduced in equal quarterly amounts in an aggregate annual amount equal to 5.00% of the principal amount of the Revolving Commitments outstanding on the Closing Date. If, as a result of any such reduction, the Revolving Loans exceed the Revolving Commitments, the Borrowers shall be required to repay the Revolving Loans in an amount equal to such excess.
Use of Proceeds:    The proceeds of up to $600.0 million of Revolving Loans on the Closing Date will be used (together with the proceeds of (x) up to $285.0 million of revolving loans borrowed under the Existing Credit Agreement and (y) cash on hand of Holdings and its subsidiaries and of the company identified by Holdings to the Lead Arrangers as “Pinnacle” (the “Target”), collectively, in an aggregate amount of not less than the remaining cash consideration balance required to consummate the Acquisition on the Closing Date) to:
   (i) to pay a portion of the purchase price for the acquisition of the Target (the “Acquisition”); and
   (ii) to pay certain fees, costs and expenses (the “Transaction Costs”) incurred in connection with the Transactions.

 

A-2


   The proceeds of the Revolving Loans may be used after the Closing Date to finance working capital needs and other general corporate purposes (including capital expenditures, acquisitions and investments, working capital and/or purchase price adjustments (including in connection with the Acquisition), restricted payments, restricted debt payments and related fees and expenses) and for any other purpose not prohibited by the Credit Documentation.
Incremental Facilities:    None.
Refinancing Facility:    The Credit Documentation will provide for customary refinancing facilities (“Refinancing Facilities”) consistent with the Documentation Considerations.
CERTAIN PAYMENT PROVISIONS
Fees and Interest Rates:    As set forth on Annex I hereto.
Optional Prepayments and Commitment Reductions:    Loans may be prepaid and commitments may be reduced, in whole or in part, without premium or penalty, in minimum amounts consistent with the Documentation Considerations, at the option of the Borrowers at any time upon same day notice (or, in the case of a prepayment of SOFR Loans (as defined in Annex I hereto), 3 U.S. Government Securities Business Days (to be defined in the Credit Documentation) prior notice), subject to reimbursement of the Lenders’ actual redeployment costs (but not lost profits) in the case of a prepayment of SOFR Loans prior to the last day of the relevant interest period. Optional prepayments of the Revolving Loans and the installments thereof as directed by the Borrowers (or in the absence of direction from the Borrowers, in the direct order of maturity); provided that, all Revolving Loans shall be repaid on a pro rata basis.
Mandatory Prepayments:    The following amounts shall be applied to prepay the Revolving Loans on a pro rata basis, in each case with carve-outs and exceptions consistent with the Documentation Considerations:
   (a) 100% of the net cash proceeds of any incurrence by the Borrowers or any of their Restricted Subsidiaries of indebtedness that is (i) not permitted under the Credit Documentation or (ii) incurred pursuant to a Refinancing Facility to refinance or replace the Revolving Credit Facility;
   (b) 100% of the net cash proceeds of any sale or other disposition of assets or as a result of casualty or condemnation received by the Borrowers or any of their Restricted Subsidiaries, in each case upon terms and subject to exceptions and limitations consistent with the Documentation Considerations as if the Credit Documentation constituted Other Applicable Indebtedness (as defined in the Existing Credit Agreement); and

 

A-3


   (c) the percentage of Excess Cash Flow (as defined in the Existing Credit Agreement, subject to the Documentation Considerations) consistent with, and subject to the exceptions and limitations in, the Documentation Considerations as if the Credit Documentation constituted Other Applicable Indebtedness.
   Any Lender (each a “Declining Lender”) may elect not to accept any mandatory prepayment, but in the case of clause (a) above, solely to the extent the relevant prepayment does not represent a refinancing of the Revolving Credit Facility. Any prepayment amount declined by a Declining Lender (such declined payment, the “Declined Proceeds”) will be an addition to the Available Basket.
   Any mandatory prepayment of the Loans of any Lender pursuant to clauses (a), (b) or (c) above shall be accompanied by a dollar-for-dollar reduction of the Revolving Commitments of such Lender.
   The Revolving Loans shall also be prepaid to the extent the aggregate principal amount thereof exceed the Revolving Commitments.
Collateral:    Subject to the Documentation Considerations, the obligations of the Loan Parties shall be secured by a perfected first-priority security interest in substantially all of the Loan Parties’ assets (including a pledge of the capital stock of the Borrowers owned by Holdings or another Borrower and a pledge of the capital stock of each Loan Party’s direct and indirect subsidiaries (the “Collateral”), in each case subject to permitted liens and other exceptions to be set forth in the Credit Documentation and no more favorable to the Lenders than those in the Existing Credit Agreement.
   The obligations of the Loan Parties with respect to the Revolving Credit Facility (and other indebtedness permitted to be secured by pari passu liens on the Collateral) will have liens on the Collateral ranking equally with the liens securing the Existing Credit Agreement.
Intercreditor
Agreement
:
   On the Closing Date, the Administrative Agent, on its own behalf and on behalf of the Lenders, and the Collateral Agent under the Existing Credit Agreement (the “Existing Collateral Agent”), on its own behalf and on behalf of the Secured Parties (as defined in the Existing Credit Agreement) and the holders of future obligations that are permitted to share liens on the Collateral equally and ratably with the Revolving Credit Facility, will enter into a pari passu intercreditor agreement (the “Intercreditor Agreement”) that will be in substantially the form of Exhibit E-1 to the Existing Credit Agreement.

 

A-4


CERTAIN CONDITIONS

Initial Conditions:    The availability of the Revolving Commitments, and the initial funding of any Revolving Loans that will be funded on or after the Closing Date, will be subject only to the conditions precedent referred to in Section 2 of the Commitment Letter and the conditions precedent listed on Annex B attached to the Commitment Letter. (the date upon which all such conditions precedent shall be satisfied and the funding under the Revolving Credit Facility shall take place, the “Closing Date”).
Conditions to Borrowings after the Closing Date:    The making of each Revolving Loan after the Closing Date shall be conditioned upon (a) the accuracy in all material respects of all representations and warranties (or in all respects to the extent that any representation and warranty is qualified by materiality or material adverse effect) in the Credit Documentation as of the date of the relevant extension of credit, except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall be required to be accurate in all material respects as of such earlier date, (b) there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit, (c) delivery of a customary borrowing notice and (d) Liquidity (to be defined as cash and cash equivalents of Holdings and its subsidiaries and undrawn amounts under all Indebtedness or Holdings and its subsidiaries) being equal to zero and pro forma compliance with the Financial Covenants and a Total Leverage Ratio of not more than 2.50:1.00.
Post-Closing Conditions:    To be agreed between the Borrowers and Administrative Agent but in any event to include a post-closing requirement for the Target and its subsidiaries to guarantee the obligations of the Borrower, and to grant a pari passu first lien security interest to the Administrative Agent, on behalf of the Lenders, which requirement will be identical to the equivalent obligation under the Existing Credit Agreement, in each case of the foregoing to the extent that such requirement was not satisfied on or before the Closing Date in accordance with the Term Sheet, as modified by the Certain Funds Provision.

DOCUMENTATION

  
Credit Documentation:    The definitive financing documentation for the Revolving Credit Facility, including the Intercreditor Agreement (the “Credit Documentation”), shall contain the terms and conditions set forth in this Term Sheet and such other terms as the Borrowers and the Lead Arrangers may agree; it being understood and agreed that the Credit Documentation shall be based upon and, except to the extent otherwise specified herein, necessary to give due regard to the nature of the Revolving Credit Facility and any new or updated agency and administrative requirements of the Administrative Agent or agreed by the Borrowers and the Lead Arrangers, substantially identical to the Amended and Restated Credit Agreement, dated as of June 18, 2021 (as further amended from time to time prior to the Closing Date, the “Existing Credit Agreement”), among Holdings, the Canadian Borrower, the U.S. Borrowers, the Lenders party thereto (the “Existing Lenders”) and Bank of Montreal, in its capacities as administrative agent and collateral agent (this clause, the “Documentation Considerations”).

 

A-5


Representations and Warranties:    Subject to the Documentation Considerations, substantially the same as the Existing Credit Agreement, including as to materiality thresholds.
Affirmative Covenants:    Subject to the Documentation Considerations, substantially the same as the Existing Credit Agreement, including as to time periods and thresholds.
Financial Covenants:    The Financial Covenants shall be limited to a maximum Total Leverage Ratio (as defined in the Existing Credit Agreement) covenant and a minimum Interest Coverage Ratio (as defined below) (the “Financial Covenants”).
   The Financial Covenants shall be tested only on the last day of any fiscal quarter (or, in the case of the fourth fiscal quarter, on the last day of the relevant fiscal year) of the Borrowers (with measurement to commence, if applicable, as of the last day of the first full fiscal quarter after the Closing Date).
   The maximum Total Leverage Ratio covenant shall be, initially, 4.50:1.00 with step-downs to 4.25:1.00 on September 30, 2023, 4.00:1.00 on March 31, 2024, 3.75:1.00 on September 30, 2024, and 3.50:1.00 on March 31, 2025, and thereafter (the “Maximum Total Leverage Ratio”); provided that during any Specified Exception Period (as defined below), the Maximum Total Leverage Ratio shall be increased by 0.50:1.00; provided that in no event shall the Maximum Total Leverage Ratio exceed 4.50:1.00. The Borrowers shall be permitted, in connection with a Permitted Acquisition, to elect to take a specified exception to the Maximum Total Leverage Ratio (a “Specified Exception”), to be effective commencing on the date of consummation of the relevant Permitted Acquisition and terminating on the earlier of (i) the last day of the fourth full fiscal quarter occurring after such consummation and (ii) the date on which the Borrowers deliver written notice to terminate such Specified Exception; provided that the Borrowers may rescind such notice pursuant to this clause (ii) prior to the dates set forth in clause (i) above (such effective period, the “Specified Exception Period”); provided, further, that no more than two Specified Exceptions may be made during the term of the Revolving Credit Facility.
   The minimum Interest Coverage Ratio (defined as the ratio of Consolidated EBITDA (as defined in the Existing Credit Agreement) to Consolidated Cash Interest Expense (as defined below) shall be 2.50:1.00 (the “Minimum Interest Coverage Ratio”). For the purpose of the Minimum Interest Coverage Ratio:

 

A-6


   Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense (as defined in the Existing Credit Agreement) for such period but only to the extent such Consolidated Interest Expense is paid or currently payable in cash in such period, other than (without duplication and to the extent, but only to the extent, included in the determination of Consolidated Interest Expense for such period in accordance with GAAP and paid in cash for such period): (i) amortization of debt discount and debt issuance commission, fees and expenses, (ii) any fees (including underwriting fees) and out-of-pocket expenses paid in connection with the consummation of the Transactions, any Permitted Acquisitions or any other debt issuance permitted hereunder, (iii) any agent or collateral monitoring fees, letter of credit fees, commitment fees (other than the Revolving Facility Commitment Fee and unused commitment fees under the Existing Credit Agreement) and other periodic bank fees, (iv) accretion or accrual of discounted liabilities other than Indebtedness, (v) any expense resulting from the discounting of any Indebtedness in connection with the application of purchase accounting in connection with any acquisition and (vi) any costs of surety bonds in connection with financing activities.
   For purposes of the Credit Documentation, any obligation of a person under a lease that is not (or would not be) required to be classified and accounted for as a capitalized lease on a balance sheet of such person under GAAP prior to the effectiveness of Financial Accounting Standards Board (FASB) Standard ASC 842 (Leases) shall not be treated as a capitalized lease and shall continue to be treated as an operating lease.
   For purposes of determining compliance with the Financial Covenants and the other provisions of the Financing Documentation affected by such compliance, the cash proceeds of a sale of, or contribution to, equity (which equity shall be Permitted Equity of the Borrowers) of the Borrowers during any fiscal quarter and on or prior to the day that is 15 business days after the day on which financial statements are required to be delivered for such fiscal quarter will, at the request of the Borrowers, be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of Consolidated EBITDA, a “ Specified Equity Contribution”); provided, that (a) in each four consecutive fiscal quarter period, there shall be no more than 2 fiscal quarters (which may be consecutive) in which a Specified Equity Contribution is made, (b) no more than 5 Specified Equity Contributions may be made in the aggregate, (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrowers to be in pro forma compliance with the Financial Covenants, (d) any Specified Equity Contribution shall be counted as Consolidated EBITDA solely for purposes of determining compliance with the

 

A-7


   Financial Covenants and, except as described in clause (e) below, shall not be included for any other purpose during any fiscal quarter in which the pro forma adjustment applies and (e) there shall be no pro forma or other reduction of the amount of indebtedness (including by way of netting of cash) with the proceeds of any Specified Equity Contribution for purposes of determining compliance with the Financial Covenants for the fiscal quarter in respect of which such Specified Equity Contribution was made (other than, with respect to any future period including such fiscal quarter, with respect to any portion of such Specified Equity Contribution that is actually applied to repay any indebtedness).
Negative Covenants:    Subject to the Documentation Considerations, substantially the same as the Existing Credit Agreement, including as to baskets, incurrence tests and thresholds.
Unrestricted Subsidiaries:    Subject to the Documentation Considerations, the Credit Documentation will contain provisions substantially the same as the Existing Credit Agreement pursuant to which the Borrowers will be permitted to designate (or re-designate) any existing or subsequently acquired or organized Restricted Subsidiary as an “unrestricted subsidiary” (each, an “Unrestricted Subsidiary”) and designate (or re-designate) any such Unrestricted Subsidiary as a Restricted Subsidiary; provided, in each case, that an equivalent designation is made under the Existing Credit Agreement.
Events of Default:    Subject to the Documentation Considerations, substantially the same as the Existing Credit Agreement, including as to thresholds and cure periods.
   Notwithstanding the foregoing, no breach of the Financial Covenants may result in an event of default until the date that is 15 business days after the day on which financial statements are required to be delivered for the relevant fiscal quarter if, the Borrowers then have a right to receive a Specified Equity Contribution; provided, that no such event of default shall have occurred if the Borrowers have delivered a notice of intent to cure within such 15 business day period unless the relevant Specified Equity Contribution has not been made within 15 business days of the date on which the relevant financial statements were required to be delivered; provided further that no Lender shall be required to make any Loan from and after the time the Administrative Agent has received such notice of intent to cure unless and until the relevant Specified Equity Contribution is actually made.

 

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Voting:    Amendments and waivers of the Credit Documentation will require the approval of Lenders (that are non-defaulting Lenders) holding more than 50% of the aggregate amount of the Revolving Commitments (the “Required Lenders”), except that:
   (a) the consent of each Lender directly and adversely affected thereby (but not the Required Lenders) shall be required with respect to:
   (i) reductions in the principal amount of any Loan owed to such Lender,
   (ii) extensions of the final maturity of any Loan, owed to such Lenders or the due date of any interest or fee payment owed to such Lender (in each case, other than extensions for administrative convenience as agreed by the Administrative Agent),
   (iii) reductions in the rate of interest (other than a waiver of default interest) or the amount of any fees owed to such Lender (it being understood that any change in the definitions of any ratio used in the calculation of such rate of interest or fees (or the component definitions) shall not constitute a reduction in any rate of interest or fees),
   (iv) increases in the amount of such Lender’s commitment (it being understood that a waiver of any condition precedent or the waiver of any default, event of default or mandatory prepayment shall not constitute an increase of any commitment of any Lender),
   (v) extensions of the expiry date or scheduled reduction date of such Lender’s commitment (it being understood that a waiver of any condition precedent or the waiver of any default, event of default or mandatory prepayment shall not constitute an extension of any commitment of any Lender),
   (vi) any modification to the priority of payments or pro rata sharing of payments provisions (including any component definition thereof), except as otherwise provided in the Credit Documentation, or
   (vii) any modification that would contractually subordinate the obligations under the Revolving Credit Facility (including the Guaranty) in right of payment to any other indebtedness or contractually subordinate the liens on all or substantially all of the Collateral securing the Revolving Credit Facility to liens securing other indebtedness.
   (b) the consent of 100% of the Lenders shall be required with respect to:
   (i) reductions of any of the voting percentages set forth in the definition of “Required Lenders”,
   (ii) releases of all or substantially all of the Collateral (other than in accordance with the Credit Documentation), and

 

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   (iii) releases of all or substantially all of the value of the Guaranty (other than in accordance with the Credit Documentation), and
   (c) the consent of the Administrative Agent (but not the Required Lenders or any other Lender or group of Lenders) will be required to effectuate any amendment to the Credit Documentation that adds one or more provisions to the Credit Documentation that are, in the reasonable judgment of the Administrative Agent, more favorable to the Lenders (including in connection with any Refinancing Facility).
   The Credit Documentation will contain provisions to permit the amendment and extension and/or replacement of the Revolving Credit Facility, which may be provided by existing Lenders or other persons who become Lenders in connection therewith, in each case without the consent of any other Lender.
   The Credit Documentation shall contain provisions allowing the Borrowers to replace a Lender or terminate the commitment of a Lender and prepay such Lender’s outstanding Loans under the Revolving Credit Facility (as the Borrowers shall elect) in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby (so long as the Required Lenders or a majority of the relevant group of affected Lenders, as the case may be, consent), increased costs, taxes, etc. and “defaulting” or insolvent Lenders.
   Notwithstanding the foregoing, certain amendments and waivers of the Credit Documentation that affect solely the Lenders under a particular facility, class or tranche and not directly and adversely affect any other Lender (including waiver or modification of conditions to extensions of credit under the Revolving Credit Facility, pricing or other modifications) will, as agreed upon, require only the consent of Lenders holding more than 50% (or, with respect to amendments and waivers relating to pricing, scheduled commitment reductions, maturity, subordination, release of all or substantially all of the Collateral or of the Guaranty and reductions of the voting percentages set forth in any relevant definitions, 100%) of the aggregate commitments or loans, as applicable, under such facility, class or tranche and no other consents or approvals shall be required.
   In addition, if the Administrative Agent and the Borrowers have jointly identified a clear mistake, obvious error or any error or omission of a technical nature in the Credit Documentation, then the Administrative Agent and the Borrowers shall be permitted to amend such provision without any further action or consent of any other party.

 

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Defaulting Lenders:    The Credit Documentation shall contain customary limitations on and protections with respect to “defaulting” Lenders consistent with the Documentation Considerations, including, but not limited to, non- payment/escrow of amounts owed to any such defaulting Lender to secure its obligations (including its obligation to fund Revolving Loans) and exclusion for purposes of voting for so long as such Lender is a “defaulting” Lender (after automatic reallocation among non-defaulting Revolving Lenders up to an amount such that the Revolving Credit Facility exposure of such non-defaulting Revolving Lenders does not exceed their Revolving Commitments).
Assignments and Participations:    The Lenders shall be permitted to assign all or a portion of their Loans and commitments to any person (other than to (a) any Disqualified Institution (provided that the list of entities that are Disqualified Institutions is made available to any Lender who specifically requests a copy thereof; (provided such Lender agrees to keep such identities confidential))), (b) any natural person and (c) except as otherwise provided herein, the Borrowers or any affiliate thereof) with the consent of (i) the Borrowers (not to be unreasonably withheld, conditioned or delayed); provided that the Borrowers may withhold their consent to any assignment to any person (other than an Affiliate of a Company Competitor that is a Bona Fide Debt Fund) that is not a “Disqualified Institution” but is known by the Borrowers to be an affiliate of a Disqualified Institution regardless of whether such person is identifiable as an affiliate of a Disqualified Institution on the basis of such affiliate’s name)); provided that the Borrowers shall be deemed to have consented to any assignment unless it has objected thereto by delivering written notice to the Administrative Agent within 10 business days after receipt of a request for consent thereto and (ii) the Administrative Agent (not to be unreasonably withheld, conditioned or delayed), unless such assignment is to a Lender, an affiliate of a Lender or an Approved Fund. Non-pro rata assignments shall be permitted. In the case of partial assignments (other than to another Lender, an affiliate of a Lender or an Approved Fund), the minimum assignment amount shall be $5.0 million in the case of loans and/or commitments under the Revolving Credit Facility, in each case unless otherwise agreed by the Borrowers and the Administrative Agent. The Administrative Agent shall receive a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent) in connection with all assignments.