BENEFYTT TECHNOLOGIES, INC. 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
Benefytt Technologies, Inc.
(Name of Subject Company (Issuer))
Daylight Beta Corp.
(Name of Filing Person-Offeror)
Daylight Beta Parent Corp.
(Name of Filing Person-Offeror)
Daylight Beta Intermediate Corp.
Daylight Beta Holdings, LP
Daylight Beta GP, LLC
Madison Dearborn Capital Partners VIII-A, L.P.
Madison Dearborn Capital Partners VIII-C, L.P.
Madison Dearborn Capital Partners VIII Executive-A, L.P.
Madison Dearborn Partners VIII-A&C, L.P.
Madison Dearborn Partners, LLC
(Names of Filing Persons-Other)
Class A Common Stock, par value $0.001 per share
Class B Common Stock, par value $0.001 per share
(Title of Class of Securities)
Class A Common Stock-08182C106
Class B Common Stock-None
(CUSIP Number of Class of Securities)
Annie Terry
c/o Madison Dearborn Partners, LLC 70 West Madison Street, Suite 4600 Chicago, IL 60602
(312) 895-1000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copy to: | |||
Richard J. Campbell, P.C. | |||
Robert M. Hayward, P.C. | |||
Kirkland & Ellis LLP | |||
300 North LaSalle Street | |||
Chicago, Illinois 60654 | |||
(312) 862-2000 | |||
CALCULATION OF FILING FEE | |||
Transaction Valuation(1) | Amount of Filing Fee(2) | ||
$451,880,256.36 | $58,654.06 |
- Estimated for purposes of calculating the filing fee only. The calculation assumes the purchase of 13,567,640 shares of Class A Common Stock of Benefytt Technologies, Inc. The transaction value also includes the aggregate offer price for: (i) 687,667 shares of Class B Common Stock expected to be exchanged for Class A Common Stock prior to the consummation of the offer; (ii) 603,758 nominal shares underlying stock appreciation rights (valued at the offer price minus the weighted average exercise price of such rights); and (iii) 3,554 outstanding stock options (valued at the offer price minus the weighted average exercise price of such rights).
- Calculated in accordance with Rule 0-11 under the Securities and Exchange Act of 1934, as amended, and Fee Rate Advisory #1 for fiscal year 2020, issued August 23, 2019, by multiplying the transaction value by 0.0001298
- Check the 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.
- Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Amount Previously Paid: None | Filing Party: N/A | |
Form of Registration No.: N/A | Date Filed: N/A | |
Check the appropriate boxes below to designate any transactions to which the statement relates: | ||
☒ | Third-party 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(s) relied upon:
- 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 (which, together with any amendments and supplements thereto, collectively constitute this "Schedule TO") relates to the tender offer (the "Offer") by Daylight Beta Corp., a Delaware corporation ("Purchaser") and a wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation ("Parent"), to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares") of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt" or the "Company"), at a price of $31.00 per share net to the seller in cash without interest and less any required withholding taxes, if any, and Class B Common Stock, par value $0.001 per share (the "Class B Shares" and, together with the Class A Shares, the "Shares") for no consideration, upon the terms and conditions set forth in the offer to purchase dated July 24, 2020 (the "Offer to Purchase"), a copy of which is attached as Exhibit (a)(1)(A), and in the related letter of transmittal (the "Letter of Transmittal"), a copy of which is attached as Exhibit (a)(1)(B), which, together with any amendments or supplements, collectively constitute the "Offer."
All of the information set forth in the Offer to Purchase is incorporated by reference herein in response to Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the information specifically provided for in this Schedule TO.
Item 1. Summary Term Sheet.
Regulation M-A Item 1001
The information set forth in the section of the Offer to Purchase entitled "Summary Term Sheet" is incorporated herein by reference.
Item 2. Subject Company Information.
Regulation M-A Item 1002
- Name and Address. The name of the subject company and the issuer of the securities to which this Schedule TO relates is Benefytt Technologies, Inc., a Delaware corporation. Benefytt's principal executive offices are located at 3450 Buschwood Park Dr., Suite 200, Tampa, Florida 33618, and its telephone number is (813) 397-1187.
- Securities. This Schedule TO relates to the Offer by Purchaser to purchase all of the Class A Shares at a purchase price of $31.00 per share, net to the seller in cash, without interest thereon and subject to any required withholding taxes and all of the Class B Shares for no consideration upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Benefytt has advised Parent and Purchaser that, as of July 16, 2020, there were (i) 13,567,640 Class A Shares issued and outstanding; (ii) 687,667 Class B Shares issued and outstanding; (iii) 603,758 nominal shares underlying outstanding stock appreciation rights; and (iv) 3,554 Shares issuable under outstanding stock options.
- Trading Market and Price. Information concerning the principal market in which the Class A Shares are traded and the high and low sales prices for the Shares in the principal market for each quarter during the last two years is set forth in the section of the Offer to Purchase under the caption THE TENDER OFFER-Section 6 ("Price Range of Shares; Dividends") and is incorporated herein by reference. There is no established trading market for the Class B Shares.
Item 3. Identity and Background of Filing Person.
Regulation M-A Item 1003
(a)-(c) Name and Address; Business and Background of Entities; and Business and Background of Natural Persons. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
1
THE TENDER OFFER-Section 8 ("Certain Information Concerning Parent and Purchaser") and Schedule I attached thereto.
Item 4. Terms of the Transaction.
Regulation M-A Item 1004
(a) Material Terms. The information set forth in the Offer to Purchase is incorporated herein by reference.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
Regulation M-A Item 1005
-
Transactions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 8 ("Certain Information Concerning Parent and Purchaser") and Schedule I attached thereto THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt")
-
Significant Corporate Events. The information set forth in the Offer to Purchase under the following captions is incorporated herein by
reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt") THE TENDER OFFER-Section 11 ("The Merger Agreement; Other Agreements")
THE TENDER OFFER-Section 12 ("Purpose of the Offer; Plans for Benefytt")
Item 6. Purposes of the Transaction and Plans or Proposals.
Regulation M-A Item 1006
- Purposes. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference: THE TENDER OFFER-Section 12 ("Purpose of the Offer; Plans for Benefytt")
(c)(1)-(7)Plans. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 9 ("Source and Amount of Funds")
THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt") THE TENDER OFFER-Section 11 ("The Merger Agreement; Other Agreements")
THE TENDER OFFER-Section 12 ("Purpose of the Offer; Plans for Benefytt") 2
THE TENDER OFFER-Section 13 ("Certain Effects of the Offer")
THE TENDER OFFER-Section 14 ("Dividends and Distributions")
Item 7. Source and Amount of Funds or Other Consideration.
Regulation M-A Item 1007
(a), (b), (d) Source of Funds; Conditions; Borrowed Funds. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 9 ("Source and Amount of Funds")
THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt")
THE TENDER OFFER-Section 11 ("The Merger Agreement; Other Agreements")
Item 8. Interest in Securities of the Subject Company.
Regulation M-A Item 1008
- Securities Ownership. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference: THE TENDER OFFER-Section 8 ("Certain Information Concerning Parent and Purchaser") and Schedule I attached thereto
THE TENDER OFFER-Section 12 ("Purpose of the Offer; Plans for Benefytt")
- Securities Transactions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference: THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt")
THE TENDER OFFER-Section 11 ("The Merger Agreement; Other Agreements")
Item 9. Persons/Assets Retained, Employed, Compensated or Used.
Regulation M-A Item 1009
-
Solicitations or Recommendations. The information set forth in the Offer to Purchase under the following captions is incorporated herein by
reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 3 ("Procedures for Accepting the Offer and Tendering Shares")
THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt")
THE TENDER OFFER-Section 17 ("Fees and Expenses")
Item 10. Financial Statements.
Regulation M-A Item 1010
- Financial Information. Not applicable.
- Pro Forma Information. Not applicable.
3
Item 11. Additional Information.
Regulation M-A Item 1011
- Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER-Section 10 ("Background of the Offer; Past Contacts or Negotiations with Benefytt")
THE TENDER OFFER-Section 11 ("The Merger Agreement; Other Agreements")
THE TENDER OFFER-Section 12 ("Purpose of the Offer; Plans for Benefytt")
THE TENDER OFFER-Section 13 ("Certain Effects of the Offer")
THE TENDER OFFER-Section 15 ("Certain Conditions of the Offer")
THE TENDER OFFER-Section 16 ("Certain Legal Matters; Regulatory Approvals")
-
Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by
reference.
Item 12. | Exhibits. | |
Exhibit No. | Description | |
(a)(1)(A) | Offer to Purchase, dated July 24, 2020 | |
(a)(1)(B) | Form of Letter of Transmittal | |
(a)(1)(C) | Form of Notice of Guaranteed Delivery | |
(a)(1)(D) | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | |
(a)(1)(E) | Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | |
(a)(1)(F) | Form of Summary Advertisement as published on July 24, 2020 in the New York Times | |
(a)(1)(G) | Press Release issued by Benefytt Technologies, Inc. on July 13, 2020 (incorporated by reference to Exhibit 99.1 to Benefytt | |
Technologies, Inc.'s Current Report on Form 8-K filed with the SEC on July 13, 2020) | ||
(b)(1) | Commitment Letter, dated as of July 12, 2020, by and among Daylight Beta Corp., Truist Bank and SunTrust Robinson Humphrey, | |
Inc. | ||
(b)(2) | Preferred Commitment Letter, dated July 12, 2020, by and among Daylight Beta Intermediate Corp. and HPS Investment Partners, | |
LLC | ||
(d)(1) | Agreement and Plan of Merger, dated as of July 12, 2020, by and among Benefytt Technologies, Inc., Daylight Beta Corp. and | |
Daylight Beta Parent Corp. (incorporated by reference to Exhibit 2.1 to Benefytt Technologies, Inc.'s Current Report | ||
on Form 8-K filed with the SEC on July 13, 2020) | ||
(d)(2) | Confidentiality Agreement, dated May 21, 2020, by and between Benefytt Technologies, Inc. and Madison Dearborn Partners, LLC, | |
on behalf of its Funds VII private equity funds | ||
(d)(3) | Exclusivity Agreement, dated as of June 12, 2020, between Benefytt Technologies, Inc. and Madison Dearborn Partners, LLC | |
4 |
Exhibit No. | Description |
(d)(4) | Amendment No. 1 to Exclusivity Agreement, dated as of July 3, 2020, between Benefytt Technologies, Inc. and Madison Dearborn |
Partners, LLC | |
(d)(5) | Equity Commitment Letter, dated July 12, 2020, by and among Madison Dearborn Capital Partners VIII-A, L.P., Madison Dearborn |
Capital Partners VIII-C, L.P. and Madison Dearborn Capital Partners VIII Executive-A, L.P. and Daylight Beta Parent Corp. | |
(d)(6) | Limited Guarantee, dated as of July 12, 2020, by and among Madison Dearborn Capital Partners VIII-A, L.P., Madison Dearborn |
Capital Partners VIII-C, L.P. and Madison Dearborn Capital Partners VIII Executive-A, L.P. and Benefytt Technologies, Inc. | |
(d)(7) | Tender and Support Agreement, dated as of July 12, 2020, by and among Daylight Beta Parent Corp., a Delaware corporation, |
Daylight Beta Corp., a Delaware corporation, and each of the stockholders party thereto. | |
(d)(8) | Exchange Agreement, dated as of July 12, 2020, by and among Daylight Beta Parent Corp., Health Plan Intermediaries, LLC, Health |
Plan Intermediaries Sub, LLC, Benefytt Technologies, Inc. and Health Plan Intermediaries Holdings, LLC (incorporated by | |
reference as Exhibit 10.1 to Benefytt Technologies, Inc.'s Current Report on Form 8-K, filed with the SEC on July 13, 2020) |
- Not applicable.
- Not applicable
Item 13. Information required by Schedule 13E-3.
Not applicable.
5
SIGNATURES
After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: July 24, 2020
DAYLIGHT BETA CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA PARENT CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA INTERMEDIATE CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA HOLDINGS, LP
By: Daylight Beta GP, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA GP, LLC
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
MADISON DEARBORN CAPITAL PARTNERS VIII-A,
L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
6
MADISON DEARBORN CAPITAL PARTNERS VIII-C, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: | /s/ Annie S. Terry |
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII
EXECUTIVE-A, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN PARTNERS VIII-A&C, L.P.
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN PARTNERS, LLC
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
7
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Annie S. Terry the undersigned's true and lawful attorney-in-fact to: (i) execute for and on behalf of the undersigned, the Tender Offer Statement Under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934 on Schedule TO (the "Schedule TO") of Benefytt Technologies, Inc., a Delaware corporation (the "Company"), any and all amendments thereto, and to file the Schedule TO, any and all such amendments, supplements, exhibits and documents thereto required in connection therewith with the Securities Exchange Commission; (ii) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete and execute any such Schedule TO and timely file such form with the United States Securities and Exchange Commission and any stock exchange in which the Common Stock of the Company is listed on, if any; and (iii) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorney-in-fact may approve in such attorney-in-fact's discretion.
The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this power of attorney and the rights and powers herein granted. The undersigned acknowledges that the foregoing attorneys-in-fact, in serving in such capacity at the request of the undersigned, are not assuming, nor is the Company assuming, any of the undersigned's responsibilities to comply with Section 14 of the Exchange Act.
This Power of Attorney shall remain in full force and effect until revoked by the undersigned in a signed writing delivered to the foregoing attorneys-in fact.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as f this 24th day of July, 2020.
DAYLIGHT BETA CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA PARENT CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA INTERMEDIATE CORP.
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
8
DAYLIGHT BETA HOLDINGS, LP
By: Daylight Beta GP, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
DAYLIGHT BETA GP, LLC
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Vice President and Secretary
MADISON DEARBORN CAPITAL PARTNERS VIII-A, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII-C, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII
EXECUTIVE-A, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Annie S. Terry
Name: Annie S. Terry
Title: Managing Director
9
MADISON DEARBORN PARTNERS VIII-A&C, L.P.
By: Madison Dearborn Partners, LLC
Its: General Partner
By: | /s/ Annie S. Terry |
Name: Annie S. Terry
Title: Managing Director
MADISON DEARBORN PARTNERS, LLC
By: | /s/ Annie S. Terry |
Name: Annie S. Terry
Title: Managing Director
10
Exhibit (a)(1)(A)
Offer to Purchase for Cash
All Outstanding Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 Net Per Class A Share
No Consideration to be Paid Per Class B Share
by
Daylight Beta Corp.
a wholly-owned subsidiary of
Daylight Beta Parent Corp., an affiliate of Madison Dearborn Partners, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON AUGUST 20, 2020,
UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The Offer (as defined herein) is being made pursuant to the Agreement and Plan of Merger, dated as of July 12, 2020 (as the same may be amended, the "Merger Agreement"), by and among Daylight Beta Parent Corp., a Delaware corporation ("Parent"), Daylight Beta Corp., a Delaware corporation and a direct wholly-owned subsidiary of Parent ("Purchaser"), and Benefytt Technologies, Inc., a Delaware corporation ("Benefytt" or the "Company"). Purchaser is offering to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share, of Benefytt (the "Class A Shares"), whether vested or unvested, at a price of $31.00 per Class A Share, net to the seller in cash, without interest and less any applicable withholding taxes (such amount or any higher amount per share that may be paid pursuant to the Offer being hereinafter referred to as the "Offer Price"), upon the terms and subject to the conditions set forth in this offer to purchase (this "Offer to Purchase") and the related letter of transmittal (the "Letter of Transmittal"). Purchaser is also offering to acquire all of the outstanding shares of Class B Common Stock, par value $0.001 per share, of Benefytt (the "Class B Shares" and, together with the Class A Shares, the "Shares"), for no consideration. Purchaser's offer to purchase all of the outstanding Class A Shares and Class B Shares pursuant to the Offer to Purchase and the Letter of Transmittal, together with any amendments or supplements thereto, are collectively referred to herein as the "Offer." All holders of Class B Shares have agreed to exchange their Class B Shares into Class A Shares and tender such Class A Shares prior to the expiration of the Offer. Pursuant to the Merger Agreement, following the consummation of the Offer and the satisfaction or waiver of each of the applicable conditions set forth in the Merger Agreement, Purchaser will merge with and into Benefytt (the "Merger"), with Benefytt continuing as the surviving corporation in the Merger as a direct wholly-owned subsidiary of Parent. As a result of the Merger, each (i) outstanding Class A Share (other than Class A Shares (1) held by Benefytt as treasury stock, (2) owned, directly or indirectly, by Parent or Purchaser, and (3) owned by Benefytt stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such Class A Shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the "DGCL")) will be converted into the right to receive the Offer Price; and (ii) Class B Share outstanding or held in treasury by Benefytt immediately prior to the consummation of the Merger shall automatically be cancelled and retired and will cease to exist, and no consideration shall be delivered in exchange therefor.
Following careful consideration the board of directors of Benefytt has: (i) determined that it is in the best interests of Benefytt and its stockholders to enter into the Merger Agreement, (ii) approved the
execution and delivery of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein, (iii) declared advisable the Merger Agreement and the transactions contemplated thereby, and (iv) subject to Section 6.2 of the Merger Agreement and the terms and conditions of the Merger Agreement, resolved to recommend the holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the DGCL, which permits completion of the Merger upon the collective ownership by Parent, Purchaser or any wholly-owned subsidiary of Parent of at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date, and, if the Merger is so effected pursuant to Section 251(h) of the DGCL, no vote of Benefytt's stockholders will be required to adopt the Merger Agreement or consummate the Merger. Parent and Purchaser do not foresee any reason that would prevent them from completing the Merger pursuant to Section 251(h) of the DGCL following the consummation of the Offer.
The Offer is conditioned upon, among other things:
- there being validly tendered and received (within the meaning of Section 251(h) of the DGCL) and not validly withdrawn (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in satisfaction of such guarantee in accordance with Section 251(h) of the DGCL) as of one minute after 11:59 p.m. Eastern Time on August 20, 2020 (the "Expiration Date," unless extended by Purchaser in accordance with the Merger Agreement, in which event "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire) a number of Shares which, together with any Shares beneficially owned by Parent or any wholly-owned Subsidiary of Parent, equals at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date (the "Minimum Condition");
- there not being in effect immediately prior to the Expiration Date any law or order (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits the consummation of the Offer, the Merger or the other transactions contemplated by the Merger Agreement (the "Transactions");
- the expiration or early termination of the waiting period applicable to the consummation of the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and
- the absence of a termination of the Merger Agreement in accordance with its terms.
The Offer is also subject to other conditions described in Section 15-"Certain Conditions of the Offer." The Minimum Condition may be waived by Purchaser only with the prior written consent of Benefytt on the terms and subject to the conditions of the Merger Agreement and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC").
A summary of the principal terms of the Offer appears on pages 1 through 9. You should read this entire Offer to Purchase carefully before deciding whether to tender your Shares in the Offer.
IMPORTANT
If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (a) complete and sign the Letter of Transmittal, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or a manually executed facsimile thereof) and any other required documents to American Stock Transfer & Trust Company LLC, in its capacity as depositary for the Offer (the "Depositary"), and either deliver the certificates for your Shares to the Depositary along with the Letter of Transmittal (or a manually executed facsimile thereof) or tender your Shares by book-entry transfer by following the procedures described in Section 3-"Procedures for Accepting the Offer and Tendering Shares," in each case prior to the Expiration Date, or (b) 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 to Purchaser pursuant to the Offer.
If you desire to tender your Shares pursuant to the Offer and the certificates representing your Shares are not immediately available, you cannot comply in a timely manner with the procedures for tendering your Shares by book-entry transfer or you cannot deliver all required documents to the Depositary prior to the Expiration Date, you may tender your Shares to Purchaser pursuant to the Offer by following the procedures for guaranteed delivery described in Section 3-"Procedures for Accepting the Offer and Tendering Shares."
* * * * *
Questions and requests for assistance regarding the Offer or any of the terms thereof may be directed to D.F. King & Co., Inc., as information agent for the Offer (the "Information Agent"), at the address and telephone number set forth for the Information Agent on the back cover of this Offer to Purchase. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, the notice of guaranteed delivery and other tender offer materials may be directed to the Information Agent. 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.
TABLE OF CONTENTS | ||
1 | ||
10 | ||
13 | ||
1. | 13 | |
2. | 15 | |
3. | 16 | |
4. | 19 | |
5. | Certain Material United States Federal Income Tax Consequences. | 19 |
6. | 24 | |
7. | 24 | |
8. | 25 | |
9. | 26 | |
10. | Background of the Offer; Past Contacts or Negotiations with Benefytt. | 29 |
11. | 31 | |
12. | 50 | |
13. | 53 | |
14. | 54 | |
15. | 54 | |
16. | 56 | |
17. | 58 | |
18. | 58 | |
59 |
SUMMARY TERM SHEET
Purchaser, a direct wholly-ownedsubsidiary of Parent, is offering to purchase all of the outstanding Class A Shares of Benefytt Technologies, Inc., a Delaware Corporation ("Benefytt" or the "Company") at a price of $31.00 per Class A Share, net to the seller in cash, without interest and less any applicable withholding taxes, as further described herein, upon the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal and the other exhibits to the Schedule TO. Purchaser is also offering to acquire all of the outstanding Class B Shares of Benefytt, as further described herein, however no consideration will be paid for such Class B Shares. Purchaser's offer to purchase all of the outstanding Class A Shares and Class B Shares pursuant to the Offer to Purchase and the Letter of Transmittal, together with any amendments or supplements thereto, are collectively referred to herein as the "Offer." The following are some questions you, as a stockholder of Benefytt, 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 and the Letter of Transmittal and the other exhibits to the Schedule TO. To better understand the Offer and for a complete description of the legal terms of the Offer, you should read this Offer to Purchase and the Letter of Transmittal carefully and in their entirety. 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 | All outstanding shares of Class A Common Stock, par value $0.001 per share ("Class A |
Shares"), and Class B Common Stock, par value $0.001 per share, ("Class B Shares" and, | |
together with the Class A Shares, the "Shares") of the Company. | |
Price Offered Per Share | $31.00 per Class A Share, net to the seller in cash, without interest and less any applicable |
withholding taxes. No consideration will be paid for Class B Shares. | |
Scheduled Expiration of Offer | One minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless the Offer is extended |
or terminated. See Section 1-"Terms of the Offer." | |
Purchaser | Daylight Beta Corp., a Delaware corporation and a wholly-owned subsidiary of Daylight Beta |
Parent Corp., a Delaware corporation. Daylight Beta Parent Corp. is indirectly controlled by | |
Madison Dearborn Partners VIII-A&C, L.P., a Delaware limited partnership. | |
The Benefytt Board's Recommendation | The board of directors of Benefytt (the "Benefytt Board") has recommended that the |
stockholders of the Company tender their Shares in the Offer. |
Who is offering to buy my Shares?
Daylight Beta Corp. ("Purchaser"), a direct wholly-owned subsidiary of Daylight Beta Parent Corp. ("Parent"), is offering to purchase all of the outstanding Shares. Purchaser is a Delaware corporation which was formed for the sole purpose of consummating the acquisition contemplated by the Merger Agreement. Parent is indirectly controlled by Madison Dearborn Partners VIII-A&C, L.P., a Delaware limited partnership, which is ultimately controlled by Madison Dearborn Partners, LLC ("MDP"). See the "Introduction" and Section 8-"Certain Information Concerning Parent and Purchaser."
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How many Shares are you offering to purchase in the Offer?
We are making an offer to purchase all of the outstanding Shares on the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal. See the "Introduction" and Section 1-"Terms of the Offer."
Why are you making the Offer?
We are making the Offer because we want to acquire control of, and ultimately the entire equity interest in, Benefytt. If the Offer is consummated, Parent intends, as soon as practicable after consummation of the Offer, to have Purchaser consummate the Merger, subject to the terms and conditions set forth in the Merger Agreement. Upon consummation of the Merger, Benefytt would be a wholly-owned subsidiary of Parent.
How much are you offering to pay and what is the form of payment? Will I have to pay any fees or commissions?
We are offering to pay $31.00 per Class A Share, net to you in cash, without interest and less any applicable withholding taxes. We will not pay any consideration for Class B Shares tendered in the Offer. If you are the holder of record of your Shares and you tender them to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses to do so. If you own your Shares through a broker, dealer, commercial bank, trust company or other nominee, and your broker 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 the "Introduction," Section 1-"Terms of the Offer," and Section 2 -"Acceptance for Payment and Payment for Shares."
Is there an agreement governing the Offer?
Yes, Parent, Purchaser and Benefytt have entered into an Agreement and Plan of Merger, dated as of July 12, 2020 (as the same may be amended, the "Merger Agreement"). The Merger Agreement provides, among other things, for the terms and conditions of the Offer and the subsequent merger of Purchaser with and into Benefytt (the "Merger"). If the Minimum Condition (as defined in Section 15-"Certain Conditions of the Offer") and the other conditions to the Offer are satisfied or waived and we consummate the Offer, we intend to effect the Merger as soon as practicable pursuant to Section 251(h) of the DGCL without a vote on the adoption of the Merger Agreement by the Benefytt stockholders, subject to the terms and conditions set forth in the Merger Agreement.
What are the most significant conditions to the Offer?
Our obligation to purchase Shares tendered in the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Merger Agreement (the "Offer Conditions"), including, among other things:
- there being validly tendered and received (within the meaning of Section 251(h) of the DGCL) and not validly withdrawn (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in satisfaction of such guarantee in accordance with Section 251(h) of the DGCL) a number of Shares which, together with any Shares beneficially owned by Parent or any wholly-owned Subsidiary of Parent, equals at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date (the "Minimum Condition");
- the expiration or early termination of the waiting period applicable to the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement (the "Transactions") under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act");
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- there not being in effect immediately prior to the Expiration Date any law or order (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits the consummation of the Transactions; and
- the absence of a termination of the Merger Agreement in accordance with its terms.
The Offer is also subject to a number of other conditions. We can waive some of the Offer Conditions without the consent of Benefytt. We cannot, however, waive the Minimum Condition without the consent of Benefytt. See Section 15-"Certain Conditions of the Offer."
Do you have the financial resources to pay for all of the Shares that you are offering to purchase in the Offer and to consummate the Merger and the other Transactions?
Yes. We estimate that we will need approximately $732 million to purchase all of the Shares pursuant to the Offer, to complete the Merger (which estimate includes payment in respect of all outstanding "in-the-money" options and stock appreciation rights granted under Benefytt's equity plans), to pay estimated related transaction fees and expenses, to repay certain indebtedness of Benefytt and to make certain payments in connection with the termination of Benefytt's tax receivable agreement, dated as of February 13, 2013, with Health Plan Intermediaries Holdings, LLC, Health Plan Intermediaries, LLC and Health Plan Intermediaries Sub, LLC (the "Tax Receivable Agreement"). Madison Dearborn Capital Partners VIII-A, L.P., Madison Dearborn Capital Partners VIII-C, L.P. and Madison Dearborn Capital Partners VIII Executive-A, L.P., each a Delaware limited partnership advised by MDP (collectively, the "MDP Funds") have provided Parent with an equity commitment letter, pursuant to which the MDP Funds have agreed to contribute to Parent up to $505,000,000 to purchase equity securities of Parent, subject to the satisfaction of certain customary conditions set forth in the equity commitment letter. Parent will contribute or otherwise advance to Purchaser the net proceeds from the MDP Funds' equity investment, which, taken together with the proceeds of bank financing and preferred stock financing (collectively, the "Debt Financing") arranged by Parent and Purchaser, we anticipate will be sufficient to purchase all of the Shares in the Offer and complete the Merger and related refinancing transactions, and to pay related transaction fees and expenses. See Section 9-"Source and Amount of Funds."
The Offer is not conditioned upon Parent and/or Purchaser obtaining third party Debt Financing, however Benefytt has agreed in the Merger Agreement to take certain actions to assist Parent and Purchaser obtain third party Debt Financing. See Section 11-"The Merger Agreement; Other Agreements."
Is your financial condition relevant to my decision to tender my Shares in the Offer?
We do not think that Purchaser's financial condition is relevant to your decision whether to tender Shares and accept the Offer because:
- the Offer is being made for all outstanding Shares solely for cash;
- the Offer is not subject to any financing condition;
- if Purchaser consummates the Offer, Purchaser will acquire all remaining Shares for the same cash price in the Merger;
- Parent and Purchaser have sufficient committed sources of funds, including committed debt and equity financing, to purchase all Shares tendered pursuant to the Offer and to fund the Merger; and
- the MDP Funds are private equity funds engaged in the purchase, sale and ownership of private equity investments and have no business operations other than investing and managing / monitoring investments; only the MDP Funds' commitment to fund the equity commitment as described above and in Section 9-"Source and Amount of Funds" is material to your decision with respect to the Offer.
See Section 9-"Source and Amount of Funds."
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How long do I have to decide whether to tender my Shares in the Offer?
You will have until one minute after 11:59 p.m., Eastern Time, on August 20, 2020 to tender your Shares in the Offer, subject to extension of the Offer in accordance with the terms of the Merger Agreement. Further, if you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure by which a broker, a bank or any other fiduciary that is an eligible institution may guarantee that the missing items will be received by the Depositary within two Nasdaq (as defined below) trading days. Shares delivered by a Notice of Guaranteed Delivery will not be counted by Purchaser toward the satisfaction of the Minimum Condition; therefore it is preferable for Shares to be tendered by the other methods described herein. See Section 1-"Terms of the Offer" and Section 3-"Procedures for Accepting the Offer and Tendering Shares."
If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should be aware that such institutions may establish their own earlier deadline for tendering Shares in the Offer. Accordingly, if you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact such institution as soon as possible in order to determine the times by which you must take action in order to tender Shares in the Offer.
Can the Offer be extended and under what circumstances can or will the Offer be extended?
In some cases, we are required to extend the Offer beyond its initial Expiration Date. If we extend the time period of this Offer, this extension will extend the time that you will have to tender your Shares. We are required to extend our Offer beyond its then-scheduled Expiration Date if any condition to the Offer has not been satisfied or waived by Purchaser or Parent (to the extent waivable) as of the Expiration Date for one or more 10 business day periods (or such longer period as may be agreed to by the parties to the Merger Agreement) in order to permit the Offer Conditions to be satisfied; provided that if the sole unsatisfied Offer Condition (other than those conditions that by their terms are to be satisfied at the time that the Purchaser accepts for payment all Shares tendered (and not validly withdrawn) pursuant to the Offer (the "Offer Acceptance Time")), is the Minimum Condition, we are not required to make more than two such 10-business day extensions. We are also required to extend the Offer for any minimum period required by any law, rule, any interpretation or position of the SEC, the SEC staff or any rules and regulations of the Nasdaq Stock Market ("Nasdaq") applicable to the Offer (including in order to comply with Rule 14e-1(b) promulgated under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") in respect of any change in the Offer Price).
In addition, we may (but are not required to) extend the offer for successive periods of up to five business days if, as of any scheduled Expiration
Date: (1) all of the Offer Conditions have been satisfied or waived (other than the conditions that are to be satisfied at the Offer Acceptance Time), (2) the full amount of the Debt Financing has not been funded and will not be available to be funded at the closing of the Offer and (3) Parent and Purchaser acknowledge and agree in writing that the Offer Conditions relating to the accuracy of the Company's representations and warranties in the Merger Agreement and the absence of a Company Material Adverse Effect (in each case described in Section 15-"Certain Conditions to the Offer") will be deemed to have been satisfied or waived from and after the initial extension of the Offer (if such Offer Conditions were actually satisfied at the time of such extension).
In no event will we be required or permitted to extend our Offer beyond November 9, 2020 or, if earlier, the termination of the Merger Agreement in accordance with its terms.
See Section 1-"Terms of the Offer" for more details on our ability to extend the Offer.
Can the Offer be terminated?
Unless the Merger Agreement is terminated in accordance with its terms, Purchaser shall not, and Parent shall cause Purchaser not to, terminate or withdraw the Offer prior to any scheduled Expiration Date without the prior written consent of Benefytt.
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What will happen if the Merger Agreement is terminated before the Offer is accepted?
If the Merger Agreement is terminated in accordance with its terms, Purchaser shall, and Parent shall cause Purchaser to, immediately and
unconditionally terminate the Offer and not acquire any Shares pursuant thereto, and Purchaser shall, and Parent shall cause Purchaser to, immediately return, and shall cause the Depositary to return, in accordance with applicable laws, all tendered Shares to the registered holders of such Shares.
How will I be notified if the Offer is extended?
If we extend the Offer, we will inform the Depositary of that fact and will make a public announcement of the extension not later than 9:00 AM, New York City time, on the next business day after the day on which the Offer was scheduled to expire. See Section 1-"Terms of the Offer."
How do I tender my Shares?
If you are the shareholder of record, to tender your Shares you must deliver the certificates (if any) representing your Shares or confirmation of a book-entry transfer of such Shares into the account of the Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility"), together with a completed Letter of Transmittal or an Agent's Message, and any other documents required by the Letter of Transmittal, to the Depositary not later than the time the Offer expires. If your Shares are held in street name (that is, through a broker, dealer or other nominee), they can be tendered by your nominee through the Book-Entry Transfer Facility. If you are unable to deliver any required document or instrument to the Depositary by the expiration of the Offer, you may gain some extra time by having a broker, a bank or any other fiduciary that is an eligible institution guarantee that the missing items will be received by the Depositary within two Nasdaq trading days. For the tender to be valid, however, the Depositary must receive the missing items within such two trading day period. See Section 3-"Procedures for Accepting the Offer and Tendering Shares."
Until what time may I withdraw previously tendered Shares?
You may withdraw previously tendered Shares any time prior to the Expiration Date by following the procedures for withdrawing your Shares in a timely manner. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn pursuant to Section 14(d)(5) of the Exchange Act after September 22, 2020, which is the 60th day after the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct your broker, dealer, commercial bank, trust company or nominee prior to the expiration of the Offer in a timely manner to arrange for the withdrawal of your Shares.
How do I withdraw previously tendered Shares?
To withdraw any of your previously tendered Shares, you must deliver a written notice of withdrawal, or a facsimile of one, 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 your broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Shares, who must withdraw such Shares while you still have the right to do so. See Section 4-"Withdrawal Rights."
What does the Benefytt Board think of the Offer?
We are making the Offer pursuant to the Merger Agreement, which has been approved by the Benefytt Board. The Benefytt Board has:
- determined that it is in the best interests of Benefytt and its stockholders to enter into the Merger Agreement; 5
- approved the execution and delivery of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein;
- declared advisable the Merger Agreement and the transactions contemplated thereby; and
- subject to Section 6.2 of the Merger Agreement and the terms and conditions of the Merger Agreement, resolved to recommend that the holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
See the "Introduction" and Section 10-"Background of the Offer; Past Contacts or Negotiations with Benefytt."
Do I have to vote to approve the Offer or the Merger?
No. Your vote is not required to approve the Offer. You only need to tender your Shares if you choose to do so. If, following the completion of the Offer, the Shares accepted for payment pursuant to the Offer together with the Shares otherwise owned by us or our affiliates equal at least one Share more than a majority of all issued and outstanding Shares as of one minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless the Offer is extended in accordance with the terms of the Merger Agreement (as may be so extended, the "Expiration Date") and the other conditions of the Merger are satisfied or waived, assuming certain statutory requirements are met, we will be able to consummate the Merger pursuant to Section 251(h) of the DGCL without a vote or any further action by the stockholders of the Company. See Section 12-"Purpose of the Offer; Plans for Benefytt."
Upon successful consummation of the Offer, will Benefytt continue as a public company?
No. Following the purchase of Shares in the Offer, we expect to consummate the Merger in accordance with Section 251(h) of the DGCL, and no stockholder vote to adopt the Merger Agreement or any other action by the stockholders of Benefytt will be required in connection with the Merger. If the Merger takes place, Benefytt will no longer be publicly-owned or listed. We do not expect there to be a significant period of time between the consummation of the Offer and the consummation of the Merger. If you decide not to tender your Shares in the Offer and the Merger occurs as described above, unless you exercise appraisal rights in the manner described below, 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 in the Offer. Following consummation of the Merger, the Shares will no longer be eligible to be traded on Nasdaq or any other securities exchange, there will not be a public trading market for the Shares, and Benefytt will no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly-held companies. See Section 13-"Certain Effects of the Offer."
Will the Offer be followed by the Merger if all of the Shares are not tendered in the Offer?
Yes. So long as a sufficient number of Shares are tendered to satisfy the Minimum Condition in the Offer and the other conditions to the Offer and the Merger have been satisfied, then Purchaser will be merged with and into Benefytt. If the Minimum Condition is not satisfied, pursuant to the Merger Agreement, we are not required to accept any Shares for purchase or consummate the Merger and we may not accept the Shares tendered without Benefytt's consent. If the Merger takes place, Parent will own all of the Shares, and all remaining Class A Shares outstanding immediately prior to the the effective time of the Merger (the "Effective Time") (other than Class A Shares (1) held by Benefytt as treasury stock, (2) owned, directly or indirectly, by Parent or Purchaser (each Class A Share referred to in clauses (1) and (2), an "Excluded Share"), and (3) owned by Benefytt stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such Class A Shares in accordance with Section 262 of the DGCL (each Class A Share referred to in clause (3), a "Dissenting Share")) will be converted into the right to receive $31.00 per Class A Share in cash, without interest and less any applicable withholding taxes. Each Class B Share outstanding or held in treasury by Benefytt immediately prior to the consummation of the Merger shall automatically be cancelled and retired and will cease to exist, and no consideration shall be delivered in exchange therefor. See the "Introduction."
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If you do not consummate the Offer, will you nevertheless consummate the Merger?
No. None of Purchaser, Parent or Benefytt are under any obligation to pursue or consummate the Merger if the Offer has not been earlier consummated.
If I object to the price being offered, will I have appraisal rights?
Appraisal rights are not available as a result of the Offer. However, if the Merger takes place, stockholders who have not tendered their Shares in the Offer and who are entitled to demand and properly demand appraisal of such Shares pursuant to and comply in all respects with the applicable legal requirements, will have appraisal rights under Delaware law. If you choose to exercise your appraisal rights in connection with the Merger and you are entitled to demand, and properly demand, appraisal of your Shares pursuant to, and comply in all respects with, the applicable provisions of Delaware law, you will be entitled to payment for your Shares based on a judicial determination of the fair value of your Shares, together with interest from the Effective Time through the date of payment of the judgment upon the amount determined to be the fair value. Notwithstanding the foregoing, at any time before the entry of judgment in the proceedings, the surviving corporation in the Merger (the "Surviving Corporation") may pay to each holder of Shares entitled to appraisal an amount in cash, in which case interest shall accrue thereafter only upon the sum of (i) the difference, if any, between the amount so paid and the fair value of the Shares as determined by the Court of Chancery, and (ii) interest theretofore accrued, unless paid at that time. The fair value may be more than, less than or equal to the price that we are offering to pay you for your Shares in the Offer. Section 262 of the DGCL provides that the Court of Chancery shall dismiss the proceedings as to all holders of Shares who are otherwise entitled to appraisal rights unless (1) the total number of Shares entitled to appraisal exceeds 1% of the outstanding Shares of the class or series entitled to appraisal, or (2) the value of the consideration provided in the Merger for such total number of Shares exceeds $1 million. A copy of Section 262 of the DGCL has been filed as Annex B to Benefytt's Solicitation/Recommendation Statement on Schedule 14D-9. See Section 12-"Purpose of the Offer; Plans for Benefytt."
If I decide not to tender, how will the Offer affect my Shares?
If the Offer is consummated and certain other conditions are met, the Merger will occur and all of the Shares outstanding prior to the Effective Time (other than Excluded Shares, Dissenting Shares or any Class B Shares outstanding or held in treasury) will at the Effective Time be converted into the right to receive the Offer Price without interest and less any applicable withholding taxes or deductions required by applicable law. Therefore, if the Merger takes place, the principal difference to you between tendering your Shares and not tendering your Shares is that if you tender your Shares, you will be paid earlier and that no appraisal rights will be available. Because the Merger will be effected under Section 251(h) of the DGCL, assuming the requirements of Section 251(h) of the DGCL are met, no stockholder vote to adopt the Merger Agreement or any other action by the stockholders of Benefytt will be required in connection with the Merger. We do not expect there to be significant time between the consummation of the Offer and the consummation of the Merger. Upon consummation of the Merger, there no longer will be any public trading market for the Shares. Also, Benefytt will no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC relating to publicly-held companies. See the "Introduction" and Section 13-"Certain Effects of the Offer."
What is the market value of my Shares as of a recent date?
On July 10, 2020, the last trading day before execution of the Merger Agreement was announced, the last sale price of a Class A Share reported on Nasdaq was $22.37 per Class A Share. The Offer Price represents a 59% premium to Benefytt's 30-dayvolume-weighted average price per Class A Share as of the close of trading on July 10, 2020. On July 23, 2020, the last trading day before we commenced the Offer, the last sale price of the Class A Shares reported on Nasdaq was $31.02 per Class A Share. We encourage you to obtain a recent quotation for Shares in deciding whether to tender your Shares. See Section 6-"Price Range of Shares; Dividends."
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Have any stockholders already agreed to tender their Shares in the Offer or to otherwise support the Offer?
Yes. We have entered into a tender and support agreement (the "Tender Agreement") with Michael W. Kosloske, Benefytt's founder, and certain entities controlled by Mr. Kosloske (collectively, the "Founder Parties"), who beneficially owned approximately 544,363 Class A Shares and 687,667 Class B Shares as of the date of the Merger Agreement. These Shares collectively constitute approximately 8.6% of the total outstanding Shares and the total voting power of the Shares. Parent, together with Benefytt, have also entered into an exchange agreement (the "Exchange Agreement") with Health Plan Intermediaries, LLC, Health Plan Intermediaries Sub, LLC (together, the "Kosloske Entities") and Health Plan Intermediaries Holdings, LLC ("Holdings"), pursuant to which the Kosloske Entities have agreed to exchange all of the Series B Membership Interests of Holdings held by them for Class A Shares on a one-to-one basis and the Kosloske Entities' Class B Shares will be automatically cancelled on the Expiration Date (the "Founder Exchange"). Pursuant to the Tender Agreement, Mr. Kosloske has agreed, among other things, to tender all of the Shares beneficially owned by him pursuant to the terms of the Offer immediately following the Founder Exchange, and in any event not later than the Expiration Date. See Section 11 -"The Merger Agreement; Other Agreements."
Are there any compensation arrangements between MDP and Benefytt's executive officers or other key employees?
No. As of the date of this Offer to Purchase, no member of Benefytt's current management has discussed or entered into any agreement, arrangement or understanding with Parent, Purchaser or their affiliates regarding employment with, or the right to participate in the equity of, the Surviving Corporation or Parent. See Section 12-"Purpose of the Offer; Plans for Benefytt."
If I tender my Shares, when and how will I get paid?
If the conditions to the Offer as set forth in Section 15 are satisfied or waived and Purchaser consummates the Offer and accepts your Class A Shares for payment, we will pay you an amount equal to the number of Shares you tendered multiplied by $31.00 per Share in cash, without interest and less any applicable withholding taxes, promptly following expiration of the Offer. No payment will be made in respect of Class B Shares tendered in the Offer. See Section 1-"Terms of the Offer" and Section 2-"Acceptance for Payment and Payment for Shares."
What will happen to my equity awards in the Offer and the Merger?
Stock options to purchase Shares and stock appreciation rights are not sought in or affected by the Offer. However, pursuant to the Merger Agreement, each outstanding equity award will be cancelled and converted into the right to receive cash consideration equal to (x) $31.00 minus the applicable per share exercise price of such award, multiplied by (y) the number of Shares subject to the equity award, subject to any required tax withholdings, payable shortly after the closing of the Merger (the "Award Cash-out Payment"). Any options or stock appreciation rights with a per share exercise price equal to or greater than $31.00 will be cancelled at the Effective Time for no payment or consideration. Benefytt's equity incentive plans will terminate as of the Effective Time. See Section 11-"The Merger Agreement; Other Agreements."
What are the material United States federal income tax consequences of the Offer and the Merger?
The receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger (or pursuant to the exercise of appraisal rights in accordance with Delaware law) will be a taxable transaction for United States federal income tax purposes if you are a United States holder (as defined in Section 5-"Certain Material United States Federal Income Tax Consequences"). In general, you will recognize capital gain or loss equal to the difference between your adjusted tax basis in the Shares you tender or exchange in the Merger (or retain for exercise of appraisal rights) and the amount of cash you receive for those Shares. If you are a United States
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holder and you hold your Shares as a capital asset, the gain or loss that you recognize will be a capital gain or loss and will be treated as a long-term capital gain or loss if you have held the Shares for at least one year. If you are a Non-United States holder (as defined in Section 5-"Certain Material United States Federal Income Tax Consequences"), you will generally not be subject to United States federal income tax on your receipt of cash in exchange for your Shares pursuant to the Offer or the Merger (or pursuant to the exercise of appraisal rights in accordance with Delaware law). You should consult your tax advisor about the particular tax consequences to you of tendering your Shares. See Section 5-"Certain Material United States Federal Income Tax Consequences" for a further discussion of certain material United States federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the Merger or exercising appraisal rights.
Who should I talk to if I have additional questions about the Offer?
You may call D.F. King & Co, Inc., the Information Agent for the Offer, toll-free at (888) 628-8208 or you may contact them by email at benefytt@dfking.com. Banks and brokers may call (212) 269-5550.
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INTRODUCTION
To the Holders of Shares of Class A Common Stock and Class B Common Stock of Benefytt Technologies, Inc.:
Daylight Beta Corp. ("Purchaser"), a Delaware corporation and a direct wholly-owned subsidiary of Daylight Beta Parent Corp. ("Parent"), a Delaware corporation controlled by Madison Dearborn Partners Fund VIII-A&C, L.P. ("MDP GP"), hereby offers to purchase for cash all outstanding shares of Class A Common Stock, par value $0.001 per share (each, a "Class A Share"), whether vested or unvested, of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt" or the "Company"), at a price of $31.00 per Class A Share, net to the seller in cash, without interest and less any applicable withholding taxes (such amount or any higher amount per share that may be paid pursuant to the Offer being hereinafter referred to as the "Offer Price"), and all outstanding shares of Class B Common Stock, par value $0.001 per share (each, a "Class B Share" and, together with the Class A Shares, the "Shares") of Benefytt, for no consideration ($0.00), upon the terms and subject to the conditions set forth in this offer to purchase (this "Offer to Purchase") and in the related letter of transmittal (the "Letter of Transmittal") (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The Offer and the withdrawal rights will expire at one minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless the Offer is extended in accordance with the terms of the Merger Agreement (as defined below) (as may be so extended, the "Expiration Date").
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 12, 2020 (as the same may be amended, the "Merger Agreement"), by and among Parent, Purchaser and Benefytt. The Merger Agreement provides that Purchaser will be merged with and into Benefytt (the "Merger") with Benefytt continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of Parent (the "Surviving Corporation"). Pursuant to the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each Class A Share outstanding immediately prior to the Effective Time (other than Class A Shares (1) held by Benefytt as treasury stock, (2) owned, directly or indirectly, by Parent or Purchaser (each Class A Share referred to in clauses (1) and (2), an "Excluded Share"), and (3) owned by Benefytt stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such Class A Shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the "DGCL") (each Class A Share referred to in clause (3), a "Dissenting Share")) will be converted into the right to receive $31.00 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration"). Each Class B Share outstanding or held in treasury by Benefytt immediately prior to the Effective Time shall automatically be cancelled and retired and will cease to exist, and no consideration shall be delivered in exchange therefor. The Merger Agreement is more fully described in Section 11-"The Merger Agreement; Other Agreements," which also contains a discussion of the treatment of Benefytt equity awards.
Tendering stockholders who are record owners of their Shares and tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 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, dealer, commercial bank, trust company or other nominee should consult such institution as to whether it charges any service fees or commissions. Parent or Purchaser will pay all charges and expenses of American Stock Transfer & Trust Company LLC, as depositary for the Offer (the "Depositary"), and D.F. King & Co., Inc., as information agent for the Offer (the "Information Agent"), incurred in connection with the Offer. See Section 17-"Fees and Expenses."
Following careful consideration the board of directors of Benefytt has: (i) determined that it is in the best interests of Benefytt and its stockholders to enter into the Merger Agreement, (ii) approved the execution and delivery of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein, (iii) declared advisable the Merger Agreement and the transactions contemplated thereby, and (iv) subject to Section 6.2 of the Merger Agreement and the terms and conditions of the Merger Agreement, resolved to recommend
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the holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
A more complete description of the Benefytt 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 Benefytt's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), which is being mailed to the stockholders of Benefytt with this Offer to Purchase.
The Offer is conditioned upon, among other things:
- there being validly tendered and received (within the meaning of Section 251(h) of the DGCL) and not validly withdrawn (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in satisfaction of such guarantee in accordance with Section 251(h) of the DGCL) as of one minute after 11:59 p.m., Eastern Time, on August 20, 2020 (the "Expiration Date," unless extended by Purchaser in accordance with the Merger Agreement, in which event "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire) a number of Shares which, together with any Shares beneficially owned by Parent or any wholly-owned Subsidiary of Parent, equals at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date (the "Minimum Condition");
- there not being in effect immediately prior to the Expiration Date any law or order (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits the consummation of the Offer, the Merger or the other transactions contemplated by the Merger Agreement (the "Transactions");
- the expiration or early termination of the waiting period applicable to the consummation of the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and
- the absence of a termination of the Merger Agreement in accordance with its terms.
The Offer is also subject to a number of other conditions. We can waive some of the conditions to the Offer without the consent of Benefytt. We cannot, however, waive the Minimum Condition without the consent of Benefytt. See Section 15-"Certain Conditions of the Offer."
Benefytt has advised Parent that, as of the close of business on July 16, 2020, there were 13,567,640 Class A Shares and 687,667 Class B Shares issued and outstanding (constituting a total of 14,255,307 shares issued and outstanding). Assuming that no Shares are issued after July 16, 2020, a minimum of 7,127,655 Shares would need to be validly tendered and not withdrawn prior to the Expiration Date in order to satisfy the Minimum Condition. The actual number of Shares required to be tendered to satisfy the Minimum Condition will depend on the actual number of Shares outstanding on the date we accept Shares for payment pursuant to the Offer.
The Merger Agreement provides that, from and after the Effective Time, until successors are duly elected or appointed and qualified in accordance with applicable law, the directors of Purchaser immediately prior to the Effective Time will be the directors of the Surviving Corporation and the officers of Benefytt immediately prior to the Effective Time will be the officers of the Surviving Corporation.
This Offer to Purchase does not constitute a solicitation of proxies, and Purchaser is not soliciting proxies in connection with the Offer or the Merger. If the Minimum Condition is satisfied, Purchaser would have sufficient voting power after the time Purchaser accepts for payment all Shares validly tendered and not withdrawn pursuant to the Offer (the "Offer Acceptance Time") to approve the Merger without the vote of any other stockholder of Benefytt pursuant to Section 251(h) of the DGCL. We do not foresee any reason that would prevent us from completing the Merger pursuant to Section 251(h) of the DGCL following the consummation of the Offer. See Section 11-"The Merger Agreement; Other Agreements."
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Certain material United States federal income tax consequences of the sale of Shares pursuant to the Offer and the exchange of Shares pursuant to the Merger are described in Section 5-"Certain Material United States Federal Income Tax Consequences."
This Offer to Purchase and the Letter of Transmittal and the other exhibits to the Schedule TO 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.
Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), Purchaser will accept for payment and pay for all Class A Shares validly tendered prior to the Expiration Date and not properly withdrawn as permitted under Section 4-"Withdrawal Rights." Purchaser will also accept all Class B Shares validly tendered prior to the Expiration Date and not properly withdrawn as permitted under Section 4-"Withdrawal Rights," however no payment will be made in respect of such Class B Shares. The term "Expiration Date" means one minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open, in which event the term "Expiration Date" means the latest time and date on which the Offer, as so extended, expires.
The Offer is conditioned upon the satisfaction of the Minimum Condition and the other conditions set forth in Section 15-"Certain Conditions of the Offer."
Purchaser is required to extend the Offer beyond its then-scheduled Expiration Date: (i) for the minimum period required by any law, any interpretation or position of the SEC, the staff thereof or any rules and regulations of the Nasdaq Stock Market ("Nasdaq") applicable to the Offer (including in order to comply with Rule 14e-1(b) promulgated under the Exchange Act in respect of any change in the Offer Price) and (ii) if any condition to the Offer has not been satisfied or waived by Purchaser or Parent (to the extent waivable) as of such Expiration Date, for one or more 10- business day periods (or such longer period as may be agreed to by the parties to the Merger Agreement) in order to permit the Offer Conditions to be satisfied; provided that if the sole unsatisfied Offer Condition (other than those conditions that by their terms are to be satisfied at the Offer Acceptance Time) is the Minimum Condition, Purchaser is not required to make more than two such 10-business day extensions. In no event will Purchaser be required to extend the Offer beyond November 9, 2020 or, if earlier, the termination of the Merger Agreement in accordance with its terms.
In addition, Purchaser may (but is not required to) extend the offer for successive periods of up to five business days if, as of any scheduled Expiration Date: (1) all of the Offer Conditions have been satisfied or waived (other than the conditions that are to be satisfied at the Offer Acceptance Time), (2) the full amount of the Debt Financing has not been funded and will not be available to be funded at the closing of the Offer and (3) Parent and the Purchaser acknowledge and agree in writing that the Offer Conditions relating to the accuracy of the Company's representations and warranties in the Merger Agreement and the absence of a Company Material Adverse Effect (in each case described in Section 15-"Certain Conditions to the Offer") will be deemed to have been satisfied or waived from and after the initial extension of the Offer (if such Offer Conditions were actually satisfied at the time of such extension).
Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, Purchaser expressly reserves the right to:
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increase the Offer Price, (ii) waive any Offer Condition (other than the Minimum Condition) or (iii) make any other changes to the terms and conditions of the Offer not inconsistent with the terms of the Merger Agreement. Purchaser may not, however, without the prior written consent of the Company, (A) amend or waive the Minimum Condition, (B) decrease the Offer Price or (C) make any change to the Offer that: (1) changes the form of consideration to be delivered by Purchaser pursuant to the Offer, (2) reduces the number of Class A Shares to be purchased in the Offer to less than the amount required to satisfy the Minimum Condition, (3) imposes conditions or requirements to the Offer in addition to the Offer Conditions,
(4) terminates the Offer or accelerates, extends or otherwise changes the Expiration Date, except as permitted by the Merger Agreement, (5) otherwise amends or modifies any of the other terms of the Offer in a manner that adversely affects any holder of Class A Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other Transactions, or
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(6) provides for any "subsequent offering period" within the meaning of Rule 14d-11 promulgated under the Exchange Act.
The rights reserved by Purchaser in the preceding paragraph are in addition to Purchaser's rights pursuant to Section 15-"Certain Conditions of the Offer." Any extension, delay, termination, waiver or amendment 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 Expiration Date, in accordance with the public announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) 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 shall 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 on which banks are not required or authorized by law to close in New York City.
The Merger Agreement does not contemplate a subsequent offering period for the Offer.
If Purchaser extends the Offer or if Purchaser (whether before or after its acceptance for payment of Shares) is delayed in its acceptance for payment of or payment for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described herein under Section 4-"Withdrawal Rights." However, the ability of Purchaser to delay the payment for Shares that Purchaser has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder promptly pay the consideration offered. Alternatively, if the Offer is not consummated, the Shares are not accepted for payment or Shares are properly withdrawn, promptly after the termination of the Offer or withdrawal of such Shares, Purchaser shall, and Parent shall cause Purchaser to, immediately return, and shall cause the Depositary to return, in accordance with applicable laws, all tendered Shares to the registered holders of such Shares.
If Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, Purchaser will disseminate additional Offer materials and extend the Offer to the extent required by Rules 14d-4(d),14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an Offer must remain open following material changes in the terms of the Offer, other than a change in price, percentage of securities sought, or inclusion of or changes to a dealer's soliciting fee, will depend upon the facts and circumstances, including the materiality, of the 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, if material changes are made with respect to information that approaches the significance of price and share levels, a minimum of 10 business days may be required to allow for adequate dissemination and investor response. Accordingly, if, prior to the Expiration Date, Purchaser decreases the number of Shares being sought or increases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the 10th 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 Expiration Date, Purchaser increases 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 the Merger Agreement is terminated in accordance with its terms, Purchaser shall, and Parent shall cause Purchaser to, immediately and unconditionally terminate the Offer and not acquire any Shares pursuant thereto,
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and Purchaser shall, and Parent shall cause Purchaser to, immediately return, and shall cause the Depositary to return, in accordance with applicable laws, all tendered Shares to the registered holders of such Shares.
Benefytt has provided Purchaser with Benefytt's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Benefytt'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.
Upon the terms and subject to the conditions of the Merger Agreement and the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment) and the satisfaction or earlier waiver of all the conditions to the Offer set forth in Section 15 -"Certain Conditions of the Offer," Purchaser will accept for payment and will pay for all Class A Shares validly tendered prior to the Expiration Date and not properly withdrawn pursuant to the Offer promptly after the Expiration Date. Subject to the Merger Agreement and in compliance with
Rule 14e-1(c) under the Exchange Act, Purchaser expressly reserves the right to delay payment for Shares pending receipt of regulatory or government approvals. Rule 14e-1(c) under the Exchange Act relates to the obligation of Purchaser to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer. See Section 16-"Certain Legal Matters; Regulatory Approvals." No Payment will be made in respect of Class B Shares.
In all cases, payment for Class A Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of
- if applicable the certificates evidencing such Shares (the "Share Certificates") or, if the Class A Shares are held via a book entry at The Depository Trust Company, (the "Book-Entry Transfer Facility") confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3-"Procedures for Accepting the Offer and Tendering Shares," (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer at the Book-Entry Transfer Facility, 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. Accordingly, tendering stockholders may be paid at different times depending upon when Share Certificates, Letter of Transmittal or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.
For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of Purchaser's 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 Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or Purchaser is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to Purchaser's rights under the Offer hereof, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 4-"Withdrawal Rights" and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest on the Offer Price for Shares be paid, regardless of any delay in making such payment.
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If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased or untendered Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3-"Procedures for Accepting the Offer and Tendering Shares," such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), promptly following the expiration or termination of the Offer.
If, prior to the Expiration Date, Purchaser increases the price being paid for Shares, Purchaser will pay the increased consideration for all Shares purchased pursuant to the Offer, whether or not those Shares were tendered prior to the increase in consideration.
3. Procedures for Accepting the Offer and Tendering Shares.
Valid Tenders. In order for a stockholder to validly tender Shares pursuant to the Offer, either (i) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer at the Book Entry Transfer Facility, an Agent's Message in lieu of the Letter of Transmittal), and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either the Share Certificates evidencing tendered Shares (if any) must be received by the Depositary at such address or, for Shares held via book entry at the Book-Entry Transfer Facility, such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (ii) the tendering stockholder must comply with the guaranteed delivery procedures described below. No alternative, conditional or contingent tenders will be accepted. For any uncertificated Shares held of record by a person other than a clearing corporation as nominee, such Shares will only be deemed to have been tendered for the purposes of satisfying the Minimum Condition upon physical receipt of an executed Letter of Transmittal by the Depositary.
DTC Book-EntryTransfer. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, either the Letter of Transmittal (or a manually signed facsimile thereof), 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 received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.
The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, that states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that 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 such participant.
Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 3, includes any participant in the Book-Entry Transfer Facility's systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith, unless such holder has completed either the box entitled
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"Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (ii) if the Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of or participant in a recognized "Medallion Program" approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP), or any other "eligible guarantor institution," as such term is defined in Rule 17Ad-15 of the Exchange Act (each, an "Eligible Institution" and collectively "Eligible Institutions"). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued in the name of or returned to, a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and the Share Certificates evidencing such stockholder's Shares are not immediately available or such stockholder cannot deliver the Share Certificates and all other required documents to the Depositary prior to the Expiration Date, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered; provided that all of the following conditions are satisfied:
- such tender is made by or through an Eligible Institution;
- a properly completed and duly executed "Notice of Guaranteed Delivery," substantially in the form made available by Purchaser, is received prior to the Expiration Date by the Depositary as provided below; and
- if applicable, the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal are received by the Depositary within two trading days after the date of execution of such Notice of Guaranteed Delivery. As used in this Offer to Purchase, "trading day" means any day on which Nasdaq is open for business.
The Notice of Guaranteed Delivery may be delivered by overnight courier or transmitted by facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by Purchaser. In the case of Shares held through the Book-Entry Transfer Facility, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant by means of the confirmation system of the Book-Entry Transfer Facility.
Shares tendered by a Notice of Guaranteed Delivery will not be deemed "received" for the purpose of satisfying the Minimum Condition unless and until Shares underlying such Notice of Guaranteed Delivery are delivered to the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase.
The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer at the Book-Entry Transfer Facility, receipt of a Book-Entry Confirmation). 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.
Tender Constitutes Binding Agreement. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder's acceptance of the Offer, as well as the tendering
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stockholder's representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal, and that when Purchaser accepts the Shares for payment, it will acquire good and unencumbered title, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and Purchaser upon the terms and subject to the conditions of the Offer.
Determination of Validity. All questions as to the validity, form, eligibility (including, without limitation, time of receipt) and acceptance for payment of any tender of Shares will be determined by Purchaser in its discretion. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, 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 other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of Purchaser. None of Purchaser, 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. Stockholders may challenge Purchaser's interpretation of the terms and conditions of the Offer (including, without limitation, the Letter of Transmittal and the instructions thereto), and only a court of competent jurisdiction can make a determination that will be final and binding on all parties.
Appointment. By executing the Letter of Transmittal (or delivering an Agent's Message) as set forth above, the tendering stockholder will irrevocably appoint the designees of Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, 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 or rights issued or issuable in respect of such Shares. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective) with respect thereto. Each designee of Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of Benefytt's stockholders, actions by written consent in lieu of any such meeting or otherwise, as such designee in its sole discretion deems proper. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Shares, Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares and other securities and rights, including voting at any meeting of stockholders.
Backup Withholding. Under the "backup withholding" provisions of United States federal income tax law, the Depositary may be required to
withhold and pay over to the Internal Revenue Service (the "IRS") a portion of the amount of any payments made to certain stockholders pursuant to the Offer with respect to payments to certain stockholders of the Offer Price of Shares purchased pursuant to the Offer, unless, (a) each such stockholder who is a "U.S. person" as defined in the instructions to the IRS Form W-9 provides the Depositary with such stockholder's correct taxpayer identification number ("TIN") and certifies that such stockholder is not subject to backup withholding by completing the IRS Form W-9 in the Letter of Transmittal, (b) the IRS does not notify the Depositary that the TIN provided is incorrect, (c) the IRS does not notify the Depositary to withhold interest or dividends because you have underreported interest or dividends on your income tax return, and (d) such stockholder certifies that they are not subject to backup withholding for underreporting of interest and dividends. Certain stockholders (including, among others, certain corporations and certain non-United States individuals) are not subject to backup withholding. If a stockholder does not provide its correct TIN or fails to provide the certifications described above, the IRS may impose a penalty on the stockholder and payment of cash
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to the stockholder pursuant to the Offer may be subject to United States federal backup withholding (currently imposed at a rate of 24%). All stockholders surrendering Shares pursuant to the Offer who are U.S. persons should complete and sign the IRS Form W-9 included in the Letter of Transmittal to provide the information necessary to avoid backup withholding. Each stockholder who is not such a U.S. person must submit an appropriate and properly completed IRS Form W-8 (a copy of which may be obtained from the Depositary or from the IRS website at: http://www.irs.gov/w8) certifying, under penalties of perjury, to such Non-United States holder's foreign status in order to establish an exemption from backup withholding. See Instruction 8 of the Letter of Transmittal.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after September 22, 2020, which is the 60th day after the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer.
For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses 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(s) of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share 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 Accepting the Offer and Tendering Shares," any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.
If Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described herein.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3-"Procedures for Accepting the Offer and Tendering Shares."
All questions as to the form and validity (including, without limitation, time of receipt) of any notice of withdrawal will be determined by
Purchaser, in its reasonable discretion, whose determination will be final and binding upon the tendering party. None of Purchaser, the Depositary, the Information Agent or any other person will be under duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.
5. Certain Material United States Federal Income Tax Consequences.
The following is a summary of certain material United States federal income tax consequences to beneficial holders of Shares upon the tender of Shares for cash pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger (or pursuant to the exercise of appraisal rights in accordance with Delaware law). This
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summary is general in nature and does not discuss all aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any local, state or non-United States jurisdiction and does not consider any aspects of United States federal tax law other than income taxation (such as estate or gift tax laws or the Medicare tax on certain investment income). This summary deals only with Shares held as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended (the "Code") (generally, property held for investment), and does not address tax considerations applicable to any holder 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;
- an insurance company;
- a mutual fund;
- a regulated investment company or real estate investment trust;
- a controlled foreign corporation or passive foreign investment company;
- corporations that accumulate earnings to avoid United States federal income tax;
- a government organization;
- a person holding Shares through a partnership or other entity or arrangement classified as a partnership or disregarded entity for United States federal income tax purposes, including S corporations;
- a dealer, trader or broker in stocks and securities, commodities or currencies;
- a trader in securities that elects mark-to-market treatment;
- a person subject to the alternative minimum tax provisions of the Code;
- a person who 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 who holds Shares as "qualified small business stock" within the meaning of Section 1202 or Section 1045 of the Code;
- a person that actually or constructively owns five percent or more of the total combined voting power or value of our Shares;
- a person holding Shares that are, or were in the past, subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code);
- a person who is deemed to sell Shares under the constructive sale provisions of the Code;
- an accrual method taxpayer subject to Section 451(b) of the Code;
- a person that holds Shares as part of a hedge, straddle, constructive sale, conversion or other integrated transaction or as part of a synthetic security;
- a United States expatriate; or
- certain former citizens and long-term residents of the United States.
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 a partner in the partnership generally will depend upon
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the status of the partner and the activities of the partner and the partnership. Holders that are partnerships and partners in such partnerships should consult their own tax advisors regarding the tax consequences of exchanging the Shares pursuant to the Offer or pursuant to the Merger.
This summary is based on the Code, the regulations promulgated under the Code, 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. Important Note: If you are a citizen or tax resident or subject to the tax laws of more than one country, you should be aware that there might be additional or different tax and social insurance consequences that may apply to you.
Because individual circumstances may differ, 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-United States 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), created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
- an estate, the income of which is subject to United States federal income taxation, regardless of its source; or
- a trust if (A) (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and (ii) one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it was in existence on August 20, 1996 and has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
Payments with Respect to Shares
The exchange of Shares for cash pursuant to the Offer or the Merger (or pursuant to the exercise of appraisal rights) 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 the Merger (or pursuant to the exercise of appraisal rights) 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. 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 of such holder's Shares for cash.
Long-term capital gains of non-corporate United States holders are currently subject to United States federal income tax at a reduced rate. The ability to use any capital loss to offset other income or gain is subject to certain limitations under the Code. If a United States holder acquired different blocks of Shares at different times and different prices, such United States holder must calculate gain or loss separately with respect to each such block of Shares.
If you are tendering unvested restricted Shares, your tax treatment may be different than as described herein.
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Backup Withholding Tax
Proceeds from the exchange of Shares for cash pursuant to the Offer or the Merger (or pursuant to the exercise of appraisal rights) generally will be subject to backup withholding at the applicable rate (currently 24%) unless the applicable United States holder or other payee provides its valid TIN and complies with certain certification procedures or otherwise establishes an exemption from backup withholding tax. Each United States holder who is a "U.S. person" (as defined in the instructions to IRS Form W-9) 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. See Section 3-"Procedures for Accepting the Offer and Tendering Shares." United States holders who fail to furnish a TIN in the manner required may also be subject to penalties imposed by the IRS.
Backup withholding is not an additional tax. To the extent that any amounts withheld under the backup withholding rules from a payment to a United States holder results in an overpayment of tax, the amount of such overpayment may be refunded or allowed as a credit against that holder's United States federal income tax liability, provided that the required information is timely furnished to the IRS. Each United States holder should consult his or her own tax advisors regarding application of backup withholding in his or her particular circumstances and the availability of, and procedure for obtaining, an exemption from backup withholding under current United States Treasury regulations.
Non-United States Holders
The following is a summary of certain material United States federal income tax consequences that will apply to you if you are a Non-United States holder of Shares. The term "Non-United States holder" means a beneficial owner of Shares that is not a United States holder or a partnership for United States federal income tax purposes.
The following discussion applies only to Non-United States holders, and assumes that no item of income, gain, deduction or loss derived by the Non-United States holder in respect of Shares at any time is effectively connected with the conduct of a United States trade or business.
Payments with Respect to Shares
Gain recognized on payments made to a Non-United States holder with respect to Shares exchanged for cash in the Offer or the Merger (or pursuant to the exercise of appraisal rights) generally will be exempt from United States federal income tax unless:
- 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 is an individual who is present in the United States for 183 or more days in the taxable year of the sale and certain other conditions exist; or
- Benefytt is or has been a United States real property holding corporation ("USRPHC") for United States federal income tax purposes during the shorter of the Non-United States holder's holding period or the five years preceding the sale, and certain exceptions do not apply.
A Non-United States holder described in the first bullet point above 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 a Non-United States holder described in the first bullet point above is a non-United States corporation for United States federal income tax purposes, it may be subject to an additional "branch profits tax" at a 30% rate or at a lower rate if such holder is eligible for the benefits of an income tax treaty that provides for a lower rate.
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An individual Non-United States holder described in the second bullet point above will generally be subject to a flat 30% (or such lower rate as may be provided by an applicable income tax treaty) tax on the gain derived from the sale, which may be offset by United States source capital losses, even though the individual is not considered a resident of the United States, provided that such Non-United States holder has timely filed United States federal income tax returns with respect to such losses.
Benefytt has not been, is not and does not anticipate becoming a USRPHC prior to the Offer Acceptance Time (or, if applicable, the Effective Time) for United States federal income tax purposes. In the event Benefytt is or becomes a USRPHC prior to the Offer Acceptance Time (or, if applicable, the Effective Time), provided that our common stock is regularly traded, as defined by applicable United States Treasury regulations, on an established securities market, Shares will be treated as "United States real property interests," subject to United States federal income tax, only with respect to a Non-United States holder that actually or constructively owns more than 5% of the Shares during the shorter of the five year period ending on date of the Offer Acceptance Time (or, if applicable, the Effective Time), or period that the Non-United States holder held the Shares.
Backup Withholding Tax
A Non-United States holder generally will be subject to backup withholding (currently imposed at a rate of 24%) with respect to the proceeds from the disposition of Shares pursuant to this Offer to Purchase or the Merger (or pursuant to the exercise of appraisal rights) unless 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. See Section 3-"Procedures for Accepting the Offer and Tendering Shares." IRS Forms W-8 are available for download from the IRS website at: http://www.irs.gov/w8.
Backup withholding is not an additional tax. To the extent that any amounts withheld under the backup withholding rules from a payment to a Non-United States holder results in an overpayment of tax, the amount of such overpayment may be refunded or allowed as a credit against that holder's United States federal income tax liability, provided that the required information is timely furnished to the IRS. Each Non-United States holder should consult his or her own tax advisors regarding application of backup withholding in his or her particular circumstances and the availability of, and procedure for obtaining, an exemption from backup withholding under current United States Treasury regulations.
STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE OFFER OR THE MERGER (OR THE EXERCISE OF APPRAISAL RIGHTS) ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-UNITED STATES TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
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6. Price Range of Shares; Dividends.
The Class A Shares are listed on the Nasdaq under the symbol "BFYT." The Class B Shares are not listed on any stock exchange and there is no market for such shares. The following table sets forth for the indicated periods the high and low sales prices of the Class A Shares as reported on Nasdaq. Benefytt has not declared or paid any dividends during the applicable periods.
High | Low | |||||
Year Ended December 31, 2018: | ||||||
First Quarter | $ 36.65 | $ 21.20 | ||||
Second Quarter | 35.80 | 21.65 | ||||
Third Quarter | 62.90 | 30.70 | ||||
Fourth Quarter | 63.13 | 22.17 | ||||
Year Ended December 31, 2019: | ||||||
First Quarter | 46.60 | 25.76 | ||||
Second Quarter | 35.00 | 18.27 | ||||
Third Quarter | 27.08 | 16.25 | ||||
Fourth Quarter | 27.95 | 15.95 | ||||
Year Ending December 31, 2020: | ||||||
First Quarter | 31.49 | 15.60 | ||||
Second Quarter | 26.28 | 16.95 | ||||
Third Quarter (through July 23, 2020) | 31.42 | 18.05 |
The Offer Price represents a 59% premium to Benefytt's 30-dayvolume-weighted average price as of the close of trading on July 10, 2020, the last trading day prior to the announcement of the signing of the Merger Agreement. On July 23, 2020, the last trading day prior to the original printing of this Offer to Purchase, the last per share sale price of the Shares reported on Nasdaq was $31.02 per share.
Stockholders are urged to obtain current market quotations for Shares before making a decision with respect to the Offer.
The Merger Agreement prohibits the declaration or payment of any dividend or other distribution with respect to Benefytt common stock, unless consented to by Parent in writing.
7. Certain Information Concerning Benefytt.
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 under "Available Information") and should be considered in conjunction with the financial and other information in such filings and other publicly available information regarding the Company. Neither Parent nor Purchaser has any knowledge that would indicate that any statements contained in this Offer to Purchase based on such filings and information is untrue.
General. Headquartered in Tampa, Florida, Benefytt is a technology driven distributor of Medicare, health and life insurance products that meet the demands and needs of its consumers. Benefytt actively markets products to individuals through televised commercials, e-commerce platforms and digital marketing campaigns, strategic marketing partner relationships, and other licensed-agent distribution channels, consisting of both its internal distribution network, and an external distribution network of independently owned and operated distributors. Benefytt's principal executive offices are at 3450 Buschwood Park Dr., Suite 200, Tampa, Florida 33618 and its telephone number is (813) 397-1187.
Available Information. Benefytt is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the SEC relating to its
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business, financial condition and other matters. Certain information, as of particular dates, concerning Benefytt's business, principal physical properties, capital structure, material pending litigation, operating results, financial condition, directors and officers (including their remuneration and equity incentive awards granted to them), the principal holders of Benefytt's securities, any material interests of such persons in transactions with Benefytt, and other matters is required to be disclosed in proxy statements and periodic reports distributed to Benefytt's stockholders and filed with the SEC. Such reports, proxy statements and other information are available free of charge at the SEC's website at www.sec.gov. Benefytt also maintains a website at www.benefytt.com. The information contained in, accessible from or connected to Benefytt's website is not incorporated into, or otherwise a part of, this Offer to Purchase or any of Benefytt's filings with the SEC. The website addresses referred to in this paragraph are inactive text references and are not intended to be actual links to the websites.
8. Certain Information Concerning Parent and Purchaser.
Parent and Purchaser are indirectly controlled by MDP GP, which is the general partner of Madison Dearborn Capital Partners VIII-A, L.P., Madison Dearborn Capital Partners VIII-C, L.P. and Madison Dearborn Capital Partners VIII Executive-A, L.P., each a Delaware limited partnership advised by MDP (collectively, the "MDP Funds"). The principal office for each of Parent and Purchaser, the MDP Funds, the MDP GP, and MDP is located at c/o Madison Dearborn Partners, LLC, 70 West Madison Street, Suite 4600, Chicago, IL 60602 and the telephone number of these entities is
- 895-1000.Purchaser and Parent were formed for the purpose of completing the Offer and the Merger and have conducted no business activities other than those related to the structuring and negotiation of the Offer and the Merger. The principal business of MDP is as a private equity investment firm.
The name, citizenship, business address, business phone number, principal occupation or employment and five-year employment history for each of the directors, executive officers and control persons of Parent, Purchaser, the MDP Funds, MDP GP, MDP and certain other entities formed by the MDP Funds in connection with the Offer are set forth in Schedule I to this Offer to Purchase.
Except as otherwise described in this Offer to Purchase, (i) none of Parent, Purchaser, the MDP Funds, MDP GP or MDP nor, to the best knowledge of MDP, 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 or any other equity securities of Benefytt and (ii) none of Parent, Purchaser, the MDP Funds, MDP GP or MDP, nor, to the best knowledge of MDP, any of the persons or entities referred to above nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the Shares or any other equity securities of Benefytt during the past 60 days.
Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, Purchaser, the MDP Funds, MDP GP or MDP, nor, to the best knowledge of MDP, any of the persons listed in Schedule I to this Offer to Purchase, has any present or proposed material agreement, arrangement, understanding or relationship with Benefytt or any of its executive officers, directors, controlling persons or subsidiaries. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, Purchaser, the MDP Funds, MDP GP or MDP nor, to the best knowledge of MDP, any of the persons listed in Schedule I to this Offer to Purchase, has any agreement, arrangement, or understanding with any other person with respect to any securities of Benefytt, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies.
On September 4, 2019, an affiliate of Amynta Holdings LLC ("Amynta"), which is partially and indirectly owned by Madison Dearborn Capital Partners VII-A, L.P., Madison Dearborn Capital Partners VII Executive-A, L.P. and Madison Dearborn Capital Partners VII-C, L.P., executed a non-disclosure agreement with Benefytt relating to a potential transaction. Amynta submitted an indication of interest to Benefytt's investment bankers on September 23, 2019, however Amynta was not invited to proceed to the next round of Benefytt's process.
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Except as set forth in this Offer to Purchase, none of Parent, Purchaser, the MDP Funds, MDP GP or MDP nor, to the best knowledge of MDP, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with Benefytt 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 material contacts, negotiations or transactions between Parent, Purchaser, the MDP Funds, MDP GP or MDP or any of their respective subsidiaries or, to the best knowledge of MDP, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Benefytt or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of Benefytt's securities, an election of Benefytt's directors or a sale or other transfer of a material amount of Benefytt's assets during the past two years.
None of the persons listed in Schedule I has, to the knowledge of Parent, Purchaser, the MDP Funds, MDP GP or MDP, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the persons listed in Schedule I to this Offer to Purchase has, to the knowledge of Parent, Purchaser, the MDP Funds, MDP GP or MDP, during the past five years, been 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 the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
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 its exhibits are available on the SEC's website at http://www.sec.gov.
9. Source and Amount of Funds.
The Offer is not conditioned upon any financing arrangements.
Parent and Purchaser estimate that the total amount of funds required (i) to purchase all of the Shares pursuant to the Offer, (ii) to complete the Merger (which estimate includes payment in respect of all outstanding "in-the-money" options and stock appreciation rights granted under Benefytt's equity plans), (iii) to pay estimated related transaction fees and expenses, (iv) to repay certain indebtedness of Benefytt and (v) to make certain payments in connection with the termination of the Tax Receivable Agreement, will be approximately $732 million. Parent and Purchaser anticipate funding these payments through the issuance of equity of Parent and the incurrence or issuance of debt and/or equity of Purchaser, including the Debt Financing as described herein.
Bank Financing. Purchaser has received a commitment letter, dated as of July 12, 2020 (as amended, supplemented or otherwise modified, the "Bank Commitment Letter"), from Truist Bank and SunTrust Robinson Humphrey, Inc. (together with Truist Bank and any additional lenders that become party thereto via joinder or otherwise, collectively, the "Bank Financing Sources") pursuant to which the Bank Financing Sources made debt commitments for the purpose of refinancing certain indebtedness of Benefytt and to finance certain other working capital needs, capital expenditures and other general corporate needs (such commitments, the "Bank Financing"). The proceeds of the Bank Financing, together with equity contributions from the MDP Funds (and any co-investors), and the proceeds of the Preferred Stock (as defined below) financing will be sufficient to fund the acquisition of Benefytt, to refinance the indebtedness of Benefytt described below, and to pay the fees, premiums, expenses and other transaction costs incurred in connection with the foregoing.
Pursuant to the Bank Commitment Letter, the Bank Financing Sources have committed to provide, subject to the terms and conditions of the Bank Commitment Letter, (i) a senior secured revolving credit facility in an aggregate principal amount equal to $65.0 million (the "Revolving Credit Facility"), and (ii) a senior secured term loan facility in an aggregate principal amount of $142.5 million (the "Term Loan Facility" and, together
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with the Revolving Credit Facility, the "Credit Facilities"), in each case with a term of three years from the closing of the Credit Facilities. To the extent the Company makes scheduled amortization payments and/or any prepayments of the Term Loan Facility between the date of the Merger Agreement and the Effective Time, the aggregate principal amount of the Term Loan Facility commitments shall be reduced on a dollar for dollar basis. The Credit Facilities are expected to bear interest, at the borrower's option, at a rate equal to (i) the "Base Rate" (defined as the highest of (x) the prime rate (as determined by Truist Bank), (y) the federal funds rate plus 0.50% per annum, or (z) a daily Eurodollar rate based on an interest period of one month plus 1.0% per annum, which in any case shall not be less than 0%) plus the "Applicable Rate" for loans bearing interest at the Base Rate (as set forth below) or (ii) the "Eurodollar Rate" (based on LIBOR) plus the "Applicable Rate" for loans bearing interest at the Eurodollar Rate (as set forth below), subject to a 0% Eurodollar floor. The "Applicable Rate" shall be determined as set forth in the grid below:
Consolidated Total Net Leverage Ratio | Applicable Margin for | Applicable Margin for |
Eurodollar Rate Loans | Base Rate Loans | |
Greater than 2.00:1.00 | 2.00% | 1.00% |
Less than or equal to 2.00:1.00 but greater than 1.00:1.00 | 1.75% | 0.75% |
Less than or equal to 1.00:1.00 | 1.50% | 0.50% |
The commitments will be secured by a perfected first priority security interest in substantially all present and after-acquired assets of Purchaser, Benefytt and each of Benefytt's direct and indirect wholly owned domestic subsidiaries, subject to customary exceptions (the "Loan Parties").
The funding of the Bank Financing is subject, among other things, to the execution by the Loan Parties and delivery of the definitive documentation of the Bank Financing; receipt of the MDP Funds' equity contribution; consummation of the debt refinancing described above; consummation of the Transactions in all material respects in accordance with the Merger Agreement; absence of any Company Material Adverse Effect (as defined in the Merger Agreement); the Bank Financing Sources' receipt of certain historical and pro forma financial information; an inside date of 30 days following the date of the Merger Agreement and certain other customary closing conditions.
The foregoing summary of certain provisions of the Bank Commitment Letter and all other provisions of the Bank Commitment Letter discussed herein are qualified by reference to the full text of the Bank Commitment Letter, a copy of which is filed as Exhibit (b)(1) to the Schedule TO and incorporated herein by reference.
Preferred Equity Financing. Daylight Beta Intermediate Corp., a Delaware corporation ("Intermediate"), an indirect parent company of Purchaser, has received a commitment letter, dated as of July 12, 2020 (as amended, supplemented or otherwise modified, the "Preferred Commitment Letter" and, together with the Bank Commitment Letter, the "Debt Commitment Letters"), from HPS Investment Partners, LLC (together with its affiliate and any funds, entities, investors or accounts that it manages, sponsors, administers or advises, collectively, the "Preferred Purchasers") pursuant to which the Preferred Purchasers made commitments to purchase 100% of the Series A preferred stock of Intermediate (such stock, the "Preferred Stock"). The proceeds of the Preferred Stock and the Bank Financing, together with the proceeds of equity contributions from the MDP Funds (and any co-investors), will be used to fund the acquisition of Benefytt and to pay the fees, premiums, expenses and other transaction costs incurred in connection with the foregoing.
Pursuant to the Preferred Commitment Letter, the Preferred Purchasers have committed to purchase, subject to the terms and conditions of the Preferred Commitment Letter, 87,500 shares of a single class of non-convertible Series A Preferred Stock of Intermediate, with an initial liquidation preference of $1,000 per share and an aggregate initial liquidation preference of $87.5 million. The Preferred Stock shall accrue dividends at a rate equal to (i) 12.5% per annum for the first eight years after the date of issuance thereof and (ii) an additional 1.0% per annum on each anniversary after the eighth anniversary of the date of issuance. The Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed by the Issuer. The Preferred Stock will rank senior to Intermediate's common equity.
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The purchase of the Preferred Stock is subject, among other things, to the execution by Intermediate and delivery of the definitive documentation of the Preferred Stock; receipt of the MDP Funds' equity contribution; consummation of the Transactions in all material respects in accordance with the Merger Agreement; receipt of the proceeds of the Bank Financing and substantially concurrent repayment in full or refinancing of Benefytt's existing credit facility; and certain other customary closing conditions.
The foregoing summary of certain provisions of the Preferred Commitment Letter and all other provisions of the Preferred Commitment Letter discussed herein are qualified by reference to the full text of the Preferred Commitment Letter, a copy of which is filed as Exhibit (b)(2) to the Schedule TO and incorporated herein by reference.
Equity Financing. Parent has received an equity commitment letter (the "Equity Commitment Letter"), pursuant to which the MDP Funds have committed to contribute to Parent their pro rata portion of an amount of cash consideration up to $505,000,000 to purchase equity securities of Parent solely for the purpose of funding, and to the extent necessary to fund, a portion of the amounts required to be paid by Parent under the Merger Agreement at the Offer Acceptance Time and at the closing of the Merger and related fees and expenses (the "Closing Payments") (such committed equity financing, the "Equity Financing" and together with the Debt Financing, the "Financing"). The funding of each of the MDP Funds' pro rata portion of the Equity Financing is subject to (i) there having been no amendment or modification to the Merger Agreement other than in accordance with the terms set forth therein (which include, in some circumstances, seeking the consent of Financing Sources), (ii) the satisfaction or waiver by Parent of each of the conditions to Parent's obligations to consummate the Offer and the Merger (other than the conditions that by their nature are to be satisfied at the Offer Acceptance Time or the closing of the Merger, as applicable, but subject to the prior or substantially concurrent satisfaction (or waiver by Parent) of such conditions), (iii) the consummation of the Offer and the Merger in accordance with the terms of the Merger Agreement, and (iv) the consummation and funding of the Debt Financing. The funding of the Equity Financing will occur contemporaneously with the closing of the Merger. The MDP Funds' equity commitment is subject to reduction (x) in the event that the full amount of the equity commitment is not necessary in order to consummate the transactions contemplated by the Merger Agreement and (y) on a dollar for dollar basis for purchases in cash actually made and funded to Parent on or prior to the closing of the Merger by co-investors (including affiliates of the MDP Funds) for equity securities of Parent and provided that the cash amount so purchased remains funded and available for use by Parent to make the Closing Payments.
The MDP Funds' obligation to fund its equity commitment will terminate automatically and immediately upon the earliest to occur of (i) the closing of the Merger, provided that the MDP Funds (and co-investors, if any) have funded the Equity Financing, (ii) the termination of the Merger Agreement in accordance with its terms, (iii) Benefytt or its affiliates commencing a suit, action or proceeding against the MDP Funds or their affiliates (including MDP and MDP GP), Parent or Purchaser relating to the Equity Commitment Letter, the Limited Guarantee (as defined below), the Offer, the Merger Agreement, the Debt Commitment Letters or the transaction contemplated thereby (other than certain retained claims as set forth in the Limited Guarantee), or (iv) any event that terminates or satisfies the MDP Funds' obligations under the Limited Guarantee (as defined below).
Benefytt is a third party beneficiary under the Equity Commitment Letter and has the right to enforce, and to cause Parent to enforce, the terms of the Equity Commitment Letter solely for the purpose of seeking specific performance of Parent's right to cause the Equity Financing to be funded in accordance with the terms of the Equity Commitment Letter (solely to the extent that Parent can cause the Equity Financing to be funded pursuant to the terms of the Equity Commitment Letter and seek specific performance under the terms of the Merger Agreement).
This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Equity Commitment Letter, a copy of which has been filed as Exhibit (d)(4) to the Schedule TO-T and which is incorporated herein by reference.
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Limited Guarantee. Concurrently with the execution and delivery of the Merger Agreement, the MDP Funds executed and delivered to Benefytt a limited guarantee (the "Limited Guarantee") in favor of Benefytt guaranteeing their pro rata portion of Parent's obligations to pay the Parent Termination Fee (as described in Section 11-"The Merger Agreement; Other Agreements-Parent Termination Fee") pursuant to Section 8.5 of the Merger Agreement (the "Guaranteed Obligations"); provided that in no event will the maximum amount of the Guaranteed Obligations exceed $29,400,000 in the aggregate.
The MDP Funds will have no further liabilities or obligations under the Limited Guarantee upon the earliest to occur of (i) the closing of the Merger,
- the termination of the Merger Agreement in accordance with its terms (other than a termination for which the Parent Termination Fee is due and owing (a "Qualifying Termination")), or (iii) the 60th day after a Qualifying Termination unless prior to the 60th day after a Qualifying Termination, Benefytt has commenced a suit, action or proceeding alleging that the Parent Termination Fee is due and owing (a "Qualifying Suit"). If Benefytt has filed a Qualifying Suit prior to the 60th day after a Qualifying Termination, then the MDP Funds' will have no further liabilities and obligations under the Limited Guarantee following the earliest of (w) the closing of the Merger, (x) a final, non-appealable resolution of such Qualifying Suit determining that either Parent does not owe a Parent Termination Fee or that the MDP Funds do not owe any amounts under the Limited Guarantee, (y) a written agreement between the MDP Funds and Benefytt terminating the MDP Funds' liabilities and obligations under the Limited Guarantee, or (z) payment of the Guaranteed Obligations in full by Parent or the MDP Funds.
In addition, in the event that Benefytt or any of its affiliates commence any suit, action or proceeding (a) asserting that the MDP Funds are liable in excess of or to a greater extent than the Parent Termination Fee or the provisions of the Limited Guarantee are illegal, invalid or unenforceable,
- arising under, or in connection with, the Limited Guarantee, the Offer, the Merger Agreement, the Equity Commitment Letter, the Debt Commitment Letters or the transactions contemplated thereby (other than certain retained claims as set forth in the Limited Guarantee), (c) asserting any retained claims in a jurisdiction other than Delaware, then (x) the obligations of the MDP Funds under the Limited Guarantee will terminate, (y) the MDP Funds will be entitled to recover any previous payments made under the Limited Guarantee, and (z) neither the MDP Funds nor any of their affiliates will have any liability to Benefytt or its affiliates under the Limited Guarantee.
10. Background of the Offer; Past Contacts or Negotiations with Benefytt.
The following is a description of MDP's participation in a process with Benefytt that resulted in the execution of the Merger Agreement. For a review of Benefytt's activities relating to this process, please refer to Benefytt's Schedule 14D-9 being mailed to stockholders with this Offer to Purchase. References to MDP in this section may be references to affiliates and representatives of MDP, and to actions to be taken by or on behalf of Parent or Purchaser, entities that are controlled by MDP.
On September 4, 2019, an affiliate of Amynta Holdings LLC ("Amynta"), which is partially and indirectly owned by Madison Dearborn Capital Partners VII-A, L.P., Madison Dearborn Capital Partners VII Executive-A, L.P. and Madison Dearborn Capital Partners VII-C, L.P., executed a non- disclosure agreement with Benefytt relating to a potential transaction. Amynta submitted an indication of interest to Benefytt's investment bankers on September 23, 2019, however Amynta was not invited to proceed to the next round of Benefytt's process. Amynta did not have any further engagement with Benefytt or its representatives.
On May 19, 2020, a representative of MDP called Gavin Southwell, President and Chief Executive Officer of Benefytt, and expressed that MDP might have interest in exploring a potential transaction with Benefytt. There was no discussion of valuation and no proposal was made during this initial call with this person.
On May 21, 2020, Benefytt entered into a confidentiality agreement with MDP. Later on May 21, representatives of MDP met with members of Benefytt's senior management in an introductory meeting. In addition, during the period between May 21 and June 9, 2020, members of Benefytt's senior management
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participated in, with representatives of Benefytt's financial advisor, BofA Securities, Inc. ("BofA Securities") and Benefytt's legal counsel, Weil, Gotshal & Manges ("Weil"), in attendance, numerous due diligence sessions with MDP on various subjects, including finance, operations and legal due diligence matters. During this time period, Benefytt continued to make additional information available to MDP and its advisors through BofA Securities, including in response to requests for further information and diligence requests made by MDP.
On June 9, 2020, representatives of MDP met with members of Benefytt's senior management, during which meeting the parties discussed the potential acquisition of Benefytt by funds affiliated with MDP. Later on June 9, 2020, MDP submitted a non-binding proposal to Benefytt that included proposals to either (i) acquire 100% of the equity of Benefytt for $30.00 per share in cash or (ii) acquire a minority interest in Benefytt pursuant to a recapitalization transaction and investment in convertible preferred stock of Benefytt, noting MDP's preference for a whole company acquisition of Benefytt.
On June 10, 2020, a representative of BofA Securities provided MDP with a counter proposal from Benefytt at $32.00 per share.
On June 11, 2020, MDP submitted a revised non-binding proposal to acquire all outstanding equity interests of Benefytt for $31.00 per share in cash and indicated that this revised proposal was being submitted with the expectation that MDP would be provided with exclusivity in order to progress expeditiously toward the entry into a negotiated, definitive transaction agreement with Benefytt.
On June 12, representatives of Weil and Kirkland & Ellis LLP, outside legal counsel to MDP ("Kirkland") negotiated the terms of the Exclusivity Agreement. On the same day, Benefytt and MDP entered into the Exclusivity Agreement providing for, among other things, an exclusivity period ending at 11:59 p.m. Eastern Time on July 5, 2020.
Beginning on June 15, 2020, MDP and its advisors were given access to a virtual data room with non-public information and materials regarding Benefytt, including information on Benefytt's operations and business as well as certain contractual, legal, compliance and employment matters. MDP also began to conduct numerous due diligence sessions with Benefytt management and advisors on various subjects, including legal, finance and operations due diligence matters.
On June 18, 2020, Weil provided an agreement and plan of merger to Kirkland, which contemplated a one-step merger transaction structure. On June 19, 2020, Weil provided an exchange and termination agreement to Kirkland, which contemplated, among other things, (i) the agreement by the Series B Members of Health Plan Intermediaries Holdings, LLC ("Holdings") to exchange their Series B Membership Interests in Holdings for an equal number of Class A Shares immediately prior to the effective time contemplated by the merger agreement and (ii) the termination of the tax receivable agreement in exchange for the payment to the Series B Members of Holdings the termination fee contemplated thereunder.
On June 29, 2020, Kirkland delivered comments to the merger agreement to Weil that, among other things, revised the structure of the transaction as a cash tender offer followed by a merger effected pursuant to Section 251(h) of the DGCL following consummation of the offer. From June 29, 2020 until July 12, 2020, Weil and Kirkland negotiated the terms and exchanged drafts of the merger agreement.
On July 3, 2020, Weil delivered a revised merger agreement to Kirkland. Also on July 3, Kirkland and Weil negotiated the terms of an amendment to the Exclusivity Agreement, and Benefytt and Parent entered into such amendment, extending the exclusivity period to 11:59 p.m. EST on July 12, 2020.
On July 3, 2020, Kirkland delivered comments on the exchange and termination agreement to Weil, as well as a support agreement, limited guarantee and equity commitment letter. On July 6, 2020, Weil delivered comments on the equity commitment letter, limited guarantee, support agreement, and exchange and termination agreement to Kirkland. The comments on the support agreement reflected the inclusion of a change in recommendation by the Benefytt Board as a termination event under the support agreement.
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On July 7, 2020, representatives of Weil and Kirkland had a call to discuss the open points in the merger agreement and the points that would be raised in MDP's latest comments on the merger agreement. Kirkland sent a revised draft of the merger agreement to Weil on July 8, 2020. The primary open points in the July 8th draft of the merger agreement related to: (i) MDP's proposals with respect to the circumstances in which Merger Sub would be obligated to extend the offer period; (ii) MDP's proposals regarding conditions to the offer, including the standard of accuracy for the capitalization representations; (iii) the scope of the representations and warranties and interim operating covenants; (iv) MDP's proposed company termination fee equal to 3.25% of the aggregate transaction consideration, in response to Benefytt's proposal of 2.75%, and a Parent termination fee equal to 6.0% of the aggregate transaction consideration, in response to Benefytt's proposal of 6.5%, and (vi) events that would result in Benefytt's obligation to pay the company termination fee.
On July 8, 2020, Kirkland also delivered revised drafts of the exchange and termination agreement, limited guarantee, equity commitment letter and support agreement to Weil and on July 9, 2020, Weil delivered revised drafts of the support agreement, and exchange and termination agreement to Kirkland.
On July 10, 2020, Weil delivered revised drafts of the merger agreement and limited guarantee to Kirkland. On July 11, 2020, representatives of Weil and Kirkland had a call to discuss the terms of the merger agreement and the other legal documentation. Later on July 11, 2020, Kirkland delivered a revised draft of the merger agreement to Weil and drafts of the exchange agreement and tax receivables agreement termination agreement. The primary remaining open issues raised in the July 11th draft of the merger agreement following these exchanges related to the circumstances of Merger Sub's obligation to extend the offer period, the scope of certain representations and warranties, the size of the termination fees and events that would trigger the termination fee. Also on July 11, Kirkland also delivered initial drafts of the debt commitment letter, proposed form of credit agreement, debt fee letter and preferred equity commitment letter (collectively, the "Debt Documents") to Weil. The debt commitment letter provided for a revolving credit facility and a term loan to be made available and/or funded under and pursuant to the term of the proposed form of credit agreement attached as an exhibit to the debt commitment letter. Upon entry into such credit agreement at the closing, by way of refinancing or amendment and restatement, the event of default that would otherwise have resulted from the closing of the transaction (and the incurrence of indebtedness thereunder) would not be applicable.
On July 12, 2020, Weil delivered revised drafts of the merger agreement and support agreement to Kirkland. Throughout the evening of July 11th and throughout the day and into the evening of July 12th, Kirkland and Weil continued to exchange drafts of the merger agreement, related transaction agreements and debt documentation.
Later on July 12, MDP was advised that the Benefytt Board had unanimously adopted resolutions (i) determining that it is in the best interests of Benefytt and its stockholders to enter into the merger agreement, (ii) approving the execution and delivery of the merger agreement and the transactions contemplated hereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein, (iii) declaring advisable the merger agreement and the transactions contemplated thereby and (iv) resolving to recommend the holders of Shares accept the Offer by tendering their Class A Shares to Merger Sub pursuant to the Offer. The parties finalized the merger agreement and the Debt Documents and the parties executed the Merger Agreement, the related transaction agreements and the Debt Documents.
On the morning of July 13, 2020, prior to the opening of trading of Benefytt's stock on the NASDAQ Global Select Market, Benefytt and MDP issued a press release announcing the execution of the merger agreement on July 12, 2020.
11. The Merger Agreement; Other Agreements.
The following is a summary of certain provisions of the Merger Agreement and certain other agreements entered into in connection with the Merger Agreement. This summary of the Merger Agreement 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
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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 7-"Certain Information Concerning Benefytt." Capitalized terms used but not defined herein shall have the respective meanings given to them in the Merger Agreement. Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below.
The Offer
The Merger Agreement provides that Purchaser will commence the Offer as promptly as practicable, but in no event later than 10 business days, after the date of the Merger Agreement. Subject to the satisfaction of the Minimum Condition and the other conditions that are described in Section 15 -"Certain Conditions of the Offer," Purchaser will, and Parent will cause Purchaser to, consummate the Offer, accept for payment (the time of such acceptance, the "Offer Acceptance Time") and thereafter pay for all Shares validly tendered and not validly withdrawn pursuant to the Offer as soon as practicable after the Expiration Date. If the Offer is consummated, each Benefytt stockholder will receive $31.00 (the "Offer Price") for each Class A Share validly tendered and not properly withdrawn by such stockholder prior to the Expiration Date, net to such stockholder in cash, without interest thereon and subject to deduction for any withholding taxes. No consideration will be paid for Class B Shares. The Offer is initially scheduled to expire at one minute after 11:59 p.m. Eastern time, at the end of the day on August 20, 2020, but may be extended and re-extended as described below.
Purchaser has expressly reserved the right to: (i) increase the Offer Price, (ii) waive any Offer Condition (other than the Minimum Condition) or
- make any other changes to the terms and conditions of the Offer not inconsistent with the terms of the Merger Agreement. Purchaser may not, however, without the prior written consent of the Company, (A) amend or waive the Minimum Condition, (B) decrease the Offer Price or (C) make any change to the Offer that: (1) changes the form of consideration to be delivered by Purchaser pursuant to the Offer, (2) reduces the number of Class A Shares to be purchased in the Offer to less than that required to satisfy the Minimum Condition, (3) imposes conditions or requirements to the Offer in addition to the Offer Conditions, (4) terminates the Offer or accelerates, extends or otherwise changes the Expiration Date except as permitted by the Merger Agreement, (5) otherwise amends or modifies any of the other terms of the Offer in a manner that adversely affects any holder of Class A Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other Transactions, or (6) provides for any "subsequent offering period" within the meaning of Rule 14d-11 promulgated under the Exchange Act.
Extensions of the Offer
The Merger Agreement provides that Purchaser will extend the Offer: (i) for the minimum period required by any law, any interpretation or position of the SEC, the staff thereof or any rules and regulations of the Nasdaq Stock Market ("Nasdaq") applicable to the Offer and (ii) if any condition to the Offer has not been satisfied or waived by Purchaser or Parent (to the extent waivable) as of such Expiration Date, for one or more 10 business day periods (or such longer period as may be agreed to by the parties to the Merger Agreement) in order to permit the Offer Conditions to be satisfied; provided that if the sole unsatisfied Offer Condition (other than those conditions that by their terms are to be satisfied at the Offer Acceptance Time) is the Minimum Condition, Purchaser is not required to make more than two such 10-business day extensions. In no event will Purchaser be required to extend our Offer beyond November 9, 2020 or, if earlier, the termination of the Merger Agreement in accordance with its terms.
In addition, Purchaser may (but is not required to) extend the offer for successive periods of up to five business days if, as of any scheduled Expiration Date: (1) all of the Offer Conditions have been satisfied or waived (other than the conditions that are to be satisfied at the Offer Acceptance Time), (2) the full amount of the
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Debt Financing has not been funded and will not be available to be funded at the closing of the Offer and (3) Parent and the Purchaser irrevocably acknowledge and agree in writing that the Offer Conditions relating to the accuracy of the Company's representations and warranties in the Merger Agreement and the absence of a Material Adverse Effect (in each case described in Section 15-"Certain Conditions to the Offer") will be deemed to have been irrevocably satisfied or waived from and after the initial extension of the Offer with respect to the obligations of Parent and the Purchaser to pay the Parent Termination Fee and consummate the Offer.
Termination of the Offer
The Merger Agreement provides that Purchaser may not terminate or withdraw the Offer prior to the Expiration Date without the prior written consent of Benefytt, except in the event that the Merger Agreement is terminated pursuant to its terms. In the event that the Merger Agreement is terminated pursuant to its terms, Purchaser will (and Parent will cause Purchaser to) promptly and unconditionally terminate the Offer, not acquire any Shares pursuant thereto, and cause any depositary acting on its behalf to promptly return, in accordance with applicable law, all tendered Shares to the registered holders thereof.
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws
The Merger Agreement provides that, subject to the terms and conditions of the Merger Agreement, and in accordance with the DGCL, at the Effective Time: (1) Purchaser will be merged with and into Benefytt, with Benefytt becoming a wholly owned subsidiary of Parent; and (2) the separate corporate existence of Purchaser will thereupon cease. From and after the Effective Time, the Surviving Corporation will possess all properties, rights, privileges, powers and franchises of Benefytt and Purchaser, and all of the debts, liabilities and duties of Benefytt and Purchaser will become the debts, liabilities and duties of the Surviving Corporation.
At the Effective Time, the board of directors of the Surviving Corporation will consist of the directors of Purchaser as of immediately prior to the Effective Time, to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until their successors are duly elected or appointed and qualified. At the Effective Time, the officers of Benefytt as of immediately prior to the Effective Time will be the officers of the Surviving Corporation, until their successors are duly appointed. At the Effective Time, the certificate of incorporation of Benefytt as the Surviving Corporation will be amended to read substantially identically to the certificate of incorporation of Purchaser as in effect immediately prior to the Effective Time, and the bylaws of Purchaser, as in effect immediately prior to the Effective Time, will become the bylaws of the Surviving Corporation, until thereafter amended.
Closing and Effective Time
The closing of the Merger will take place within two business days following the satisfaction or waiver of all conditions to closing of the Merger (described below under the caption, "-Conditions to the Closing of the Merger") (other than those conditions to be satisfied at the closing of the Merger), or such other time agreed to in writing by Parent and Benefytt. On the date of which the closing of the Merger occurs (the "Closing Date"), the parties will file a certificate of merger with the Secretary of State for the State of Delaware as provided under the DGCL. The time at which the Merger will become effective will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware in accordance with the applicable provision of the DGCL (the time of such filing and the acceptance for record by the Secretary of State of the State of Delaware, or such later time as may be agreed in writing by Parent and Benefytt and specified in the certificate of merger, being referred to herein as the "Effective Time").
Merger Consideration
Benefytt common stock
At the Effective Time, and without any action required by any stockholder, each Class A Share (other than Excluded Shares or Dissenting Shares) outstanding as of immediately prior to the Effective Time will be cancelled and
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extinguished, and automatically converted into the right to receive the Offer Price in cash, without interest thereon and less any applicable withholding taxes (the "Merger Consideration"). At the Effective Time, each Class B Share outstanding or held in treasury by Benefytt immediately prior to the Effective Time shall automatically be cancelled and retired and will cease to exist, and no consideration shall be delivered in exchange therefor.
Outstanding Options and Stock Appreciation Rights of Benefytt
At the Effective Time, each option and stock appreciation right that is outstanding, whether vested or unvested, as of immediately prior to the Effective Time (other than options and stock appreciation rights with a per share exercise price equal to or greater than $31.00) will be cancelled and automatically converted into the right to receive the Award Cash-out Payment (as described in the "Summary" section above).
Any option or stock appreciation right (whether vested or unvested) with a per share exercise price equal to or greater than $31.00 will be cancelled immediately upon the Effective Time without payment or consideration.
Exchange and Payment Procedures
At or prior to the Offer Acceptance Time, Parent will designate the Company's transfer agent, American Stock Transfer & Trust Company LLC, or such other payment agent reasonably acceptable to Benefytt (the "Payment Agent"), to make payments of the Merger Consideration to stockholders who did not tender their Shares to Purchaser pursuant to the Offer. At or prior to the Effective Time, Parent will deposit (or cause to be deposited) with the Payment Agent cash sufficient to pay the aggregate Offer Price to stockholders who did not tender their Shares to Purchaser pursuant to the Offer.
Promptly following the Effective Time (and in any event within three business days), the Payment Agent will mail to each holder of record (as of immediately prior to the Effective Time) a letter of transmittal in customary form and instructions for use in effecting the surrender of such holder's Class A Shares represented by such holder's certificate(s) or book-entry shares in exchange for the Offer Price payable in respect of such shares. The amount of any consideration paid to stockholders may be reduced by any applicable withholding taxes.
If any cash deposited with the Payment Agent is not claimed within 12 months following the Effective Time, such cash will be returned to Parent, upon demand, and any holders of Class A Shares who have not complied with the exchange procedures in the Merger Agreement will thereafter look only to Parent for payment of the Offer Price. Immediately prior to the date any Merger Consideration deposited with the Payment Agent that remains unclaimed would otherwise escheat to or become the property of any governmental entity, such Merger Consideration 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 person previously entitled thereto.
Representations and Warranties
The Merger Agreement contains representations and warranties of Benefytt, Parent and Purchaser.
Some of the representations and warranties in the Merger Agreement made by Benefytt are qualified as to "materiality" or "Company Material Adverse Effect." For purposes of this Offer and the Merger Agreement, "Company Material Adverse Effect" means, with respect to Benefytt, any change, event, circumstance, state of fact, effect, development, condition or occurrence (each a "Change" and collectively, "Changes") that, individually or in the aggregate, has, or would reasonably be expected to have, a material adverse effect on the financial condition, assets, liabilities, business or results of operations of Benefytt and its subsidiaries, taken as a whole. However, the Merger Agreement provides that the following changes, events, circumstances, states of fact, effects, developments, conditions or occurrences will not be considered in determining whether a Company Material Adverse Effect has occurred:
- Changes in, or events generally affecting, the financial, securities or capital markets; 34
- general economic or political conditions in the United States or any foreign jurisdiction in which Benefytt or any of its subsidiaries operate, including any changes in currency exchange rates, interest rates, monetary policy or inflation;
- Changes in, or events generally affecting, the industries in which Benefytt or any of its subsidiaries operate;
- any acts of war, sabotage, civil disobedience or terrorism or natural disasters (including hurricanes, tornadoes, floods or earthquakes), epidemics, pandemics or other public health emergencies (including the novel strain of coronavirus (SARS-Cov-2) and its disease commonly known as COVID-19 (including any and all additional strains, variations or mutations thereof) or any law enacted or imposed by any governmental entity in response thereto or in connection therewith or effects thereof), or other force majeure event;
- any failure by Benefytt or any of its subsidiaries to meet any internal or published budgets, projections, forecasts or predictions in respect of financial performance for any period;
- a decline in the price of the Shares, or a Change in the trading volume of the Shares, on the Nasdaq (provided that any change underlying such failure or decline described in this bullet or the proceeding bullet may be considered);
- Changes in law after the date of the Merger Agreement;
- Changes in U.S. generally accepted accounting principles (or authoritative interpretation thereof) after the date of the Merger Agreement;
- the taking of any action required to be taken pursuant to the Merger Agreement or the failure to take any specific action expressly prohibited by the Merger Agreement for which Parent has unreasonably refused Benefytt's written request to provide consent;
- the announcement of the acquisition of Benefytt and the other transactions contemplated by the Merger Agreement and the impact thereof on the relationships with customers, suppliers, distributors, partners, other third parties with whom Benefytt has a relationship or employees;
- any litigation brought by stockholders of Benefytt or Parent alleging breach of fiduciary duty or inadequate disclosure in connection with the Merger Agreement or any of the Transactions; or
- any demand, action, claim, or proceeding for appraisal of any Shares pursuant to the DGCL in connection herewith.
Notwithstanding the foregoing exclusions, any Change referred to above in the first through fourth, seventh and eighth bullets may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such Change, individually or taken together with any other Change, has a disproportionate effect on Benefytt and its subsidiaries, taken as a whole, relative to other companies in the industries and markets in which Benefytt and its subsidiaries operate (but only to the extent of the incremental disproportionate effect on Benefytt and its subsidiaries, taken as a whole, compared to other companies operating in the industries and markets in which Benefytt and its subsidiaries operate).
In the Merger Agreement, Benefytt has made customary representations and warranties to Parent and Purchaser that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
- due organization, valid existence, good standing and authority and qualification to conduct business with respect to Benefytt;
- Benefytt's corporate power and authority to enter into and perform the Merger Agreement, the enforceability of the Merger Agreement and the absence of conflicts with laws, Benefytt's organizational documents and Benefytt's contracts;
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- the organizational documents of Benefytt;
- the necessary approval of the Benefytt Board;
- the rendering of Bank of America's opinion to the Benefytt Board;
- the inapplicability of anti-takeover statutes to the Merger;
- the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws to Benefytt or the resulting creation of any lien upon Benefytt's assets due to the performance of the Merger Agreement;
- required consents, approvals and regulatory filings in connection with the Merger Agreement and performance thereof;
- the capital structure of Benefytt;
- the absence of any undisclosed exchangeable security, option, warrant or other right convertible into Benefytt common stock;
- the absence of any undisclosed contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any of Benefytt's securities;
- the subsidiaries of Benefytt;
- the accuracy and required filings of Benefytt's SEC filings and financial statements;
- Benefytt's disclosure controls and procedures;
- Benefytt's internal accounting controls and procedures;
- certain indebtedness of Benefytt;
- the absence of specified undisclosed liabilities;
- the conduct of the business of Benefytt and its subsidiaries in the ordinary course consistent with past practice except specifically as a result of Benefytt's sale process since December 31, 2019 and the absence of any change, event, development or state of circumstances that has had or would be reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect since December 31, 2019;
- the existence and enforceability of specified categories of Benefytt's material contracts, and any notices with respect to termination therefrom;
- certain real property leased or subleased by Benefytt;
- environmental matters;
- trademarks, patents, copyrights and other intellectual property matters including data security requirements and privacy;
- health regulatory matters;
- tax matters;
- employee benefit plans;
- labor matters;
- Benefytt's compliance with laws, standards and requirements and possession of necessary permits;
- litigation matters;
- insurance matters;
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- absence of any transactions, relations or understandings between Benefytt or any of its subsidiaries, on the one hand, and any affiliate or related person thereof, on the other hand;
- payment of fees to brokers in connection with the Merger Agreement; and
- the exclusivity and terms of the representations and warranties made by Parent and Purchaser.
In the Merger Agreement, Parent and Purchaser have made customary representations and warranties to Benefytt that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
- due organization, good standing and authority and qualification to conduct business with respect to Parent and Purchaser and availability of these documents;
- Parent owns all of the issued and outstanding capital stock of Purchaser;
- Parent's and Purchaser's corporate authority to enter into and perform the Merger Agreement and the enforceability of the Merger Agreement;
- the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws or the resulting creation of any lien upon Parent or Purchaser's assets due to the performance of the Merger Agreement;
- required consents and regulatory filings in connection with the Merger Agreement;
- the absence of litigation, orders and investigations;
- the absence of ownership of capital stock of Benefytt;
- payment of fees to brokers in connection with the Merger Agreement;
- delivery and enforceability of each of the Equity Commitment Letter and the Limited Guarantee;
- the commitments to provide financing to Parent, the availability of Parent's financing and sufficiency of funds;
- none of the offer documents, when filed with the SEC, contain any untrue statements of material fact or omit to state any material fact; and
- the exclusivity and terms of the representations and warranties made by Benefytt.
The representations and warranties contained in the Merger Agreement will not survive the consummation of the Merger.
Conduct of Business Pending the Merger
The Merger Agreement provides that, except as: (1) consented to or approved by Parent in writing (such consent or approval not to be unreasonably withheld, conditioned or delayed), (2) required by applicable law, (3) required by the Merger Agreement or (4) otherwise disclosed in Benefytt's disclosure letter to the Merger Agreement, during the period of time between the date of the signing of the Merger Agreement and the first to occur of the Effective Time and the termination of the Merger Agreement (the "Interim Period"), Benefytt will use its reasonable best efforts to:
- conduct its business and the business of its subsidiaries in the ordinary course of business;
- preserve intact its business organization, operations, assets, goodwill and relationships with material customers, carriers, suppliers, licensors, licensees, distributors, officers, employees and other third parties; and
- operate its business and the business of its subsidiaries in accordance with applicable law.
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In addition, Benefytt has also agreed that, except as (1) as required by applicable law, (2) as Parent may consent to or approve in writing (which consent or approval may not be unreasonably withheld with respect to certain of the actions described below), (3) as disclosed in Benefytt's disclosure letter to the Merger Agreement, or (4) as required by the Merger Agreement or certain other agreements related to the Transactions, Benefytt will not, and will not permit any of its subsidiaries to, among other things:
- amend its certificate of incorporation or bylaws (or comparable governing documents);
- adjust, split, combine, subdivide or reclassify any shares of capital stock, or repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests except in connection with the vesting of certain equity awards and the Founder Exchange pursuant to the Exchange Agreement;
- declare or pay dividends on its capital stock;
- merge or consolidate with or into any other entity, or restructure, reorganize, recapitalize, consolidate or completely or partially liquidate;
- except as may otherwise be required by the existing terms of certain Benefytt compensation and benefit plans, (A) increase the compensation or benefits payable to any current or former employee, director, or individual service provider of Benefytt, other than increases in base salary or fees for employees or independent contractors with annual base salary or annual fees below $250,000 (after giving effect to such increases) in the ordinary course of business consistent with past practice that does not exceed 5% on an individual basis or $50,000 in the aggregate; (B) grant any new equity-based awards, or amend or modify the terms of any such outstanding awards,
- grant any extraordinary bonus (including any change of control, transaction or other similar bonus) to any director or executive officer of Benefytt, (D) enter into any new agreement providing for severance, other than as required under certain existing Benefytt plans,
- make any change to a Benefytt compensation or benefit plan that would materially increase the costs to Benefytt or any of its subsidiaries, or establish, enter into, terminate or materially amend any such plan other than routine changes to health and welfare plans in the ordinary course of business that do not result in any material increase in costs to Benefytt in the aggregate or as otherwise provided in the Merger Agreement, or (F) accelerate the payment, funding or timing of any compensation due under any Benefytt compensation and benefit plan or otherwise;
- incur any indebtedness, except (A) in the ordinary course of business, borrowings under Benefytt's existing credit facility, (B) indebtedness solely between Benefytt and its wholly owned subsidiaries or (C) letters of credit, bank guarantees, or similar instruments issued in the ordinary course of business which do not exceed $10,000,000 in the aggregate and certain other customary exceptions;
- make or commit to any capital expenditures other than in the ordinary course of business and which do not exceed $1,000,000, in the aggregate;
- transfer, lease, license, sell, abandon, assign or otherwise dispose of any properties or assets with a fair market value of more than $2,000,000 individually or $5,000,000 in the aggregate, except in the ordinary course of business;
- disclose any material confidential information (including source code) of Benefytt or any of its subsidiaries to any person, other than in the ordinary course of business consistent with past practice pursuant to a written confidentiality agreement;
- issue, deliver, sell, or grant, or commit to issue, sell or grant any equity interests of Benefytt, other than as contemplated by the Merger Agreement or the Exchange Agreement;
- spend or commit to spend in excess of $2,500,000 individually or $5,000,000 in the aggregate to acquire or invest in any business or other assets or real property, other than for assets that are used in the ordinary course of business;
- make any material change with respect to Benefytt's financial accounting policies or procedures;
- enter into any new line of business, subject to certain exceptions;
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- make any loans, advances, capital contributions or investments in any other person;
- amend, waive, modify or terminate certain material contracts of Benefytt and its subsidiaries, or enter into new contracts that could be considered material;
-
settle, compromise or propose to settle or compromise any litigation involving or against Benefytt, other than settlements or compromises
(x) involving a monetary payment not in excess of $1,000,000 individually or $3,000,000 in the aggregate or any de minimis injunctive or equitable relief or restrictions on the business activities of Benefytt and (B) for amounts not in excess of Benefytt's available insurance coverage as of the date hereof and, in each case, not with a government entity; - enter into, negotiate, modify or extend any collective bargaining agreement or recognize or certify any labor union, labor organization, or group of employees as the bargaining representative for any employees of Benefytt;
- implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended;
- hire, engage, furlough, temporarily layoff or terminate (without cause) any officer or senior manager;
- waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any person (other than a service provider of Benefytt or a subsidiary), or enter into any such obligation binding on Benefytt or its subsidiaries;
- make, revoke or change any material tax election, settle or compromise any liability or assessment with respect to any material taxes, surrender any claim for a refund of material taxes, adopt or change any material method of accounting for tax purposes, amend any material tax return, enter into any closing agreement with respect to any material taxes or file any material tax return in a manner inconsistent with past practice; or
- agree or commit to do any of the foregoing.
No Solicitation of Other Offers
From the date of the Merger Agreement until the earlier to occur of the termination of the Merger Agreement and the Effective Time, Benefytt has agreed not to, and to cause its subsidiaries directors, officers and employees not to, and to use reasonable best efforts to cause Benefytt's and any of its subsidiaries' respective representatives not to:
- solicit, initiate, knowingly encourage or knowingly facilitate (including by way of providing information), or take any action designed to lead to, any inquiries, indication of interest or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal;
- continue, knowingly encourage, knowing facilitate, or otherwise participate in any discussions or negotiations with any person regarding any Acquisition Proposal; or
- knowingly provide any information or data concerning Benefytt or any of its subsidiaries to any person in connection with any Acquisition Proposal.
In addition, Benefytt has agreed to (x) cease and cause to be terminated any discussions and negotiations with any person conducted heretofore with respect to any Acquisition Proposal, or proposal, offer, inquiry or indication of interest that would reasonably be expected to lead to an Acquisition Proposal, (y) immediately terminate all physical and electronic data room access previously granted to any such person or its representatives and request the prompt return or destruction of any confidential information provided to any such person or its representatives, and (z) not waive any standstill, confidentiality, or similar provision to which
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Benefytt or any of its subsidiaries is a party; provided that Benefytt shall not be prohibited from permitting a person to request the waiver of a "standstill" or similar obligation solely to make an unsolicited and nonpublic Acquisition Proposal in compliance with the terms of the Merger Agreement or from granting such a waiver, in each case, to the extent that (A) such waiver is required for such person to make an unsolicited and nonpublic Acquisition Proposal to Benefytt in compliance with the Merger Agreement and (B) the Benefytt Board has determined in good faith after consultation with its outside legal counsel that such waiver is necessary to comply with the directors' fiduciary duties under applicable law.
Notwithstanding these restrictions, prior to the Offer Acceptance Time, and after giving written notice to Parent, Benefytt may, if it receives an unsolicited written Acquisition Proposal after the date of the Merger Agreement that is not preceded by a breach of its non-solicitation obligations or certain restrictions on the Benefytt Board and that the Benefytt Board reasonably believes is bona fide and determines in good faith, based on the information then available and after consultation with outside legal counsel and an independent financial advisor of nationally recognized reputation, that such Acquisition Proposal either constitutes a Superior Proposal or would reasonably be expected to lead to a Superior Proposal: (i) provide or give access to non-public information regarding Benefytt or any of its subsidiaries to the person who made such Acquisition Proposal, its potential sources of financing and their respective representatives pursuant to a confidentiality agreement with terms that are no less favorable in all material respects to Benefytt than in the Confidentiality Agreement (provided that any non-public information not previously provided to Parent is made available to Parent promptly (and in any event within 24 hours) following the time such non-public information is made available to such Person) and (ii) engage or participate in any discussions or negotiations with such person and its representatives regarding such Acquisition Proposal.
Benefytt must promptly (and, in any event, within 24 hours) notify Parent in writing if any inquiry, proposal, offer or indication of interest with respect to, or that would reasonably be expected to lead to, an Acquisition Proposal is received by Benefytt, any of its subsidiaries or any of their respective representatives, indicating, in such notice, the identity of such person and the material terms and conditions thereof and provide Parent with a copy of any such inquiry, proposal or offer or indication of interest and any draft agreement, term sheet, financing commitment and other documents provided in connection therewith. Benefytt must keep Parent reasonably informed, on a prompt basis, of any material developments with respect to any such inquiry, request for information, proposal, offer or indication of interest (including promptly notifying Parent in writing of any material changes to the terms of any such proposals or offers (and, in any event, within 24 hours).
If Benefytt terminates the Merger Agreement prior to the Offer Acceptance Time for the purpose of entering into an agreement in respect of a Superior Proposal, Benefytt must pay a $14,700,000 termination fee to Parent.
For purposes of this Offer to Purchase and the Merger Agreement:
"Acquisition Proposal" means any proposal, offer, inquiry or indication of interest from any person or group (as defined in or under Section 13 of the Exchange Act), other than Parent or its subsidiaries, relating to (i) any merger, consolidation, tender offer, recapitalization, reorganization, share exchange, business combination, joint venture, partnership, sale, license or other similar transaction involving Benefytt or any of its subsidiaries pursuant to which such person or group would, directly or indirectly, acquire beneficial ownership of 20% or more of the outstanding Shares or outstanding membership interests of Holdings (or 20% or more of the issued and outstanding securities of the surviving or resulting company in a merger, consolidation, business combination or similar transaction), securities representing 20% or more of the total voting power of Benefytt or Holdings, or 20% or more of the consolidated revenues, consolidated net income or consolidated assets of Benefytt and its subsidiaries, (ii) any acquisition by such Person or group (as defined in or under Section 13 of the Exchange Act), which if consummated would result in such Person or group becoming the beneficial owner, directly or indirectly, of 20% or more of the outstanding Shares or outstanding membership interests of Holdings, securities representing 20% or more of the total voting power of Benefytt or Holdings, or 20% or more of the consolidated revenues, consolidated net income or consolidated assets of
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Benefytt and its subsidiaries or (iii) any combination of the foregoing, in each case, other than the transactions contemplated by the Merger Agreement and whether in one or a series of related transactions.
"Intervening Event" means any material change, event, development or occurrence with respect to Benefytt that (i) was not known to, or reasonably foreseeable by, the Benefytt Board prior to the execution of the Merger Agreement (or if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable), which change, event, development or occurrence, or any material consequence thereof, becomes known to, or reasonably foreseeable by, the Benefytt Board prior to the Offer Acceptance Time and (ii) does not relate to (A) any Acquisition Proposal or (B) any (x) changes in the market price or trading volume of Benefytt or (y) Benefytt meeting, failing to meet or exceeding published or unpublished revenue or earnings projections, in each case in and of itself (it being understood that the facts or occurrences giving rise or contributing to such change or event may be taken into account when determining whether an Intervening Event has occurred).
"Superior Proposal" means any bona fide written offer from any person or "group" made after the date of the Merger Agreement that is not preceded by a breach of the non-solicitation provisions or certain restrictions on the Benefytt Board and that, if consummated, would result in such person or group (or their stockholders) owning, directly or indirectly, a majority of the outstanding Shares (or of the stock of the surviving entity in a merger or the direct or indirect parent of the surviving entity in a merger), securities representing a majority of the total voting power of Benefytt or Holdings, or a majority of the assets of Benefytt and its subsidiaries, taken as a whole, and which Benefytt's Board determines in good faith (after consultation with its outside legal counsel and financial advisor) to be (i) more favorable to the holders of Shares, from a financial point of view, than the Transactions and (ii) reasonably likely to be completed, in each case of clauses (i) and (ii), taking into account the financial terms of such proposal (including, if applicable at the time of such determination, any changes to the financial terms of the Merger Agreement or the transactions contemplated hereby then proposed by Parent in response to such offer or otherwise), and such legal, regulatory, financing and other aspects of such proposal that the Benefytt Board considers appropriate.
The Board of Directors' Recommendation; Company Board Recommendation Change
As described above, and subject to the provisions described below, the Benefytt Board has made the recommendation that Benefytt's stockholders tender their Shares to Purchaser pursuant to the Offer on the terms and conditions set forth in the Merger Agreement (the "Company Recommendation"). The Merger Agreement provides that the Benefytt Board will not change the Company Recommendation except as described below.
Prior to the termination of the Merger Agreement, the Benefytt Board may not take any action described in the following:
- withhold, withdraw, qualify or modify (or publicly propose to withhold, withdraw, qualify or modify), in a manner adverse to Parent, the Company Recommendation or approve, recommend or otherwise declare advisable any Acquisition Proposal (each, a "Change in Recommendation");
- cause or permit Benefytt or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement partnership agreement or other agreement (other than a confidentiality agreement with terms that are no less favorable in all material respects to Benefytt than the Confidentiality Agreement) relating to, or that would reasonably be expected to lead to, any Acquisition Proposal (each, an "Alternative Acquisition Agreement");
- adopt, approve or recommend, or publicly propose to adopt, approve or recommend any Acquisition Proposal or to enter into an Alternative Acquisition Agreement;
- fail to include the Company Recommendation in the Schedule 14D-9; or
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- fail to expressly reaffirm publicly the Company Recommendation within 10 business days following Parent's written request to do so if an Acquisition Proposal is publicly announced or disclosed.
Notwithstanding the restrictions described above, following receipt of a written Acquisition Proposal by Benefytt after the date of the Merger Agreement that is not preceded by a breach of its non-solicitation obligations or certain restrictions on the Benefytt Board and that the Benefytt Board determines in good faith, after consultation with its outside legal counsel and financial advisors, constitutes a Superior Proposal and the failure to make a Change in Recommendation or terminate the Merger Agreement in response to such Acquisition Proposal would be inconsistent with the directors' fiduciary duties under applicable law, the Benefytt Board may, at any time prior to the Offer Acceptance Time, make a Change in Recommendation or terminate the Merger Agreement in accordance with its terms in order to enter into a definitive Alternative Acquisition Agreement with respect to such Superior Proposal if all of the following conditions are met:
-
Benefytt shall have provided to Parent four business days' prior written notice of its intention to take such action, which notice shall
(A) state that it has received a written Acquisition Proposal that constitutes a Superior Proposal, (B) specify the material terms and conditions of the Superior Proposal (including the consideration offered therein and the identity of the person or group making the Acquisition Proposal) and (C) include a copy of the proposed Alternative Acquisition Agreement, proposed financing commitment (if any) and any other ancillary agreements and other documents relating to such Acquisition Proposal; - after providing such notice and prior to making a Change in Recommendation or terminating the Merger Agreement, as applicable, Benefytt shall have engaged and negotiated in good faith with Parent (to the extent Parent wishes to negotiate) during such four business day period, which may be on a non-exclusive basis, with respect to any adjustments proposed by Parent during such period to the terms and conditions of the Merger Agreement or the transactions contemplated hereby such that the Acquisition Proposal would cease to constitute a Superior Proposal or the Benefytt Board would no longer determine that the failure to make such Change in Recommendation or to terminate the Merger Agreement, as applicable, would be inconsistent with the directors' fiduciary duties under applicable law; and
- following the end of such four business day period, the Benefytt Board shall have determined, in good faith, after consultation with its financial advisor and outside legal counsel, that, in light of such Superior Proposal and taking into account any revised terms proposed by Parent, such Acquisition Proposal continues to constitute a Superior Proposal and that the failure to make such Change in Recommendation or to terminate the Merger Agreement, as applicable, would continue to be inconsistent with the directors' fiduciary duties under applicable law (it being understood and agreed that any amendment to any material term or condition of such Superior Proposal shall require a new notice as provided under the first bullet above, and the procedures set forth in these bullets shall otherwise have been complied with, except that each reference to a four business day period shall be to a two business day period).
In addition, upon the occurrence of any Intervening Event, the Benefytt Board may, at any time prior to the Offer Acceptance Time, make a Change in Recommendation if prior thereto all of the following conditions are met:
- the Benefytt Board shall have determined in good faith, after consultation with its outside legal counsel, that an Intervening Event has occurred and the failure to make a Change in Recommendation in response to such Intervening Event would be inconsistent with the directors' fiduciary duties under applicable law;
- Benefytt shall have provided to Parent four business days' prior written notice, which notice shall (A) set forth in reasonable detail information describing the material circumstances giving rise to such Intervening Event and the rationale for the proposed Change in Recommendation and (B) state
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expressly that, subject to the provisions set forth in the next two bullets, the Benefytt Board has determined to make a Change in Recommendation;
- after providing such notice and prior to making such a Change in Recommendation, Benefytt shall have engaged and negotiated in good faith with Parent (to the extent Parent wishes to negotiate) during such four business day period with respect to any adjustments to the terms and conditions of the Merger Agreement or the transactions contemplated hereby such that the failure of the Benefytt Board to make a Change in Recommendation in response to the Intervening Event in accordance with the final bullet below would no longer be inconsistent with the directors' fiduciary duties under applicable law; and
- following the end of such four business day period, the Benefytt Board shall have determined in good faith, after consultation with its outside legal counsel, that in light of such Intervening Event and taking into account any revised terms proposed by Parent, the failure to make a Change in Recommendation would continue to be inconsistent with the directors' fiduciary duties under applicable law.
Employee Benefits
For a period of 12 months following the Effective Time, Parent has agreed, with respect to each employee of Benefytt who continues to remain employed with the Company or its subsidiaries immediately after the Effective Time (the "continuing employees") to provide (a) a base salary or base wage and target annual cash bonus opportunity or commission opportunity (as applicable) that, in each case, is no less favorable than such salary, wage or bonus opportunity provided immediately prior to the Effective Time, (b) employee benefits (other than any equity-based compensation or benefits, transaction-triggered benefits, deferred compensation, defined benefit pension or retiree health or welfare benefits) that are substantially comparable in the aggregate to those provided immediately prior to the Effective Time and (c) severance benefits that are no less favorable than the severance benefits provided by Benefytt immediately prior to the Effective Time.
Parent also has agreed under the Merger Agreement to provide credit for service with Benefytt or its subsidiaries for purposes of vesting, eligibility to participate, level of paid time off, and severance benefits under all employee benefit plans maintained by Parent or its affiliates for the benefit of continuing employees (other than any equity-based compensation or benefits, defined benefit pension, or retiree health or welfare benefits), except to the extent that any such recognition would result in a duplication of benefits. Parent will also provide certain health plan coordination benefits.
Each continuing employee who participates in a cash bonus program of the Company will be eligible to receive a cash bonus pursuant to the terms and conditions of such cash bonus program, based on the Company's actual performance through the end of the applicable performance period. The compensation committee of the Benefytt Board may adjust the performance criteria to account for the Transactions and all related expenses and costs, to the extent such adjustment does not adversely affect the participants in the program.
Efforts to Close the Merger
Under the Merger Agreement, Parent, Purchaser and Benefytt agreed to use reasonable best efforts to take all actions and assist and cooperate with the other parties, in each case as necessary, proper and advisable pursuant to applicable law or otherwise to consummate the Offer and the Merger.
Cooperation with Debt Financing
Although the obligation of Parent and Purchaser to consummate the Offer and the Merger is not subject to any financing condition (including, without limitation, consummation of any debt financing), Benefytt has agreed that during the Interim Period, Benefytt will use its reasonable best efforts to cooperate with Parent as is customary for financings of the type contemplated by the Debt Commitment Letters, and at Parent's sole
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expense, in connection with Parent's arrangement and obtaining the Debt Financing. Such cooperation shall include (if reasonably requested by Parent):
- assisting in the preparation of a customary bank information memorandum, marketing materials and similar marketing documents and deliver customary authorization letters in connection therewith;
- causing the senior officers of Benefytt to participate in a reasonable number of meetings and due diligence sessions upon reasonable advance notice and at mutually agreeable times, in each case in connection with the Debt Financing;
- facilitating the execution and delivery of definitive documents customarily required in connection with the Debt Financing, including the pledging of collateral, any guarantees, pledge and security documents, credit agreements, notes, mortgages, other definitive financing documents, or other certificates required to be executed or entered into with respect to the Debt Financing; provided, that no such definitive documents shall be effective until the closing of the Merger;
- furnishing Parent, by at least three business days prior to the Closing Date, with all documentation and other information required by regulatory authorities under applicable "know your customer," beneficial owner and anti-money laundering rules and regulations that is reasonably requested at least 10 business days prior to the Closing Date;
- furnishing Parent with the financial statements required by the Bank Commitment Letter;
- providing certain information necessary to assist in Parent's preparation of customary pro forma financial statements;
- taking such actions as may be reasonably requested by Parent that are necessary to facilitate the satisfaction of the conditions to the Debt Financing to the extent that the satisfaction thereof is within the control of Benefytt; and
- obtaining a customary payoff letter in connection with the payoff of Benefytt's existing credit facility.
Notwithstanding the foregoing, the Merger Agreement provides that such cooperation will not: (i) require the entry by Benefytt or any of its subsidiaries into any agreement or commitment that would be effective prior to the Effective Time or that is not contingent on the occurrence of the Effective Time, (ii) unreasonably interfere with the normal operations of Benefytt and its subsidiaries, (iii) include any actions that Benefytt reasonably believes would result in a violation of any contract or confidentiality agreement or any law or contravene, conflict with or violate Benefytt's organizational documents, (iv) involve consenting to the grant of liens or other encumbrances and any related filings, prior to the closing of the Merger,
- require the giving of representations or warranties to any third parties (other than pursuant to customary authorization letters) or indemnification that would be effective prior to the Effective Time or that is not contingent on the occurrence of the Effective Time, (vi) require the waiver or amendment of any terms of the Merger Agreement, (vii) require the payment of any fees or reimbursement of any expenses prior to the closing of the Merger for which Benefytt has not received prior reimbursement, (viii) cause any director, officer or employee of Benefytt or any of its subsidiaries to incur any personal liability, (ix) require the delivery of any projections, pro forma financial information or any other forward-looking information, (x) require the delivery of any financial statements in a form or subject to a standard different than those provided to Parent on or prior to the date of the Merger Agreement,
- require Benefytt or any of its subsidiaries to pay any commitment or other fees or incur or pay any expenses in connection with the Debt Financing prior to the closing of the Merger (other than expenses incurred by Benefytt in connection with the preparation of historical financial information or the preparation of payoff documentation) or (xii) require delivery of any legal opinions by counsel to Benefytt or any of its subsidiaries or accountants' comfort letters or reliance letters.
The Merger Agreement requires Parent to use its reasonable best efforts to obtain the Debt Financing on or prior to the Closing Date on the terms and conditions described in the Debt Commitment Letters. In addition, Parent has agreed to use reasonable best efforts to arrange alternative financing if any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated by the Debt Commitment Letters.
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Indemnification and Insurance
The Merger Agreement provides that, from and after the Effective Time, the Surviving Corporation will indemnify, defend and hold harmless, and will advance expenses to, each person who served as a director and officer of Benefytt and its subsidiaries prior to the Effective Time for all costs (including settlement costs) or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages, penalties or liabilities incurred in connection with any claim, action, suit, proceeding or investigation arising out of, or based on, their capacity as such to the fullest extent permitted by the organizational documents of the Surviving Corporation and applicable law, provided that if it is determined that such person is ultimately not entitled to indemnification such person will undertake to repay the advances.
In addition, the Merger Agreement provides that the Surviving Corporation will ensure that the organizational documents of the Surviving Corporation and its subsidiaries, for a period of six years from the Effective Time, contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of Benefytt and its subsidiaries than are currently set forth in Benefytt's organizational documents.
Without limiting the foregoing, unless Benefytt has purchased a "tail" policy prior to the Effective Time (which Benefytt may purchase, provided that the premium for such insurance does not exceed 300% of the aggregate annual premiums currently paid), the Merger Agreement requires Parent to cause the Surviving Corporation to purchase and maintain, for a period of at least six years commencing at the Effective Time, a "tail" policy with terms at least as favorable to the indemnified parties as provided in Benefytt's current directors' and officers' insurance policies. Neither Parent nor the Surviving Corporation will be required to expend for such policies an aggregate amount in excess of 300% of the aggregate annual premiums currently paid by Benefytt for its directors' and officers' insurance policies, and if the premium for such insurance coverage would exceed such amount, Parent shall cause the Surviving Corporation to obtain the greatest coverage available for a cost that does not exceed such amount.
Parent and the Surviving Corporation shall not settle, compromise, or consent to a judgment in a proceeding for which indemnification could be sought by a former director or officer unless such settlement, compromise or consent includes an unconditional release of the party who could have sought indemnification or such person consents in writing.
For additional information, please refer to Benefytt's Schedule 14D-9 being mailed to stockholders with this Offer to Purchase.
Stockholder Litigation
Benefytt and Parent will each give the other party the opportunity to participate in (but not control) the defense and settlement of any stockholder litigation against such party and/or its directors or officers relating to the Offer, the Merger or any transactions contemplated in the Merger Agreement, and neither Benefytt (or its subsidiaries or representatives) nor Parent or Purchaser (or their respective subsidiaries or representatives) will compromise, settle or come to any arrangement regarding any such stockholder litigation without the other party's prior written consent.
Conditions to the Closing of the Merger
The obligations of Parent and Purchaser, on the one hand, and Benefytt, on the other hand, to consummate the Merger is subject to the satisfaction or waiver (where permitted by applicable law) of each of the following conditions:
- No governmental entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the Merger; and
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- Purchaser (or Parent on Purchaser's behalf) shall have irrevocably accepted for payment all Class A Shares validly tendered and not validly withdrawn pursuant to the Offer.
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time in the following ways:
- by mutual written agreement of Benefytt and Parent at any time prior to the Offer Acceptance Time;
- by either Benefytt or Parent, if:
- the Offer Acceptance Time shall not have occurred prior to 11:59 a.m., Eastern Time, on November 9, 2020 (the "Termination Date"); provided, however, that this right to terminate the Merger Agreement shall not be available to any party that has breached in any material respect its obligations under the Merger Agreement, which breach shall have been the principal cause of the failure of the Acceptance Time to have occurred or the Merger to be consummated prior to the Termination Date (such termination, an "Outside Date Termination"); or
- any law or order permanently restraining, enjoining or otherwise prohibiting the consummation of the Offer or Merger shall have become final and non-appealable.
- by Benefytt:
- if (i) any representation or warranty of Parent or Purchaser in the Merger Agreement fails to be true and correct as of the date of the Merger Agreement or as of the Offer Acceptance Time (subject to certain materiality and other qualifications as set forth in the Merger Agreement) or, at any time prior to the Offer Acceptance Time, each of Parent and Purchaser shall have failed to perform in all material respects all obligations required to be performed by it under the Merger Agreement and (ii) such breach or failure to be true is not curable or, if curable, is not cured prior to the earlier of (A) 30 days following notice to Parent from Benefytt of such breach or failure and (B) the date that is three business days prior to the Termination Date; provided that Benefytt shall not have the right to terminate the Merger Agreement pursuant to this provision if Benefytt is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement (a "Parent Breach Termination");
- in order to substantially concurrently enter into a definitive Alternative Acquisition Agreement with respect to a Superior Proposal as described under "-The Board of Directors' Recommendation; Company Board Recommendation Change," provided that Benefytt shall not be entitled to terminate the Merger Agreement pursuant to this provision unless, prior to or concurrently with such termination, Benefytt pays to Parent the Company Termination Fee described below, or if Benefytt is in breach of its obligations described under "-No Solicitation of Other Offers" or "-The Board of Directors' Recommendation; Company Board Recommendation Change" (such termination, a "Superior Proposal Termination"); or
- if (i) all of the Offer Conditions shall have been satisfied or waived at the Expiration Date (other than those conditions that by their terms are to be satisfied at the Offer Acceptance Time), (ii) Purchaser shall have failed to accept for payment all Class A Shares validly tendered pursuant to the Offer and not properly withdrawn and the Offer Acceptance Time has not occurred when required by the Merger Agreement (iii) Benefytt shall have given Parent written notice at least three business days prior to such termination stating Benefytt's intention to terminate the Merger Agreement pursuant to this provision, (iv) all of the Offer Conditions remain satisfied throughout such three business day period and (v) the Purchaser shall have failed to consummate the Offer by the end of such three business day period (such termination, a "Failure to Close Termination").
- by Parent if:
- the Benefytt Board shall have made a Change in Recommendation;
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- there has been a breach of any representation, warranty, covenant or agreement made by Benefytt in the Merger Agreement, such that the conditions to Purchaser's obligation to accept the Shares tendered in the Offer would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured prior to the earlier of (i) 30 days following written notice to Benefytt from Parent of such breach or failure and (ii) the date that is three business days prior to the Termination Date; provided that Parent shall not have the right to terminate the Merger Agreement pursuant to this provision if Parent is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement such that Benefytt has a valid right to terminate the Merger Agreement as set forth in the second bullet describing Benefytt's termination rights above (such termination, a "Company Breach Termination"); or
- the Offer expires or is terminated or withdrawn in accordance with its terms and at such time as (i) all of the Offer Conditions having been satisfied or waived (other than (x) the Minimum Condition and (y) those conditions that by their nature are to be satisfied at the Offer Acceptance Time), and (ii) the Minimum Condition having not been satisfied, in each case, without the acceptance for payment of any Shares thereunder; provided that Parent shall not have the right to terminate the Merger Agreement pursuant to this provision if Parent is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement such that Benefytt has a valid right to terminate the Merger Agreement as set forth in the second bullet describing Benefytt's termination rights above.
In the event that the Merger Agreement is terminated pursuant to the termination rights above, the Merger Agreement will be of no further force or effect without liability of any party to the other parties, as applicable, except certain sections of the Merger Agreement will survive the termination of the Merger Agreement in accordance with their respective terms, including terms relating to payment of any applicable termination fees, reimbursement of expenses and indemnification. Notwithstanding the foregoing, nothing in the Merger Agreement will relieve Benefytt from any liability for any willful breach of the Merger Agreement prior to its termination. In addition, no termination of the Merger Agreement will affect the rights or obligations of any party pursuant to the confidentiality agreement between MDP and Benefytt, which rights, obligations and agreements will survive the termination of the Merger Agreement in accordance with their respective terms.
Termination Fee
Parent will be entitled to receive a termination fee of $14,700,000 (the "Company Termination Fee") from Benefytt if the Merger Agreement is terminated:
- by Parent, if the Benefytt Board has effected a Change in Recommendation;
- by Benefytt, in the event of a Superior Proposal Termination; or
- by either Parent or Company, in the event of an Outside Date Termination, provided that Parent had the right at such time to terminate as a result of a Change in Recommendation.
The Company Termination Fee is payable within two business days of termination, except in the case of a Superior Proposal Termination, in which case the Company must pay such fee concurrently with such termination.
In addition, if (i) the Merger Agreement is terminated due to an Outside Date Termination or a Company Breach Termination, (ii) prior to such termination an Acquisition Proposal shall have been publicly made to Benefytt's stockholders or shall have otherwise been publicly announced or become publicly known and (iii) within 12 months after the date of such termination, Benefytt enters into a definitive agreement providing for any Acquisition Proposal (that is subsequently consummated) or consummates any Acquisition Proposal, then Benefytt shall pay the Company Termination Fee to Parent; provided that for the purposes of the obligations
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referred to in this paragraph, references to "20% or more" in the definition of "Acquisition Proposal" shall be deemed to be references to "50% or more."
Benefytt will be entitled to receive a termination fee of $29,400,000 from Parent (the "Parent Termination Fee") if the Merger Agreement is validly terminated by Benefytt due to a Parent Breach Termination or Failure to Close Termination, in each case as described above under "- Termination of the Merger Agreement."
Specific Performance
Parent, Purchaser and Benefytt have agreed that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the obligations, undertakings, covenants or agreements of the parties to the Merger Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy for such breaches.
Accordingly, Benefytt and Parent have agreed that each shall be entitled to injunctive relief to prevent breaches or threatened breaches of the Merger Agreement by the other parties, and to enforce specifically the terms and provisions of the Merger Agreement (including Parent and Purchasers obligations to consummate the Offer and the Merger) without the necessity of proving actual harm or damages or posting a bond or other security, in each case in addition to any other remedy to which such party is entitled at law or in equity. The parties have further agreed that they will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance or other equitable remedy is not an appropriate remedy for any reason at law or in equity.
Notwithstanding the foregoing, Benefytt will not be entitled to specific performance of Parent's obligation to cause the Equity Financing to be funded and consummate the closing of the Merger unless (i) all of the Offer Conditions have been satisfied, (other than those conditions that by their terms are to be satisfied by actions taken at or immediately prior to the consummation of the Offer, each of which would be satisfied if the Offer Acceptance Time were to then occur) at the time the Offer Acceptance Time would have otherwise occurred under the Merger Agreement, (ii) the Debt Financing has been funded or an agent of the lenders and the Purchaser has confirmed in writing to Parent that such financing will be funded at or prior to the Offer Acceptance Time if the Equity Financing is funded at or prior to the Offer Acceptance Time, (iii) Benefytt has irrevocably confirmed that it is ready, willing and able to cause the closing of the Offer and the Merger to occur in accordance with the terms of the Merger Agreement if specific performance is granted and the Equity Financing and Debt Financing are funded and (iv) Purchaser shall have failed to accept the Shares tendered in the Offer or to consummate the Merger within two Business Days of the receipt of such notice.
In no event will Benefytt or any of its successors or permitted assigns be entitled to (x) enforce or seek to enforce specifically the remedy of specific performance of any Debt Commitment Letter against any financing source, (y) be entitled to specifically enforce Parent's rights under the Equity Commitment Letter to cause the Equity Financing to be funded or to consummate the closing of Merger other than as expressly described above, or
- seek to specifically enforce any provision of the Merger Agreement or to obtain an injunction or injunctions, or to bring any other proceeding in equity in connection with the transactions contemplated by the Merger Agreement, against any person other than against Parent and only under the circumstances expressly set forth above.
Limitations of Liability
The maximum aggregate monetary damages of Parent and Purchaser for breaches (including any willful breach) under the Merger Agreement, the Limited Guarantee or the Equity Commitment Letter (taking into account the payment of the termination fee, if applicable) will not exceed, an amount equal to the Parent Termination Fee in the aggregate for all such breaches. The maximum aggregate monetary damages of Benefytt for breaches under the Merger Agreement (taking into account the payment of the termination fee, if applicable) will not exceed an amount equal to the Company Termination Fee in the aggregate for all such breaches.
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Notwithstanding such limitations on liability for monetary damages, Parent, Purchaser and Benefytt may be entitled to an injunction, specific performance or other equitable relief as provided in the Merger Agreement, described above.
Fees and Expenses
Whether or not the Merger is completed, Benefytt, on the one hand, and Parent and Purchaser, on the other hand, are each responsible for all of their respective costs and expenses incurred in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement, except Parent shall indemnify Benefytt and its subsidiaries for certain costs and expenses associated with their cooperation with the Debt Financing and Parent shall be responsible for, and pay, all of the fees, costs and expenses incurred in connection with the filings required under the HSR Act.
Amendment
The Merger Agreement may be amended by the parties in an executed written instrument at any time except for certain provisions which also require prior written consent from any of Parent's financing sources who are adversely affected by such amendment.
Governing Law
The Merger Agreement is governed by Delaware law.
Equity Commitment Letter and Limited Guarantee
The descriptions of the Equity Commitment Letter and the Limited Guaranty included in Section 9-"Source and Amount of Funds-Equity Financing" and "-Limited Guarantee" are incorporated into this Section 11 by reference.
Confidentiality Agreement
On May 21, 2020, Benefytt and MDP entered into a confidentiality agreement (the "Confidentiality Agreement"), in connection with Parent's evaluation of the potential acquisition of Benefytt. Under the Confidentiality Agreement, MDP agreed, subject to certain exceptions, to keep confidential any non-public information concerning Benefytt for a period of two years and agreed to certain non-solicitation provisions relating to Benefytt employees for a period of 18 months from the date of the Confidentiality Agreement. This summary of the Confidentiality Agreement is qualified in its entirety by reference to the full text of the Confidentiality Agreement, a copy of which is filed as Exhibit (d)(2) to the Schedule TO, which is incorporated herein by reference.
Tender and Support Agreement; Exchange Agreement
Concurrently with the execution of the Merger Agreement, Michael W. Kosloske, Benefytt's founder, and certain entities controlled by Mr. Kosloske (collectively, the "Founder Parties") entered into an exchange agreement (the "Exchange Agreement") with Benefytt, Holdings and Parent and a tender and support agreement (the "Tender Agreement") with Parent and Purchaser. Pursuant to the Exchange Agreement, the Founder Parties have agreed, on or prior to the Expiration Date, to exchange all of the Series B membership interests of Holdings for Class A Shares (the "Founder Exchange") on a one-to-one basis and the Founder Parties' Class B Shares will be automatically cancelled. As of the date of the Merger Agreement, the Founder Parties beneficially owned 544,363 Class A Shares and 687,677 Class B Shares, collectively constituting approximately 8.6% of the total outstanding Shares.
Pursuant to the Tender Agreement, the Founder Parties have agreed, among other things, to tender all of the Shares beneficially owned by such parties pursuant to the terms of the Offer immediately following the Founder
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Exchange, and in any event not later than the Expiration Date. As a result of the Founder Exchange, the Founder Parties will only own Class A Shares at the time they tender their Shares to Purchaser. The Tender Agreement contains customary representations and warranties of the parties and generally prohibits the Founder Parties from selling or transferring any of the Shares held by such persons except in connection with the transactions contemplated by the Exchange Agreement and the Tender Agreement. The Tender Agreement will terminate upon the earliest to occur of: (i) the termination of the Merger Agreement in accordance with its terms; (ii) the occurrence of the Effective Time; (iii) the acquisition by Parent of all Shares held by the Founder Parties which are subject to the Tender Agreement; (iv) any amendment to the Merger Agreement that is effected without the Founder Parties consent that decreases the amount, or changes the form or timing of consideration payable to stockholders (other than extensions permitted by the Merger Agreement); and (v) the termination of the Offer prior to the Offer Acceptance Time.
The foregoing summaries are qualified in their entirety by reference to the full text of the Exchange Agreement and the Tender Agreement, copies of which are filed as Exhibits (d)(8) and (d)(7), respectively, to the Schedule TO, which is incorporated herein by reference.
Exclusivity Agreement
On June 12, 2020, Benefytt and MDP entered into an exclusivity agreement, which was subsequently amended on July 3, 2020 (as amended, the
"Exclusivity Agreement"), pursuant to which, among other things, Benefytt agreed to a period of exclusive negotiation with MDP commencing on the date of the Exclusivity Agreement and ending at 11:59 p.m. (EST) on July 5, 2020 (subsequently extended to July 12, 2020). The Exclusivity Agreement also provided that Benefytt would cease and cause to be terminated any ongoing contacts, discussions, access to information or negotiations with third parties relating to a possible transaction and provide MDP with notice of any inquiry, offer, proposal or expression of interest relating to a possible transaction received by Benefytt or by any of Benefytt's subsidiaries or representatives. The obligations under
the Exclusivity Agreement terminated upon the execution of the Merger Agreement. This summary of the Exclusivity Agreement is qualified in its entirety by reference to the full text of the Exclusivity Agreement and the amendment thereto, copies of which are filed as Exhibits (d)(3) and (d)(4), respectively, to the Schedule TO, which is incorporated herein by reference.
12. Purpose of the Offer; Plans for Benefytt.
Purpose of the Offer. The purpose of the Offer is to acquire control of, and would be the first step in the acquisition of the entire equity interest in, Benefytt. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. All Shares acquired by Purchaser pursuant to the Offer will be retained by Purchaser pending the Merger. If the Offer is successful, Purchaser intends to consummate the Merger as promptly as practicable after the closing of the Offer Acceptance Time.
If you sell your Shares in the Offer, you will cease to have any equity interest in Benefytt or any right to participate in its earnings and future growth. If the Merger is consummated but you do not tender your Shares, you will no longer have an equity interest in Benefytt, and instead will only have the right to receive the Offer Price or, to the extent you are entitled to and have properly demanded appraisal in connection with the Merger, the amounts to which you are entitled in accordance with Section 262 of the DGCL. Similarly, after selling your Shares in the Offer or the subsequent Merger, you will not bear the risk of any decrease in the value of Benefytt.
Merger Without a Vote of the Benefytt Stockholders. If the Offer is consummated, we do not anticipate seeking the approval of Benefytt remaining public stockholders before effecting the Merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the stock irrevocably accepted for purchase or exchange pursuant to such offer and received by the depositary prior to the expiration of such offer, together with stock otherwise owned by the acquirer and its affiliates and any rollover stock, equals at least the amount of shares of each class
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of stock of the target corporation that would otherwise be required to approve a merger for the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, then the acquirer can effect a merger without the action of the other stockholders of the target corporation. Accordingly, if we consummate the Offer, we intend to effect the closing of the Merger without a vote of the stockholders of Benefytt in accordance with Section 251(h) of the DGCL.
Appraisal Rights. Under the DGCL, holders of Shares do not have appraisal rights as a result of the Offer. In connection with the Merger, however, stockholders of Benefytt will have the right to demand appraisal of their Shares under the DGCL. Stockholders who comply with the applicable statutory procedures under the DGCL will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with interest, if any, as set forth below.
Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the price per Share paid in the Merger and the market value of the Shares. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered and that "[f]air price obviously requires consideration of all relevant factors involving the value of a company." The Delaware Supreme Court has stated that in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be "exclusive of any element of value arising from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a "narrow exclusion [that] does not encompass known elements of value," but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that "elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered."
Stockholders should recognize that the value determined in a judicial process could be higher than, the same as or lower than the price per Share paid pursuant to the Offer or the consideration per Share to be paid in the Merger. Moreover, Purchaser may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of the Shares is less than the price paid in the Offer or the Merger. Stockholders also should note that investment banking opinions as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the Offer or the Merger, are not opinions as to fair value under the DGCL.
When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value, together with interest, if any, by the Surviving Corporation to the stockholders entitled thereto. Payment shall be made to such holders of Shares represented by certificates upon surrender by those stockholders of the certificates representing their Shares to Benefytt and, in the case of holders of uncertificated Shares, forthwith. Unless the Court of Chancery, in its discretion, determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the Effective Time and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the Surviving Corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the Shares as determined by the court, and (2) interest theretofore accrued, unless paid at that time. Section 262 of the DGCL provides that the Court of Chancery shall dismiss the proceedings as to all holders of Shares who are otherwise entitled to appraisal rights unless (x) the total number of Shares entitled to appraisal exceeds 1% of the outstanding Shares of the class or series eligible for appraisal or (y) the value of the consideration provided in the Merger for such total number of Shares exceeds $1 million.
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Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the surviving corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9constitutes the formal notice of appraisal rights under Section 262 of the DGCL.
As described more fully in the Schedule 14D-9, if a stockholder elects to exercise appraisal rights under Section 262 of the DGCL for their Shares, such stockholder must do all of the following:
- within the later of the consummation of the Offer, which is the date on which Purchaser irrevocably accepts for purchase the Shares tendered pursuant to the Offer, and twenty days after the date of mailing of the Schedule 14D-9, deliver to Benefytt a written demand for appraisal of Shares held, which demand must reasonably inform Benefytt of the identity of the stockholder and that the stockholder is demanding appraisal;
- not tender their Shares in the Offer;
- continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Effective Time; and
- strictly follow the statutory procedures for perfecting appraisal rights under Section 262 of the DGCL.
In the event that any holder of Shares who demands appraisal under Section 262 of the DGCL fails to perfect, or effectively withdraws or loses his rights to appraisal as provided in the DGCL, the Shares of such stockholder will be converted into the right to receive the Offer Price for the Shares. Any stockholder wishing to exercise appraisal rights is urged to consult legal counsel before attempting to exercise such rights.
Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights. The foregoing discussion is not a complete statement of the law relating to appraisal rights and is qualified in its entirety by Section 262 of the DGCL as in effect on the date of the Merger Agreement. A copy of Section 262 of the DGCL as in effect on the date of the Merger Agreement is included as Annex B to the Schedule 14D-9. This discussion does not constitute the notice of appraisal rights required by Section 262 of the DGCL.
Going Private Transaction. The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable to certain "going private" transactions and which may under certain circumstances be applicable to the Merger or another business combination following the purchase of Shares pursuant to the Offer in which Purchaser seeks to acquire the remaining Shares not held by it. Purchaser and Benefytt believe that Rule 13e-3 will not be applicable to the Merger because it is anticipated that the Merger will be effected within one year following the consummation of the Offer and, in the Merger, stockholders will receive the same price per Share as paid in the Offer. Rule 13e-3 requires, among other things, that certain financial information concerning Benefytt and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders be filed with the SEC and disclosed to stockholders prior to consummation of the transaction.
Plans for Benefytt. If the Offer and Merger are consummated, at the Effective Time, the Surviving Corporation's certificate of incorporation as in effect immediately prior to the Effective Time will be amended and restated in its entirety to be substantially identical to the certificate of incorporation of Purchaser, the Surviving Corporation's bylaws will be amended and restated in its entirety to conform to the bylaws of Purchaser as in effect immediately prior to the Effective Time other than to change the name of Purchaser thereunder. Purchaser's directors immediately prior to the Effective Time will be the initial directors of the Surviving Corporation until their successors have been elected or appointed. Benefytt's officers immediately prior to the Effective Time will be the initial officers of the Surviving Corporation until their successors have been elected or appointed.
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Except as otherwise provided herein, it is expected that, initially following the Merger, the business and operations of Benefytt will, except as set forth in this Offer to Purchase, be continued substantially as they are currently being conducted. Based on available information, we are conducting a detailed review of Benefytt and its assets, corporate structure, dividend policy, capitalization, indebtedness, operations, properties, policies, management and personnel, obligations to report under Section 15(d) of the Exchange Act and the delisting of its securities from a registered national securities exchange, and will consider what, if any, changes would be desirable in light of the circumstances which exist upon completion of the Offer. We will continue to evaluate the business and operations of Benefytt during the pendency of the Offer and after the consummation of the Offer and will take such actions as we deem appropriate under the circumstances then existing. Thereafter, we intend to review such information as part of a comprehensive review of Benefytt's business, operations, capitalization and management with a view to optimizing development of Benefytt's potential. Possible changes could include changes in Benefytt's business, corporate structure, charter, bylaws, capitalization, board of directors, management, business development opportunities, indebtedness or dividend policy, and although, except as disclosed in this Offer to Purchase, we have no current plans with respect to any of such matters, Parent, Purchaser and the Surviving Corporation expressly reserve the right to make any changes they deem appropriate in light of such evaluation and review or in light of future developments.
As of the date of this Offer to Purchase, no member of Benefytt's current management has entered into any agreement, arrangement or understanding with Parent, Purchaser or their affiliates regarding employment with, or the right to participate in the equity of, the Surviving Corporation or Parent. Moreover, as of the date of this Offer to Purchase, no discussions have been held between members of Benefytt's current management and Parent, Purchaser or their affiliates with respect to any such agreement, arrangement or understanding. Parent may establish equity-based compensation plans for management of the Surviving Corporation. It is anticipated that awards granted under any such equity-based compensation plans would generally vest over a number of years of continued employment and would entitle management to share in the future appreciation of the Surviving Corporation. Although it is likely that certain members of Benefytt's management team will enter into arrangements with the Surviving Corporation or Parent regarding employment (and severance arrangements) with, and the right to purchase or participate in the equity of, the Surviving Corporation or Parent, as of the date of this Offer to Purchase no discussions have occurred between members of Benefytt's current management and Parent, Purchaser or MDP, and there can be no assurance that any parties will reach an agreement on commercially reasonable terms, or at all.
In the normal course of its business of investing, MDP may pursue acquisitions of other companies in Benefytt's industry and look to combine those companies with Benefytt. Except as described above or elsewhere in this Offer to Purchase, Purchaser and Parent have no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving Benefytt or any of its subsidiaries (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of Benefytt or any of its subsidiaries, (iii) any change in the Company Board or management of Benefytt, (iv) any material change in Benefytt's capitalization or dividend policy, (v) any other material change in Benefytt's corporate structure or business, (vi) a class of securities of Benefytt being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of Benefytt being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act.
13. Certain Effects of the Offer.
Market for the Shares. If the Offer is successful, there will be no market for the Shares because Parent and Purchaser intend to consummate the Merger as promptly as practicable following the Offer Acceptance Time.
Nasdaq Listing. The Shares are listed on the Nasdaq. Immediately following the consummation of the Merger (which is expected to occur as promptly as practicable following the Offer Acceptance Time), the Shares will no longer meet the requirements for continued listing on the Nasdaq because the only stockholder will be
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Parent. Immediately following the consummation of the Merger, we intend to and will cause Benefytt to delist the Shares from the Nasdaq.
Exchange Act Registration. The Shares are currently registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Registration of the Shares may be terminated by Benefytt upon application to the SEC if the outstanding Shares are not listed on a "national securities exchange" and if there are fewer than 300 holders of record of the Shares.
Parent intends to seek to cause Benefytt to apply for termination of registration of the Shares as soon as possible after consummation of the Offer if the requirements for termination of registration are met. Termination of registration of the Shares under the Exchange Act would reduce the information required to be furnished by Benefytt to its stockholders and to the SEC and would ultimately make certain provisions of the Exchange Act (such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement or information statement in connection with stockholders' meetings or actions in lieu of a stockholders' meeting pursuant to Section 14(a) and 14(c) of the Exchange Act and the related requirement of furnishing an annual report to stockholders) no longer applicable with respect to the Shares. In addition, if the Shares are no longer registered under the Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions would no longer be applicable to Benefytt. Furthermore, the ability of "affiliates" of Benefytt and persons holding "restricted securities" of Benefytt to dispose of such securities pursuant to Rule 144 under the U.S. Securities Act of 1933, as amended, may be impaired or eliminated.
If registration of the Shares is not terminated prior to the Merger, then the registration of the Shares under the Exchange Act will be terminated following completion of the Merger.
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 using Shares as collateral. Depending upon factors similar to those described above regarding listing and market quotations, following the Offer, the Shares may no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board, in which event the Shares would be ineligible as collateral for margin loans made by brokers.
14. Dividends and Distributions.
As discussed in Section 11-"The Merger Agreement; Other Agreements," the Merger Agreement prohibits the declaration or payment of any dividend or other distribution with respect to Benefytt Class A Shares or Class B Shares without Parent's prior consent.
15. Certain Conditions of the Offer.
Purchaser is not required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to Purchaser's obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), pay for any Shares that are validly tendered in the Offer and not validly withdrawn prior to the Expiration Date unless, immediately prior to the applicable Expiration Date:
- the number of Shares validly tendered and, received (within the meaning of Section 251(h) of the DGCL) and not validly withdrawn (excluding Class A Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in satisfaction of such guarantee in accordance with Section 251(h) of the DGCL), together with any Shares beneficially owned by Parent or any wholly-owned subsidiary of Parent, equals at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date;
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- no governmental entity of competent jurisdiction shall have enacted, issued, promulgated or enforced or entered any laws or issued any order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits the Transactions;
- each regulatory filing required to be made pursuant to the Merger Agreement prior to the closing of the Merger shall have been made by Parent or Benefytt (as applicable);
- with respect to the representations and warranties of Benefytt set forth in the Merger Agreement:
- the representations and warranties of the Company set forth in Sections 5.1(b)(i)-(iii) of the Merger Agreement (relating to certain aspects of the capital structure of Benefytt) shall be true and correct, subject only to inaccuracies that would not increase the aggregate amount of consideration payable by Purchaser in the Offer and the Merger by more than $3,000,000, relative to if such representations and warranties were true and correct in all respects, as of the date of the Merger Agreement and at the Offer Acceptance Time (in each case except to the extent that any such representation and warranty speaks as of a particular date, in which case such representation and warranty shall be true and correct as of such earlier date);
- the representations and warranties of Benefytt set forth in Section 5.1(f)(i) (relating to the absence of certain changes) of the Merger Agreement shall be true and correct in all respects as of the date of the Merger Agreement and at the Offer Acceptance Time;
-
the representation and warranties of Benefytt set forth in Section 5.1(c) (relating to corporate authorizations and approval) and
Section 5.1(t) (relating to brokers and finders) of the Merger Agreement shall be true and correct in all material respects as of the date of the Merger Agreement and at the Offer Acceptance Time; - each of the other representations and warranties of Benefytt set forth in the Merger Agreement shall be true and correct as of the date of the Merger Agreement and at the Offer Acceptance Time (except to the extent that any such representation and warranty speaks as of a particular date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties of Benefytt to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect, provided that in the case of this clause (4) and the preceding clause (3), such representations and warranties will be read without giving effect to any "materiality," "Company Material Adverse Effect" or similar qualification contained therein); and
- Parent and Purchaser shall have received a certificate from Benefytt certifying each of the conditions set forth in (1) through (4) above.
- Benefytt shall have performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Offer Acceptance Time and shall not have failed to comply with any covenant or agreement of Benefytt thereunder at or prior to the Offer Acceptance Time, and Parent and Purchaser shall have received a certificate of the Company to the foregoing effect;
- the waiting period applicable to the consummation of the Transactions under the HSR Act shall have expired or been earlier terminated;
- the Founder Exchange and the tendering of all Shares held or controlled by the Founder Parties shall have occurred prior to the Expiration Date and no party (other than Parent) shall have breached in any material respect any of its obligations under, or terminated or repudiated, the Exchange Agreement;
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- after the date of the Merger Agreement, there shall not have occurred any Change that, individually or taken together with any other Changes, has had or would reasonably be expected to have a Company Material Adverse Effect; and
- the Merger Agreement shall not have been terminated in accordance with its terms.
Purchaser has expressly reserved the right to: (i) increase the Offer Price, (ii) waive any Offer Condition (other than the Minimum Condition) or
- make any other changes to the terms and conditions of the Offer not inconsistent with the terms of the Merger Agreement. Purchaser may not, however, without the prior written consent of the Company, (A) amend or waive the Minimum Condition, (B) decrease the Offer Price or (C) make any change to the Offer that: (1) changes the form of consideration to be delivered by Purchaser pursuant to the Offer, (2) reduces the number of Class A Shares to be purchased in the Offer to less than that required to satisfy the Minimum Condition, (3) imposes conditions or requirements to the Offer in addition to the Offer Conditions, (4) terminates the Offer or accelerates, extends or otherwise changes the Expiration Date, except as permitted by the Merger Agreement, (5) otherwise amends or modifies any of the other terms of the Offer in a manner that adversely affects any holder of Class A Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other Transactions, or (6) provides for any "subsequent offering period" within the meaning of Rule 14d-11 promulgated under the Exchange Act.
Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof. In the case of an extension of the Offer, Parent and Purchaser will make a public announcement of such extension no later than 9:00 a.m., Eastern Time, on the next business day after the previously scheduled Expiration Date.
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 Benefytt with the SEC and other publicly available information concerning Benefytt, Purchaser is not aware of any governmental license or regulatory permit that appears to be material to Benefytt'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 Benefytt's business, or certain parts of Benefytt'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-"Certain Conditions of the Offer."
State Takeover Statutes. A number of states (including Delaware, where Benefytt 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.
As a Delaware corporation, Benefytt would have been subject to Section 203 of the DGCL had it not opted out of Section 203 of the DGCL in its certificate of incorporation. In general, Section 203 of the DGCL
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("Section 203") restricts an "interested stockholder" (including a person who has the right to acquire 15% or more of the corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other actions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder. In connection with its approval of the Merger Agreement, the Offer and the Merger, the Benefytt Board adopted a resolution approving the Merger Agreement and the Transactions, including the Offer and the Merger for purposes of Section 203 of the DGCL.
Purchaser is not aware of any other state takeover laws or regulations which are applicable to the Offer or the Merger and has not attempted to comply with any such state takeover laws or regulations. If any government official or third party should seek to apply any such state takeover law to the Offer or the Merger or other business combination between Purchaser or any of its affiliates and Benefytt, Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover statutes is 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, Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, Purchaser may not be obligated to accept for payment or pay for any tendered Shares. See Section 15-"Certain Conditions of the Offer."
United States Antitrust Compliance. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC") and the Antitrust Division of the U.S. Department of Justice (the "Antitrust Division"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. These requirements apply to Purchaser's acquisition of the Shares in the Offer and the Merger.
Under the HSR Act, the purchase of Shares in the Offer may not be completed until the expiration of a fifteen (15) calendar day waiting period which begins when Parent files a Pre-merger Notification and Report Form under the HSR Act with the FTC and the Antitrust Division, unless such waiting period is earlier terminated by the FTC and the Antitrust Division. If the end of the fifteen (15) calendar day waiting period is set to fall on a federal holiday or weekend day, the waiting period is automatically extended until 11:59 p.m., New York City time, the next business day. Parent and the Company each filed a Pre-merger Notification and Report Form under the HSR Act with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer and the Merger on July 24, 2020, and the required waiting period with respect to the Offer and the Merger will expire at 11:59 p.m., New York City Time, on August 10, 2020, unless earlier terminated by the FTC and the Antitrust Division, or if Parent withdraws its HSR filing under 16 C.F.R. §803.12 or if Parent or the Company receives a formal request for additional information or documentary material prior to that time (referred to as a "Second Request"). If prior to the expiration or termination of this waiting period either the FTC or the Antitrust Division issues a Second Request, the waiting period with respect to the Offer and the Merger would be extended for an additional period of up to 10 calendar days following the date of Parent's or the Company's (as applicable) substantial compliance with the Second Request. Only one extension of the waiting period pursuant to a Second Request is authorized by the HSR Act rules. After that time, absent Parent's and the Company's agreement, they can be prevented from closing only by court order. The FTC or the Antitrust Division may terminate the additional 10 calendar day waiting period before its expiration. In practice, complying with a Second Request can take a significant period of time.
At any time before or after Parent's acquisition of Shares pursuant to the Offer, the 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 Benefytt or its subsidiaries or Parent or its subsidiaries. State attorneys general may also bring legal action under both state and Federal antitrust laws, as
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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.
Texas Insurance Licensure. Under Texas insurance law and regulations promulgated thereunder, Parent is required to file certain information with the Texas Department of Insurance ("TDI") in connection with its acquisition of indirect control of several Benefytt subsidiaries that are licensed in Texas as insurance agencies and third-party administrators. Parent submitted the required filings to TDI with respect to the Merger on July 17, 2020.
17. Fees and Expenses.
We have retained the Depositary and the Information Agent in connection with the Offer. Each of the Depositary 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 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 being made to all holders of Shares other than Benefytt. Purchaser is not aware of any jurisdiction in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. If Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, 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 (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In those jurisdictions where applicable laws require that the Offer 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.
No person has been authorized to give any information or to make any representation on behalf of Parent or Purchaser not contained herein or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized.
Purchaser has filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC in the manner set forth under Section 7 -"Certain Information Concerning Benefytt."
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SCHEDULE I
Directors and Executive Officers of Parent and Purchaser and Certain Related Parties
The following schedule describes the relationships between Purchaser, Parent, MDP and certain of their affiliates, and sets forth the name, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each officer, director and/or manager of the entities described below. The current business address of each entity and person is c/o Madison Dearborn Partners, LLC, 70 West Madison Street, Suite 4600, Chicago, IL 60602 and the phone number of each entity and person is (312) 895-1000. Certain additional information about the entities and persons described in this Schedule I is included in Section 8-"Certain Information Concerning Parent and Purchaser."
The following entities were formed in connection with the proposed acquisition of Benefytt by affiliates of MDP (the "Deal Entities"):
Entity | State of | Controlled By | Management | ||
Formation | |||||
Daylight Beta Corp ("Purchaser") | Delaware | Daylight Beta Parent Corp., as sole stockholder | Board of Directors | ||
Daylight Beta Parent Corp. ("Parent") | Daylight Beta Intermediate Corp., as sole | Board of Directors | |||
Delaware | stockholder | ||||
Daylight Beta Intermediate Corp. | Delaware | Daylight Beta Holdings, LP, as sole stockholder | Board of Directors | ||
Daylight Beta Holdings, LP | Delaware | Daylight Beta GP, LLC, as general partner | General Partner | ||
Managed | |||||
Daylight Beta GP, LLC | Delaware | Madison Dearborn Capital Partners VIII-A, L.P., as | Member Managed | ||
managing member |
The executive officers of each of the foregoing entities are as follows:
- Paul J. Finnegan (Co-Chief Executive Officer)
- Samuel M. Mencoff (Co-Chief Executive Officer)
- Karla J. Bullard (Vice President and Chief Financial Officer)
- Annie S. Terry (Vice President and Secretary)
- Elizabeth Q. Betten (Vice President)
- Matthew W. Raino (Vice President)
- Vahe A. Dombalagian (Managing Director and President of Daylight Beta Corp. and Daylight Beta Parent Corp.; Vice President of Daylight Beta Intermediate Corp. and Daylight Beta GP, LLC).
Vahe Dombalagian is the sole director of each of the foregoing entities which is managed by a board of directors.
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The following table sets forth certain information with respect to the persons listed above:
Name | Citizenship | Present Principal Occupation or Employment; Material Positions Held | |
During the past Five Years | |||
Paul J. Finnegan | USA | Co-Chief Executive Officer of MDP. Mr. Finnegan has been with MDP for each of | |
the last five years. | |||
Samuel M. Mencoff | USA | Co-Chief Executive Officer of MDP. Mr. Mencoff has been with MDP for each of | |
the last five years. | |||
Karla J. Bullard | USA | Chief Financial Officer and Managing Director of MDP. Ms. Bullard has been with | |
MDP for each of the last five years. | |||
Annie S. Terry | USA | Managing Director, General Counsel and Chief Compliance Officer of MDP. | |
Ms. Terry has been with MDP for each of the last five years. | |||
Elizabeth Q. Betten | USA | Managing Director of MDP. Ms. Betten has been with MDP for each of the last five | |
years. | |||
Matthew W. Raino | USA | Managing Director of MDP. Mr. Raino has been with MDP for each of the last five | |
years. | |||
Vahe A. Dombalagian | USA | Managing Director of MDP. Mr. Dombalagian has been with MDP for each of the | |
last five years. |
Each of Madison Dearborn Capital Partners VIII-A, L.P., Madison Dearborn Capital Partners VIII-C, L.P. and Madison Dearborn Capital Partners VIII Executive-A, L.P. hold an economic interest in Daylight Beta Holdings, LP. The following table sets forth certain information about the MDP entities which own and control the Deal Entities:
Entity | State of | Controlled By | Management | ||
Formation | |||||
Madison Dearborn Partners VIII-A&C, L.P., as | General Partner Managed | ||||
Madison Dearborn Capital Partners VIII-A, L.P. | Delaware | general partner | |||
Madison Dearborn Partners VIII-A&C, L.P., as | General Partner Managed | ||||
Madison Dearborn Capital Partners VIII-C, L.P. | Delaware | general partner | |||
Madison Dearborn Capital Partners VIII Executive-A, | Madison Dearborn Partners VIII-A&C, L.P., as | General Partner Managed | |||
L.P. | Delaware | general partner | |||
Madison Dearborn Partners, LLC, as general | General Partner Managed | ||||
Madison Dearborn Partners VIII-A&C, L.P. | Delaware | partner | |||
Samuel M. Mencoff and Paul J. Finnegan, as | Manager Managed | ||||
Madison Dearborn Partners, LLC | Delaware | Managers | |||
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Certain information regarding the executive officers of Madison Dearborn Partners, LLC is set forth below:
Name | Citizenship | Present Principal Occupation or Employment; Material Positions Held | |
During the past Five Years | |||
John A. Canning, Jr. | USA | Chairman of MDP. Mr. Canning has been with MDP for each of the last five years. | |
Paul J. Finnegan | USA | See profile above. | |
Samuel M. Mencoff | USA | See profile above. | |
Karla J. Bullard | USA | See profile above. | |
Annie S. Terry | USA | See profile above. | |
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The Letter of Transmittal, certificates for Shares and any other required documents should be sent by each stockholder of Benefytt or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
American Stock Transfer & Trust Company LLC
Mail or deliver the Letter of Transmittal, or a facsimile, together with the certificate(s) (if any) representing your shares, to:
If delivering by mail: | If delivering by express mail, courier, or other |
expedited service: | |
American Stock Transfer & Trust Co., LLC | American Stock Transfer & Trust Co., LLC |
Operations Center | Operations Center |
6201 15th Avenue | 6201 15th Avenue |
Brooklyn, New York 11219 | Brooklyn, New York 11219 |
Other Information:
Questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed Delivery may be directed to the Information Agent at its location and telephone numbers set forth below. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Shareholders (toll-free): (888) 628-8208
Banks and Brokers: (212) 269-5550
Email: Benefytt@dfking.com
Exhibit (a)(1)(B)
LETTER OF TRANSMITTAL
To Tender Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 Net Per Class A Share
No Consideration to be Paid Per Class B Share
Pursuant to the Offer to Purchase dated July 24, 2020
by
DAYLIGHT BETA CORP.,
a direct wholly-owned subsidiary of
DAYLIGHT BETA PARENT CORP., an affiliate of Madison Dearborn Partners, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON AUGUST 20,
2020, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The Depositary for the Offer is:
American Stock Transfer & Trust Co., LLC
Method of delivery of the certificate(s) is at the option and risk of the owner thereof. See Instruction 1.
Mail or deliver this Letter of Transmittal, or a facsimile, together with the certificate(s) (if any) representing your shares, to:
If delivering by mail: | If delivering by express mail, courier, or other | |||||
expedited service: | ||||||
American Stock Transfer & Trust Co., LLC | American Stock Transfer & Trust Co., LLC | |||||
Operations Center | Operations Center | |||||
6201 15th Avenue | 6201 15th Avenue | |||||
Brooklyn, New York 11219 | Brooklyn, New York 11219 | |||||
For assistance call D.F. King & Co., Inc. at one of the following numbers: | ||||||
Banks and Brokers may call collect: (212) 269-5550 | ||||||
All others may call toll free: (888) 628-8208 | ||||||
DESCRIPTION OF SHARES TENDERED | ||||||
Name(s) and Address of Registered Holder(s) | Shares Tendered | |||||
If there is any error in the name or address shown below, please make the | ||||||
necessary corrections | (attached additional list if necessary) | |||||
Certificated Shares* | Book-Entry | |||||
Shares | ||||||
Total Number | Number | |||||
of Shares | ||||||
Certificate | of Shares | Represented | Book-Entry | |||
Represented | by Certificate(s) | Shares | ||||
Numbers(s) | by Certificate(s) | Tendered** | Tendered | |||
Class A Shares | ||||||
Total Class A | ||||||
Shares | ||||||
Class B Shares | ||||||
Total Class B | ||||||
Shares |
* Need not be completed by stockholders tendering solely by book-entry.
** Unless otherwise indicated, it will be assumed that all Shares represented by certificates described above are being tendered hereby. See Instruction 4.
The Offer (as defined below) is not being made to (nor will tender of Company Shares (as defined below) be accepted from or on behalf of) stockholders in any jurisdiction where it would be illegal to do so.
This Letter of Transmittal is to be used by stockholders of Benefytt Technologies, Inc., a Delaware corporation (the "Company") for delivery if certificates for Company Shares ("Share Certificates") are to be forwarded herewith, or if delivery of Company Shares is to be made by book-entry transfer at the Depositary (pursuant to the procedures set forth in Section 3 of the Offer to Purchase). If delivery of Company Shares is to be made by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company ("DTC"), Company Shares may be delivered by means of this Letter of Transmittal or by means of an Agent's Message (as defined in Instruction 2 below). Company Shares held in book-entry other than through DTC (e.g., the Company is the holder of record of Company Shares) may only be delivered by means of this Letter of Transmittal.
Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for book-entry transfer on a timely basis, or who cannot deliver the Share Certificates and all other required documents to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase), must tender their Company Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase in order to participate in the Offer. See Instruction 2. Delivery of documents to DTC does not constitute delivery to the Depositary.
Additional Information if Company Shares Have Been Lost, Are Being Delivered By Book-Entry Transfer Through DTC, or Are Being
Delivered Pursuant to a Previous Notice of Guaranteed Delivery.
If any Share Certificate(s) you are tendering with this Letter of Transmittal has been lost, stolen, destroyed or mutilated, then you should contact the Company's transfer agent, American Stock Transfer & Trust Co., LLC (the "Transfer Agent"), at (877) 248-6417 or (718) 921-8317 regarding the requirements for replacement. You may be required to post a bond to secure against the risk that the Share Certificate(s) may be subsequently recirculated. You are urged to contact the Transfer Agent immediately in order to receive further instructions, for a determination of whether you will need to post a bond and to permit timely processing of this documentation. See Instruction 11.
- Check here if tendered Company 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 Company Shares by book-entry transfer):
Name of Tendering Institution:
DTC Account Number: | Transaction Code Number: |
- Check here if tendered Company Shares are being delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary and complete the following:
Name(s) of Tendering Stockholder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Eligible Institution that Guaranteed Delivery:
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Daylight Beta Corp., a Delaware corporation ("Purchaser") and a direct wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation ("Parent"), the above described shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares") and/or Class B Common Stock, par value $0.001 per share (the "Class B Shares" and, collectively with the Class A Shares, the "Company Shares") of Benefytt Technologies, Inc., a Delaware corporation ("Company"), pursuant to Purchaser's offer to purchase all outstanding Company Shares, at a purchase price of $31.00 per Class A Share, net to the tendering stockholder in cash, without interest and less any required withholding taxes (or any higher amount per Class A Share that may be paid pursuant to the Offer) and no consideration ($0.00) per Class B Share, each upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 24, 2020 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (as it may be amended or supplemented from time to time, this "Letter of Transmittal" and, together with the Offer to Purchase, the "Offer").
Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms and conditions of any such extension or amendment) and subject to, and effective upon, acceptance for payment of Company Shares validly tendered herewith and not properly withdrawn prior to the Expiration Date 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 Company Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Company Shares or other securities issued or issuable in respect thereof on or after July 24, 2020 (collectively, "Distributions")) and irrevocably constitutes and appoints American Stock Transfer & Trust Company, LLC the true and lawful agent and attorney-in-fact of the undersigned with respect to such Company 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 Company Shares tendered by this Letter of Transmittal), to (i) deliver Share Certificates for such Company Shares (and any and all Distributions) or transfer ownership of such Company Shares (and any and all Distributions) on the account books maintained by the DTC, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Company 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 Company 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, the undersigned hereby irrevocably appoints Annie S. Terry, and any other designees of Purchaser, and each of them, as attorneys-in-fact and proxies of the undersigned, each with full power of substitution, (i) to vote at any annual or special meeting of the Company's 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) to 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) to 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 Company 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 Company 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 Company 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 Company 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 Company Shares to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Company Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such
Company Shares (and any and all Distributions), including voting at any meeting of the Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any and all Company Shares tendered hereby (and any and all Distributions) and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to such Company Shares (and any and all 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 Company Shares, or the Share 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 Company Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of any and all Company Shares tendered hereby (and any and all Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser all Distributions in respect of any and all Company 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 deduct from the purchase price of Company Shares tendered hereby 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 Company Shares unless and until the Company Shares are accepted for payment and until the Share 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 Company Shares held in book-entry form, ownership of Company 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 Company Shares, the Share Certificate(s) and all other required documents (including delivery through DTC) is at the option and risk of the undersigned and that the risk of loss of such Company Shares, Share Certificate(s) and other documents shall pass only after the Depositary has actually received the Company Shares or Share Certificate(s) (including, in the case of a book-entry transfer, by Book-Entry Confirmation (as defined below)).
All authority herein conferred or agreed to be conferred pursuant to this Letter of Transmittal 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 hereby acknowledges that delivery of any Share Certificate shall be effected, and risk of loss and title to such Share Certificate shall pass, only upon the proper delivery of such Share Certificate to the Depositary.
The undersigned understands that the valid tender of Company 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 Company 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 of or the conditions of any such extension or amendment).
Unless otherwise indicated under "Special Payment Instructions," please issue the check for the purchase price of all of Company Shares purchased and, if appropriate, return any Share Certificates not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price of all Company Shares purchased and, if appropriate, return any Share Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Company Shares purchased and, if appropriate, return any Share Certificates
not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such Share Certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please credit any Company Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the applicable account at the Transfer Agent or DTC, as the case may be. The undersigned recognizes that Purchaser has no obligation, pursuant to the "Special Payment Instructions," to transfer any Company Shares from the name of the registered holder thereof if Purchaser does not accept for payment any of such Company Shares so tendered.
LOST CERTIFICATES: PLEASE CALL AMERICAN STOCK TRANSFER & TRUST CO., LLC AT (877) 248-6417 OR (718) 921-8317 TO OBTAIN NECESSARY DOCUMENTS TO REPLACE YOUR LOST SHARE CERTIFICATES.
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Company Shares accepted for payment and/or Share Certificates not tendered or not accepted for payment are to be issued in the name of someone other than the undersigned.
Issue ☐ Check and/or ☐ Share Certificates to:
Name
(Please Print)
Address
(Include Zip Code)
(Taxpayer Identification or Social Security No.)
(Also Complete IRS Form W-9 Included Herein Or The Appropriate Version of
IRS Form W-8, as applicable)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Company Shares accepted for payment and/or Share Certificates not tendered or not accepted are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown above.
Mail ☐ Check and/or ☐ Share Certificates to:
Name
(Please Print)
Address
(Include Zip Code)
(Taxpayer Identification or Social Security No.)
(Also Complete IRS Form W-9 Included Herein, Or the Appropriate Version of IRS
Form W-8, as applicable)
IMPORTANT
STOCKHOLDER: SIGN HERE
Signature(s) of Holder(s) of Company Shares
Dated:, 2020
Name(s)
(Please Print)
Capacity (full title) (See Instruction 5)
(Include Zip Code)
Address
Area Code and
Telephone No.
Tax Identification or Social Security No. (See IRS Form W-9 included herein)
Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by Share Certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.
Guarantee of Signature(s)
(If Required-See Instructions 1 and 5)
Authorized Signature
Name
Name of Firm
Address
(Include Zip Code)
Area Code and Telephone No.
Dated:, 2020
(Additionally, please complete and return the IRS Form W-9 included in this Letter of Transmittal, or the appropriate version of IRS Form
W-8, as applicable)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
- Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section, includes any participant in DTC's systems whose name(s) appear(s) on a security position listing as the owner(s) of Company Shares) of Company Shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) if such Company Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program or by any other "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the U.S. Securities Exchange Act, as amended (each, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. If you have any questions regarding the need for a signature guarantee, please call the Information Agent at (866) 856-3065.
- Requirements of Tender. This Letter of Transmittal is to be completed if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer. Share Certificates (if any) evidencing tendered Company Shares, or, in the case of book-entry transfer through DTC, timely confirmation of such transfer of Company Shares (a "Book-Entry Confirmation") into the Depositary's account at DTC, as well as this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis or who cannot deliver all other required documents to the Depositary prior to the Expiration Date, may tender their Company Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) Share Certificates (if any), or in the case of Company Shares held at DTC, a Book-Entry Confirmation, evidencing all tendered Company Shares, in proper form for transfer, in each case together with this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery through DTC, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within two (2) Nasdaq Stock Market trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Please do not send your Share Certificates directly to the Purchaser, Parent or Company.
The term "Agent's Message" means a message, transmitted by DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Company Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of this Letter of Transmittal and that Purchaser may enforce such agreement against the participant.
The method of delivery of this Letter of Transmittal, Share Certificates (if any) and all other required documents, including delivery through DTC, is at the election and the risk of the tendering stockholder and the delivery of all such documents will be deemed made (and the risk of loss and title to Share Certificates will pass) only when actually received by the Depositary (including, in the case of book-entry transfer through DTC, by Book-Entry Confirmation). If delivery is by mail, it is recommended that all
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such documents be sent by properly insured, registered mail. In all cases, sufficient time should be allowed to ensure timely delivery prior to the expiration of the Offer.
Purchaser will not accept any alternative, conditional or contingent tenders, and no fractional Company Shares will be purchased. By executing this Letter of Transmittal (or facsimile thereof), the tendering stockholder waives any right to receive any notice of the acceptance for payment of Company Shares.
- Inadequate Space. If the space provided herein is inadequate, Share Certificate numbers, the number of Company Shares represented by such Share Certificates and/or the number of Company Shares tendered should be listed on a signed separate schedule attached hereto. The undersigned understands and acknowledges that all questions as to validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Company Shares will be determined by Purchaser (which may delegate power in whole or in part to the Depositary) in its sole and absolute discretion, and such determination shall be final and binding on all parties, subject to the right of any such party to dispute such determination in a court of competent jurisdiction.
- Partial Tenders (Not Applicable to Certificate Stockholders who Tender by Book-Entry Transfer). If fewer than all Company Shares represented by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Company Shares which are to be tendered in the box entitled "Number of Shares Represented by Certificate(s) Tendered." In such case, a new certificate for the remainder of Company Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Company Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.
- Signatures on Letter of Transmittal; Stock Powers and Endorsements.
- Exact Signatures. If this Letter of Transmittal is signed by the registered holder(s) of Company Shares tendered hereby, then the signature(s) must correspond with the name(s) as written on the face of such Share Certificates (if any) for such Company Shares without alteration, enlargement or any change whatsoever.
- Holders. If any Company Shares tendered hereby are held of record by two or more persons, then all such persons must sign this Letter of Transmittal.
- Different Names on Share Certificates. If any Company Shares tendered hereby are registered in different names on different Share Certificates, then it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates.
- Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of Company Shares tendered hereby, then no endorsements of Share Certificates for such Company Shares or separate stock powers are required unless payment of the purchase price is to be made, or Company Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered holder(s) of Company Shares tendered hereby, then such Share Certificates for such Company Shares must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificates for such Company Shares. Signature(s) on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other legal entity or other person acting in a fiduciary or representative capacity, then such person should so indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act must be submitted.
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6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser or any successor entity thereto will pay all stock transfer taxes with respect to the transfer and sale of any Company Shares to it or its order pursuant to the Offer (for the avoidance of doubt, transfer taxes do not include United States federal income tax or backup withholding). If, however, payment of the purchase price is to be made to, or if Share Certificate(s) for Company Shares not tendered or not accepted for payment are to be registered in the name of, any person(s) other than the registered holder(s), or if tendered Share Certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, then the amount of any stock transfer taxes or other taxes required by reason of the payment to a person other than the registered holder(s) of such Share Certificate (in each case whether imposed on the registered holder(s) or such other person(s)) payable on account of the transfer to such other person(s) will be deducted from the purchase price of such Company Shares purchased unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to Share Certificate(s) evidencing the Company Shares tendered hereby.
- Special Payment and Delivery Instructions. If a check is to be issued for the purchase price of any Company Shares tendered by the Letter of Transmittal in the name of, and, if appropriate, Share Certificates for Company Shares not tendered or not accepted for payment are to be issued or returned to, any person(s) other than the signer of this Letter of Transmittal or if a check and, if appropriate, such Share Certificates are to be returned to any person(s) other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, then the appropriate boxes on this Letter of Transmittal must be completed.
- IRS Form W-9. To avoid backup withholding, a tendering stockholder is required to provide the Depositary with a correct taxpayer identification number ("TIN") on Internal Revenue Service ("IRS") Form W-9, which is included herein following "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax, and that such stockholder is a U.S. person (as defined in the instructions to IRS Form W-9). If a tendering stockholder has been notified by the IRS that such stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification section of the IRS Form W-9, unless such stockholder has since been notified by the IRS that such stockholder is no longer subject to backup withholding. Failure to provide the information on the IRS Form W-9 may subject the tendering stockholder to federal backup withholding on the payment of the purchase price for all Company Shares purchased from such stockholder. If the tendering stockholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such stockholder should write "Applied For" in the space for the TIN on the IRS Form W-9, sign and date the IRS Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number under "Important Tax Information" below. If you write "Applied For" in the space for the TIN and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold a portion of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. If the correct TIN is not provided, then the stockholder may be subject to a penalty imposed by the IRS.
Certain stockholders (including, among others, certain corporations and certain foreign individuals and entities) may not be subject to backup withholding. Stockholders who are not U.S. persons (as defined in the instructions to IRS Form W-9) should submit an appropriate and properly completed IRS Form W-8, a copy of which may be obtained from the Depositary or from the IRS website at: http://www.irs.gov/w8, in order to avoid backup withholding. Such stockholders should consult a tax advisor to determine which version of IRS Form W-8 is appropriate. See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for more instructions.
9. Irregularities. All questions as to the validity, form, eligibility (including, without limitation, time of receipt) and acceptance for payment of any tender of Company Shares will be determined by Purchaser in its
Page 3
discretion. Purchaser reserves the absolute right to reject any or all tenders of Company Shares determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. Purchaser also reserves the absolute right to waive any of the conditions of the Offer (other than the Minimum Condition (as defined in the Offer to Purchase), which may only be waived with the consent of the Company) and any defect or irregularity in the tender of any Company Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Company Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of Purchaser. None of Purchaser, the Depositary, the Information Agent (as the foregoing are defined in the Offer to Purchase) or any other person is or 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. Stockholders may challenge Purchaser's interpretation of the terms and conditions of the Offer (including, without limitation, the Letter of Transmittal and the instructions thereto), and only a court of competent jurisdiction can make a determination that will be final and binding on all parties.
- Requests for Additional Copies. Questions or requests for assistance may be directed to the Information Agent at its address and telephone number set forth below or to your broker, dealer, commercial bank or trust company. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished at Purchaser's expense.
- Lost, Mutilated, Destroyed or Stolen Share Certificates. If any Share Certificate representing Company Shares has been lost, destroyed or stolen, then the stockholder should promptly notify American Stock Transfer & Trust Co., LLC at (877) 248-6417. The stockholder will then be instructed as to the steps that must be taken in order to replace such Share Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen Share Certificates have been followed.
This Letter of Transmittal, properly completed and duly executed, together with Share Certificates (if any) representing Company Shares being tendered (or confirmation of book-entry transfer through DTC) and all other required documents, must be received before one minute after 11:59 P.M., Eastern Time, on the Expiration Date, or the tendering stockholder must comply with the procedures for guaranteed delivery.
Page 4
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a stockholder who is a U.S. person (as defined in the instructions to IRS Form W-9) surrendering Company Shares must, unless an exemption applies, provide the Depositary (as payer) with the stockholder's correct TIN on IRS Form W-9, a copy of which is included in this Letter of Transmittal. If the stockholder is an individual, then the stockholder's TIN is generally such stockholder's Social Security number. If the correct TIN is not provided, then the stockholder may be subject to a penalty imposed by the IRS and payments of cash to the stockholder (or other payee) pursuant to the Offer may be subject to United States federal backup withholding (currently imposed at a rate of 24%).
Certain stockholders (including, among others, certain corporations and certain foreign individuals and entities) may not be subject to backup withholding and reporting requirements. In order for an exempt stockholder who is not a U.S. person (as defined in the instructions to IRS Form W-9) to avoid backup withholding, such person should complete, sign and submit an appropriate IRS Form W-8 signed under penalties of perjury, attesting to his, her or its exempt status. IRS Forms W-8 can be obtained from the Depositary, or from the IRS website at: http://www.irs.gov/w8. Such stockholders should consult a tax advisor to determine which version of IRS Form W-8 is appropriate. Exempt stockholders who are U.S. persons should furnish their TIN, check the "Exempt payee" box on the IRS Form W-9 and sign, date and return the IRS Form W-9 to the Depositary in order to avoid erroneous backup withholding. See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional instructions.
If backup withholding applies, the Depositary is required to withhold and pay over to the IRS a portion of any payment made to a stockholder. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding may be reduced by the amount of tax withheld provided the required information is timely provided to the IRS. If backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS provided the required information is timely provided to the IRS.
Purpose of IRS Form W-9
To prevent backup withholding on payments that are made to a stockholder with respect to Company Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of the stockholder's correct TIN by completing the IRS Form W-9 included in this Letter of Transmittal certifying that (1) the TIN provided on the IRS Form W-9 is correct (or that such stockholder is awaiting a TIN), (2) the stockholder is not subject to backup withholding because (i) the stockholder is exempt from backup withholding, (ii) the stockholder has not been notified by the IRS that the stockholder is subject to backup withholding as a result of a failure to report all interest and dividends or (iii) the IRS has notified the stockholder that the stockholder is no longer subject to backup withholding, and (3) the stockholder is a U.S. person (as defined in the instructions to IRS Form W-9).
What Number to Give the Depositary
The tendering stockholder is required to give the Depositary the TIN, generally the Social Security number or employer identification number, of the record holder of all Company Shares tendered hereby. If such Company Shares are in more than one name or are not in the name of the actual owner, consult the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such stockholder should write "Applied For" in the space for the TIN on the IRS Form W-9, sign and date the IRS Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number below. If the tendering stockholder writes "Applied For" in the space for the TIN and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold a portion of all payments of the purchase price, which will be refunded if a TIN is provided to the Depositary within sixty (60) days of the Depositary's receipt of the Certificate of Awaiting Taxpayer Identification Number. If the Depositary is provided with an incorrect TIN in connection with such payments, then the stockholder may be subject to a penalty imposed by the IRS.
Page 5
NOTE: FAILURE TO COMPLETE AND RETURN THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE INSTRUCTIONS ENCLOSED WITH THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN THE SPACE FOR THE TIN ON THE IRS FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate IRS Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, a portion of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a taxpayer identification number within sixty (60) days.
Signature | Date |
Page 6
Form W-9 | Request for Taxpayer | Give Form to the |
(Rev. October 2018) | Identification Number and Certification | |
Department of the Treasury | requester. Do not | |
Internal Revenue Service | u Go to www.irs.gov/FormW9 for instructions and the latest information. | send to the IRS. |
- Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
- 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 | 4 Exemptions (codes apply only to | |||||||||
certain entities, not individuals; see | |||||||||||
one of the following seven boxes. | |||||||||||
☐ C Corporation | ☐ S Corporation | ☐ Partnership | ☐ | Trust/estate | instructions on page 3): | ||||||
Print or | ☐ | lndividual/sole proprietor or | Exempt payee code (if any) | ||||||||
single-member LLC | |||||||||||
type | ☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership) | Exemption from FATCA reporting | |||||||||
See | u | ||||||||||
code (if any) | |||||||||||
Specific | Note. Check the appropriate box in the line above for the tax classification of the single-member owner. Do not | ||||||||||
(Applies to accounts maintained | |||||||||||
Instructions | check LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner | ||||||||||
on page 2. | of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a | outside the U.S.) | |||||||||
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
- -
Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give | or | ||||||||
the Requester for guidelines on whose number to enter. | Employer identification number | ||||||||
- | |||||||||
Part II | Certification |
Under penalties of perjury, I certify that:
- 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
- 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
- I am a U.S. citizen or other U.S. person (defined below); and
- 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 | Signature of | |
Here | ||
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)
- 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.
Cat. No. 10231X | Form W-9 (Rev. 10-2018) |
Form W-9 (Rev. 10-2018) | Page 2 |
By signing the filled-out form, you:
- Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
- Certify that you are not subject to backup withholding, or
- 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
-
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.
- The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
- The treaty article addressing the income.
- The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
- The type and amount of income that qualifies for the exemption from tax.
- 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:
- You do not furnish your TIN to the requester,
- You do not certify your TIN when required (see the instructions for Part II for details),
- The IRS tells the requester that you furnished an incorrect TIN,
- 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
-
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.
Form W-9 (Rev. 10-2018) | Page 3 |
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 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-memberlimited liability company
(LLC) owned by an individual and | Individual/sole proprietor or single- member |
disregarded for U.S. federal tax purposes. | LLC |
• LLC treated as a partnership for U.S. | Limited liability company and enter the |
federal tax purposes, | appropriate tax classification. |
• LLC that has filed Form 8832 or 2553 to | (P= Partnership; C= C corporation; or |
be taxed as a corporation, or | S= S corporation) |
- 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.
• 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
Form W-9 (Rev. 10-2018) | Page 4 |
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
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 | Exempt payees 1 through 4 |
dividends | |
Payments over $600 required to be reported | Generally, exempt payees |
and direct sales over $5,0001 | 1 through 52 |
Payments made in settlement of payment | Exempt payees 1 through 4 |
card or third party network transactions |
- See Form 1099-MISC, Miscellaneous Income, and its instructions.
- 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.
Form W-9 (Rev. 10-2018) | Page 5 |
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.
- 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.
- 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 TIN to the requester, you must cross out item 2 in the certification before signing the form.
- Real estate transactions. You must sign the certification. You may cross out item 2 of the certification. Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))
- 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) | The actual owner of the account or, if |
other than an account maintained by an | combined funds, the first individual on the | |
FFI | account1 | |
3. | Two or more U.S. persons (joint | |
account maintained by an FFI) | Each holder of the account | |
4. | Custodian account of a minor (Uniform | The minor2 |
Gift to Minors Act) | ||
5. | a. The usual revocable savings trust | The grantor-trustee1 |
(grantor is also trustee) | The actual owner1 | |
b. So-called trust account that is not a | ||
legal or valid trust under state law | ||
6. | Sole proprietorship or disregarded | The owner3 |
entity owned by an individual | ||
7. | Grantor trust filing under Optional | The grantor* |
Form 1099 Filing Method 1 (see | ||
Regulations section 1.671-4(b)(2)(i) | ||
(A)) | ||
For this type of account: | Give name and EIN of: | |
8. | Disregarded entity not owned by an | The owner |
individual | ||
9. | A valid trust, estate, or pension trust | Legal entity4 |
10. Corporation or LLC electing corporate | The corporation | |
status on Form 8832 or Form 2553 | ||
11. Association, club, religious, charitable, | The organization | |
educational, or other taxexempt | ||
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 | The public entity | |
Agriculture in the name of a public | ||
entity (such as a state or local | ||
government, school district, or prison) | ||
that receives agricultural program | ||
payments | ||
15. Grantor trust filing under the Form | The trust | |
1041 Filing Method or the Optional | ||
Form 1099 Filing Method 2 (see | ||
Regulations section 1.671-4(b)(2)(i)(B)) |
- 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.
- You must show your individual name and you may also enter your business or DBA name on the "Business name/disregarded
Form W-9 (Rev. 10-2018) | Page 6 |
entity" name line. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
-
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.
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:
American Stock Transfer & Trust Co., LLC
Mail or deliver this Letter of Transmittal, or a facsimile, together with the certificate(s) (if any) representing your shares, to:
If delivering by mail: | If delivering by express mail, courier, or other expedited service: |
American Stock Transfer & Trust Co., LLC | American Stock Transfer & Trust Co., LLC |
Operations Center | Operations Center |
6201 15th Avenue | 6201 15th Avenue |
Brooklyn, New York 11219 | Brooklyn, New York 11219 |
Questions or requests for assistance may be directed to the Information Agent at the telephone numbers and address set forth below. Questions or requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent at the address and telephone numbers set forth below. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
48 Wall Street, 22nd Floor
New York, New York 10005
Banks and Brokers Call: (212) 269-5550
All Others Call: (888) 628-8208
Email: benefytt@dfking.com
Exhibit (a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
For Tender of Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 NET PER CLASS A SHARE
NO CONSIDERATION TO BE PAID PER CLASS B SHARE
Pursuant to the Offer to Purchase dated July 24, 2020
by
DAYLIGHT BETA CORP.,
a direct wholly-owned subsidiary of
DAYLIGHT BETA PARENT CORP.
an affiliate of
MADISON DEARBORN PARTNERS, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE
AFTER 11:59 P.M., EASTERN TIME, ON AUGUST 20, 2020, UNLESS
THE OFFER IS EXTENDED OR EARLIER TERMINATED.
This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates representing shares of Class A Common Stock, par value $0.001 per share, and/or of Class B Common Stock, par value $0.001 per share (collectively, the "Shares"), of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt"), are not immediately available, (ii) the procedure for book-entry transfer described in Section 3 of the Offer to Purchase (as defined below) cannot be completed prior to the expiration of the Offer or (iii) time will not permit all required documents to reach American Stock Transfer & Trust Co., LLC (the "Depositary") prior to the expiration of the Offer. This Notice of Guaranteed Delivery may be delivered by mail, facsimile transmission or overnight courier to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
American Stock Transfer & Trust Co., LLC
If delivering by mail: | If delivering by express mail, courier, or other expedited service: |
American Stock Transfer & Trust Co., LLC | American Stock Transfer & Trust Co., LLC |
Operations Center | Operations Center |
6201 15th Avenue | 6201 15th Avenue |
Brooklyn, New York 11219 | Brooklyn, New York 11219 |
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR EMAIL ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE APPROPRIATE LETTER OF TRANSMITTAL.
The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent's Message (as defined in the Offer to Purchase) and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.
Ladies and Gentlemen:
The undersigned hereby tenders to Daylight Beta Corp., a Delaware corporation and a direct wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation, upon the terms and subject to the conditions set forth in the offer to purchase, dated July 24, 2020 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the "Letter of Transmittal" and, together with the Offer to Purchase, the "Offer"), receipt of which is hereby acknowledged, the number of shares of Class A Common Stock, par value $0.001 per share, and/or shares of Class B Common Stock, par value $0.001,per share of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt"), specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Number and Class of Shares and Certificate No(s) (if available)
- Check here if Shares will be tendered by book entry transfer. Name of Tendering Institution:
DTC Account Number:
Dated:, 2020
Name(s) of Record Holder(s):
(Please type or print)
Address(es):
(Zip Code)
Area Code and Tel. No
(Daytime telephone number)
Signature(s):
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (defined in Section 3 of the Offer to Purchase), hereby (i) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended and (ii) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates representing the Shares tendered hereby, in proper form for transfer, or a confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC (pursuant to the procedures set forth in Section 3 of the Offer to Purchase), in either case together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or, in the case of a book-entry transfer, an Agent's Message (defined in Section 3 of the Offer to Purchase), together with any other documents required by the Letter of Transmittal, all within two (2) Nasdaq Stock Market trading days after the date hereof.
Name of Firm:
Address: | (Authorized Signature) | |||||
Name: | ||||||
(Please type or print) | ||||||
Title: | ||||||
(Zip Code) | ||||||
Area Code and Tel. No.: | Date: | |||||
NOTE: | DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE. CERTIFICATES |
REPRESENTING TENDERED SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. |
Exhibit (a)(1)(D)
Offer To Purchase For Cash
All Outstanding Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 NET PER CLASS A SHARE
No Consideration to be Paid Per Class B Share
Pursuant to the Offer to Purchase dated July 24, 2020
by
DAYLIGHT BETA CORP.
a
direct wholly-owned subsidiary of
DAYLIGHT BETA PARENT CORP.
an affiliate of
MADISON DEARBORN PARTNERS, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE
AFTER 11:59 P.M., EASTERN TIME, ON AUGUST 20, 2020, UNLESS
THE OFFER IS EXTENDED OR EARLIER TERMINATED.
July 24, 2020
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by Daylight Beta Corp., a Delaware corporation ("Purchaser") and a wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation, to act as Information Agent in connection with Purchaser's offer to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares"), of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt"), at a purchase price of $31.00 per Class A Share, net to the seller in cash without interest, less any applicable withholding taxes, and all of the outstanding shares of Class B Common Stock, par value $0.001 per share (the "Class B Shares" and together with the Class A Shares, the "Shares") for no consideration, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 24, 2020 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, 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 Benefytt has recommended that holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
Certain 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:
- The Offer to Purchase;
- The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients, together with "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" providing information relating to backup United States federal income tax withholding;
- A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to American Stock Transfer & Trust Company LLC (the "Depositary") by
the expiration date of the Offer or if the procedure for book-entry transfer cannot be completed by the expiration date of the Offer;
- 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;
- Benefytt's Solicitation/Recommendation Statement on Schedule 14D-9; and
- A return envelope addressed to the Depositary for your use only.
Your prompt action is requested. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at one minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless the Offer is extended or earlier terminated.
For Shares to be properly tendered pursuant to the Offer, (a) the share certificates (if any) or confirmation of receipt of such Shares under the procedure for book-entry transfer through The Depository Trust Company ("DTC"), together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an "Agent's Message" (as defined in Section 3 of the Offer to Purchase) in the case of book- entry transfer through DTC, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Depositary and the Information Agent as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 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 addresses and telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
D.F. King & Co., Inc.
Nothing contained herein or in the enclosed documents shall render you the agent of the 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.
Exhibit (a)(1)(E)
Offer To Purchase For Cash
All Outstanding Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 NET PER CLASS A SHARE
NO CONSIDERATION TO BE PAID PER CLASS B SHARE
Pursuant to the Offer to Purchase dated
July 24, 2020
by
DAYLIGHT BETA CORP.,
a
direct wholly-owned subsidiary of
DAYLIGHT BETA PARENT CORP.
an affiliate of
MADISON DEARBORN PARTNERS, LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE
AFTER 11:59 P.M., EASTERN TIME, ON AUGUST 20, 2020,
UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
July 24, 2020
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated July 24, 2020 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the "Letter of Transmittal") in connection with the offer by Daylight Beta Corp., a Delaware corporation ("Purchaser") and a direct wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation ("Parent"), to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares"), of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt"), at a purchase price of $31.00 per Class A Share, net to the seller in cash without interest and less any required withholding taxes, upon the terms and subject to the conditions of the Offer to Purchase. Purchaser is also offering to acquire all of the outstanding shares of Class B Common Stock, par value $0.001 per share, of Benefytt (the "Class B Shares" and, together with the Class A Shares, the "Shares"), for no consideration. Purchaser's offer to purchase all of the outstanding Class A Shares and Class B Shares pursuant to the Offer to Purchase and the Letter of Transmittal, together with any amendments or supplements thereto, are collectively referred to herein as the "Offer."
Also enclosed is Benefytt's Solicitation/Recommendation Statement on Schedule 14D-9.
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 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:
- The offer price for the Offer is $31.00 per Class A Share, net to you in cash without interest and less any applicable withholding taxes.
- The Offer is being made for all outstanding Shares.
- The Offer is being made in connection with the Agreement and Plan of Merger, dated as of July 12, 2020, (together with any amendments or supplements thereto, the "Merger Agreement"), among Parent, Purchaser and Benefytt, pursuant to which, following the consummation of the Offer and the satisfaction or waiver of the applicable conditions set forth therein, without a vote of the stockholders of Benefytt in accordance with Section 251(h) of the General Corporation Law of the State of Delaware ("DGCL") Purchaser will merge with and into Benefytt (the "Merger"), and Benefytt will continue as the surviving corporation in the Merger as a direct wholly-owned subsidiary of Parent.
- Following careful consideration, the board of directors of Benefytt has (i) determined that it is in the best interests of Benefytt and its stockholders to enter into the Merger Agreement, (ii) approved the execution and delivery of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein, (iii) declared advisable the Merger Agreement and the transactions contemplated thereby, and (iv) subject to Section 6.2 of the Merger Agreement and the terms and conditions of the Merger Agreement, resolved to recommend the holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
- The Offer and withdrawal rights will expire at one minute after 11:59 p.m., Eastern Time, on August 20, 2020, unless the Offer is extended or earlier terminated.
- The Offer is subject to certain conditions described in Section 15 of the Offer to Purchase.
- Any transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by the Purchaser, except as otherwise provided in the Letter of Transmittal.
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 expiration of the Offer.
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 acceptance thereof would not be in compliance with the laws of such jurisdiction, and Purchaser is not aware of any jurisdiction in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. If Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, 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 (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In those jurisdictions where applicable laws require that the Offer 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.
INSTRUCTION FORM
With Respect to the Offer to Purchase for Cash
All Outstanding Shares of Class A Common Stock and Class B Common Stock
of
BENEFYTT TECHNOLOGIES, INC.
at
$31.00 NET PER CLASS A SHARE
NO CONSIDERATION TO BE PAID PER CLASS B SHARE
Pursuant to the Offer to Purchase dated July 24, 2020
by
DAYLIGHT BETA CORP.,
a
direct wholly-owned subsidiary of
DAYLIGHT BETA PARENT CORP.
an affiliate of
MADISON DEARBORN PARTNERS, LLC
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated July 24, 2020 (as it may be amended or
supplemented from time to time, the "Offer to Purchase"), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the "Letter of Transmittal") and, together with the Offer to Purchase, the "Offer"), in connection with the offer by Daylight Beta Corp., a Delaware corporation ("Purchaser") and a direct wholly-owned subsidiary of Daylight Beta Parent Corp., a Delaware corporation ("Parent"), to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares"), of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt"), at a purchase price of $31.00 per Class A Share, net to the seller in cash without interest and less any applicable withholding taxes, and all of the outstanding shares of Class B Common Stock (the "Class B Shares" and, together with the Class A Shares, the "Shares"), par value $0.001 per share, for no consideration ($0.00), in each case 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 to American Stock Transfer & Trust Company LLC (the "Depositary") will be determined by Purchaser (which may delegate power in whole or in part to the Depositary) 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.
- Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.
Dated:, 2020
(Signature(s))
(Please Print Name(s))
Address
Include Zip Code
Area Code and
Telephone No.
Taxpayer Identification or
Social Security No.
Exhibit (a)(1)(F)
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 by the Offer to Purchase (as defined below), dated July 24, 2020, and the related Letter of Transmittal (as defined below) and any amendments or supplements thereto. Purchaser (as defined below) is not aware of any jurisdiction in which the making of the Offer or the tender of Shares in connection therewith would not be in compliance with the laws of such jurisdiction. If Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, 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 (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. In those jurisdictions where applicable laws require that the Offer 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.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Class A Common Stock and Class B Common Stock
of
Benefytt Technologies, Inc.
at
$31.00 Net Per Class A Share
No Consideration to be Paid Per Class B Share
Pursuant to the Offer to Purchase Dated July 24, 2020
by
Daylight Beta Corp.,
a direct wholly-owned subsidiary of
Daylight Beta Parent Corp.,
an affiliate of
Madison Dearborn Partners, LLC
Daylight Beta, Corp. ("Purchaser"), a Delaware corporation and a direct wholly-owned subsidiary of Daylight Beta Parent, Corp. ("Parent"), a Delaware corporation, hereby offers to purchase all of the outstanding shares of Class A Common Stock, par value $0.001 per share (the "Class A Shares") of Benefytt Technologies, Inc., a Delaware corporation ("Benefytt" or the "Company"), at a price of $31.00 per Class A Share, net to the seller in cash, without interest and less any applicable withholding taxes (such amount or any higher amount per share that may be paid pursuant to the Offer being hereinafter referred to as the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 24, 2020 (as may be amended or supplemented from time to time, the "Offer to Purchase"), and in the related letter of transmittal (the "Letter of Transmittal"). Purchaser is also offering to acquire all of the outstanding shares of Class B Common Stock, par value $0.001 per share, of Benefytt (the "Class B Shares" and, together with the Class A Shares, the "Shares"), for no consideration. Purchaser's offer to purchase all of the outstanding Class A Shares and Class B Shares pursuant to the Offer to Purchase and the Letter of Transmittal, together with any amendments or supplements thereto, are collectively referred to herein as the "Offer." All holders of Class B Shares have agreed to exchange their Class B Shares into Class A Shares and tender such Class A Shares prior to the expiration of the Offer. Parent is affiliated with Madison Dearborn Partners LLC, a Delaware limited liability company. Tendering stockholders who have Shares registered in their names and who tender directly to American Stock Transfer & Trust Company, LLC (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, dealer, commercial bank, trust company or other nominee should consult with such institution as to whether it charges any service fees or commissions.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE AFTER 11:59 P.M., EASTERN TIME,
ON AUGUST 20, 2020, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 12, 2020, among Parent, Purchaser and Benefytt (as the same may be amended, the "Merger Agreement"), pursuant to which, following the consummation of the Offer and the satisfaction or waiver of each of the applicable conditions set forth in the Merger Agreement, Purchaser will merge with and into Benefytt (the "Merger"), with Benefytt continuing as the surviving corporation in the Merger as a direct wholly-owned subsidiary of Parent. As a result of the Merger, each (i) outstanding Class A Share (other than Class A Shares (1) held by Benefytt as treasury stock, (2) owned, directly or indirectly, by Parent or Purchaser, and (3) owned by Benefytt stockholders who have properly and validly exercised their statutory rights of appraisal in respect of such Class A Shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the "DGCL")) will be converted into the right to receive the Offer Price; and (ii) Class B Share outstanding or held in treasury by Benefytt immediately prior to the consummation of the Merger shall automatically be cancelled and retired and will cease to exist, and no consideration shall be delivered in exchange therefor. As a result of the Merger, Benefytt will cease to be a publicly traded company and will become wholly-owned by Parent. The Merger Agreement is more fully described in the Offer to Purchase.
The Offer is conditioned upon, among other things: (i) there being validly tendered and received (within the meaning of Section 251(h) of the DGCL) and not validly withdrawn (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in satisfaction of such guarantee in accordance with Section 251(h) of the DGCL) as of one minute after 11:59 p.m. Eastern Time on August 20, 2020 (the "Expiration Date," unless extended by Purchaser in accordance with the Merger Agreement, in which event "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire) a number of Shares which, together with any Shares beneficially owned by Parent or any wholly-owned subsidiary of Parent, equals at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date (the "Minimum Condition"); (ii) there not being in effect immediately prior to the Expiration Date any law or order (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits the consummation of the Offer, the Merger or the other transactions contemplated by the Merger Agreement (the "Transactions"); (iii) the expiration or early termination of the waiting period applicable to the consummation of the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (iv) the absence of a termination of the Merger Agreement in accordance with its terms. The Offer is also subject to other conditions described in the Offer to Purchase.
The purpose of the Offer is for Parent, through Purchaser, to acquire control of, and would be the first step in the acquisition of the entire equity interest in, Benefytt. Following the consummation of the Offer, Purchaser intends to effect the Merger as promptly as practicable, subject to the
satisfaction of certain conditions.
Following careful consideration the board of directors of Benefytt has: (i) determined that it is in the best interests of Benefytt and its stockholders to enter into the Merger Agreement, (ii) approved the execution and delivery of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, upon the terms and subject to the conditions set forth therein, (iii) declared advisable the Merger Agreement and the transactions contemplated thereby and (iv) subject to Section 6.2 of the Merger Agreement and the terms and conditions of the Merger Agreement, resolved to recommend the holders of Shares accept the Offer by tendering their Class A Shares to Purchaser pursuant to the Offer.
The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the DGCL, which permits completion of the Merger upon the collective ownership by Parent, Purchaser or any wholly-owned subsidiary of Parent of at least one Share more than a majority of all issued and outstanding Shares as of the Expiration Date, and, if the Merger is so effected pursuant to Section 251(h) of the DGCL, no vote of Benefytt's stockholders will be required to adopt the Merger Agreement or consummate the Merger. Following the purchase of Shares in the Offer, Parent and Purchaser expect to consummate the Merger in accordance with Section 251(h) of the DGCL, and do not expect there to be a significant period of time between the consummation of the Offer and the consummation of the Merger.
Subject to the applicable rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and the provisions of the Merger Agreement, Purchaser expressly reserves the right to: (i) increase the Offer Price, (ii) waive any Offer Condition (as defined in the Offer to Purchase) (other than the Minimum Condition) or (iii) make any other changes to the terms and conditions of the Offer not inconsistent with the terms of the Merger Agreement. Purchaser may not, however, without the prior written consent of the Company, (A) amend or waive the Minimum Condition,
- decrease the Offer Price or (C) make any change to the Offer that: (1) changes the form of consideration to be delivered by Purchaser pursuant to the Offer, (2) reduces the number of Class A Shares to be purchased in the Offer to less than that required to satisfy the Minimum Condition, (3) imposes conditions or requirements to the Offer in addition to the Offer Conditions, (4) terminates the Offer or accelerates, extends or otherwise changes the Expiration Date, except as permitted by the Merger Agreement, (5) otherwise amends or modifies any of the other terms of the Offer in a manner that adversely affects any holder of Class A Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other Transactions, or (6) provides for any "subsequent offering period" within the meaning of Rule 14d-11 promulgated under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act").
Purchaser is required to extend the Offer beyond its then-scheduled Expiration Date: (i) for the minimum period required by any law, any interpretation or position of the SEC, the staff thereof or any rules and regulations of the Nasdaq Stock Market applicable to the Offer (including in order to comply with Rule 14e-1(b) promulgated under the Exchange Act in respect of any change in the Offer Price) and (ii) if any condition to the Offer has not been satisfied or waived by Purchaser or Parent (to the extent waivable) as of such Expiration Date, for one or more 10 business day periods (or such longer period as may be agreed to by the parties to the Merger Agreement) in order to permit the Offer Conditions to be satisfied; provided that if the sole unsatisfied Offer Condition (other than those conditions that by their terms are to be satisfied at the time that the Purchaser accepts for payment all Shares tendered (and not validly withdrawn) pursuant to the Offer (the "Offer Acceptance Time")) is the Minimum Condition, Purchaser is not required to make more than two such 10-business day extensions. In no event will Purchaser be required to extend the Offer beyond November 9, 2020 or, if earlier, the termination of the Merger Agreement in accordance with its terms. In addition, Purchaser may (but is not required to) extend the offer for successive periods of up to five business days if, as of any scheduled Expiration Date: (1) all of the Offer Conditions have been satisfied or waived (other than the conditions that are to be satisfied at the Offer Acceptance Time), (2) the full amount of the Debt Financing (as defined in the Offer to Purchase) has not been funded and will not be available to be funded at the closing of the Offer and (3) Parent and the Purchaser acknowledge and agree in writing that the Offer Conditions relating to the accuracy of the Company's representations and warranties in the Merger Agreement and the absence of a Company Material Adverse Effect (in each case described in the Offer to Purchase) will be deemed to have been satisfied or waived from and after the initial extension of the Offer (if such Offer Conditions were actually satisfied at the time of such extension).The Merger Agreement does not contemplate a subsequent offering period for the Offer.
Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., Eastern Time, on the next business day after the previously scheduled Expiration Date, in accordance with the public announcement requirements of Rule 14e-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 properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of Purchaser's 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 Offer 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 tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the Offer Price for Shares be paid, regardless of any delay in making such payment.
In all cases, Purchaser will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of
- the certificates evidencing such Shares (if any) or confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer into the Depositary's DTC account, 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.
Shares tendered pursuant to the Offer may be withdrawn at any time on or before the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn at any time after September 22, 2020, which is the 60th day after the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer. For a withdrawal of Shares to be effective, the Depositary must receive at one of its addresses set forth on the back cover of the Offer to Purchase a written or facsimile transmission notice of withdrawal before the Expiration Date or before the Shares have been accepted for payment. Any such notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the record holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), unless such Shares have been tendered for the account of any 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. If certificates representing the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the record owner and the serial numbers shown on such certificates must also be furnished to the Depositary prior to the physical release of such certificates. Purchaser will determine, in its reasonable discretion, all questions as to the
form and validity (including time of receipt) of any notice of withdrawal, and such determination will be final and binding. No withdrawal of Shares shall be deemed to have been properly made until all defects and irregularities have been cured or waived. None of Purchaser, 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 any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by following one of the procedures for tendering Shares described in the Offer to Purchase at any time prior to the Expiration Date.
Benefytt has provided Purchaser with its stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Benefytt'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.
The receipt of cash as payment for the Shares pursuant to the Offer or the Merger (or pursuant to the exercise of appraisal rights in accordance with Delaware law) will be a taxable transaction for United States federal income tax purposes if you are a United States holder (as defined in the Offer to Purchase). For a summary of certain material United States federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the Merger or exercising appraisal rights, see the Offer to Purchase. Each holder of Shares should consult its or his or her own tax advisor regarding the United States federal income tax consequences of the Offer and the Merger (or the exercise of appraisal rights) in light of its, his or her particular circumstances, as well as the income or other tax consequences that may arise under the laws of any United States local, state or federal or non-United States taxing jurisdiction and the possible effects of changes in such tax laws.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.
The Offer to Purchase, the related Letter of Transmittal and the other exhibits to the Schedule TO contain important information that 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 number set forth below. Requests for copies of the Offer to Purchase, the Letter of Transmittal, the notice of guaranteed delivery and other tender offer materials may be directed to the Information Agent or to your broker, dealer, commercial bank or trust company. Such copies will be furnished promptly at Purchaser's expense. Neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Banks and Brokerage Firms, Please Call: (212) 269-5550
Stockholders and All Others Call Toll-Free: (888) 628-8208
Email: benefytt@dfking.com
July 24, 2020
Exhibit (b)(1)
Execution Version
TRUIST BANK
SUNTRUST ROBINSON HUMPHREY, INC.
3333 Peachtree Road Northeast
Atlanta, GA 30326
CONFIDENTIAL
July 12, 2020
Daylight Beta Corp.
c/o Madison Dearborn Partners LLC 70 West Madison Street, Suite 4600 Chicago, IL 60602
Attention: Michael J. Dolce, Managing Director, Head of Capital Markets
Project Dawn
Commitment Letter
Ladies and Gentlemen:
Daylight Beta Corp., a Delaware corporation (the "Initial Borrower" or "you"), has advised Truist Bank and SunTrust Robinson Humphrey, Inc. ("STRH" and, together with Truist Bank, "Truist", and any Additional Agents (as defined below) appointed pursuant to Section 2 below, the "Commitment Parties", "us" or "we") that you intend to acquire, directly or indirectly, the "Parent" (as defined in Exhibit Ahereto) and consummate the other transactions described in Exhibit Ahereto. Capitalized terms used but not defined herein are used with the meanings assigned to them on the exhibits attached hereto (such exhibits, together with this letter, collectively, this "Commitment Letter").
1. Commitments
In connection with the Transactions, Truist Bank is pleased to advise you of its commitment to provide, and hereby agrees to provide, 100% of the Facilities upon the terms expressly set forth in this Commitment Letter (including, without limitation, in the form of Credit Agreement attached hereto as Exhibit B(the "Agreed Credit Agreement")) and subject solely to the Exclusive Funding Conditions (as defined below). Truist Bank and any Additional Agent (or affiliate thereof) that assumes a portion of the commitment of Truist to the Facilities pursuant to Section 2 below are referred to herein collectively as the "Initial Lenders" and each an "Initial Lender".
2. Titles and Roles
You hereby appoint (i) STRH to act as lead arranger and bookrunner for the Facilities (as defined in Exhibit A) (in such capacity, together with any other lead arrangers or bookrunners appointed as contemplated below, the "Lead Arrangers" and each a "Lead Arranger") and (ii) Truist Bank to act as sole administrative agent for the Facilities (in such capacity, the "Administrative Agent").
It is further agreed that STRH will have "top left" placement on any materials or other documentation used in connection with the Facilities and shall hold the leading role and responsibility associated with such "top left" placement. You agree that no other agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that compensation expressly contemplated by this Commitment Letter and the Fee Letters referred to below or as otherwise agreed to by STRH and you) will be paid in order to obtain the commitment of the Lenders (as defined herein) to participate in the
Facilities unless you and we shall so agree; providedthat, on or prior to the date which is fifteen (15) business days after the date you execute and deliver this Commitment Letter, you may appoint, with up to sixty percent (60%) in the aggregate of the economics and commitment amounts for the Facilities, additional agents, co-agents, lead arrangers, bookrunners, managers or arrangers (any such agent, co-agent, lead arranger, bookrunner, manager or arranger, an "Additional Agent"), it being understood that (a) such Additional Agents (or their affiliates) shall assume a proportion of the commitments with respect to the Facilities that is equal to the proportion of the economics allocated to such Additional Agents (or their affiliates), (b) no Additional Agent (nor any affiliate thereof) shall receive greater economics (measured as a percentage of its commitment) in respect of the Facilities than that received by Truist, (c) to the extent you appoint Additional Agents and/or confer additional titles in respect of the Facilities on the Additional Agents, the economics allocated to, and the commitment amounts of, Truist in respect of the Facilities will be proportionately reduced by the amount of the economics allocated to, and the commitment amount of, such Additional Agents (or their affiliates (other than Excluded Affiliates (as defined below))) and (d) the commitment amount of each such Additional Agent shall be allocated pro rata between the Revolving Credit Facility and the Term Loan Facility, in each case upon the execution and delivery by such Additional Agents and you of customary joinder documentation and, thereafter, each such Additional Agent shall constitute a "Commitment Party", "Initial Lender" and/or "Lead Arranger", as applicable, under this Commitment Letter and under the Joint Fee Letter (as defined below). The parties hereto agree that Excluded Affiliates of such Additional Agents shall be treated in the same manner as Excluded Affiliates of Truist hereunder.
3. Syndication
The Lead Arrangers intend to syndicate the Facilities to a group of banks, financial institutions and other lenders, reasonably acceptable to you, such consent not to be unreasonably withheld or delayed (together with the Initial Lenders but excluding Disqualified Institutions, the "Lenders"); providedthat, the Lead Arrangers will not syndicate, assign or participate to (a) those persons that are competitors of you or the Parent and your or their subsidiaries, including any affiliates of such entities, in each case, that are (including, for the avoidance of doubt, any such affiliates) separately identified by you or Sponsor to us in writing from time to time as such pursuant to this clause (a) or, in the case of affiliates of any such specified entities, those that are clearly identifiable on the basis of their name (other than bona fide debt funds) (other than those excluded pursuant to clauses
- or (c) of this paragraph) (providedthat, for the avoidance of doubt, any such identification shall not apply retroactively to any prior assignment to any Lender permitted hereunder at the time of such assignment), (b) those banks, financial institutions and other persons to the extent separately identified by you or the Sponsor to us in writing prior to the date hereof, in each case including any such entity's affiliates that are identified as such pursuant to this clause (b) or are clearly identifiable as such on the basis of their name, or (c) Excluded Affiliates (such persons or entities in clause (a),
- or (c), collectively, the "Disqualified Institutions"). Notwithstanding any other provision of this Commitment Letter to the contrary and notwithstanding any assignment, syndication or participation by the Initial Lenders (except in the case of an assignment to an Additional Agent and for purposes of determining whether a Successful Syndication (as defined in the Agent Fee Letter) has occurred), (A) (i) the Initial Lenders shall not be released, relieved or novated from their respective obligations hereunder (including their respective obligations to fund the Facilities on the Closing Date (as defined in Exhibit A)) in connection with any syndication, assignment or participation of the Facilities, including their respective commitments in respect thereof, until the initial funding or effectiveness of the Facilities on the Closing Date, (ii) no assignment or novation shall become effective with respect to all or any portion of the Initial Lender's commitments in respect of the Facilities until the initial funding or effectiveness of the Facilities on the Closing Date and (iii) the Initial Lenders shall retain exclusive control over all rights and obligations with respect to their respective commitments in respect of the Facilities, including all rights with respect to consents, modifications, supplements and amendments, until the initial funding or effectiveness of the Facilities on the Closing Date has occurred.
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The Lead Arrangers intend to commence syndication efforts with respect to the Facilities promptly following your execution and delivery of this Commitment Letter and, until the earlier to occur of (a) a Successful Syndication (as defined in the Agent Fee Letter) and (b) thirty (30) days after the Closing Date (such period, the "Syndication Period"), you agree to use commercially reasonable efforts to assist (and to use commercially reasonable efforts to cause the Parent to assist) the Lead Arrangers in completing a syndication reasonably satisfactory to the Lead Arrangers and you. Such assistance shall include using your commercially reasonable efforts to: (i) ensure that the syndication efforts benefit from your and the Sponsor's existing banking relationships; (ii) direct contact (which shall be telephonically or through an e-platform) between your and the Sponsor's senior management and the proposed Lenders (and using your commercially reasonable efforts to obtain such contact between the senior management of the Parent and the proposed Lenders) at times and by means to be mutually agreed; (iii) assist (and using your commercially reasonable efforts to cause the Sponsor and the senior management of the Parent to assist) in the preparation of a confidential information memoranda customary for transactions of this type (the "Confidential Information Memorandum") and other customary and readily available marketing materials to be used in connection with the syndication of the Facilities, including the projections ("Projections") and the financial statements required under Section 4.01(h) of the Agreed Credit Agreement (collectively with the Agreed Credit Agreement, the "Information Materials"); (iv) host with the Lead Arrangers, one meeting of prospective Lenders at a time and telephonically or through an e-platform to be mutually agreed (and to the extent we, in consultation with you, reasonably determine to be necessary, one or more conference calls with prospective Lenders in addition to such meeting) (and using your commercially reasonable efforts to cause the senior management of the Parent to be available for such meeting and, to the extent we, in consultation with you, reasonably determine to be necessary, such conference calls); and (v) ensure that, until the end of the Syndication Period, there shall be no other issues of competing debt securities or syndicated credit facilities of you, the Parent and your or its respective subsidiaries being offered, placed or arranged (other than the Facilities, indebtedness to be agreed to remain outstanding after the Closing Date, indebtedness expressly permitted under the Acquisition Agreement (as defined in Exhibit A), intercompany indebtedness, deferred purchase price obligations and indebtedness incurred in the ordinary course of business (including, without limitation, capital lease obligations, purchase money and equipment financings and borrowings of revolving loans and letters of credit under the Existing Credit Agreement (as defined in Exhibit A))), which would have a materially adverse impact on the primary syndication of the Facilities. 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 (not created in contemplation hereof) binding on you, the Parent or your or its 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) would expose the Parent to an unreasonable risk of liability for disclosure of sensitive or personal information or otherwise that the Parent is not required to provide pursuant to the Acquisition Agreement, (2) your commercially reasonable efforts to cause the Parent 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 and shall be subject to the limitations set forth in the Acquisition Agreement and otherwise limited to actions or assistance to the extent practical and appropriate, and (3) the only financial statements that shall be required to be provided to the Lead Arrangers in connection with the syndication of the Facilities shall be those required to be delivered pursuant to Section 4.01(h) of the Agreed Credit Agreement. Notwithstanding anything to the contrary contained in this Commitment Letter or any Fee Letter or any other letter agreement or undertaking concerning the financing of the Transactions to the contrary, neither the commencement nor the completion of the syndication of the Facilities nor the compliance with any of the other provisions set forth in any provision of this or any other paragraph of this Section 3shall constitute a condition to the commitments hereunder or the funding or effectiveness of the Facilities on the Closing Date or at any time thereafter.
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STRH, in its capacity as a Lead Arranger, will manage, in consultation with you (subject to your rights set forth in the preceding paragraphs of this Section 3and your right to appoint Additional Agents in Section 2), all aspects of the syndication, including decisions as to the selection of institutions (other than Disqualified Institutions) to be approached and when they will be approached, when the Lenders' commitments will be accepted, which Lenders (other than Disqualified Institutions) will participate, the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders.
You acknowledge that STRH on your behalf will make available an information package and presentation to the proposed syndicate of Lenders by posting the information package and presentation on IntraLinks or another similar electronic system. In connection with the syndication of the Facilities, unless the parties hereto otherwise agree in writing, you shall be under no obligation to provide Information Materials suitable for distribution to prospective Lenders (each, a "Public Lender") that have personnel that do not wish to receive material non-public information (within the meaning of the United States federal and state securities laws, "MNPI") with respect to the Parent, its subsidiaries, the respective securities of any of the foregoing or the Acquisition (as defined in Exhibit A) and who may be engaged in investment and other market-related activities with respect to such entities' securities. You agree, however, that: (a) the Agreed Credit Agreement will contain provisions concerning information to be provided to Public Lenders and the absence of MNPI therefrom; (b) Information Materials made available to prospective Public Lenders in accordance with this Commitment Letter shall not contain MNPI, whether or not any Information Materials are marked "PUBLIC"; and (c) Truist, on your behalf, may distribute the following documents to all prospective Lenders, (i) administrative materials for prospective Lenders, such as lender meeting invitations and funding and closing memoranda, (ii) notifications of changes to the Facilities' terms, and (iii) other materials intended for prospective Lenders after the initial distribution of the Information Materials, including drafts and final versions of the Credit Documentation (as defined below). Upon request of STRH, prior to distribution of Information Materials to prospective Lenders, you or the Parent shall provide us with a customary letter authorizing the dissemination thereof.
4. Information
You hereby represent and warrant (with respect to Information (as defined below) relating to the Parent and its subsidiaries and businesses, to your knowledge) that, (a) all written information, other than the Projections, forward looking statements and information of a general economic or industry- specific nature (including as disclosed in Parent reports publicly filed prior to the Closing Date, including any "Risk Factors" or "Forward Looking Statement" sections), concerning you, the Parent, your and its respective subsidiaries, the Acquisition and the other transactions contemplated hereby (the "Information"), that has been or will be made available to us by you or your representatives in connection with the transactions contemplated hereby, taken as a whole and as supplemented, does not contain (or, in the case of Information furnished after the date hereof, will not contain), as of the time it was (or hereafter is) furnished, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made, as supplemented and updated as provided below, and (b) the Projections (and any other written projections that have been or will be made available to us by or on behalf of you in connection with the transactions contemplated hereby), have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time furnished (it being recognized by the Commitment Parties that (i) such Projections are not to be viewed as facts or a guarantee of performance and are subject to significant uncertainties and contingencies many of which are beyond your control and (ii) no assurance can be given that any particular financial Projections will be realized, and that actual results during the period or periods covered by any such Projections may differ from the projected results, and such differences may be material). You agree that if, at any time prior to the later of the Closing Date and the end of the Syndication Period, you become aware that any of the representations and warranties in the preceding sentence would
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be (with respect to Information relating to the Parent and its subsidiaries and businesses, to your knowledge) incorrect in any material respect if the Information or Projections were being furnished and such representations and warranties were being made at such time, then you will (and will use commercially reasonable efforts to cause the Parent to) promptly supplement the Information and the Projections so that (with respect to Information relating to the Parent and its subsidiaries and businesses, to your knowledge) such representations are correct, in all material respects, under those circumstances. The making and accuracy of the foregoing representations and warranties, whether or not cured, shall not be a condition to the obligations of the Commitment Parties. You understand that in arranging the Facilities we may use and rely on the Information and the Projections without independent verification thereof, and we do not assume responsibility for the accuracy or completeness of the Information or the Projections.
5. Fees
As consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to pay or cause to be paid the nonrefundable compensation described in (a) that certain joint fee letter dated the date hereof and delivered herewith (the "Joint Fee Letter") on the terms and subject to the conditions expressly set forth therein and (b) that certain Agent Fee Letter dated as of the date hereof and delivered herewith (the "Agent Fee Letter" and, together with the Joint Fee Letter, the "Fee Letters") on the terms and subject to the conditions expressly set forth therein.
6. Conditions
Each Initial Lender's commitments hereunder are subject solely to the satisfaction (or waiver by the Initial Lenders) of the conditions precedent set forth in Section 4.01 of the Agreed Credit Agreement (the "Exclusive Funding Conditions"), and upon the satisfaction (or waiver by the Initial Lenders) of the Exclusive Funding Conditions, the initial funding or effectiveness of the Facilities shall occur.
Notwithstanding anything in this Commitment Letter, the Fee Letters, the Agreed Credit Agreement or any other letter agreement or other undertaking concerning the financing of the transactions contemplated hereby to the contrary, the only conditions (express or implied) to the initial funding or availability of the Facilities on the Closing Date are the Exclusive Funding Conditions. The Lead Arrangers will cooperate with you as reasonably requested in coordinating the timing and procedures for the funding of the Facilities in a manner consistent with the Acquisition Agreement on the Closing Date.
7. Indemnification and Expenses
You agree (a) to indemnify and hold harmless the Commitment Parties, their controlled affiliates (other than Excluded Affiliates) and controlling persons and the respective directors, officers, employees, members, partners, advisors, agents and other representatives of each of the foregoing and their respective successors (excluding any Excluded Affiliate, each, an "indemnified person") from and against any and all actual losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Fee Letters, the Transactions or the use of proceeds of the Facilities or any claim, litigation, investigation or proceeding (a "Proceeding") relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, whether or not such Proceedings are brought by you, the Parent, your or its equity holders, affiliates, creditors or any other person, and to reimburse each indemnified person within thirty
- days of written demand (together with reasonable backup documentation) for any reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing (but limited, in the case of legal fees and expenses, to one counsel to such indemnified persons taken as a whole and, if reasonably necessary, one special counsel, one local counsel in any relevant material jurisdiction and, in the case of an actual conflict of interest, one additional counsel to the affected indemnified persons taken as a whole, in each
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case excluding allocated costs of in-house counsel); providedthat, the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from (i) the willful misconduct, bad faith, fraud or gross negligence of such indemnified person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, partners, advisors, agents and other representatives (other than Excluded Affiliates)), (ii) the material breach of the Commitment Letter or any Fee Letter by any indemnified person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, partners, advisors, agents and other representatives (other than Excluded Affiliates)) (in the case of each of preceding clause (i) and this clause (ii), as determined by a court of competent jurisdiction in a final non-appealable judgment), and (iii) any disputes solely among indemnified persons (other than (x) any claims against the Commitment Parties in their capacity as the Administrative Agent, a Lead Arranger or any similar role under the Facilities unless such claim would otherwise be excluded pursuant to clause (i) above and (y) claims arising out of any act or omission of you or the Parent or any of your or its respective subsidiaries) and (iv) in our capacity (if any) as financial advisor to the Parent or lender, agent, arranger or similar role under the Existing Credit Agreement, and (b) if the Closing Date occurs, to reimburse the Commitment Parties and their affiliates (other than any Excluded Affiliate) for all reasonable and documented out-of-pocket expenses (including, but not limited to, due diligence expenses, syndication expenses, travel expenses, and (limited to) reasonable fees, charges and disbursements of one primary counsel to the Commitment Parties in their capacity as such (which, for the avoidance of doubt, shall not include any fees, charges or disbursements of counsel while acting for any Sale Advisory Person (as defined below) or lender, agent, arranger or similar role under the Existing Credit Agreement) and, if reasonably necessary, one local counsel in any relevant material jurisdiction incurred in connection with the Facilities and any related documentation (including this Commitment Letter, the Fee Letters, and the Credit Documentation) or the administration, amendment, modification or waiver of any of the foregoing) within thirty (30) days of written demand (including documentation reasonably supporting such request) (other than with respect to such fees and expenses accrued prior to the Closing Date, which, for the avoidance of doubt, shall be paid on the Closing Date so long as written demand including documentation reasonably supporting such request is provided at least three (3) business days prior to the Closing Date); providedthat, such fees and expenses (i) in the case of legal counsel, shall be limited to the reasonable fees and expenses of counsel described in this clause (b) which, in any event, shall exclude allocated costs of in-house counsel and (ii) in the case of any other advisors and consultants, shall be limited to advisors and consultants approved by you. No person a party hereto nor any indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems, including, without limitation, SyndTrak, IntraLinks, the internet, email or similar electronic transmission systems, in each case, except to the extent any such damages are found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith, fraud or willful misconduct of, or material breach of this Commitment Letter, or any Fee Letter by, such person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, partners, advisors, agents and other representatives (other than Excluded Affiliates)). None of the indemnified persons or you, the Sponsor, the Parent or any of your or their respective affiliates or their respective directors, officers, employees, advisors, and agents of the foregoing shall be liable for any indirect, special, punitive or consequential damages in connection with this Commitment Letter, the Fee Letters, the Facilities or the transactions contemplated hereby; providedthat, nothing contained in this sentence shall limit your indemnification and reimbursement obligations to the extent expressly set forth herein. Each indemnified person (by accepting the benefits hereof) agrees to refund and return any and all amounts paid by you to such indemnified person pursuant to the terms of this paragraph to the extent such indemnified person is not entitled to the payment thereof pursuant to the terms of this paragraph.
You shall not be liable for any settlement of any Proceeding (or expenses solely in respect of such settlement) effected without your consent (which consent shall not be unreasonably withheld, delayed or conditioned), but if settled with your written consent, or if there is a final judgment in any such Proceeding,
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you agree to indemnify and hold harmless each indemnified person to the extent and in the manner set forth above. You shall not, without the prior written consent of the affected indemnified person (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened Proceeding against such indemnified person in respect of which indemnity could have been sought hereunder by such indemnified person unless (a) such settlement includes an unconditional release of such indemnified person in form and substance reasonably satisfactory to such indemnified person from all liability or claims that are the subject matter of such Proceeding, (b) includes confidentiality provisions reasonably satisfactory to such indemnified person and (c) such settlement does not include any statement as to any admission of fault, culpability or failure to act by or on behalf of any indemnified person.
In case any Proceeding is instituted involving any indemnified person for which indemnification is to be sought hereunder by such indemnified person, then such indemnified person will promptly notify you of the commencement of any Proceeding after such indemnified person has actual knowledge of the same; provided, however, that the failure so to notify you will not relieve you from any liability that you may have to such indemnified person pursuant to this Section 7.
Notwithstanding anything to the contrary contained herein, upon the occurrence of the Closing Date, (a) the relevant provisions of the Credit Documentation shall supersede the provisions of the preceding paragraphs and (b) your obligation pursuant to this Commitment Letter to reimburse an indemnified person (or its related indemnified persons) for losses, claims, damages, liabilities, expenses, fees or any such indemnified obligations or any other expense reimbursement shall automatically terminate and be replaced in all respects by the relevant provisions set forth in the Credit Documentation.
8. Sharing of Information, Absence of Fiduciary Relationship, Affiliate Activities
You acknowledge that the Commitment Parties (or their affiliates) are full service securities firms and we may from time to time (a) effect transactions, for our own or our affiliates' account or the account of customers, and hold positions in loans, securities or options on loans or securities of you, the Parent or its affiliates and of other companies that may be the subject of the transactions contemplated by this Commitment Letter or with which you, the Sponsor or the Parent or its subsidiaries may have commercial or other relationships or adverse interests or (b) provide debt financing, equity capital, investment banking, financial advisory services, securities trading, hedging, financing and brokerage activities and financial planning and benefits counseling to other companies in respect of which you may have conflicting interests. In addition, consistent with each Commitment Party's policy to hold in confidence the affairs of its customers, the Commitment Parties will not furnish information obtained from you, the Sponsor, the Parent or your or their respective affiliates and representatives to any of their other clients (or to clients of its affiliates) or in connection with the performance by the Commitment Parties and their affiliates of services for its other clients (or for clients of their affiliates). You also acknowledge that the Commitment Parties and their affiliates have no obligation to use in connection with the transactions contemplated hereby, or to furnish to you, confidential information obtained from other companies or other persons.
You further acknowledge and agree that (a) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (b) you have been advised that the Commitment Parties and their affiliates are engaged in a broad range of transactions that may involve interests that differ from your and your affiliates' interests and that the Commitment Parties have no obligation to disclose such interests and transactions to you or your affiliates, (c) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate and you are not relying on any Commitment Party for such advice, and (d) none of the Commitment Parties nor their affiliates have any obligation to you or your affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein or in any other express writing executed and delivered by such Commitment Party and you.
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Please note that neither the Commitment Parties nor any of their respective affiliates provide tax, accounting or legal advice.
You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and us is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether we or our affiliates have advised or are advising you on other matters, (b) we, on the one hand, and you, on the other hand, have an arms-length business relationship that does not directly or indirectly give rise to, nor do you rely on, any fiduciary duty on our part, (c) in connection therewith and with the process leading to the Transactions, the Commitment Parties and their respective affiliates (as the case may be) are acting solely as a principal and not as agents or fiduciaries of you, the Sponsor and their management, stockholders, creditors, affiliates or any other person, (d) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (e) you have consulted legal and financial advisors to the extent you deemed appropriate, (f) you have been advised that we and our affiliates are engaged in a broad range of transactions that may involve interests that differ from your interests and that we and our affiliates have no obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship and (g) you will not claim that any Commitment Party (in its capacity as such) or its applicable affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with the transactions contemplated by this Commitment Letter or the process leading thereto.
You acknowledge that certain of the Commitment Parties may be parties to the Existing Credit Agreement. The Parent and its affiliates' rights and obligations under any agreement with any of the Commitment Parties (including the Existing Credit Agreement) that currently or hereafter may exist are, and shall be, separate and distinct from the rights and obligations of the parties hereto pursuant to this letter agreement. You hereby agree that the Commitment Parties may render their services under this Commitment Letter notwithstanding any actual or potential conflict of interest presented by the foregoing, and you hereby waive any conflict of interest claims relating to the relationship between the Commitment Parties and you and your affiliates in connection with the engagement contemplated hereby, on the one hand, and the exercise by the Commitment Parties or any of their affiliates of any of their rights and duties under any credit or other agreement (including the Existing Credit Agreement), on the other hand.
9. Confidentiality
This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter nor any Fee Letter nor any of their terms shall be disclosed to any other person, except (a) the Sponsor and your and their respective officers, directors, employees, affiliates, members, partners, stockholders, actual and potential co-investors, attorneys, accountants, agents and advisors on a confidential basis, (b) the Parent and its officers, directors, employees, affiliates, members, partners, stockholders, attorneys, accountants, agents and advisors on a confidential basis (providedthat, any disclosure of the Fee Letters or its terms or substance under this clause (b)prior to the Closing Date (i) shall be redacted in a customary manner in respect of (x) the amounts, percentages and basis points of compensation set forth therein and (y) the Flex Provisions (as defined in the Agent Fee Letter) set forth therein relating to the pricing and other economic terms of the Facilities (and, after the Closing Date, may be disclosed in an unredacted version to the Parent and its respective officers, directors, employees, attorneys, accountants, agents and advisors), unless in either case the Commitment Parties otherwise consent in writing (including via e-mail) (such consent not to be unreasonably withheld, delayed or conditioned), (ii) may be used for customary accounting purposes, including accounting for deferred accounting costs, or (iii) may be used as part of projections, pro forma information and a generic disclosure of aggregate sources and uses), in each case, on a confidential basis, (c) in any legal, regulatory, judicial or administrative proceeding or as otherwise required by applicable law, rule or regulation or the order of any court or administrative agency or as
8
requested by a governmental authority (including a self-regulatory authority) (in which case you agree, to the extent practicable and permitted by law, rule or regulation, to inform us promptly thereof in advance), (d) in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter and any Fee Letter, (e) the Agreed Credit Agreement (but not the Fee Letters or the contents thereof other than the existence thereof and the contents thereof as part of projections, pro forma information and a generic disclosure of aggregate sources and uses) may be disclosed to actual and prospective Lenders in connection with the Transactions or in any public regulatory filing or any securities exchange requirement relating to the Transactions, (f) to the extent any such information becomes publicly available other than by reason of disclosure by you, your subsidiaries or your controlled affiliates in violation of this Commitment Letter, (g) the existence and contents of the Commitment Letter and the Agreed Credit Agreement may be disclosed in any tender offer, proxy, public filing, prospectus, offering memorandum, offering circulation, syndication materials, or other materials in connection with the Transactions, (h) with the Commitment Parties' consent in writing (including via e-mail) and (i) after your acceptance hereof, this Commitment Letter and the Joint Fee Letter, including the existence and contents hereof and thereof, may be shared with any prospective Additional Agents on a confidential basis. The foregoing restrictions shall cease to apply after the occurrence of the Closing Date (other than with respect to any economics (including the Flex Provisions (as defined in the Agent Fee Letter) referenced in the Agent Fee Letter)).
The Commitment Parties shall treat confidentially all information received by them from you, the Parent, the Sponsor or your or their respective affiliates and representatives in connection with the Acquisition and the other Transactions and only use such information for the purposes of providing the services contemplated by this Commitment Letter; provided, however, that nothing herein shall prevent the Commitment Parties and their affiliates from disclosing any such information (a) [reserved], (b) to any actual or prospective Lenders, participants or derivative counterparties (other than Disqualified Institutions and persons to whom you have affirmatively denied to provide your consent to the assignment or syndication thereto), (c) in any legal, regulatory, judicial, or administrative proceeding or other compulsory process or otherwise as required by applicable law, rule or regulations or the order of any court or administrative agency or as requested by a governmental authority (in which case such Commitment Party shall promptly notify you, in advance, to the extent practicable and permitted by law, rule or regulation (except with respect to any audit or examination conducted by bank accountants or regulatory authority exercising examination or regulatory authority)), (d) upon the request or demand of any governmental or regulatory authority (including any self-regulating authority) having jurisdiction over such Commitment Party or any of its affiliates or upon the good faith determination by counsel that such information should be disclosed in light of ongoing oversight or review of such Commitment Party by any governmental or regulatory authority having jurisdiction over such Commitment Party or its affiliates (in which case such Commitment Party shall, except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority, promptly notify you, in advance, to the extent practicable and lawfully permitted to do so), (e) to the officers, directors, members, partners, employees, legal counsel, independent auditors, professionals and other experts or agents of the Commitment Parties (collectively, "Representatives") (providedthat, any such Representative is advised of its obligation to retain such information as confidential and is directed to keep information of this type confidential), (f) to any of its affiliates (other than an Excluded Affiliate) and Representatives of its affiliates (other than an Excluded Affiliate) (providedthat, any such affiliate or Representative is advised of its obligation to retain such information as confidential, and the Commitment Parties shall be responsible for the compliance of their affiliates and Representatives of their affiliates with this paragraph) solely in connection with the Facilities and the related Transactions, (g) to the extent any such information becomes publicly available other than by reason of disclosure by the Commitment Parties, their affiliates or Representatives in breach of this Commitment Letter or other obligation of confidentiality owed to you, the Sponsor, the Parent or your or their respective affiliates, (h) for purposes of establishing a "due diligence" defense, (i) to the extent that such information is received by such Commitment Party, its affiliates (other than an Excluded Affiliate) or their respective Representatives from a third party that is not
9
known (after due inquiry) by such Commitment Party to be subject to confidentiality obligations to you, the Sponsor, the Parent or your or their respective affiliates, (j) to the extent that such information is independently developed by such Commitment Party, its affiliates (other than an Excluded Affiliate), or their respective Representatives without the use of such information, and (k) to enforce their respective rights hereunder or under the Fee Letters; providedthat, the disclosure of any such information to any actual or prospective Lenders, participants or derivative counterparties referred to above shall be made subject to the acknowledgment and acceptance by such actual or prospective Lender, participant or derivative counterparty that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties, including, without limitation, as agreed in any Information Materials or other marketing materials) in accordance with the standard syndication processes of such Commitment Party or customary market standards for dissemination of such type of information, in the event of any electronic access through IntraLinks, another website or similar electronic system or platform, which shall in any event require "click through" or other affirmative action on the part of the recipient to access such information and acknowledge its confidentiality obligations in respect thereof, in each case on terms reasonably acceptable to you; provided, however, that, no such disclosure shall be made by the Commitment Parties to (i) any of their affiliates and any of their employees that is engaged as principals primarily in private equity, mezzanine financing or venture capital or any of such affiliate's officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents (a "Private Equity Affiliate"), (ii) any of their affiliates and any of their employees that are engaged directly or indirectly in a sale of the Parent and its subsidiaries as buy-side or sell-side representative or any such affiliate's officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents (a "Sale Advisory Person" and, together with the Private Equity Affiliates, in each case, other than a limited number of senior employees who are required, in accordance with industry regulations or the applicable Commitment Party's internal policies and procedures to act in a supervisory capacity and the applicable Commitment Party's internal legal, compliance, risk management, credit or investment committee members, the "Excluded Affiliates") or (iii) any Disqualified Institution. The Commitment Parties' obligations under this paragraph shall remain in effect until the earlier of (x) two years from the date hereof and (y) the Closing Date, at which time our obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the Credit Documentation upon the execution and delivery thereof.
10. Miscellaneous
This Commitment Letter shall not be assignable by any party hereto (except (i) in connection with the appointment of Additional Agents in accordance with Section 2above or (ii) by you to the ultimate Borrower or one or more of your affiliates that is a newly formed wholly-owned domestic "shell" company controlled, directly or indirectly, by the Sponsor to effect the consummation of the Acquisition) without the prior written consent of the other parties hereto (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and the indemnified persons and is not intended to and does not confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons to the extent expressly set forth herein. Each Initial Lender shall be liable solely in respect of its own commitment to the Facilities on a several, and not joint, basis with any other Initial Lender. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and the Commitment Parties. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile or other electronic transmission (e.g., "pdf" or "tif") shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter and the Fee Letters are the only agreements that have been entered into among us and you with respect to the Facilities and set forth the entire understanding of the parties with respect thereto. This Commitment Letter shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to principles of conflicts
10
of law, to the extent that the same are not mandatorily applicable by statute and would require or permit the application of the law of another jurisdiction; provided, however, that the laws of the state which govern the Acquisition Agreement (as defined in Exhibit A) shall govern in determining
- the interpretation of a "Company Material Adverse Effect" (as defined in the Acquisition Agreement) and whether a "Company Material Adverse Effect" has occurred, (b) the accuracy of any Specified Acquisition Agreement Representation and whether as a result of any inaccuracy thereof you or your applicable affiliate have the right or would have the right (without regard to any notice requirement but taking into account any applicable cure provisions) to terminate your obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement and (c) whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement (in each case, without regard to the principles of conflicts of laws thereof, to the extent that the same are not mandatorily applicable by statute and would require or permit the application of the law of another jurisdiction). Each of the parties hereto agrees that (i) this Commitment Letter is a binding and enforceable agreement with respect to the subject matter 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 or effectiveness of the Facilities is subject only to the Exclusive Funding Conditions, including the execution and delivery of the Credit Documentation as provided in this Commitment Letter and (ii) each Fee Letter is a binding and enforceable agreement with respect to the subject matter contained therein. Reasonably promptly following the execution of this Commitment Letter, the parties hereto shall proceed with the negotiation in good faith of the Credit Documentation for the purpose of executing and delivering the Credit Documentation substantially simultaneously with the consummation of the Acquisition; providedthat the parties hereto acknowledge and agree that the Agreed Credit Agreement is in agreed form. Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.
Each of the parties hereto irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any federal court sitting in the Borough of Manhattan in the City of New York or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and any appellate court from any thereof, over any suit, action or proceeding arising out of or relating to the Transactions or the other transactions contemplated hereby, this Commitment Letter or the Fee Letters or the performance of services hereunder or thereunder or for recognition or enforcement of any judgment and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York state or, to the extent permitted by law, in such federal court; provided, however, that the Commitment Parties shall be entitled to assert jurisdiction over you and your property in any court in which jurisdiction may be held over you or your property, and (b) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. You and we agree that service of any process, summons, notice or document by registered mail addressed to any of the parties hereto at the applicable addresses above shall be effective service of process for any suit, action or proceeding brought in any such court. You and we hereby irrevocably and unconditionally waive, to the fullest extent you and we may legally and effectively do so, any objection to the laying of venue of any such suit, action or proceeding brought in any court in accordance with clause (a)of the first sentence of this paragraph and any claim that any such suit, action or proceeding has been brought in any inconvenient forum. YOU AND WE HEREBY IRREVOCABLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) 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, THIS COMMITMENT LETTER OR THE FEE LETTERS OR THE PERFORMANCE OF SERVICES OR OBLIGATIONS HEREUNDER OR THEREUNDER.
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The Commitment Parties hereby notify you that, pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (as amended, the "PATRIOT Act") and 31 C.F.R. Section 1010.230 (the "Beneficial Ownership Regulation"), they are required to (a) obtain, verify and record information that identifies each Loan Party, which information includes names, addresses, tax identification numbers and other information that will allow the Commitment Parties or such Lender to identify the Loan Parties in accordance with the PATRIOT Act and (b) obtain a certification regarding beneficial ownership from the Borrower and each Guarantor on the Closing Date. This notice is given in accordance with the requirements of the PATRIOT Act and the Beneficial Ownership Regulation and is effective for the Commitment Parties and each Lender.
The indemnification, jurisdiction, waiver of jury trial, service of process, venue, governing law, sharing of information, no agency or fiduciary duty and confidentiality provisions contained herein and in the Fee Letters shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder; providedthat, your obligations under this Commitment Letter (but not the Fee Letters) (and other than in respect of your agreements in respect of no fiduciary or similar duties and your obligations in respect confidentiality (which shall terminate in accordance with Section 9) and syndication assistance) shall automatically terminate and be superseded by the provisions of the Credit Documentation upon the execution of the Credit Documentation, and you shall automatically be released from all liability in connection therewith at such time. You may terminate the Commitment Parties' commitments (or a portion thereof) hereunder at any time subject to the provisions of the preceding sentence.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and the Fee Letters by returning to us executed counterparts of this Commitment Letter and of each Fee Letter not later than 11:59 p.m., New York City time, on July 13, 2020. This offer will automatically expire at such time if we have not received such executed counterparts in accordance with the preceding sentence, unless we shall, in our sole discretion, agree to an extension. Unless we shall, in our sole discretion, agree to an extension, this Commitment Letter and the commitments hereunder shall automatically terminate in the event that (a) the initial borrowing thereunder does not occur on or before 11:59 p.m., New York City time, on the date that is five business days after the Termination Date (as defined in the Acquisition Agreement as in effect on the date hereof), (b) the Acquisition closes with or without the use of the Facilities, (c) after execution of the Acquisition Agreement and prior to the consummation of the Acquisition, the Acquisition Agreement is validly terminated by you (or your affiliates) or with your (or your affiliates') written consent (other than with respect to provisions therein that expressly survive termination) or (d) on the Closing Date; providedthat, the termination of any commitment pursuant to this sentence does not prejudice your rights and remedies in respect of any breach of this Commitment Letter.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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We are pleased to have been given the opportunity to assist you in connection with this important financing.
Very truly yours,
TRUIST BANK
By: | /s/ Timothy M. O'Leary |
Name: | Timothy M. O'Leary |
Title: | Managing Director |
SUNTRUST ROBINSON HUMPHREY, INC.
By: | /s/ Timothy M. O'Leary |
Name: | Timothy M. O'Leary |
Title: | Managing Director |
PROJECT DAWN
COMMITMENT LETTER
Accepted and agreed to as of the date first above written:
DAYLIGHT BETA CORP., a Delaware corporation
By: | /s/ Vahe Dombalagian |
Name: | Vahe Dombalagian |
Title: | Managing Director and President |
PROJECT DAWN
COMMITMENT LETTER
EXHIBIT A
Project Dawn
Transaction Summary
Capitalized terms used but not defined in this Exhibit Ashall have the meanings set forth in the letter to which this Exhibit Ais attached or in Exhibit Bthereto.
Daylight Beta Parent Corp. ("Holdings"), a newly created entity formed at the direction of the Sponsor (as defined below), intends to acquire (the "Acquisition"), directly or indirectly, all of the outstanding equity interests of Benefytt Technologies, Inc., a Delaware corporation (the "Parent"), and the subsidiaries of the Parent, pursuant to the Acquisition Agreement defined below. In connection therewith, it is intended that:
- Pursuant to the Agreement and Plan of Merger (together with the exhibits and disclosure schedules thereto, as amended, modified, supplemented or waived, the "Acquisition Agreement"), dated as of the date hereof, by and among Holdings, the Company and the Initial Borrower, the Initial Borrower will commence a cash tender offer (the "Offer") to acquire the outstanding shares of Class A Common Stock and Class B Common Stock of the Parent, and, following the consummation of the Offer, on the Closing Date, the Initial Borrower shall be merged with and into the Parent (such merger, the "Merger"), with the Parent surviving the Merger as the surviving corporation, becoming a wholly-owned subsidiary of Holdings, assuming the obligations of the Initial Borrower under the Facilities and assigning such obligations to its direct subsidiary, Health Plan Intermediaries Holdings, LLC, a Delaware limited liability company (the "Company").
- Substantially concurrently with or immediately prior to the closing of the Acquisition, that certain Credit Agreement, dated as of June 5, 2019, by and among, inter alios, the Parent, the Company and Bank of America, N.A., as Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time prior to the closing of the Acquisition, the "Existing Credit Agreement") will be either (at the option of Truist, with the consent of the Initial Borrower) (i) repaid in full using proceeds from the Facilities, with all commitments thereunder terminated and any security interests or guaranties in connection therewith terminated or released (other than letters of credit which have been backstopped, cash collateralized or "grandfathered" into the Revolving Credit Facility) or (ii) amended and restated in the form of the Agreed Credit Agreement (collectively, the "Loan Payoff").
- The Initial Borrower will obtain senior secured loans in an aggregate principal amount of $207.5 million, comprised of (i) $142.5 million in a senior secured term loan facility, as described in the Agreed Credit Agreement (the "Term Loan Facility") and (ii) $65 million in a senior secured revolving credit facility, as described in the Agreed Credit Agreement (the "Revolving Credit Facility" and, collectively with the Term Loan Facility, the "Facilities"). The amount of the Term Loan Facility will be reduced by the aggregate amount of scheduled amortization payments and any prepayments of the term loan under the Existing Credit Agreement during the period from the date hereof to the Closing Date.
- To the extent necessary to consummate the Transactions, equity contributions will be made (i) in cash directly or indirectly to the Initial Borrower by Madison Dearborn Partners, LLC ("MDP") and its controlled affiliates and associated funds (together with MDP, collectively, the "Sponsor") and certain other investors designated by the Sponsor (together with the Sponsor, collectively, the "Investors") or (ii) through roll over, direct or indirect issuance to or acquisition by any existing shareholders, board members and/or management of the Parent (the "Equity Contribution"); provided, that the Sponsor shall directly or indirectly own at least 50.1% of the voting equity interests of the Parent immediately following the consummation of the Transactions.
A-1
The proceeds of the Equity Contribution will be applied to fund the Acquisition, to pay the fees, premiums, expenses and other transaction costs incurred in connection with the Transactions (as defined below) and to repay in full the outstanding revolving loans under the Existing Credit Agreement. The proceeds of the Term Loan Facility will be used to repay in full the outstanding term loans under the Existing Credit Agreement (or, if the Existing Credit Agreement is amended and restated as set forth in clause (b) above, the outstanding term loans under the Existing Credit Agreement will be amended and restated on the terms set forth herein for the Term Loan Facility and shall constitute the Term Loan Facility herein).
The transactions described above are collectively referred to herein as the "Transactions". For purposes of the Commitment Letter and each Fee Letter, "Closing Date" shall mean the date on which the following occur: (i) the satisfaction (or waiver by the Initial Lenders) of the Exclusive Funding Conditions, (ii) the execution of the definitive documentation for the Facilities, (iii) the funding of the Term Loan Facility, (iv) the Loan Payoff, (v) the consummation of the Acquisition (including the Offer) and (vi) the consummation of the Merger.
A-2
EXHIBIT B
FORM OF CREDIT AGREEMENT
[Attached.]
EXHIBIT C | ||||||
FORM OF SOLVENCY CERTIFICATE | ||||||
[ | ], 2020 | |||||
This Solvency Certificate is being executed and delivered pursuant to Section [ | ] of that certain [ | ]1 (the "Credit Agreement"); the terms |
defined therein being used herein as therein defined.
I, [ ], the [chief financial officer/equivalent officer] of Parent, solely in such capacity and not in an individual capacity, hereby certify that I am the [chief financial officer/equivalent officer] of Parent and that I am generally familiar with the businesses and assets of Parent and its Subsidiaries (taken as a whole), I have made such other investigations and inquiries as I have deemed appropriate and I am duly authorized to execute this Solvency Certificate on behalf of Parent pursuant to the Credit Agreement.
I further certify, solely in my capacity as [chief financial officer/equivalent officer] of Parent, and not in my individual capacity, as of the date hereof and after giving effect to the Transactions and the incurrence of the indebtedness and obligations being incurred in connection with the Credit Agreement and the Transactions on the date hereof, that, (a) the sum of the debt (including contingent liabilities) of Parent and its Subsidiaries, taken as a whole, does not exceed the present fair saleable value (on a going concern basis) of the assets of Parent and its Subsidiaries, taken as a whole; (b) the capital of Parent and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of Parent and its Subsidiaries, taken as a whole, contemplated as of the date hereof; and (c) Parent and its Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts including current obligations beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
[Remainder of page intentionally left blank]
- Describe Credit Agreement.
IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first written above.
By:
Name: [ | ] | |||
Title: [ | ] |
Exhibit (b)(2)
Privileged & Confidential
Execution Version
HPS INVESTMENT PARTNERS, LLC
40 W 57th Street
New York, New York 10019
July 12, 2020
Daylight Beta Intermediate Corp. c/o Madison Dearborn Partners, LLC 70 W. Madison St., Suite 4600 Chicago, IL 60602
Attention: Michael Dolce
Project Dawn
Preferred Stock
Commitment Letter
Ladies and Gentlemen:
Daylight Beta Intermediate Corp., a Delaware corporation (the "Issuer" or "you"), a newly created entity formed at the direction of Madison Dearborn Partners, LLC (together with its affiliates and associated funds, collectively, the "Sponsor") has advised HPS Investment Partners, LLC ("HPS" and, together with its affiliates and any funds, entities, investors or accounts that are managed, sponsored, administered or advised by HPS, collectively, the "Commitment Parties," "us" or "we"), that you intend to acquire, directly or indirectly, a 100% ownership interest in the Company (as defined in Exhibit Ahereto) and consummate the other transactions described in Exhibit Ahereto. Capitalized terms used but not defined herein are used with the meanings assigned to them on the exhibits attached hereto (such exhibits, together with this letter, collectively, the "Commitment Letter").
- Commitments
In connection with the Transactions, HPS (the "Purchaser") is pleased to advise you of its commitment to purchase in cash in immediately available funds, and hereby agrees to purchase, 100% of the shares of the Series A preferred stock (the "Preferred Stock") to be issued by the Issuer (as defined in Exhibit B) in the aggregate initial liquidation preference of $87.5 million, upon the terms expressly set forth in this Commitment Letter (including, without limitation, in the Summary of Principal Terms and Conditions attached hereto as Exhibit B), subject solely to the Exclusive Funding Conditions (as defined below).
- Information
You hereby represent and warrant (with respect to Information (as defined below) relating to the Company and its subsidiaries and their businesses, to your knowledge) that (a) all written information, other than any projections (such projections, including financial estimates, budgets and forecasts, the "Projections"), pro forma information, forward looking statements and
1
Privileged & Confidential
information of a general economic or industry-specific nature (including as disclosed in Company reports publicly filed prior to the Closing Date, including any "Risk Factors" or "Forward Looking Statement" sections), concerning you, the Company, your and its respective subsidiaries, the Acquisition and the other transactions contemplated hereby (the "Information"), that has been or will be made available to us by you or your representatives in connection with the transactions contemplated hereby, taken as a whole and as supplemented, does not contain (or, in the case of Information furnished after the date hereof, will not contain), as of the time it was (or hereafter is) furnished, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made, as supplemented and updated as provided below and (b) the Projections that have been or will be made available to us by or on behalf of you in connection with the transaction contemplated hereby have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time furnished (it being recognized by the Commitment Parties that (i) such Projections are not to be viewed as facts or a guarantee of performance and are subject to significant uncertainties and contingencies many of which are beyond your control and (ii) no assurance can be given that any particular financial projections will be realized, and that actual results during the period or periods covered by any such Projections may differ from the projected results, and such differences may be material). You agree that if, at any time prior to the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be (with respect to Information relating to the Company and its subsidiaries and their businesses, to your knowledge) incorrect in any material respect if the Information or Projections were being furnished and such representations and warranties were being made at such time, then you will (and will use commercially reasonable efforts to cause the Company to) promptly supplement the Information and the Projections so that (with respect to Information relating to the Company and its subsidiaries and businesses, to your knowledge) such representations are correct, in all material respects, under those circumstances. Neither the making nor the accuracy of the foregoing representations and warranties, whether or not cured, shall be a condition to the obligations of the Commitment Parties. You understand that we may use and rely on the Information and the Projections without independent verification thereof, and we do not assume responsibility for the accuracy or completeness of the Information or the Projections.
- [Reserved]IV. Conditions
The commitments of the Commitment Parties hereunder are subject solely to the satisfaction (or waiver) of the Exclusive Funding Conditions, and upon the satisfaction (or waiver by the Commitment Parties) of the Exclusive Funding Conditions and the issuance of the Preferred Stock, the funding and purchase by HPS of the Preferred Stock shall occur.
Notwithstanding anything in this Commitment Letter, the closing letter dated the date hereof (the "Closing Letter"), the Preferred Equity Documentation or any other letter agreement or other undertaking concerning the financing of the transactions contemplated hereby to the contrary,
- the only representations the making and accuracy of which shall be a condition to the obligation of the Commitment Parties to purchase the Preferred Stock on the Closing Date shall be (i) such of the representations made by or with respect to the Company in the Acquisition
2
Privileged & Confidential
Agreement as are material to the interests of the Commitment Parties, but only to the extent that you or your applicable affiliates have the right (determined without regard to any notice provisions but taking into account any applicable cure provisions) to terminate your (or their) obligations under the Acquisition Agreement or decline to consummate the Acquisition as a result of a breach of such representations in the Acquisition Agreement (the "Specified Acquisition Agreement Representations") and (ii) the Specified Representations (as defined below) (the representations described in clauses (i)and (ii)being the "Closing Date Representations") and (b) the terms of the Preferred Equity Documentation shall be in a form such that they do not impair the funding and purchase of the Preferred Stock by the Commitment Parties on the Closing Date if the Exclusive Funding Conditions are satisfied (or waived by the Commitment Parties).
"Specified Representations" means the representations in the purchase agreement with respect to the Preferred Equity Documentation relating to corporate or other organizational existence, organizational power and authority of the Issuer (as they relate to due authorization, execution, delivery and performance of the Preferred Equity Documentation and the valid issuance of the Preferred Stock); due authorization, execution, delivery and enforceability, in each case, relating to the entering into and performance of such Preferred Equity Documentation by the Issuer; capitalization of the Issuer; the Preferred Stock being fully paid and non-assessable and not issued in violation of any federal or state securities laws, preemptive or similar right, solvency as of the Closing Date (after giving effect to the Transactions) of the Issuer and its subsidiaries on a consolidated basis (determined in a manner consistent with the solvency certificate attached hereto as Annex 1to Exhibit C); no violations or conflicts with organizational documents (as related to the execution and delivery of the Preferred Equity Documentation) of the Issuer; the Investment Company Act; use of proceeds of the Preferred Stock not violating OFAC or FCPA; the status of the Preferred Stock as senior in payment priority and liquidation preference to all other equity securities of the Issuer.
Notwithstanding anything in this Commitment Letter, the Preferred Equity Documentation or any other letter agreement or other undertaking concerning the financing of the transactions contemplated hereby to the contrary, (a) the commitments of the Commitment Parties hereunder are subject only to the conditions set forth in this Section IVand in Exhibit Chereto (collectively, the "Exclusive Funding Conditions"), (b) the only conditions (express or implied) to the obligation of the Commitment Parties to purchase the Preferred Stock on the Closing Date are the Exclusive Funding Conditions and (c) to the extent the Closing Date Representations with respect to the Company and its subsidiaries are qualified or subject to "material adverse effect", the definition thereof shall be "Company Material Adverse Effect" as defined in the Acquisition Agreement as in effect on the date hereof or as modified in accordance with paragraph 3 of Exhibit C("Company Material Adverse Effect") for purposes of any representations and warranties made or to be made on or as of the Closing Date. This paragraph, and the provisions herein, shall be referred to as the "Certain Funds Provision." The Commitment Parties will cooperate with you as reasonably requested in coordinating the timing and procedures for the issuance and purchase of the Preferred Stock in a manner consistent with the Acquisition Agreement on the Closing Date.
- Indemnification and Expenses
You agree (a) to indemnify and hold harmless each Commitment Party, its controlled affiliates (other than Excluded Affiliates) and controlling persons and the respective directors,
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officers, employees, members, partners, shareholders, attorneys, accountants, advisors, agents and other representatives of each of the foregoing and their respective successors (excluding any Excluded Affiliate, each, an "indemnified person") from and against any and all actual losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Closing Letter, the Transactions or the use of proceeds of the Preferred Stock or any claim, litigation, investigation or proceeding (a "Proceeding") relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, whether or not such Proceedings are brought by you, the Company, your or its equity holders, affiliates, creditors or any other person, and to reimburse each indemnified person within thirty (30) days of written demand (together with reasonable backup documentation) for any reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing (but limited, in the case of legal fees and expenses, to one counsel to such indemnified persons (taken as a whole) and, if reasonably necessary, one local counsel in any relevant material jurisdiction to such indemnified persons (taken as a whole) and, in the case of an actual or perceived conflict of interest, one additional counsel to the affected indemnified persons (taken as a whole), in each case excluding allocated costs of in-house counsel); providedthat, the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from (i) the willful misconduct, bad faith, fraud or gross negligence of such indemnified person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, members, partners, shareholders, attorneys, accountants, advisors, agents and other representatives (other than Excluded Affiliates)), (ii) the material breach of the Commitment Letter or Closing Letter by any indemnified person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, members, partners, shareholders, attorneys, accountants, advisors, agents and other representatives (other than Excluded Affiliates)) (in the case of each of preceding clause (i) and this clause (ii), as determined by a court of competent jurisdiction in a final non-appealable judgment),
- any disputes solely among indemnified persons (other than claims arising out of any act or omission of you, your subsidiaries or the Company or any of your or its respective subsidiaries) and (iv) any Commitment Party in its capacity as a direct or indirect common equity holder of the Issuer and
- if the Closing Date occurs, to reimburse the Commitment Parties and their affiliates (other than any Excluded Affiliate) for all reasonable and documented out-of-pocket expenses (including, but not limited to, due diligence expenses, travel expenses, and (limited to) reasonable fees, charges and disbursements of one primary counsel to the Commitment Parties in their capacity as such (which, for the avoidance of doubt, shall not include any fees, charges or disbursements of counsel while acting for any Sale Advisory Person (as defined below)) and, if reasonably necessary, one local counsel in any relevant material jurisdiction incurred in connection with the Preferred Stock and any related documentation (including this Commitment Letter, the Closing Letter and the Preferred Equity Documentation) or the administration, amendment, modification or waiver of any of the foregoing) within thirty (30) days of written demand (including documentation reasonably supporting such request) (other than with respect to such fees and expenses paid on the Closing Date for which written demand including documentation reasonably supporting such request is provided at least three (3) business days prior to the Closing Date); providedthat, such fees and expenses (i) in the case of legal counsel, shall be limited to the reasonable fees and expenses of counsel described in this clause (b) which, in any event, shall exclude allocated costs of in-house counsel and (ii) in the case of any other advisors and consultants, shall be limited solely to advisors
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and consultants approved by you. No person a party hereto nor the Sponsor, the Company or any indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems, including, without limitation, SyndTrak, IntraLinks, the internet, email or similar electronic transmission systems, in each case, except to the extent any such damages are found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith, fraud or willful misconduct of, or material breach of this Commitment Letter or the Closing Letter by, such person (or its controlled affiliates and controlling persons and their respective directors, officers, employees, agents and other representative (other than Excluded Affiliates)); providedthat nothing contained in this sentence shall limit your indemnification and reimbursement obligations to the extent expressly set forth herein in respect of any such damages incurred or paid by an indemnified person to a third party unaffiliated with the Commitment Parties. None of the indemnified persons or you, the Sponsor, the Company or any of your or their respective affiliates or the respective directors, officers, employees, members, shareholders, attorneys, accountants, partners, advisors and agents of the foregoing shall be liable for any indirect, special, punitive or consequential damages in connection with this Commitment Letter, the Closing Letter, the Preferred Stock or the transactions contemplated hereby; providedthat, nothing contained in this sentence shall limit your indemnification and reimbursement obligations to the extent expressly set forth herein in respect of any losses, claims, damages, liabilities and expenses incurred or paid by an indemnified person to a third party unaffiliated with the Commitment Parties. Each indemnified person (by accepting the benefits hereof) agrees to refund and return any and all amounts paid by you to such indemnified person pursuant to the terms of this paragraph to the extent such indemnified person is not entitled to the payment thereof pursuant to the terms of this paragraph.
You shall not be liable for any settlement of any Proceeding (or expenses solely in respect of such settlement) effected without your consent (which consent shall not be unreasonably withheld, delayed or conditioned), but if settled with your written consent, or if there is a final judgment in any such Proceeding, you agree to indemnify and hold harmless each affected indemnified person to the extent and in the manner set forth above. You shall not, without the prior written consent of each affected indemnified person (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened Proceeding against such indemnified person in respect of which indemnity could have been sought hereunder by such indemnified person unless such settlement (a) includes an unconditional release of such indemnified person from all liability or claims that are the subject matter of such Proceeding, (b) includes customary confidentiality provisions and (c) does not include any statement as to any admission of fault, culpability or failure to act by or on behalf of any indemnified person.
In case any Proceeding is instituted involving any indemnified person for which indemnification is to be sought hereunder by such indemnified person, then such indemnified person will promptly notify you of the commencement of any Proceeding after such indemnified person has actual knowledge of the same; provided, however, that the failure so to notify you will not relieve you from any liability that you may have to such indemnified person pursuant to this Section 5.
Notwithstanding anything to the contrary contained herein, upon the execution of the Preferred Equity Documentation (a) the relevant provisions of the Preferred Equity Documentation
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shall supersede the provisions of the preceding paragraphs and (b) your obligation pursuant to this Commitment Letter to reimburse an indemnified person (or its related indemnified persons) for losses, claims, damages, liabilities, expenses, fees or any such indemnified obligations or any other expense reimbursement shall automatically terminate and be replaced in all respects by the relevant provisions set forth in the Preferred Equity Documentation and be applicable solely to the Issuer.
VI. Sharing of Information, Absence of Fiduciary Relationship, Affiliate Activities
You acknowledge that the Commitment Parties (or their affiliates) are full service securities firms and we may from time to time (a) effect transactions, for our own or our affiliates' account or the account of customers, and hold positions in loans, securities or options on loans or securities of you, the Company or its affiliates and of other companies that may be the subject of the transactions contemplated by this Commitment Letter or with which you, the Sponsor or the Company or its subsidiaries may have commercial or other relationships or adverse interests or (b) provide debt financing, equity capital, investment banking, financial advisory services, securities trading, hedging, financing and brokerage activities and financial planning and benefits counseling to other companies in respect of which you may have conflicting interests. In addition, consistent with each Commitment Party's policy to hold in confidence the affairs of its customers, the Commitment Parties will not furnish information obtained from you, the Sponsor, the Company or your or their respective affiliates and representatives to any of their other clients (or to clients of its affiliates) or in connection with the performance by the Commitment Parties and their affiliates of services for its other clients (or for clients of their affiliates). You also acknowledge that the Commitment Parties and their affiliates have no obligation to use in connection with the transactions contemplated hereby, or to furnish to you, confidential information obtained from other companies or other persons.
You further acknowledge and agree that (a) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (b) you have been advised that the Commitment Parties and their affiliates are engaged in a broad range of transactions that may involve interests that differ from your and your affiliates' interests and that the Commitment Parties have no obligation to disclose such interests and transactions to you or your affiliates, (c) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate and you are not relying on any Commitment Party for such advice and (d) none of the Commitment Parties nor their affiliates have any obligation to you or your affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein or in any other express writing executed and delivered by such Commitment Party and you.
Please note that neither the Commitment Parties nor any of their respective affiliates provide tax, accounting or legal advice.
You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and us is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether we or our affiliates have advised or are advising you on other matters, (b) we, on the one hand, and you, on the other hand, have an arms-length business relationship that does not directly or indirectly give rise to, nor do you rely on, any fiduciary duty on our part, (c) in connection therewith and with the process leading to the
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Transactions, the Commitment Parties and their affiliates (as the case may be) are acting solely as a principal and not as agents or fiduciaries of you, the Sponsor and their management, stockholders, creditors, affiliates or any other person, (d) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (e) you have consulted legal and financial advisors to the extent you deemed appropriate, (f) you have been advised that we and our affiliates are engaged in a broad range of transactions that may involve interests that differ from your interests and that we and our affiliates have no obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship and (g) you will not claim that any Commitment Party (in its capacity as such) or its applicable affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with the transactions contemplated by this Commitment Letter or the process leading thereto.
VII. Confidentiality
This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter nor the Closing Letter nor any of its terms shall be disclosed to any other person, except (a) to the Sponsor and your and their respective officers, directors, employees, affiliates, members, partners, stockholders, actual and potential co-investors, attorneys, accountants, agents and advisors on a confidential basis, (b) to the Company and its officers, directors, employees, affiliates, members, partners, stockholders, attorneys, accountants, agents and advisors on a confidential basis; providedthat (i) the amount of the purchase price of the Preferred Stock and Section 7hereof will be redacted in a manner satisfactory to the Commitment Parties (and, after the Closing Date, may be disclosed in an unredacted version to the Company and its officers, directors, employees, attorneys, accountants, agents and advisors, in each case, on a confidential basis), unless in either case the Commitment Parties otherwise consent in writing (including via email) (such consent not to be unreasonably withheld, delayed or conditioned), (ii) on and after the Closing Date, may be used for customary accounting purposes including accounting for deferred accounting costs or (iii) may be used as part of projections, pro forma information and a generic disclosure of aggregate sources and uses), (c) in any legal, regulatory, judicial or administrative proceeding or as otherwise required by applicable law, rule or regulation or as requested by a governmental authority (including a self-regulatory authority) (in which case you agree, to the extent permitted by law, rule or regulation, to inform us promptly thereof), (d) in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter, (e) the existence and contents of the Commitment Letter and the Closing Letter, and the Term Sheet may be disclosed in any proxy, public filing, prospectus, offering memorandum, offering circulation or other materials in connection with the Transactions, (f) the Term Sheet and Exhibit Chereto (but not the Closing Letter or the contents thereof) may be disclosed to actual and prospective lead arrangers and lenders under the Senior Credit Facilities (as defined in Exhibit Ahereto) and to any rating agency in connection with the Transactions or in any public regulatory or securities exchange filing requirement relating to the Transactions; providedthat the amount of the Transaction Costs and Section 7hereof will be redacted in a manner satisfactory to the Commitment Parties, (g) to the extent any such information becomes publicly available other than by reason of disclosure by you, your controlled affiliates or your representatives in violation of this Commitment Letter, and (h) with any Commitment Party's consent in writing (including via e-mail). The foregoing restrictions shall cease to apply after the Preferred Equity Documentation shall have been executed and delivered by the parties hereto (other than with respect to the Closing Letter).
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The Commitment Parties shall treat confidentially all information received by them from you, the Company, the Sponsor or your or their respective affiliates and representatives in connection with the Acquisition and the other Transactions and only use such information for the purposes of providing the services contemplated by this Commitment Letter; provided, however, that nothing herein shall prevent the Commitment Parties from disclosing any such information (a) in any legal, regulatory, judicial or administrative proceeding or other compulsory process or otherwise as required by applicable law, rule or regulations or as requested by a governmental authority (in which case such Commitment Party shall promptly notify you, in advance, to the extent permitted by law, rule or regulation (except with respect to any audit or examination conducted by bank accountants or regulatory authority exercising examination or regulatory authority)); (b) upon the request or demand of any governmental or regulatory authority having jurisdiction over a Commitment Party or any of its affiliates or upon the good faith determination by counsel that such information should be disclosed in light of ongoing oversight or review of such Commitment Party by any governmental or regulatory authority having jurisdiction over such Commitment Party or its affiliates (in which case such Commitment Party shall, except with respect to any audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority, promptly notify you, in advance, to the extent lawfully permitted to do so); (c) to the officers, directors, employees, legal counsel, independent auditors, consultants, advisors, professionals, investors, lenders, financing sources and other experts or agents of the Commitment Parties (collectively, "Representatives") (providedthat, any such Representative is advised of its obligation to retain such information as confidential and agrees to keep information of this type confidential and the Commitment Parties shall remain responsible for such Representatives compliance with this provision); (d) to any of its affiliates (other than an Excluded Affiliate) and Representatives of its affiliates (other than an Excluded Affiliate) (providedthat, any such affiliate or Representative is advised of its obligation to retain such information as confidential, and the Commitment Parties shall be responsible for the compliance of their affiliates and Representatives of their affiliates with this paragraph) solely in connection with the Preferred Stock and the related Transactions; (e) to the extent any such information becomes publicly available other than by reason of disclosure by the Commitment Parties, their affiliates or Representatives in breach of this Commitment Letter or other obligation of confidentiality owed to you, the Sponsor, the Company or your or their respective affiliates; (f) for purposes of establishing a "due diligence" defense; (g) to the extent that such information is received by such Commitment Party, its affiliates (other than an Excluded Affiliate) or their respective Representatives from a third party that is not known (after due inquiry) by such Commitment Party to be subject to confidentiality obligations to you, the Sponsor, the Company or your or their respective affiliates; (h) to the extent that such information is independently developed by such Commitment Party, its affiliates (other than an Excluded Affiliate) or their respective Representatives without the use of such information; and (i) to enforce their respective rights hereunder or under the Closing Letter; provided, however, that, no such disclosure shall be made by the Commitment Parties to (i) any of their affiliates that is engaged as principals primarily in private equity or venture capital or any of such affiliate's officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents (a "Private Equity Affiliate") or
- any of their affiliates and/or any of their employees that are engaged directly or 8
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indirectly in a sale of the Company and its subsidiaries as buy-side or sell-side representative and acting in such capacity or any such affiliate's officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents and acting in such capacity (a "Sale Advisory Person" and, together with the Private Equity Affiliates, in each case, other than a limited number of senior employees who are required, in accordance with industry regulations or the applicable Commitment Party's internal policies and procedures to act in a supervisory capacity and the applicable Commitment Party's internal legal, compliance, risk management, credit or investment committee members, the "Excluded Affiliates") or (iii) any Disqualified Holders. The Commitment Parties' obligations under this paragraph shall remain in effect until the earlier of (x) two years from the date hereof and (y) the date the Preferred Equity Documentation is effective, at which time our obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the Preferred Equity Documentation upon the execution and delivery thereof.
VIII. Miscellaneous
This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto (except: (i) by you to the ultimate Issuer or one or more of your affiliates that is a newly formed wholly-owned domestic "shell" company controlled, directly or indirectly, by the Sponsor to effect the consummation of the Acquisition and (ii) by us to our and our affiliates' controlled funds, accounts and investment vehicles; provided, that notwithstanding such assignment, with respect to amounts to be purchased on the Closing Date, the commitments of the Commitment Parties to purchase the Preferred Stock on the terms and conditions set forth in this Commitment Letter will be reduced solely to the extent such affiliates', controlled funds, accounts and investment vehicles purchase their Preferred Stock on the Closing Date) without the prior written consent of the other parties hereto (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and the indemnified persons (to the extent set forth in Section 5) and is not intended to and does not confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons to the extent expressly set forth herein. Each Commitment Party shall be liable solely in respect of its own commitment to purchase the Preferred Stock on a several, and not joint, basis. This Commitment Letter and the Closing Letter may not be amended or waived except by an instrument in writing signed by you and the Commitment Parties. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile or other electronic transmission (e.g., "pdf" or "tif") shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter is the only agreement that has been entered into among us and you with respect to the Preferred Stock and sets forth the entire understanding of the parties with respect thereto. This Commitment Letter shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to principles of conflicts of law, to the extent that the same are not mandatorily applicable by statute and would require or permit the application of the law of another jurisdiction; providedthat the governing law of the Acquisition Agreement shall govern in determining (i) the interpretation of a "Company Material Adverse Effect" and whether a "Company Material Adverse Effect" has occurred, (ii) the accuracy of any Specified Acquisition Agreement Representation and whether as a result of any inaccuracy thereof you or your applicable
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affiliate have the right or would have the right (taking into account any applicable cure provisions) to terminate your or its obligations (or to refuse to consummate the Acquisition) under the Acquisition Agreement and (iii) whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement (in each case, without regard to the principles of conflicts of laws thereof, to the extent that the same are not mandatorily applicable by statute and would require or permit the application of the law of another jurisdiction) (the matters referred to in this proviso, the "Acquisition Related Matters"). Each of the parties hereto agrees that this Commitment Letter and the Closing Letter is a binding and enforceable agreement with respect to the subject matter herein, including an agreement to negotiate in good faith the Preferred Equity Documentation by the parties hereto in a manner consistent with this Commitment Letter and the Documentation Principles, it being acknowledged and agreed that the purchase of the Preferred Stock by HPS is subject only to the Exclusive Funding Conditions, including the execution and delivery of the Preferred Equity Documentation as provided in this Commitment Letter. Reasonably promptly following the execution of this Commitment Letter, the parties hereto shall proceed with the negotiation in good faith of the Preferred Equity Documentation for the purpose of executing and delivering the Preferred Equity Documentation substantially simultaneously with the consummation of the Acquisition. Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.
Each of the parties hereto irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any federal court sitting in the Borough of Manhattan in the City of New York or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and any appellate court from any thereof, over any suit, action or proceeding arising out of or relating to the Transactions or the other transactions contemplated hereby, this Commitment Letter or the Closing Letter or the performance of services hereunder or thereunder or for recognition or enforcement of any judgment and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York state or, to the extent permitted by law, in such federal court; provided, however, that the Commitment Parties shall be entitled to assert jurisdiction over you and your property in any court in which jurisdiction may be held over you or your property and (b) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. You and we agree that service of any process, summons, notice or document by registered mail addressed to any of the parties hereto at the applicable addresses above shall be effective service of process for any suit, action or proceeding brought in any such court. You and we hereby irrevocably and unconditionally waive, to the fullest extent you and we may legally and effectively do so, any objection to the laying of venue of any such suit, action or proceeding brought in any court in accordance with clause (a) of the first sentence of this paragraph and any claim that any such suit, action or proceeding has been brought in any inconvenient forum. YOU AND WE HEREBY IRREVOCABLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) 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, THIS COMMITMENT LETTER OR THE CLOSING LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER.
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The Commitment Parties hereby notify you that, pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (as amended, the "PATRIOT Act"), they are required to obtain, verify and record information that identifies the Issuer, which information includes names, addresses, tax identification numbers and other information that will allow the Commitment Parties to identify the Issuer in accordance with the PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for the Commitment Parties.
The indemnification, jurisdiction, waiver of jury trial, service of process, venue, governing law, sharing of information, no agency or fiduciary duty and confidentiality provisions contained herein and in the Closing Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder; providedthat, your obligations under this Commitment Letter (but not the Closing Letter) (and other than your agreements in respect of no fiduciary or similar duties and your obligations in respect confidentiality (which shall terminate in accordance with Section 8)) shall automatically terminate and be superseded by the provisions of the Preferred Equity Documentation (and solely applicable to the Issuer) upon the execution thereof, and you shall automatically be released from all liability in connection therewith at such time. For the avoidance of doubt, the information provisions set forth in the second sentence of Section 2hereof shall survive until the Closing Date. You may terminate the Commitment Parties' commitments hereunder at any time subject to the provisions of the preceding sentence.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and the Closing Letter by returning to us executed counterparts of this Commitment Letter and of the Closing Letter not later than 11:59 p.m., New York City time, on July 13, 2020. This offer will automatically expire at such time if we have not received such executed counterparts in accordance with the preceding sentence, unless we shall, in our sole discretion, agree to an extension. Unless we shall, in our sole discretion, agree to an extension, this Commitment Letter and the commitments hereunder shall automatically terminate on the date that is the earliest of (a) the Closing Date, (b) five business days following the "Termination Date" (as defined in the Acquisition Agreement as in effect on the date hereof) and (c) after execution of the Acquisition Agreement and prior to the consummation of the Acquisition, the date of a valid termination of the Acquisition Agreement by you (or your affiliates) or with your (or your affiliates') written consent (other than with respect to provisions therein that expressly survive termination); providedthat the termination of any commitment pursuant to this sentence does not prejudice your rights and remedies in respect of any breach of this Commitment Letter.
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We are pleased to have been given the opportunity to assist you in connection with this important financing.
Very truly yours,
HPS INVESTMENT PARTNERS, LLC
By: /s/ Shant Babikian
Name: Shant Babikian
Title: Managing Director
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Accepted and agreed to as of the date first above written:
DAYLIGHT BETA INTERMEDIATE CORP.
By: | /s/ Vahe Dombalagian |
Name: | Vahe Dombalagian |
Title: | Vice President |
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EXHIBIT A
Project Dawn
Equity
Transaction Summary
Capitalized terms used but not defined in this Exhibit Ashall have the meanings set forth in the commitment letter (the "Commitment Letter") to which this Exhibit Ais attached or in Exhibits B, or Cthereto.
Daylight Beta Intermediate Corp. a Delaware corporation (the "Issuer"), a newly created entity formed at the direction of Madison Dearborn Partners, LLC ("MDP") and its controlled affiliates and associated funds (together with MDP, collectively, the "Sponsor"), through one or more of its subsidiaries, intends to acquire (the "Acquisition"), directly or indirectly, all of the issued and outstanding equity interests of Benefytt Technologies, Inc., a Delaware corporation (the "Company"), pursuant to the Acquisition Agreement defined below. In connection therewith, it is intended that:
- The Sponsor and certain other investors designated by the Sponsor (together with the Sponsor, collectively, the "Investors") will directly or indirectly contribute, or have contributed, to the Issuer an aggregate amount of equity (exclusive of the Preferred Stock and otherwise in the form of common equity (as modified in accordance with paragraph 2 of Exhibit C) or through roll over, direct or indirect issuance to or acquisition by any existing shareholders, board members and/or management of the Company (the "Equity Contribution")) in an aggregate amount that, when taken together with the aggregate amount of all equity rolled over, issued directly or indirectly to, or otherwise directly or indirectly acquired by, in each case, any existing equity holder of the Company, board members and/or management of the Company, if any (collectively, the "Other Equity"), is not less than 60% of the sum of (i) the initial aggregate liquidation preference of the Preferred Stock issued on the Closing Date plus
- the aggregate principal amount of the Senior Credit Facilities funded on the Closing Date plus(iii) the Equity Contribution and the Other Equity minus(iv) the aggregate amount of cash on hand at the Issuer and its subsidiaries on the Closing Date immediately after giving effect to the consummation of the Transactions; provided, that the Sponsor shall directly or indirectly own at least 50.1% of the voting equity interests of the Parent immediately following the consummation of the Transactions.
- Pursuant to that certain Agreement and Plan of Merger, dated as of the date hereof (together with the exhibits and disclosure schedules thereto, as amended, modified, supplemented or waived from time to time, the "Acquisition Agreement"), by and among Daylight Beta Parent Corp., a Delaware corporation ("Holdings"), Daylight Beta Corp., a Delaware corporation ("Merger Sub"), and the Company, Merger Sub will commence a cash tender offer (the "Offer") to acquire the outstanding shares of Class A Common Stock and Class B Common Stock of the Company, and, following the consummation of the Offer, on the Closing Date, Merger Sub shall be merged with and into the Company (such merger, the "Merger"), with the Company surviving the Merger as the surviving corporation, becoming a wholly-owned subsidiary of Holdings.
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- On the Closing Date, the Issuer will issue 87,500 shares of a single class of non-convertible Series A Preferred Stock of the Issuer (the "Preferred Stock") in an aggregate initial liquidation preference amount of $ 87,500,000 million, as described in Exhibit Bto the Commitment Letter.
- On the Closing Date, the Company will establish senior secured credit facilities in an aggregate principal amount of up to $207.5 million, comprised of a senior secured term loan facility and a senior secured revolving credit facility (the "Senior Credit Facilities") and that certain Credit Agreement, dated as of June 5, 2019, as amended, supplemented or otherwise modified from time to time, by and among, inter alios, the Company, Health Plan Intermediaries Holdings, LLC (a subsidiary of the Company) (the "Borrower"), and Bank of America, N.A., as administrative agent (the "Existing Credit Facility", will be either (i) repaid in full using proceeds from the Senior Credit Facilities, with all commitments thereunder terminated and any security interests or guaranties in connection therewith terminated or released (other than letters of credit which have been backstopped, cash collateralized or "grandfathered" into the Senior credit Facilities) or (ii) amended and restated to provide for the Senior Credit Facilities.
- The proceeds of the Equity Contribution, the Preferred Stock and cash on hand at the Company and its subsidiaries on the Closing Date will be applied to pay the purchase price to consummate the Acquisition, to effect the Acquisition (including the Offer and the Merger) and to pay the fees, premiums, expenses and other transaction costs incurred in connection with the foregoing (the "Transaction Costs").
The transactions described above are collectively referred to herein as the "Transactions." For purposes of the Commitment Letter "Closing Date" shall mean the date of (i) the satisfaction or waiver of the Exclusive Funding Conditions, (ii) the issuance and purchase of the Preferred Stock,
- the execution of the definitive documentation for, and the funding of, the Senior Credit Facilities and the refinancing or amendment and restatement in connection therewith, (iv) the consummation of the Offer and (v) the consummation of the Merger and the Acquisition.
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EXHIBIT B
PROJECT DAWN
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
Preferred Stock
Set forth below is a summary of the principal terms and conditions for the Preferred Stock. Capitalized terms used but not defined in this Exhibit Bshall have the meanings set forth in the commitment letter (the "Commitment Letter") to which this Exhibit Bis attached or in Exhibits Aor Cattached thereto.
Preferred Stock to be | 87,500 shares of a single class of non-convertible Series A Preferred Stock of the Issuer (the "Preferred Stock"), with an |
Purchased: | initial liquidation preference of $1,000 per share and an aggregate initial liquidation preference of $87.50 million. |
Issuer | Daylight Beta Intermediate Corp., a Delaware corporation ("Issuer"). |
Purchaser: | HPS, together with its affiliates and any funds, entities, investors or accounts that are managed, sponsored, administered, |
advised or identified by HPS (collectively, the "HPS Investors") will purchase the Preferred Stock. | |
Closing: | Concurrently with the consummation of the Transactions, provided that the Exclusive Funding Conditions are satisfied |
(the "Closing Date"). | |
Voting: | The Preferred Stock shall be voting stock that is entitled to vote on the election of Issuer's directors, and shall represent |
[ ]%1 of the aggregate voting stock of Issuer entitled to vote on the election of directors. | |
Dividends: | The Preferred Stock shall accrue dividends (the "Dividends") on the then current aggregate liquidation preference of the |
Preferred Stock from time to time at the Dividend Rate (as defined below), based on the actual number of days elapsed | |
over a 360-day year and shall be payable semi-annually in arrears on each dividend payment date by capitalizing such | |
Dividends and adding it to the then outstanding liquidation preference of the Preferred Stock. The Issuer will have the | |
option (the "Cash-PayOption"), in respect of any dividend payment date for the Preferred Stock to pay up to all of the | |
Dividends accrued on the Preferred Stock during the 6 month period ending on such dividend payment date in cash in lieu | |
of capitalizing such Dividends and adding it to the then outstanding liquidation preference of the Preferred Stock. Notice | |
of the Issuer's election to exercise the Cash-Pay Option shall be given not less than 30 days prior to the date on which | |
such Dividends are due to be capitalized. |
- NTD: to be more than 25% of the greater of (x) the percentage of board seats of the GP of the Partnership appointed by HPS and (y) HPS' aggregate economic percentage interest in the Partnership, such that the redemption of the preferred results in a more than 20% decrease in HPS' aggregate direct and indirect voting interests in the Issuer.
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Privileged & Confidential | |
"Dividend Rate" means 12.5% per annum, from the Closing Date to the eight year anniversary of the Closing Date, | |
increasing by 1.00% per annum on the eight year anniversary of the Closing Date and an additional 1.00% per annum on | |
each anniversary of the Closing Date thereafter. | |
Maturity: | None - perpetual. |
Ranking: | The Preferred Stock will rank senior as to liquidation and distribution rights with respect to the common equity and any |
other equity capital of the Issuer. The Preferred Stock will be structurally subordinated to the Senior Credit Facilities. | |
Use of Proceeds: | The proceeds of the Preferred Stock will be used by the Issuer on the Closing Date, together with the proceeds of the |
Equity Contribution, proceeds of the Senior Credit Facilities and certain cash available on the balance sheet of the | |
Company and its subsidiaries, to finance the Transactions, pay fees and expenses incurred in connection therewith and | |
fund cash to the balance sheet of the Issuer or the Company for general corporate purposes and working capital needs. | |
Conditions to Initial | Subject to the Certain Funds Provision, the issuance and purchase of the Preferred Stock on the Closing Date will be |
Purchase: | subject only to the Exclusive Funding Conditions. |
Redemption: | The Preferred Stock shall be redeemable at the option of Issuer at any time, in whole or in part, at a redemption price (the |
"Redemption Price") in cash, equal to the greater of (i) 1.30x the initial liquidation preference of the Preferred Stock | |
being redeemed (for the avoidance of doubt, with no adjustment made to such initial liquidation preference in respect of | |
Dividends whether in the form of cash payments, capitalized or accrued and unpaid) minus all Dividends on such | |
Preferred Stock previously paid in cash, and (ii) the then current liquidation preference of the Preferred Stock plus all | |
accrued and unpaid Dividends on the Preferred Stock since the most recent dividend payment date through the | |
redemption date. If the Issuer exercises its election for a partial redemption of the Preferred Stock, it must redeem an | |
amount of Preferred Stock then outstanding such that the Redemption Condition (for this purpose, substituting 20% for | |
10%) is satisfied for such redemption and would be satisfied for any subsequent redemption of the remaining Preferred | |
Stock outstanding after such redemption. | |
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Privileged & Confidential | |
Change of Control/IPO: | Upon the occurrence of a Change of Control or IPO (to be defined to include a direct listing), the Issuer will be required |
to offer to redeem all of the Preferred Stock at the then current Redemption Price. | |
Change of Control will be defined consistent with the Senior Credit Facilities. | |
Documentation: | The documentation (the "Preferred Stock Documentation") relating to the issuance of the Preferred Stock and other |
related matters, will be based on, and no less favorable to Issuer than, the documentation for the Senior Credit Facilities, | |
as applied to the covenants applicable to the Company and its subsidiaries, except as otherwise provided herein, and will | |
include, without limitation, the purchase agreement, certificate of designation of the Issuer under which the Preferred | |
Stock will be issued and an Investor Rights Agreement, the terms of which, except as set forth herein, will be based on | |
the corresponding documentation related to the Preferred Units of NFP Ultimate Holdings, LLC (the "Precedent | |
Preferred"), as modified for preferred equity issued by a corporation; provided that the issuance and purchase of the | |
Preferred Stock on the Closing Date will be subject only to the Exclusive Funding Conditions. | |
Representations and | Representations and warranties to be set forth in the Purchase Agreement consistent with ones in the purchase agreement |
Warranties: | for the Precedent Preferred as modified; (i) for an issuance of preferred equity securities in a manner consistent with the |
Precedent Preferred and (ii) with respect to the sanctions rep, to include a five year lookback. | |
Covenants: | Affirmative covenants no less favorable to the Issuer than those contained in the documentation for the Senior Credit |
Facilities, as applied to the Company and its subsidiaries, and otherwise consistent with the Precedent Preferred and | |
limited to (i) company existence, (ii) payment of taxes and the covenants described below under "Tax Provisions", (iii) | |
compliance with laws, (iv) use of proceeds, (v) Anti-Corruption Laws (vi) delivery of notices and information promptly | |
after delivered to lenders under the Senior Credit Facilities, and (vii) "Access to Information" below. | |
Negative covenants no less favorable to the Issuer than those contained in the documentation for the Senior Credit | |
Facilities, as applied to the Company and its subsidiaries, and otherwise consistent with the Precedent Preferred and | |
limited to: limitations on the incurrence of indebtedness and the issuance of disqualified stock by Issuer and on preferred | |
stock by any restricted subsidiaries of Issuer; limitations on restricted payments (including dividends and other | |
distributions in respect of equity and equity repurchases); limitations on affiliate transactions; limitations on asset sales; | |
limitations on investments; | |
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Privileged & Confidential
limitations on mergers, consolidations and sale of all or substantially all assets; limitations on business activities; limitations on dividend and other payment restrictions affecting subsidiaries (consistent with the Precedent Preferred); and limitations (through a customary passive holding company covenant consistent with the Precedent Preferred) on the activities of the Issuer (where applicable, substantially consistent as applied to the Company, and its restricted subsidiaries, with those contained in the documentation for the Senior Credit Facilities, with, solely in the case of the "asset sales" and "investments" covenants, a 25% cushion for dollar based baskets) modified as follows:
-
Prohibition on (A) the incurrence of indebtedness by the Issuer or any of its subsidiaries, other than the Company and its subsidiaries (the "Holding Companies") (and the Company, which is the direct parent of the Borrower, may provide a guaranty of any indebtedness permitted to be incurred by the Borrower and its restricted subsidiaries under the Senior Credit Facilities), (B) the incurrence by the Company and its subsidiaries of additional indebtedness, in an amount such that, following such incurrence and after giving pro forma effect to such incurrence, the Consolidated Total Net Leverage Ratio (to be defined in a manner consistent with the Senior Credit Facilities; provided that if such term is defined on a "net" basis in the Senior Credit Facilities, the "netting" of any unrestricted cash shall be capped at an amount not to exceed $25.0 million in the period prior to the first anniversary of the Closing Date; and thereafter shall be uncapped) of the Company and its subsidiaries shall not exceed 3.00:1.0 (which ratio shall increase to 3.50:1.00 if the Company has achieved a Contract Asset Balance of not less than $300.0 million as of the end of any fiscal quarter, of which not less than $200.0 million of such Contract Asset Balance must be attributable to Medicare Advantage policies), other than with respect to draws under a revolving credit facility in an amount not to exceed $65.0 million and customary "non-dollar" baskets no less favorable than the Senior Credit Facilities, and (C) the issuance of preferred stock by the Holding Companies, the Company and its subsidiaries (other than the issuance of the Preferred Stock);
"Contract Asset Balance" means, as of any date, the aggregate value of cash payments due to, but not yet received by, the Company and its subsidiaries in connection with all policies sold on behalf of insurance carriers, including but not limited to, all current and future cash flows associated with first year and renewal commissions, net of any commissions due to external producers in respect of such policies.
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Privileged & Confidential | ||
ii. | Prohibition on the Sponsor and its affiliates acquiring or holding more than 25% of any tranche of indebtedness of | |
the Issuer or any of its subsidiaries (other than subordinated intercompany indebtedness among the Company and | ||
its subsidiaries) (other than purchases by any affiliate that is a bona fide debt fund affiliate or any debt that is | ||
purchased and immediately contributed to the Company for cancellation); | ||
iii. | There will be no baskets or other capacity for direct or indirect restricted payments by the Issuer (and payments by | |
Subsidiaries will solely be restricted to the extent they are made with respect to the direct or indirect equity | ||
interests of the Issuer, which, for the avoidance of doubt, will allow any such Subsidiaries to make payments to the | ||
Issuer and any of its Subsidiaries) other than for management equity repurchases subject to dollar limitations to be | ||
agreed ("Permitted Management Equity Buybacks"); and | ||
iv. | Each of the Holding Companies will not be permitted to own any assets or engage in any business other than the | |
direct or indirect ownership of, in the case of the Issuer, 100% of the equity capital of the Company (which indirect | ||
ownership the Issuer shall at all times maintain). | ||
Remedies / Trigger | Upon the occurrence and during the continuation of a "Trigger Event" (defined as (i) a breach by Issuer or its subsidiaries | |
Events: | of Issuer's payment or distribution obligations, (ii) certain bankruptcy or insolvency events, (iii) a breach by Issuer or its | |
subsidiaries of the affirmative and negative covenants with respect to the Preferred Stock described herein and (iv) the | ||
failure of Issuer to honor its obligations set forth under "Exit Demand" below (the Trigger Events referred to in items (i), | ||
(ii) and (iv) above referred to as the "Fundamental Trigger Events"), in each case subject to the appropriate grace periods |
and materiality thresholds, and in any event, to the extent applicable, no less favorable to the Issuer than the corresponding events of default in the Senior Credit Facilities, as applied to the Company and its subsidiaries), the then applicable Dividend Rate will increase by a rate (the "Default Rate") of 2.00% per annum upon the occurrence and during the continuance of such Trigger Event, and increase further by an additional 0.50% per annum on each 6th month anniversary of the occurrence of such Trigger Event, in each case until such Trigger Event has been cured or waived (whereupon the Default Rate shall no longer apply unless and until another Trigger Event shall occur); provided that in no event shall the Default Rate exceed 3.00% per annum for breaches of the affirmative covenants and 7.50% per annum for breaches of the negative covenants (it being understood that there shall be no cap on the Default Rate for any Fundamental Trigger Event).
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Privileged & Confidential
Exit Demand:The Purchaser will have the right to compel a sale or initial public offering of the Issuer in a manner substantially consistent with the provision set forth in Section 13.3 of the LLC Agreement for the Precedent Preferred, as modified
- such that the right is available to the Purchaser beginning on the 10th anniversary of the Closing Date and (ii) to permit the Purchaser to compel an initial public offering in lieu of a sale of the Issuer.
Transfers: | The Purchaser shall not transfer or assign its rights or interests in the Preferred Stock without the consent of the Issuer (in |
its sole discretion); provided that such consent shall not be required: (i) for transfers to affiliates of a Purchaser, (ii) for | |
pledges of the Preferred Stock pursuant to a fund credit facility or other leverage facility or (iii) upon the occurrence of | |
and during the continuance of, a Fundamental Trigger Event; provided, that, no transfers shall be made to (a) those | |
persons that are competitors of the Issuer, the Borrower or any of their respective subsidiaries to the extent separately | |
identified by the Issuer to the Purchaser from time to time, including any such entity's affiliates that are identified as such | |
from time to time or those that are clearly identifiable on the basis of their name or (b) those financial institutions and | |
other persons to the extent separately identified by the Issuer or the Sponsor to the Purchaser in writing prior to the date | |
of the Commitment Letter or after the date of the Commitment Letter with the consent of the Purchaser, including any | |
such entity's affiliates that are identified as such from time to time or those that are clearly identifiable on the basis of | |
their name (collectively, the "Disqualified Holders"). | |
Indemnification / Expense | If the Closing Date occurs, Purchaser to be reimbursed for all reasonable and documented out-of-pocket expenses, |
Reimbursement: | reasonable fees, third party due diligence expenses and legal documentation expenses related to the Preferred Stock. |
Access to Information: | The Purchaser and each of its affiliates shall receive, with respect to each of Issuer and its subsidiaries, monthly (if |
available) and quarterly unaudited financial statements, audited annual financial statements, annual budget, and other | |
financial and operational information, including (but not limited to) information provided to the representatives under the | |
senior credit facilities then in effect. The Purchaser may share the foregoing information with their respective investors, | |
lenders, limited partners, affiliates, directors, officers, employees and their respective counsel, consultants and advisors | |
(including rating agencies) on a confidential basis. | |
Tax Provisions: | From and after the Closing Date, the Issuer will be treated as a C corporation for U.S. federal income tax purposes and |
will not take any action that would cause it not to be a C corporation for U.S. federal income tax purposes or could | |
otherwise cause any holder of the Preferred | |
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Privileged & Confidential
Stock to own an interest in an entity that is not a C corporation for U.S. federal income tax purposes, in each case without the consent of the Purchasers, which consent may be withheld in a Purchaser's sole discretion.
Parties to include provisions reflecting their intent that (i) the Preferred Stock is intended to be treated as equity (and not debt) for U.S. federal income tax purposes, (ii) holders of Preferred Stock shall not be required to include in income as a dividend for U.S. federal income tax purposes any amounts in respect of the Preferred Stock unless and until such dividends are declared and paid in cash, and (iii) any redemption of the Preferred Stock from a holder thereof, whether in part or in full, qualifies as a sale or exchange of such Preferred Stock and not as a distribution for U.S. federal income tax purposes (provided, in the case of this clause (iii), such redemption results in a reduction of more than 10% of such holder's percentage vote of the Issuer, measured for this purpose as the sum of (a) the percentage of the aggregate voting stock of the Issuer held directly by such holder plus (b) the product of (A) 100% minus the percentage described in clause (a), and (B) the greater of (x) the percentage of board seats of the general partner of Daylight Beta Holdings, LP. (the "Partnership") appointed or deemed appointed by such holder and (y) such holder's aggregate economic percentage interest in the Partnership (the "Redemption Condition")), and the Issuer will, and will cause any paying agent or other agent of the Issuer to, report consistently with, and take no positions or actions inconsistent with (including on any IRS Form 1099 or any other information return), the intended tax treatment set forth in the preceding clauses (i) through (iii) (including by way of withholding) unless otherwise required by a change in law or a final determination of a taxing authority, in each case, which is binding on the Issuer. If the Issuer proposes to treat any redemption of the Preferred Stock that does not satisfy the Redemption Condition as a distribution for U.S. federal income tax purposes, the Issuer shall provide notice to the holder at least ten (10) business days prior to such redemption and shall cooperate with the holder in good faith to seek to cause such redemption to qualify as a sale or exchange and not as a distribution for U.S. federal income tax purposes.
The Issuer shall (a) provide to any Purchaser, as soon as reasonably practicable and no later than fifteen (15) business days of such holder's written request, (i) a certification that the Preferred Stock does not constitute a "United States real property interest", in accordance with Treasury Regulations Section 1.897-2(h)(1) or (ii) notification of its legal inability to provide the certification described in the preceding clause (i), and (b) in connection with the provision of any certification pursuant to the preceding clause (a)(i), comply with the notice provisions set forth in Treasury Regulations Section 1.897-2(h). In the event the Issuer becomes
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Privileged & Confidential | |
aware of any facts or circumstances that could reasonably be expected to cause it to become a "United | |
States real property holding corporation", the Issuer shall use its commercially reasonable efforts to | |
promptly notify the Purchasers. | |
The Issuer shall use commercially reasonable efforts to provide any information reasonably requested by | |
the Purchasers and necessary to enable the Purchasers to comply with their U.S. federal income tax | |
reporting obligations, including, but not limited to, a determination of the amount of the Issuer's current | |
and accumulated earnings and profits in any taxable year where such determination is relevant to | |
determining the amount (if any) of any distribution received by the Purchasers from the Issuer that is | |
properly treated as a dividend for U.S. federal income tax purposes. | |
Applicable Law: | New York. |
Counsel to the Purchaser: | Latham & Watkins LLP |
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EXHIBIT C
Project Dawn
Preferred Stock
Conditions
The purchase of the Preferred Stock shall be subject solely to the satisfaction or waiver by the Commitment Parties of the following conditions (subject to the Certain Funds Provision). Capitalized terms used but not defined in this Exhibit Chave the meanings set forth in the letter to which this Exhibit Cis attached or in Exhibits A, or Bthereto.
- Subject to the Certain Funds Provision, the Issuer shall have executed and delivered the Preferred Equity Documentation consistent with the Commitment Letter and the Preferred Term Sheet and the Purchaser shall have received: customary closing officer's (certifying as to resolutions, organizational documents and incumbency) and good standing (of the jurisdiction of organization of the Issuer) certificates and customary legal opinions.
- The Acquisition shall be consummated in all material respects pursuant to the Acquisition Agreement (for the avoidance of doubt, the Commitment Parties are satisfied with the Acquisition Agreement dated the date hereof) substantially concurrently with the purchase of the Preferred Stock without giving effect to any amendments or modifications to the provisions thereof or express waivers or consents thereto that, in each case, are materially adverse to the interests of HPS Investors (in their capacity as Purchasers) without the consent of the HPS Investors, such consent not to be unreasonably withheld, conditioned or delayed (it being understood and agreed that (i) any of the following decreases in the Offer Price (as defined in the Acquisition Agreement as in effect on the date hereof) shall be deemed not to be materially adverse to the interests of the HPS Investors (x) decreases of less than 15.0% in the aggregate and (y) decreases to the extent they are applied first, to reduce the Equity Contribution to a percentage not less than the minimum percentage set forth in clause (a) of Exhibit Aand second, to reduce the amount of the Preferred Stock and the Equity Contribution on a pro rata basis, (ii) any increase in Offer Price for the Acquisition shall be deemed not to be materially adverse to the interests of HPS Investors so long as funded with common equity proceeds and (iii) any adverse modification to the definition of Company Material Adverse Effect without the prior written consent of HPS Investors (such consent not to be unreasonably withheld, delayed or conditioned) shall be deemed to be materially adverse to the interests of HPS Investors); providedthat in each case the Commitment Parties shall be deemed to have consented to such modification, amendment, waiver or consent unless they shall object thereto within three (3) business days of receipt of written notice of such modification, amendment, consent or waiver.
- After the date of the Acquisition Agreement and prior to the Offer Acceptance Time (as defined in the Acquisition Agreement), there shall not have occurred any Change (as defined in the Acquisition Agreement) that, individually or taken together with any other Changes, has had or would reasonably be expected to have a Company Material Adverse Effect; provided, this condition shall deemed satisfied at the Offer Acceptance Time (as defined in the Acquisition Agreement).
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Privileged & Confidential
- So long as requested at least ten (10) business days prior to the Closing Date, the Purchasers shall have received, at least three (3) business days prior to the Closing Date, all documentation and other information with respect to the Issuer that is required by regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.
- Payment of all fees and expenses earned, due and payable to HPS and the HPS Investors required to be paid on the Closing Date under the Preferred Equity Documentation for which invoices have been received at least three (3) business days in advance (which amounts may be offset against the proceeds of the Preferred Stock) shall have been made (or shall be made substantially contemporaneously with the issuance and purchase of the Preferred Stock).
- The Specified Acquisition Agreement Representations and the Specified Representations shall be true and correct in all material respects; provided, the accuracy of the Specified Acquisition Agreement Representations shall deemed satisfied at the Offer Acceptance Time.
- Prior to, or substantially concurrently with the purchase of the Preferred Stock contemplated by the Commitment Letter, the Equity Contribution shall have been consummated substantially in the manner described in Exhibit Ato the Commitment Letter.
- Prior to, or substantially concurrently with the purchase of the Preferred Stock contemplated by the Commitment Letter the Existing Credit Facility will be either (i) repaid in full, with all commitments thereunder terminated and any security interests or guaranties in connection therewith terminated or released (other than letters of credit which have been backstopped, cash collateralized or "grandfathered" into the Senior credit Facilities) or
(ii) amended and restated to provide for the Senior Credit Facilities. - The Borrower shall have delivered to the Purchasers (i) if the Closing Date occurs after August 15, 2020, the unaudited consolidated balance sheet of the Company and its subsidiaries as of the end of the fiscal quarter ended June 30, 2020 and the related unaudited consolidated statements of income or operations and cash flows of the Company and its subsidiaries for such fiscal quarter and the then elapsed portion of the fiscal year of the Company, (ii) if the Closing Date occurs after November 15, 2020, the unaudited consolidated balance sheet of the Company and its subsidiaries as of the end of the fiscal quarter ending September 30, 2020 and the related unaudited consolidated statements of income or operations and cash flows of the Company and its subsidiaries for such fiscal quarter and the then elapsed portion of the fiscal year of the Company and (iii) if the Closing Date occurs after August 15, 2020, a pro forma consolidated balance sheet of the Company and its subsidiaries as of the date of the most recent financial statements required to be delivered pursuant to clause (i) or (ii) of this paragraph 8after giving effect to the Transactions (which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase or recapitalization accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R))). The financial statements described in clause (i) and (ii) will be deemed delivered (and this condition shall be deemed satisfied) when such financial statements are filed by the Company on Form 10-Q with the SEC.
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Exhibit (d)(2)
Benefytt Technologies, Inc.
3450 Buschwood Park Drive, Suite 200
Tampa, Florida 33618
May 21, 2020
Madison Dearborn Partners, LLC, on behalf of its Fund VIII private equity funds 70 West Madison Street, Suite 4600
Chicago, IL 60606
Attention: Vahe Dombalagian, Managing Director
Ladies and Gentlemen:
In connection with the consideration by Madison Dearborn Partners, LLC, on behalf of its Fund VIII private equity funds ("you" or "your") of a possible negotiated transaction (the "Possible Transaction") involving you or one of your affiliates and Benefytt Technologies, Inc. (together with its subsidiaries, the "Company" and each of you and the Company, a "Party," and collectively, the "Parties"), the Company is prepared to make available to you and your Representatives (as defined below) certain information concerning the Company. In consideration for and as a condition to such information being furnished to you and your Representatives (as defined below), you agree that you and your Representatives will treat any Confidential Information (as defined below) in accordance with the provisions of this letter agreement (this "Agreement"), and to take or abstain from taking certain other actions as set forth herein.
1. Confidential Information.
- The term "Confidential Information" shall mean any information or data concerning or relating to the Company and/or any of its affiliates which has been or will be furnished, or otherwise made available, to you or your Representatives by or on behalf of the Company on or after the date hereof (or, to the extent prior to the date hereof, solely in connection with that certain letter agreement between the Company (formerly known as Health Insurance Innovations, Inc.) and The Amynta Group, dated September 4, 2019) in connection with the Possible Transaction (whether in written, verbal, graphic, electronic or other form of communication), including, without limitation, any confidential or proprietary information of the Company or any information or data concerning or relating to the business, financial condition, properties, services, products, technology, employees, operations, strategy, actual or potential prospects, assets or liabilities of the Company or any of its affiliates. The term "Confidential Information" shall also be deemed to include all notes, memoranda, summaries, analyses, compilations, forecasts, models, data, studies, interpretations or other documents or materials prepared by the Company or its Representatives, or you or your Representatives, which use, contain, reflect or are based upon or derived from, in whole or in part, any such information. The term "Confidential Information" shall not include information that (i) is available to the public other than as a result of a disclosure by you or your Representatives in violation of this Agreement, (ii) was within your or your Representative's possession prior to it being furnished or made available to you or your Representatives hereunder or becomes available to you or your Representatives on a non-confidential basis from a source other than the Company or any of its Representatives; provided that, in each case, the source of such
information was not known by you (with respect to the Company, after reasonable inquiry) or your Representatives to be bound by a contractual, legal or fiduciary obligation of confidentiality to the Company or any other person, in each case, with respect to such information, or (iii) has been or is subsequently independently developed by or for you or your Representatives (on your behalf) without (A) use of or reference to any Confidential Information or (B) breaching this Agreement.
- For purposes of this Agreement:
- "affiliate" shall mean, with respect to any specified person, any other person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified person, provided, however that such term shall not mean or be deemed to mean any of your related portfolio companies, unless such portfolio company (other than Portfolio Company Consultants (defined below) serving in their capacities as such) has been provided or had made available any Confidential Information by you or your Representatives acting on your behalf or at your or your Representatives' direction on your behalf (with respect to Portfolio Company Consultants (as defined below), other than Confidential Information received by such Portfolio Company Consultant, solely in its capacity as such, as contemplated by Section 20);
- "control" and derivative terms shall mean, as used in the definition of the term "affiliate" or in relation to the term "affiliate," the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise;
- "Representatives" shall mean:
- with respect to you: your affiliates and your and their respective directors, officers, employees, agents, representatives and advisors (including insurers, attorneys, accountants, consultants and financial advisors); provided that your "Representatives" shall not include, without the prior written consent of the Company: (1) any actual or potential bidding partners or equity financing sources, (2) any actual or potential debt financing sources or (3) any of your portfolio companies (except that, no such consent shall be required for Portfolio Company Consultants serving in their capacities as such as contemplated by Section 20);
- with respect to the Company: the Company's affiliates and the Company's and its respective affiliates' directors, officers, employees, attorneys, accountants, consultants, financial advisors, agents and other representatives; and
- "person" shall be broadly interpreted to include the media and any individual, corporation, limited or general partnership, limited liability company, trust, association, joint venture, governmental or self-regulatory agency or body or other entity or group.
2. Use and Disclosure of Confidential Information.
2
- You hereby agree that you and your Representatives (i) will keep the Confidential Information confidential and use the Confidential Information solely for the purpose of evaluating, and participating in discussions with the Company regarding, the Possible Transaction and for no other purpose and (ii) will not disclose any of the Confidential Information to any person, provided that you may disclose such information (A) to those of your Representatives who have a reasonable need to know such information for the sole purpose of evaluating the Possible Transaction on your behalf and who are directed to comply with the applicable terms of this Agreement to the same extent as if they were parties hereto with respect to such terms and (B) subject to Section 2(c), to the extent you are Legally Required (as defined below) to disclose any such information. In any event, you agree, at your sole expense, to (y) undertake reasonable precautions to safeguard and protect the confidentiality of the Confidential Information and to prevent you and your Representatives from making any unauthorized disclosure or unauthorized use of such information (such measures to be no less stringent than the measures taken with respect to your own confidential and proprietary information and in any event shall involve no less than a reasonable degree of care) and (z) be responsible for any breach of, or failure to comply with, the terms of this Agreement expressly applicable to your Representatives by any of your Representatives as if such Representatives were parties hereto with respect to such terms.
- Without the prior written consent of the Company, you and your Representatives will not disclose to any person (i) the fact that the Company or you are considering the Possible Transaction or that this Agreement exists or the contents hereof, (ii) the fact that any Confidential Information has been made available to you or your Representatives, or (iii) that discussions, negotiations or investigations are taking place or have taken place concerning the Possible Transaction or the Company or any of the terms, conditions or other facts with respect to the Possible Transaction or such discussions, negotiations or investigations including, without limitation, the status thereof (all of the foregoing being referred to as "Transaction Information"). All Transaction Information shall be deemed to be Confidential Information for all purposes of this Agreement. In turn, except as Legally Required, including by the rules of any stock exchange, the Company agrees, and will direct its Representatives, not to disclose to any other person (except to the Company's Representatives) the Transaction Information relating to you without your prior written consent.
- In the event that you or any of your Representatives are required by applicable law or regulation, legal process (including by deposition, interrogatories, requests for information or documents in legal or administrative proceedings, subpoena, civil investigative demand or other similar legal process) or by a judicial, governmental or regulatory or self-regulatory authority (any of the foregoing, "Legally Required") to disclose Confidential Information, you or such Representative, as applicable, shall provide the Company with prompt (and in any event prior to any disclosure) written notice, to the extent not legally prohibited, of the existence, terms and circumstances of any such requirement so that the Company may seek, at the Company's sole expense, a protective order or other appropriate remedy. If, in the absence of a protective order or other remedy, you or your Representatives are nonetheless, upon advice of counsel, Legally Required to disclose Confidential Information, you or your Representatives may disclose only that portion of the Confidential Information which such counsel advises is Legally Required to be disclosed; provided that (i) you or such Representative shall exercise commercially reasonable efforts to seek to preserve the confidentiality of the Confidential Information, including without limitation, seeking reliable assurance that confidential treatment shall be afforded such information and (ii) such disclosure was not caused by or resulted from a previous disclosure by you or any of your Representatives in violation of this
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Agreement. You and your Representatives shall reasonably cooperate with (and shall not oppose any action by) the Company to seek a protective order or other relief to prevent or narrow the disclosure of the Confidential Information or to seek reliable assurance that confidential treatment will be afforded the Confidential Information. Notwithstanding anything in this Agreement to the contrary, you and your Representatives may disclose Confidential Information without providing the Company with notice or the opportunity to seek a protective order or other remedy, where disclosure is in connection with a routine audit or examination by, or a blanket document request in the ordinary course of your or such Representatives' business from, an auditor or a regulatory or self-regulatory authority with jurisdiction over you or such Representative, in each such case that does not target the Company, the Possible Transaction or the Confidential Information; provided that you or such Representative shall request that such regulatory authority keep the information confidential in accordance with its policies and procedures.
- Neither you nor any of your Representatives shall, without the prior written consent of the Company, (i) communicate with any potential bidding partners or financing sources regarding the Possible Transaction or (ii) enter into any agreement, arrangement or understanding (or have any discussions which might lead to such agreement, arrangement or understanding), whether written or oral, with any actual or potential bidding partners or financing sources that would reasonably be expected to limit, restrict, restrain, or otherwise impair in any manner the ability of such partners or financing sources to provide financing to any other person in any other possible transaction involving the Company, provided, that the foregoing shall not prohibit the establishment of "tree" systems by your debt financing sources whereby separate working groups or "trees" will be formed and dedicated to you and each other party, respectively, considering a possible transaction involving the Company. Furthermore, with respect to clause (ii) of the previous sentence, you acknowledge and agree that neither you nor your Representatives acting on your behalf has, prior to the date hereof, entered into any such agreements, arrangements or understandings with any person or had any such discussions.
3. Destruction of Confidential Information. If requested in writing (email being sufficient) by the Company or one of its Representatives, you will, and will direct your Representatives to, promptly (and in any event within fifteen (15) business days of such request) destroy or erase all Confidential Information in your possession or your Representatives' possession, as applicable. You shall promptly deliver to the Company (within twenty (20) business days of such request) written confirmation that such destruction or erasure has occurred. Notwithstanding the foregoing, you and your Representatives may retain copies of any Confidential Information stored in standard archival or computer back-up systems (including in email systems) or to the extent required to comply with applicable legal or regulatory requirements or bona fide document retention policies or professional accounting obligations for use solely to demonstrate compliance with such requirements, provided that any retained information shall only be accessible by information technology, compliance or legal personnel and shall be destroyed or erased in the ordinary course of your or your Representative's business. Notwithstanding the destruction or retention of the Confidential Information, you and your Representatives will continue to be bound by your obligations hereunder and such obligations will survive the termination of this Agreement with respect to any retained Confidential Information (provided such information remains "Confidential Information" pursuant to the terms of this Agreement), for five (5) years from such termination or for so long as such Confidential Information is retained, whichever is earlier.
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- Inquiries. You agree that Domenick Dicicco or each of his designees (together, the "Contact Person") has responsibility for arranging appropriate contacts with the Company or its Representatives for due diligence in connection with the Possible Transaction and that (i) all communications with the Company or its Representatives regarding the Possible Transaction, (ii) requests for additional information and requests for management or similar meetings with the Company or any of its Representatives in connection with the Possible Transaction or Confidential Information and (iii) discussions with or questions for the Company or its Representatives regarding procedures with respect to the Possible Transaction will be submitted or directed only to the Contact Person or such other person as may be expressly designated by the Company in writing, and not to any other Representative of the Company. You further agree that, without the prior written consent of the Company, neither you nor any of your Representatives acting on your behalf shall initiate or maintain contact or otherwise engage in any communication with any director, officer, employee, stockholder, creditor, affiliate, supplier, vendor, partner, customer, agent, regulator (other than as permitted in Section 2(b) above) of the Company or other commercial counterparty of the Company regarding the Company, any Confidential Information or the Possible Transaction; provided the foregoing shall not prohibit contacts or communications with such persons in the ordinary course of your business unrelated to the Possible Transaction and without using or disclosing any Confidential Information.
- No Representations or Warranties; No Agreement. You acknowledge and agree that, except as expressly set forth in any Definitive Transaction Agreement, neither the Company nor any of its Representatives (a) makes any representation or warranty, express or implied, as to the timeliness, accuracy or completeness of the Confidential Information, (b) is under any obligation to provide or make available to you or your Representatives any information that in the Company's sole and absolute discretion it determines not to provide or (c) shall have any obligation or liability to you or your Representatives on any basis relating to or resulting from the use of the Confidential Information or any errors therein or omissions therefrom (including, without limitation, any obligation to update, supplement or correct any Confidential Information). You agree that only those representations, covenants or warranties that are made in a final definitive agreement with you regarding the Possible Transaction (a "Definitive Transaction Agreement"), subject to such limitations and restrictions as may be specified therein, when, as and if executed, will be relied upon by you or your Representatives and have any legal effect. You and the Company agree that unless and until a Definitive Transaction Agreement between the Company and you has been executed and delivered, neither you nor the Company will be under any legal obligation with respect to the Possible Transaction by virtue of this Agreement or any other written or oral expression. You and your Representatives shall not have any claims against the Company or its Representatives arising out of or relating to (x) the Possible Transaction or your evaluation thereof or (y) the Confidential Information or any action or inaction taken occurring in reliance on such information, other than claims against the parties to a Definitive Transaction Agreement in accordance with the terms thereof. Neither the Company nor any of its Representatives shall have any legal, fiduciary or other duty to any prospective or actual purchaser with respect to the manner in which any sale process is conducted. You further acknowledge and agree that the Company reserves the right, in its sole discretion, to conduct the process leading up to the Possible Transaction, if any, as the Company and its Representatives determine, including, without limitation, by negotiating with any third party and entering into a preliminary or definitive agreement with a third party, rejecting any and all proposals made by you or any of your Representatives with regard to the Possible Transaction, terminating discussions and negotiations with you at any time and for no reason and terminating or denying access to
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Confidential Information at any time and for no reason. Furthermore, nothing contained in this Agreement nor the furnishing of Confidential Information shall be construed as granting or conferring any rights, by license or otherwise, in any intellectual property of the Company. All right, title and interest in the Confidential Information shall remain with the Company.
- No Waiver of Privilege. To the extent the Confidential Information includes materials subject to work product doctrine, attorney-client privilege or any other applicable privilege or protection concerning pending or threatened legal proceedings or governmental investigations, the Parties understand and agree that the Parties have a commonality of interest with respect to such matters and it is their desire, intention and mutual understanding that the sharing of such material is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or its continued protection under the work product doctrine, attorney-client privilege or other applicable privilege or protection. All Confidential Information that is entitled to protection under the attorney-client privilege, work product doctrine or other applicable privilege or protection shall remain entitled to such protection under these privileges, this Agreement, and under the joint defense doctrine.
- No Solicitation. For a period of eighteen (18) months from the date hereof, neither you nor any of your controlled affiliates (for the avoidance of doubt, other than your portfolio companies who are not your "affiliates" hereunder) will, without the prior written consent of the Company, directly or indirectly, solicit to employ, or engage, hire, employ or engage (including, without limitation, as an independent contractor) any of the "officers" of the Company as defined in Rule 16a-1(f) under the Exchange Act, or any other officers or employees of the Company with whom you came into direct contact (or otherwise directly interacted with) in connection with your consideration of the Possible Transaction; provided that the foregoing shall not prohibit you or such affiliates from hiring, employing or engaging any such person (i) who initiates discussions regarding such employment without any prohibited solicitation in breach of this Section 7 by you or such affiliates, (ii) who responds to any general solicitation for employment, including by use of advertisements in the media, web-based employment services or recruiters, that are not specifically directed by you or such affiliates to target any such officer or other employee of the Company or (iii) with whom you can reasonably demonstrate you or such affiliates have been in discussions regarding employment prior to the date of this Agreement. You agree that you and your Representatives acting on your behalf will not, without the consent of the Board of Directors of the Company (the "Board"), engage in discussions with management of the Company regarding the terms of their post-transaction employment or equity participation as part of, in connection with or after a Possible Transaction.
- Standstill.
- You hereby represent and warrant that, as of the date of this Agreement, you do not own any securities of the Company, including, without limitation, any Derivatives Securities (as defined below), and whether or not you have the right to acquire ownership thereof within sixty (60) days or within any longer or shorter period of time.
- You hereby agree that, for a period of eighteen (18) months from the date hereof, unless specifically invited in advance in writing by the Board or otherwise invited in writing by the Company or its Representatives in accordance with the Company's process in connection with the Possible Transaction, neither you nor any of your controlled affiliates will, acting alone or as part of a group, directly or indirectly:
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- acquire (or offer, seek, propose or agree to acquire), sell (or offer, seek, propose or agree to sell) or otherwise obtain (or offer, seek, propose or agree to otherwise obtain), (A) any (I) securities of the Company (or any direct or indirect rights to acquire securities of the Company or any of its subsidiaries), (II) direct or indirect rights or options to acquire or sell (or any options or other derivative instruments, contracts or securities in any way related to the price of or that give the right to direct the voting or disposition of) any securities of the Company, or (III) securities convertible into or exercisable or exchangeable for any of the foregoing (or any other economic interest in or obligations measured by the price or value of any shares of capital stock of the Company, including, without limitation, any swaps or other derivative arrangements) (clauses (II) and (III), collectively, "Derivative Securities"), or (B) any significant portion of the assets, properties, business or indebtedness of the Company;
- make, engage in or participate in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities and Exchange Commission promulgated under Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv) promulgated thereunder) or consents or undertakings to vote any securities of the Company (whether or not related to the election or removal of directors), or otherwise seek to influence or control, in any manner whatsoever, the voting of any securities of the Company;
- make any statement or proposal to the Board or the Company (or to any of the Company's Representatives or stockholders) with respect to, make any public announcement with respect to, or solicit or submit a proposal or offer for, directly or indirectly, any merger, business combination, asset purchase, recapitalization, reorganization, tender offer, exchange offer, restructuring, liquidation, dissolution or other extraordinary transaction involving the Company or any of its securities, assets or properties;
- form, join or in any way participate in a "group" as defined in Section 13(d)(3) of the Exchange Act in connection with any of the foregoing in clauses (i)-(iii) or otherwise act in concert with any other person with respect to the securities of the Company or any of the matters set forth in this Section 8(b);
- otherwise seek, alone or in concert with others, representation on the Board or to influence or control in any manner whatsoever the Board or the management, policies or affairs of the Company;
- demand a copy of the Company's record of security holders, stock ledger list or any other books or records of the Company, including, without limitation, by (A) calling or seeking to call a meeting of the Company's shareholders or otherwise seeking to influence the timing of such meeting, (B) submitting, initiating, participating in or encouraging the submission of any proposal or action by the Company's shareholders or (C) seeking removal of any member of the Board or otherwise seeking representation on the Board in any manner;
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- take any action that could reasonably be expected to require the Company or you to make a public announcement regarding any of the matters (or the possibility of any of the matters) described in this Section 8(b);
- request or otherwise make any proposal or demand that the Company or the Board amend, waive or terminate any provision of this Section 8(b);
- make or cause to be made any public statement regarding any of the matters set forth in this Section 8(b);
- make any proposal or disclose any intention, plan or arrangement inconsistent with any of the foregoing; or
- enter into any discussions, negotiations, understandings or arrangements with any other person (or otherwise advise, assist, direct or encourage any other person) with respect to any of the foregoing.
- Notwithstanding the foregoing, Section 8(b) shall be of no further force or effect if (i) the Company enters into a definitive agreement with any other person or "group" of persons that, if consummated, would involve the direct or indirect acquisition of (A) all or a majority of the Company's equity securities (or, following which transaction the persons and entities who, immediately prior to such transaction, beneficially owned securities representing a majority of the voting power of the Company do not continue to beneficially own, directly or indirectly, a majority of the voting power of the combined entity) or (B) all or substantially all of the Company and its subsidiaries' assets, on a consolidated basis, in each case (A) and (B), other than in connection with an internal restructuring transaction involving only the Company, one or more of its subsidiaries and/or any holding company formed for the purpose of such transaction, which, for the avoidance of doubt, would include, without limitation, any spin-off,split-off or similar transaction involving any division or operating segment of the Company, provided, that if such definitive agreement is subsequently terminated from and after such termination the terms of this Section 8 shall become effective again, or (ii) a tender or exchange offer is commenced by any person not affiliated with you (or with whom you would form part of a "group" as defined in Section 13(d)(3) of the Exchange Act) that, if consummated, would result in all or a majority of the Company's equity securities being owned by persons other than the Company or the then-current holders of the Company's equity securities, and the Board (or a committee thereof) fails to recommend within ten (10) business days from the date of commencement of such offer that its stockholders reject such offer. Notwithstanding anything to the contrary in Section 8(b), you shall be entitled to make confidential proposals to the Chair of the Board or the Chief Executive Officer of the Company regarding any of the matters set forth in clauses (i) or (iii) of Section 8(b), but only so long as such request or proposal would not reasonably be expected to require any public disclosure by you or the Company.
9. Material Non-PublicInformation. You acknowledge and agree that you are aware (and that your Representatives are aware or, upon providing any Confidential Information to such Representatives, will be advised by you) that (a) Confidential Information being furnished hereunder may contain material non-public information regarding the Company and its affiliates and (b) that the United States securities laws generally prohibit any persons who have material non-public information from purchasing or selling securities of a company on the basis of such information or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities on the basis of such information.
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- Remedies. You recognize the competitive value and confidential nature of the Confidential Information and the damage that would result to the Company if such information is disclosed in breach of this Agreement. You hereby agree that any breach of this Agreement by you or any of your Representatives would result in irreparable harm to the Company and that money damages would not be a sufficient remedy for any such breach. Accordingly, you agree that the Company shall be entitled to seek equitable relief, including, without limitation, injunction and specific performance, as a remedy for any breach or threatened breach hereof by you or your Representatives and you further agree not to raise, as a defense or objection to the request for or granting of such relief, that any breach would be compensable by an award of money damages. Such remedies shall not be deemed to be the exclusive remedies available to the Company for any breach or threatened breach of this Agreement by you or your Representatives, but shall be in addition to any and all other remedies available to the Company at law or in equity. In the event of a legal proceeding between the Parties in respect of this Agreement, the non-prevailing Party (as determined by a court of competent jurisdiction in a final non-appealable order) shall be liable and pay to and reimburse the prevailing Party for its costs and reasonable legal fees incurred in connection therewith.
- Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement, and all claims, proceedings or causes of action (whether in contract, tort, statute or otherwise) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, shall be governed by, construed and enforced in accordance with the laws of the State of Delaware, without giving effect to any laws, rules or provisions that would cause the application of the laws of any jurisdiction other than the State of Delaware. Each Party hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the Courts of Chancery of the State of Delaware (or, if under applicable law exclusive jurisdiction over such matters is vested in federal courts, any court of the United States of America located in the State of Delaware) (collectively, the "Delaware Courts") for any lawsuits, actions or other proceedings arising out of or relating to this Agreement and agrees not to commence any such lawsuit, action or other proceeding except in such courts. Each Party further agrees that service of any process, summons, notice or document by mail to its address set forth above shall be effective service of process for any lawsuit, action or other proceeding brought against such Party in any such court. Service made in such manner, to the fullest extent permitted by applicable law, shall have the same legal force and effect as if served upon such Party personally within the State of Delaware. Nothing herein shall be deemed to limit or prohibit service of process by any other manner as may be permitted by applicable law. Each Party hereby irrevocably and unconditionally waives any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or relating to this Agreement in the Delaware Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such lawsuit, action or other proceeding brought in any such court has been brought in an inconvenient forum. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LAWSUIT, ACTION, CLAIM OR OTHER PROCEEDING BASED
UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT IS EXPRESSLY AND IRREVOCABLY WAIVED. - Authority to Enter into Agreement. You hereby represent and warrant to the Company that this Agreement has been duly authorized by all necessary organizational action, has been duly executed and delivered by one of your officers and is enforceable against you in accordance with its terms.
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- Entire Agreement. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof, and supersedes all prior negotiations, understandings, arrangements, agreements and discussions, whether oral or written, between the Parties or their Representatives related to the subject matter hereof. In the event of any additional terms or a conflict between this Agreement, on the one hand, and the terms of any confidentiality legend set forth in a confidential information memorandum (or similar documents) related to the Possible Transaction or the terms of any "click-through" agreement or other acknowledgement related to any internet-based data room or similar repository of Confidential Information, on the other hand, the terms of this Agreement shall govern and control.
- Assignment; Third Party Beneficiaries. This Agreement and the rights and obligations herein may not be assigned or otherwise transferred, in whole or in part, by either Party without the written consent of the other Party, provided, however, that the Company may assign all of its rights, powers, privileges and obligations under this Agreement to its affiliates or to any person who enters into a transaction with the Company that is similar to the Possible Transaction. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Any attempted assignment not in compliance with this Agreement shall be void ab initio and this Agreement is not intended to, and does not, confer upon any person other than the Parties any rights or remedies hereunder, provided that each of the entities that is included in the definition of "Company" is an express, third-party beneficiary of this Agreement.
- No Modification. No provision of this Agreement can be waived, modified or amended without the prior written consent of the Parties, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment. It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
- Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed an original and all of which taken together shall constitute one instrument. Delivery and exchange of an executed counterpart by electronic means (including by portable document format or by facsimile) shall be deemed to have the same effect as delivery of a manually executed counterpart containing an original signature.
- Severability. If any term or provision of this Agreement is found to violate any law, statute, regulation, rule, order or decree of any governmental authority, court or agency, such invalidity shall not be deemed to affect any other term or provision hereof or the validity of the remainder of this Agreement, and there shall be substituted for the invalid term or provision a substitute term or provision that shall as nearly as possible achieve the intent of the invalid term or provision.
- Term. Except for those provisions that have an earlier termination date, this Agreement and the obligations set forth herein shall terminate and cease to have any force and effect two (2) years from the date of this Agreement; provided that (i) such termination shall not relieve you or your Representatives of any liability for any breach of this Agreement by you or your Representatives prior to such termination and (ii) Section 3 of this Agreement and the obligations arising thereunder shall survive such termination in accordance with the terms set forth therein.
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- Notices. All notices to be given to the Company hereunder shall be in writing and delivered personally or by overnight courier, addressed to Domenick Dicicco at 3450 Buschwood Park Drive, Suite 200, Tampa, Florida 33618, Attn: Domenick Dicicco, or by email to ddicicco@bfyt.com. All notices to be given to you hereunder shall be in writing and delivered personally or by overnight courier, addressed to Madison Dearborn Partners, LLC, on behalf of its Fund VIII private equity funds at 70 West Madison Street, Suite 4600, Chicago, IL 60602 , Attn: Legal, or by email to legal@mdcp.com.
- NFP Corp., Kaufman Hall & Associates and Ankura Consulting, and any of their respective controlled affiliates (any such person, a
"Portfolio Company Consultant") shall be permitted to provide you with insurance, healthcare and other due diligence services in connection with the Possible Transaction in the ordinary course of such Portfolio Company Consultant's business (subject to your and your Representatives' obligations hereunder, including with respect to the use and disclosure of any Confidential Information) and any such Portfolio Company Consultant shall not be deemed to be an "affiliate" hereunder, to the extent such Portfolio Company Consultant's role in the Possible Transaction and receipt of Confidential Information is solely to provide such due diligence services to you in connection with the Possible Transaction. For the avoidance of doubt, if such Portfolio Company Consultant receives or has access to Confidential Information from you, your Representatives acting on your behalf or on your or such Representatives' behalf, such person will be considered a Representative hereunder.
21. Notwithstanding anything to the contrary provided elsewhere herein, none of your affiliates, including your related private equity funds, or your or their portfolio companies will be deemed to be your Representatives hereunder solely due to the fact that one or more of your or any such affiliates' partners, officers or employees who has received or had access to any Confidential Information serves as an officer or member of the board of directors (or similar governing body) of such affiliate or portfolio company; provided that such partner, officer or employee does not (i) provide or otherwise make available any Confidential Information and does not disclose the existence of a Possible Transaction to the other partners, directors, officers or employees of such affiliate or portfolio company or (ii) act on behalf of such affiliate or portfolio company based on (or otherwise direct, encourage or cause such affiliate or portfolio company to act based on) any Confidential Information or in connection with the Possible Transaction.
[Remainder of Page Intentionally Left Blank]
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Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this Agreement shall become a binding agreement between the Company and you.
Very truly yours,
BENEFYTT TECHNOLOGIES, INC.
By: /s/ Domenick Dicicco
Name: Domenick Dicicco
Title: General Counsel & Chief Compliance Officer
Accepted and agreed as of the date first written above:
MADISON DEARBORN PARTNERS, LLC, ON BEHALF OF ITS FUND VIII PRIVATE EQUITY FUNDS
By: /s/ Usman Shakeel
Name: Usman Shakeel
Title: Associate General Counsel
[SIGNATURE PAGE TO CONFIDENTIALITY AGREEMENT]
Exhibit (d)(3)
June 12, 2020
PRIVATE AND CONFIDENTIAL
Benefytt Technologies, Inc.
3450 Buschwood Park Drive, Suite 200
Tampa, Florida 33618
Re: Exclusivity
Ladies and Gentlemen:
In connection with the consideration by Madison Dearborn Partners, LLC, on behalf of itself and certain investment funds it advises ("Buyer") of a possible negotiated transaction (the "Transaction") involving Benefytt Technologies, Inc. (the "Company") and to induce Buyer to devote time and resources and to incur expenses in connection therewith, by the execution and delivery of this exclusivity agreement (this "Agreement") and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and agreed, the Company covenants and agrees with Buyer as follows:
1. Exclusivity. During the Exclusivity Period (as defined below), the Company shall not, and shall cause its subsidiaries and direct its and their respective directors, officers, employees, financial advisors, attorneys, agents and other representatives (collectively, "Representatives") not to, directly or indirectly, (a) solicit, initiate, pursue, knowingly facilitate, knowingly encourage, engage in, or otherwise enter into any discussions, negotiations, agreements, commitments or arrangements with any person or entity (other than Buyer or its Representatives) concerning (i) any merger, consolidation, joint venture, investment, financing, change of control or other similar combination, recapitalization, reorganization or transaction involving the Company or any of its subsidiaries, (ii) any purchase or acquisition of equity or any security convertible into equity of the Company (other than pursuant to the exercise of employee incentives outstanding pursuant to the Company's security-based compensation arrangements) or any of its subsidiaries,
- any sale or other transfer or disposition (whether by sale, license or other means) of all or a portion of the assets of the Company or any of its subsidiaries (other than in the ordinary course of business) or (iv) any other similar transaction involving the Company or any of its subsidiaries (any of the foregoing, a "Competing Transaction") or (b) grant any waiver, amendment or release concerning a Competing Transaction under any standstill or confidentiality agreement. During the Exclusivity Period, the Company shall, and shall cause its subsidiaries and direct its and their respective Representatives to, immediately cease and cause to be terminated any and all contacts, discussions, access to information (other than access to information that is available in a "virtual data room" as of the date of this Agreement and only to the persons with access to such virtual data room as of the date of this Agreement) and negotiations with third parties with respect to a Competing
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Transaction or that could reasonably be expected to lead to a Competing Transaction. If, during the Exclusivity Period, the Company or any of its subsidiaries or their respective Representatives receives any inquiry, offer, proposal or expression of interest regarding a Competing Transaction (or any proposed amendment or modification thereto (including of any inquiry, offer, proposal or expression of interest regarding a Competing Transaction received prior to the date of this Agreement)), the Company shall (x) as promptly as reasonably practicable notify Buyer of such receipt and (y) other than confirming receipt, not contact or respond to such person. The parties hereby agree that the Company shall be responsible for any breach of the terms of this Agreement by its subsidiaries and its Representatives.
- Information. During the Exclusivity Period, (a) the Company shall afford to Buyer and its Representatives reasonable access to information and materials regarding the Company and its subsidiaries and their respective businesses requested by Buyer in order to facilitate Buyer's evaluation of a Transaction and (b) Buyer shall promptly notify the Company if Buyer determines it is no longer interested in pursuing a Transaction or that Buyer intends to reduce the per share price of $31.00 in cash included in the non-binding indication of interest delivered to the Company's advisor on June 11, 2020.
- Exclusivity Period. The provisions of paragraphs 1 and 2 of this Agreement shall continue until the earliest to occur of (a) 11:59 p.m. EST on July 5, 2020, (b) the execution and delivery of a Transaction Agreement (as defined below) between Buyer and the Company with respect to a Transaction and (c) Buyer providing notice to the Company pursuant to paragraph 2(c) above (such period, including any extensions thereof, the "Exclusivity Period") and shall automatically expire at such time unless extended by agreement of the parties.
- No Obligation. Each party understands and agrees that (i) neither party will be under any legal obligation with respect to the Transaction by virtue of this Agreement or any other written or oral expression, except for the obligations expressly set forth in this Agreement and in the Confidentiality Agreement (as defined below) and (ii) no contract or agreement providing for a Transaction between the parties shall be deemed to exist between the parties, in each case, unless and until a definitive written agreement setting forth the terms, conditions and other provisions relating to a Transaction (a "Transaction Agreement") has been executed and delivered. For purposes of this Agreement, the term "Transaction Agreement" does not include an executed letter of intent, unless by its express terms it is said to be a binding letter of intent, or any other preliminary written agreement nor does it include any written or verbal acceptance of an offer or bid on the part of either party.
- Injunctive Relief. It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement and that without prejudice to any rights or remedies at law or in equity otherwise available, either party shall, if the other party breaches any provision of this Agreement, be entitled to seek injunctive relief, specific performance or other appropriate equitable remedies for any such breach without posting any bond or similar security. No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
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- Attorneys' Fees and Litigation Costs. If either party files a lawsuit against the other to enforce any provision of this Agreement applicable to such other party, the substantially prevailing party in the lawsuit, as determined by a court, shall be awarded, in addition to any amounts or relief otherwise awarded, all reasonable costs of litigation incurred in connection with the lawsuit, including reasonable attorneys' fees.
- Severability. The provisions of this Agreement shall be severable if any of the provisions hereof are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. In the case of any such invalid, void or unenforceable provision, a suitable and equitable provision shall be substituted therefore in order to carry out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, void or unenforceable provision and this Agreement.
- Governing Law and Venue; Waiver of Jury Trial. This Agreement, and all claims, proceedings or causes of action (whether in contract, tort, statute or otherwise) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, shall be governed by, construed and enforced in accordance with the internal laws of the State of Delaware, without giving effect to any laws, rules or provisions (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 and without regard to any borrowing statute that would result in the application of the statute of limitations of any other jurisdiction. Each party hereby irrevocably and unconditionally (a) consents and submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in the City of Wilmington, Delaware (or, solely in the event the Court of Chancery of the State of Delaware declines to exercise such jurisdiction, the exclusive jurisdiction of any federal or state court sitting in the City of Wilmington, Delaware) (collectively, the "Courts"), for any lawsuits, actions, claims or other proceedings that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and (b) waive any objection you may now or may hereafter have to laying of venue in the Courts, including, without limitation, based on improper venue or forum non conveniens. Each party agrees not to commence any such lawsuit, action, claim or other proceeding except in the Courts. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LAWSUIT, ACTION, CLAIM OR OTHER
PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT IS EXPRESSLY AND IRREVOCABLY WAIVED. - Confidentiality. Each of the parties agrees that the provisions of that certain confidentiality agreement between the parties, dated May 21, 2020 (the "Confidentiality Agreement"), shall apply to this Agreement and the terms hereof.
- Entire Agreement. This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement of the parties relating to the subject matter hereof and supersede all other prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement may be waived, amended or modified only by an instrument in writing signed by the party against which such waiver, amendment or modification is sought to be enforced, and such written instrument shall set forth specifically the provisions of this Agreement that are to be so waived, amended or modified. Neither party hereto shall assign this Agreement or its rights or obligations hereunder without the prior written consent of the other party.
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- Headings. The headings in this Agreement are for convenience of reference only and will not limit or otherwise affect the meaning of provisions contained herein.
- Counterparts. This Agreement may be executed in any number of counterparts, each of such counterparts shall for all purposes be deemed an original and all such counterparts shall together constitute but one and the same instrument. Delivery and exchange of an executed counterpart by electronic means (including by portable document format or by facsimile) shall be deemed to have the same effect as delivery of a manually executed counterpart containing an original signature.
- Notices. All notices to be given to Buyer hereunder shall be in writing and delivered personally or by overnight courier, addressed to Madison Dearborn Partners, LLC at 70 West Madison Street, Suite 4600, Chicago, Illinois 60602, Attn: Legal, or by email to legal@mdcp.com. All notices to be given to the Company hereunder shall be in writing and delivered personally or by overnight courier, addressed to Domenick DiCicco at 3450 Buschwood Park Drive, Suite 200, Tampa, Florida 33618, Attn: Domenick DiCicco, or by email to ddicicco@bfyt.com.
[Signature page follows]
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Please confirm acceptance of, and agreement with, the foregoing by signing one copy of this Agreement and returning it (by mail, by facsimile transmission, .pdf document, or by any other form of delivery) to the undersigned.
Very truly yours,
MADISON DEARBORN PARTNERS, LLC,
on behalf of itself and certain investment funds it advises
By: /s/ Vahe Dombalagian
Name:Vahe Dombalagian
Title: Managing Director
Agreed to and accepted as of the date first written above:
BENEFYTT TECHNOLOGIES, INC.
By: /s/ Domenick DiCicco
Name: Domenick DiCicco
Title: General Counsel & Chief Compliance Officer
[SIGNATURE PAGE TO EXCLUSIVELY AGREEMENT]
Exhibit (d)(4)
July 3, 2020
PRIVATE AND CONFIDENTIAL
Benefytt Technologies, Inc.
3450 Buschwood Park Drive, Suite 200
Tampa, Florida 33618
Re: Amendment No. 1 to Exclusivity Agreement
Ladies and Gentlemen:
This Amendment No. 1 (the "Amendment") to that certain Exclusivity Agreement (the "Agreement") dated as of June 12, 2020, by and between Madison Dearborn Partners, LLC, on behalf of itself and certain investment funds it advises ("Buyer") and Benefytt Technologies, Inc. (the "Company"), is entered into as of July 3, 2020, by and between the same parties. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement. In order to induce Buyer to continue to devote time and resources and to incur expenses in connection with the Transaction, by the execution and delivery of this Amendment and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and agreed, the Company covenants and agrees with Buyer as follows:
1. Exclusivity Period. Section 3 of the Agreement shall be amended to read in its entirely as follows:
The provisions of paragraphs 1 and 2 of this Agreement shall continue until the earliest to occur of (a) 11:59 p.m. EST on July 12, 2020, (b) the execution and delivery of a Transaction Agreement (as defined below) between Buyer and the Company with respect to a Transaction and
- Buyer providing notice to the Company pursuant to paragraph 2(c) above (such period, including any extensions thereof, the "Exclusivity Period") and shall automatically expire at such time unless extended by agreement of the parties.
- No Other Amendments: Other than as expressly set forth in Section 1of this Amendment, no other terms or conditions of the Agreement shall be amended or modified hereby and all other terms and conditions of the Agreement shall remain in full force and effect in accordance with their terms.
- Governing Law and Venue; Waiver of Jury Trial. This Amendment, and all claims, proceedings or causes of action (whether in contract, tort, statute or otherwise) that may be based upon, arise out of or relate to this Amendment, or the negotiation, execution or performance of this Amendment, shall be governed by, construed and enforced in accordance with the internal laws of the State of Delaware, without giving effect to any laws, rules or
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provisions (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 and without regard to any borrowing statute that would result in the application of the statute of limitations of any other jurisdiction. Each party hereby irrevocably and unconditionally (a) consents and submits to the exclusive jurisdiction of the Courts, for any lawsuits, actions, claims or other proceedings that may be based upon, arise out of or relate to this Amendment, or the negotiation, execution or performance of this Amendment and (b) waive any objection you may now or may hereafter have to laying of venue in the Courts, including, without limitation, based on improper venue or forum non conveniens. Each party agrees not to commence any such lawsuit, action, claim or other proceeding except in the Courts. ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LAWSUIT, ACTION, CLAIM OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS AMENDMENT IS EXPRESSLY AND IRREVOCABLY WAIVED.
[Signature page follows]
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Please confirm acceptance of, and agreement with, the foregoing by signing one copy of this Amendment and returning it (by mail, by facsimile transmission, .pdf document, or by any other form of delivery) to the undersigned.
Very truly yours,
MADISON DEARBORN PARTNERS, LLC,
on behalf of itself and certain investment funds it advises
By: /s/ Vahe Dombalagian
Name: Vahe A. Dombalagian
Title: Managing Director
Agreed to and accepted as of the date first written above:
BENEFYTT TECHNOLOGIES, INC.
By: /s/ Domenick DiCicco
Name: Domenick DiCicco
Title: General Counsel & Chief Compliance Officer
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO EXCLUSIVITY AGREEMENT]
Exhibit (d)(5)
MADISON DEARBORN CAPITAL PARTNERS VIII-A,L.P.
MADISON DEARBORN CAPITAL PARTNERS VIII-C,L.P.
MADISON DEARBORN CAPITAL PARTNERS VIII EXECUTIVE-A,L.P.
70 WEST MADISON STREET, SUITE 4600
CHICAGO, IL 60602
July 12, 2020
Daylight Beta Parent Corp.
Re: Equity Financing Commitment
Ladies and Gentlemen:
This letter agreement sets forth the commitment of Madison Dearborn Capital Partners VIII-A, L.P, Madison Dearborn Capital Partners VIII-C, L.P., Madison Dearborn Capital Partners VIII Executive-A, L.P., each a Delaware limited partnership (each of the foregoing, an "Investor" and collectively, the "Investors"), subject to the terms and conditions hereof, to, directly or indirectly, purchase equity securities of Daylight Beta Parent Corp., a Delaware corporation ("Parent"). Reference is hereby made to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of the date hereof, by and among Parent, Daylight Beta Corp., a Delaware corporation and Benefytt Technologies, Inc., a Delaware corporation (the "Company"). Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed to them in the Merger Agreement.
- Upon the terms and subject to the conditions set forth herein, the Investors hereby collectively commit to purchase (or cause an assignee permitted under this letter agreement to purchase), directly or indirectly, at or immediately prior to the Closing, equity securities of Parent for an aggregate purchase price equal to $505,000,000 (the "Commitment"), which amount, when taken together with the proceeds of the Debt Financing, shall be available for use by Parent solely for the purpose of allowing Parent, on the terms and subject to the conditions of the Merger Agreement, to pay the amounts payable by Parent at the Offer Acceptance Time pursuant to Section 1.1(g)(ii) and at Closing pursuant to Article IV of the Merger Agreement and to pay related fees and expenses incurred by Parent in connection with the Offer and the Merger (collectively, the "Closing Payments"). Parent agrees to sell, or otherwise issue, such equity securities of Parent (or cause equity securities of a parent company of Parent to be sold or otherwise issued) upon an Investor's payment of its portion of the Commitment. The Investors' obligation to fund in connection with the Offer and the Merger shall in no event exceed the Commitment in the aggregate, and the obligation of the Investors to fund the Commitment may be reduced (a) by each Investor in its sole discretion on a dollar-for-dollar basis for purchases in cash actually made and funded to Parent on or prior to the Closing by co-investors (including Affiliates of any of the Investors) for equity securities of Parent and provided that the cash amount so purchased remains funded and available for use by Parent to make the Closing Payments and (b) as mutually agreed to by all Investors solely to the extent that Parent does not require the full Commitment to fund the Closing Payments upon the substantially simultaneous consummation of the Offer and the Merger (the "Transactions").
- Each Investor's obligations under this letter agreement, including the obligation of each Investor to fund the Commitment, are, in each case, subject to (a) the execution and delivery of the Merger Agreement by Parent, Merger Sub and the Company and there having been no amendment or modification to the Merger Agreement other than in accordance with Section 9.2 of the Merger
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Agreement, (b) the satisfaction or waiver by Parent of each of the conditions to Parent's obligations to consummate the Transactions contained in the Merger Agreement other than any conditions that by their nature are to be satisfied at the Offer Acceptance Time or the Closing, as applicable, but subject to the prior or substantially concurrent satisfaction (or waiver by Parent) of such conditions, (c) the consummation of the Transactions in accordance with the terms of the Merger Agreement (including to the extent that the Company obtains, in accordance with the terms and subject to the satisfaction of the conditions set forth in Section 9.13 of the Merger Agreement, an order requiring Parent to specifically perform its obligations pursuant to the terms of the Merger Agreement to cause the Commitment to be funded in connection with the consummation of the Transactions) and the contemporaneous issuance of equity securities of Parent to the Investors, directly or indirectly, and (d) the consummation and funding of the Debt Financing on the terms set forth in the Debt Commitment Letter (or, if Alternative Financing is being used in accordance with Section 6.15(e) of the Merger Agreement such Alternative Financing on the terms set forth in the Debt Commitment Letter with respect thereto) prior to or contemporaneously with such funding by the Investors. For the avoidance of doubt, the obligations of Parent under the Merger Agreement shall be determined in accordance with the terms thereof, and nothing in this letter agreement shall amend, modify, or waive any of the terms of the Merger Agreement or any defenses that Parent may have to any assertion of liability or obligation against it under the Merger Agreement, other than Parent's obligation to issue and sell (or cause Parent to issue and sell) equity securities in satisfaction of the Commitment in accordance with the terms hereof. Notwithstanding anything to the contrary in this letter agreement, each of the Investors agrees and acknowledges that if, in accordance with Section 9.13 of the Merger Agreement, the Company is entitled to specific performance of Parent's and Merger Sub's obligations to consummate the Closing under the Merger Agreement, such Investor will not oppose the granting of specific performance on the basis that Parent or the Company has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.
-
The obligation of the Investors to fund the Commitment shall, in each case, automatically and immediately terminate upon the earliest to occur of
(a) the Closing, provided that the Investors shall prior thereto have fully funded and paid the Commitment (as such amount may be reduced as expressly provided herein) to Parent, directly or indirectly, (b) the valid termination of the Merger Agreement in accordance with its terms, provided Sections 5through 7 and Sections 14and 15hereof shall survive such termination, (c) the Company or any of its Affiliates or Representatives filing or otherwise commencing any Proceeding against, any Investor, any Investor Affiliate, Parent or Merger Sub relating to this letter agreement, the Limited Guarantee, the Offer, the Merger Agreement, the Debt Commitment Letter or any transaction contemplated hereby or thereby other than Retained Claims (as defined in, and to the extent permitted under, Section 4(c) of the Limited Guarantee), in each case, subject to all of the terms, conditions and limitations herein and therein or (d) the occurrence of any event which, by the terms of the Limited Guarantee, is an event which terminates or satisfies any Guarantor's obligations or liabilities under the Limited Guarantee. For purposes of this letter agreement, the term "Investor Affiliate"means (i) any former, current or future direct or indirect general or limited partner, stockholder, holder of any equity, partnership or limited liability company interest, officer, member, manager, director, employee, agent, attorney, controlling Person, assignee or Affiliate of any Investor or Parent, or (ii) any former, current or future direct or indirect general or limited partner, stockholder, holder of any equity, partnership or limited liability company interest, officer, member, manager, director, employee, agent, attorney, controlling Person, assignee or Affiliate of any of the foregoing (other than the Investors or any Affiliate of the Investors that has executed this letter agreement in favor of the Company). - The Commitment set forth herein shall not be assignable by Parent without each Investor's prior written consent (and, if assigned to any Person other than an Affiliate of Investor, prompt notice of
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any such assignment shall be provided to the Company by the Investors), and the granting of such consent in a given instance shall be solely in the discretion of the Investors and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. All or any portion of the Commitment set forth herein may be assigned by any Investor to any other Investor, any additional equity co-investor and/or their respective Affiliates and affiliated funds; provided, however,that no such assignment shall relieve any Investor of its obligations under this letter agreement (including reducing the Commitment) except to the extent actually funded by the assignee to Parent for consummation of the Transactions. Any transfer in violation of either of the two preceding sentences shall be null and void. This letter agreement, together with the Limited Guarantee and the Merger Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior arrangements and understandings with respect thereto.
- Other than as required by Law or the rules of any national securities exchange or as required or requested by the SEC in connection with any SEC filings relating to the transactions contemplated by the Merger Agreement, each of the parties agrees that it will not, nor will it permit its advisors or Affiliates to, disclose to any Person the contents of this letter agreement, other than to the Company and its Representatives who are instructed to maintain the confidentiality of this letter agreement in accordance herewith. Without limiting the foregoing, Parent, the Investors and the Company shall have the right to make such disclosure (a) in connection with the enforcement of this letter agreement, the Merger Agreement or the Limited Guarantee or any litigation in connection herewith or therewith and (b) to the extent required by applicable Law or in connection with any filings with any Governmental Entity having jurisdiction over such party or its Affiliates; provided that any reference to this letter agreement in any such SEC filings shall be in form and substance agreed by the parties hereto.
- Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered in connection herewith, each party hereto, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than the Investors and Parent (with respect to the issuance of equity securities or the causing of the issuance of equity securities as provided herein) has obligations hereunder and that, notwithstanding that each of the Investors is a partnership, no Person has any remedy, recourse or right of recovery against, or contribution from any Investor Affiliate, through any Investor, Parent, or otherwise, whether by or through attempted piercing of the corporate veil or similar action, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law, by or through a claim by or on behalf of any Investor or Parent against any Investor or any Investor Affiliate, or otherwise, except for any such Person's rights against the Investors under this letter agreement; provided, that this sentence shall not in any respect limit the Company's right to assert any Retained Claim in accordance with the Limited Guarantee.
- This letter agreement is solely for the benefit of Parent and the Investors and is not intended to, nor does it, confer any benefits on, or create any rights or remedies in favor of, any Person other than Parent; provided, however, that (a) each Investor Affiliate is an intended third party beneficiary of the covenants and agreements of Sections 6and 7hereof, (b) each Indemnified Person (as defined below) is an intended third party beneficiary of the covenants and agreements of Section 11hereof, and (c) the Company is an express intended third party beneficiary of this letter agreement and shall be entitled to enforce the terms of this letter agreement and to cause Parent to enforce this letter agreement solely in accordance with Section 9.13(b) of the Merger Agreement. In no event shall any of Parent's creditors have any right to enforce this letter agreement or to cause Parent to enforce this letter agreement. Notwithstanding anything in this letter agreement to the contrary, the Company shall have the right to cause Parent to enforce this letter agreement, provided,that the
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Company shall only be able to enforce their right to cause Parent to enforce this letter agreement if each of the conditions to obtaining specific performance in Section 9.13 of the Merger Agreement have been satisfied. Except as expressly set forth in the immediately preceding sentence or as otherwise expressly set forth herein, no obligation contained in or arising from this letter agreement will be enforceable by way of specific performance.
- Concurrently with the execution and delivery of this letter agreement, the Investors are executing and delivering to the Company a Limited Guarantee related to Parent's obligation to pay the Parent Termination Fee under the Merger Agreement (the "Limited Guarantee"). None of the Investors or any of their respective Affiliates shall have any liability to the Company or its Affiliates other than as described in Sections (4)(c) and 4(d) of the Limited Guarantee.
- Each Investor hereby represents and warrants to Parent with respect to itself that (a) it is a limited partnership, validly existing and in good standing under the laws of its jurisdiction of formation and it has all limited partnership power and authority to execute, deliver and perform this letter agreement; (b) the execution, delivery and performance of this letter agreement by such Investor has been duly and validly authorized and approved by all necessary limited partnership action, and no other proceedings or actions on the part of such Investor are necessary therefor; (c) all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Entity necessary for the due execution, delivery and performance of this letter agreement by such Investor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Entity or regulatory body is required in connection with the execution, delivery or performance of this letter agreement; (d) this letter agreement has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against such Investor in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect affecting creditors' rights generally, or by principles governing the availability of equitable remedies; (e) the execution, delivery and performance by such Investor of this letter agreement does not and will not (i) contravene, conflict with or result in any violation of any provision of the organizational documents of the Investor, (ii) contravene, conflict with or result in any violation of any applicable Law, rule, regulation, decree, order or judgment binding on such Investor or its assets or (iii) contravene, conflict with or result in any violation of or default (with or without notice or lapse of time or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any contract or agreement to which such Investor is a party; and (f) such Investor has, and, until the termination of this letter agreement in accordance with the terms hereof, will have, the financial capacity to pay and perform its obligations under this letter agreement, and all funds necessary for such Investor to fulfill its Commitment under this letter agreement shall be available to such Investor for so long as this letter agreement shall remain in effect in accordance with Section 3hereof.
- Each party acknowledges and agrees that (a) this letter agreement is not intended to, and does not, create any agency, partnership, fiduciary or joint venture relationship between or among any of the parties hereto and neither this letter agreement nor any other document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise, (b) the obligations of each of the Investors under this letter agreement are solely contractual in nature and (c) the determinations of each Investor were independent of each other. Notwithstanding anything to the contrary contained in this letter agreement, the liability of each Investor hereunder shall be several, not joint and several, based upon its respective Pro Rata Percentage, and no Investor shall be liable in the aggregate for any amounts hereunder in excess of its Pro Rata Percentage of the Commitment or such lesser amount as may be required to be paid by the Investors. The "Pro Rata Percentage" of each Investor is as set forth below:
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Madison Dearborn Capital Partners VIII-A, L.P. | 66.2399% |
Madison Dearborn Capital Partners VIII-C, L.P. | 27.8059% |
Madison Dearborn Capital Partners VIII Executive-A, L.P. | 5.9542% |
- Parent agrees that, from and after the date hereof, it will, or will cause one or more of its Subsidiaries to, pay, indemnify and hold harmless each of the Investors and each of the Investor Affiliates (collectively, the "Indemnified Persons") from and against any and all actions, suits, proceedings (including any investigations or inquiries), losses, claims, damages, liabilities, fees, costs or expenses of any kind or nature whatsoever ("Losses") which may be suffered, incurred by or asserted against or involve the Indemnified Persons as a result of or arising out of or in any way related to the transactions described in this letter agreement, the Limited Guarantee (including with respect to the Guaranteed Obligations) or the Debt Commitment Letter; provided, however, that the foregoing will not apply to any Losses of an Indemnified Person to the extent found by a final and non-appealable order of a court referenced in Section 14hereof, to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. Parent further agrees to pay or reimburse to any Indemnified Person upon demand any legal or other expenses incurred by the Indemnified Person in connection with investigating, defending, or preparing to defend any such action, suit, claim or proceeding (including any inquiry or investigation). The provisions of this Section 11are independent of all other obligations of Parent hereunder and shall survive termination or expiration of the Commitment embodied in this letter agreement. Parent agrees that no Indemnified Person shall be required to (but, at its sole election, may) seek indemnification from any other Person or Persons with respect to any matter for which such Indemnified Person is entitled to indemnification hereunder and agrees, for the benefit of each Investor and each Investor Affiliate to waive any right to contribution from any such Investor or Investor Affiliate; provided, that the foregoing shall not be deemed to limit or waive any contractual rights that Parent may have against any Investor or Investor Affiliate. PARENT HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL LOSSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF THE INVESTORS OR ANY OTHER INDEMNIFIED PERSON. NOTWITHSTANDING THE FOREGOING, NO PAYMENT SHALL BE MADE UNDER THIS SECTION 11, UNTIL THE COMMITMENT HAS BEEN FUNDED AND ALL OF PARENT'S PAYMENT OBLIGATIONS UNDER THE MERGER AGREEMENT AT THE CLOSING HAVE BEEN DISCHARGED IN FULL.
- This letter agreement may not be amended or otherwise modified, in whole or in part, and no provision of this letter agreement may be waived, without the prior written consent of Parent, each of the Investors and the Company.
-
Notices, requests, instructions, waivers or other documents to be given under this letter agreement shall be in writing and shall be deemed given,
(a) when delivered, if delivered personally to the intended recipient, (b) when sent by email (without any "bounceback" or other notice of nondelivery) and (c) one (1) Business Day later, if sent by overnight delivery via a national courier service (providing proof of delivery), and in each case, addressed to a party at the following address for such party:
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(a) If to any Investor (addressed in such Investor's name):
c/o Madison Dearborn Partners, LLC Three First National Plaza
Suite 4600
70 West Madison Street
Chicago, Illinois 60602 Attention: Legal Department
Email: legal@mdcp.com
with a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
300 North LaSalle Street Chicago, IL 60654
Attention: Richard J. Campbell, P.C. Adam T. Clifford
Email: richard.campbell@kirkland.com adam.clifford@kirkland.com
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022 United States Attention: Sarkis Jebejian, P.C.
Email: sarkis.jebejian@kirkland.com
(b) If to the Company:
Benefytt Technologies, Inc.
3450 Buschwood Park Drive Suite 200
Tampa, Florida 33618 Attention: Erik Helding
Email: heldinge@bfyt.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP 767 Fifth Avenue
New York, New York 10153
Attention: Michael J. Aiello Eoghan P. Keenan
Email: michael.aiello@weil.com eoghan.keenan@weil.com
14. THIS LETTER AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OR CHOICE OF LAW PRINCIPLES THEREOF. Each of the parties hereto hereby irrevocably and unconditionally
(A) consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware in the event any of any dispute arising out of or
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related to this letter agreement or any of the transactions contemplated hereby, (B) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (C) agrees that it will not, and waives any right to, bring any Action relating to or arising out of this letter agreement or any of the transactions contemplated hereby in any court other than the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware, and (D) waives any objection that it may now or hereafter have to the venue of any such Action in the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware or that such Action was brought in an inconvenient forum and agrees not to plead or claim the same. Each party hereto hereby agrees that and consents to service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 13shall be effective service of process for any Action in connection with this letter agreement or the transactions contemplated hereby.
- EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE COMPANY (ON BEHALF ITSELF AND ITS SUBSIDIARIES) AND EACH OF THE OTHER PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO ANY DEBT FINANCING OBTAINED BY THE ISSUER, PARENT OR ANY OF ITS SUBSIDIARIES IN CONNECTION WITH THE OFFER, THE MERGER OR THE PERFORMANCE THEREOF OR THE TRANSACTIONS CONTEMPLATED THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
- EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 15.
- This letter agreement may be executed in any number of counterparts (including by facsimile or by attachment to electronic mail in portable document format (PDF)), each such counterpart being deemed to be an original instrument, and all such counterparts, taken together, shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.
* * * * * * *
If this letter agreement is agreeable to you, please so indicate by signing in the space indicated below.
Very truly yours,
MADISON DEARBORN CAPITAL PARTNERS VIII-A,
L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII-C,
L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII
EXECUTIVE-A, L.P.
By: Madison Dearborn Partners VIII-A&C, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
Accepted and agreed as of July 12, 2020
PARENT:
DAYLIGHT BETA PARENT CORP.
By: | /s/ Vahe Dombalagian |
Name: | Vahe Dombalagian |
Its: | Managing Director |
Signature Page to Equity Commitment Letter
Exhibit (d)(6)
LIMITED GUARANTEE
This Limited Guarantee, dated as of July 12, 2020 (this "Limited Guarantee"), by Madison Dearborn Capital Partners VIII-A, L.P, Madison Dearborn Capital Partners VIII-C, L.P., Madison Dearborn Capital Partners VIII Executive-A, L.P., each a Delaware limited partnership (each of the foregoing, a "Guarantor" and collectively, the "Guarantors") is made in favor of Benefytt Technologies, Inc., a Delaware corporation (the "Company"). Reference is hereby made to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of the date hereof, by and among Daylight Beta Parent Corp. a Delaware corporation ("Parent"), Daylight Beta Corp., a Delaware corporation, and the Company. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.
- Limited Guarantee. Subject to the terms and conditions hereof, the Guarantors, in accordance with their respective Pro Rata Percentages (as hereinafter defined), hereby absolutely, irrevocably and unconditionally guarantee to the Company, the due, punctual and complete observance, performance, payment and discharge of Parent's obligation to pay the Parent Termination Fee pursuant to the terms and conditions of Section 8.5 of the Merger Agreement (the "Guaranteed Obligation") solely to the extent such Parent Termination Fee is determined by a court of competent jurisdiction to be due and payable by Parent pursuant to the terms and conditions of the Merger Agreement; provided, that this Limited Guarantee will expire and will have no further force or effect, and the Company and its Affiliates will have no rights hereunder, upon termination of the obligations and liabilities of the Guarantors hereunder in accordance with Section 6hereof. The Company hereby agrees that the Guarantors shall in no event collectively be required to pay more than the Guaranteed Obligation (or, in the case of each Guarantor, its Pro Rata Percentage of the Guaranteed Obligation) or make any payment (other than payment of the Guaranteed Obligation) pursuant to this Limited Guarantee (with it being understood and agreed that, in circumstances where the Parent Termination Fee is owed by Parent, Parent shall have no other payment obligations to the Company and this Limited Guarantee shall be construed accordingly), that no Guarantor or Guarantor Affiliate (as hereinafter defined) shall have any obligation or liability to any Person relating to, arising out of or in connection with, this Limited Guarantee (other than for the Guaranteed Obligation), and that this Limited Guarantee may not be enforced against the Guarantors without giving effect to these limitations (with it being understood and agreed that such limitations are an integral part of each Guarantor executing and delivering this Limited Guarantee and no Guarantor would have delivered this Limited Guarantee if such limitations were not given full force and effect). For the avoidance of doubt, in no event will the maximum amount of the Guaranteed Obligation exceed $29,400,000 in the aggregate. All payments hereunder shall be made in lawful money of the United States, in immediately available funds.
- Terms of Limited Guarantee.
- This Limited Guarantee is an absolute, irrevocable and unconditional guarantee of payment, not collection, and a separate Proceeding may be brought and prosecuted against the Guarantors to enforce this Limited Guarantee, irrespective of whether any action is brought against Parent, any other Guarantor, or any other Person, or whether Parent, any other Guarantor, or any other Person is joined in any such Proceeding.
- Except as otherwise provided herein and without amending or limiting the other provisions of this Limited Guarantee (including Section 6hereof), the liability of the Guarantors under this Limited Guarantee shall, to the fullest extent permitted under applicable Law, be absolute and unconditional irrespective of, and each Guarantor hereby agrees that none of the Guaranteed Obligation shall be released or discharged in whole or in part, or otherwise affected by:
- any change in the corporate existence, structure, ownership limitation of status or power, incapacity, disability or other legal limitation of Parent or any Guarantor, or any insolvency, bankruptcy, reorganization, liquidation, moratorium, fraudulent conveyance or other similar proceeding affecting Parent or any Guarantor or any of their respective assets;
- any waiver, extension, compromise, amendment or modification of the Merger Agreement in accordance with its terms, or change in the time, manner, place or terms of payment or performance, or any change or extension of the time of payment or performance of, renewal or alteration of, any Guaranteed Obligation, any escrow arrangement or other security therefor, any liability incurred directly or indirectly in respect thereof, or any agreement entered into by the Company, on the one hand, and Parent, on the other hand, in connection therewith;
- the existence of any claim, set off or other right that the Guarantors may have at any time against Parent or the Company, whether in connection with any Guaranteed Obligation or otherwise;
-
the failure or delay on the part of the Company to assert any claim or demand or to enforce any right or remedy against Parent or
any Guarantor; - the addition, substitution or release of any Person now or hereafter liable with respect to the Guaranteed Obligation or otherwise interested in the transactions contemplated by the Merger Agreement (including any other Guarantor);
- any change in the Laws, rules, or regulation of any jurisdiction, or any present or future action of any Governmental Entity, amending, varying, reducing or otherwise affecting the validity in enforceability of the Guaranteed Obligation or any of the rights of the Company under the Merger Agreement, this Limited Guarantee or otherwise;
- the adequacy of any means the Company may have of obtaining repayment of the Guaranteed Obligation; or
- or any other act or omission that may or might in any manner or to any extent vary the risk of the Guarantors or otherwise operate as a discharge of the Guarantors as a matter of Law or equity (other than payment of the Guaranteed Obligation or as permitted by Section 2(e)of this Limited Guarantee).
- To the fullest extent permitted by Law, the Guarantors hereby expressly and irrevocably waive any and all (i) rights or defenses related to this Limited Guarantee arising by reason of any Law which would otherwise require any election of remedies by the Company, (ii) promptness, diligence, notice of acceptance of, or reliance on, this Limited Guarantee and of the Guaranteed Obligation, (iii) presentment, demand for payment, default, dishonor and protest, notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligation and notice of any other kind,
- except as otherwise expressly contemplated by this Limited Guarantee, any requirement that the Company exhaust any right, power or remedy or proceed against Parent, Merger Sub, or any other Person, (v) all defenses which may be available by virtue of any stay, moratorium or other similar Law which is now or hereafter in effect and (vi) all suretyship defenses generally (other than those Parent or Merger Sub may validly assert under the Merger Agreement). The Guaranteed Obligation shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Limited Guarantee, and all dealings between Parent or the Guarantors, on the one hand, and the Company, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Limited Guarantee. When pursuing its rights and remedies hereunder against any Guarantor, the Company shall be under no obligation to pursue such rights and remedies it may have against Parent or any other Person for the Guaranteed Obligation or any right of offset with respect thereto, and any failure by the Company to pursue such other rights or remedies or to collect any payments from Parent or such other Person or to realize upon or to exercise any such right of offset shall not relieve any Guarantor of any liability hereunder.
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- The Company shall not be obligated to file any claim relating to any Guaranteed Obligation in the event that Parent becomes subject to a bankruptcy, insolvency, reorganization or similar proceeding, and the failure of the Company to so file shall not affect the Guarantors' obligations hereunder. In the event that any payment to the Company in respect of any Guaranteed Obligation is rescinded or must otherwise be returned for any reason whatsoever, this Limited Guarantee shall continue to be effective or reinstated, as the case may be, and the Guarantors shall remain liable hereunder with respect to the Guaranteed Obligation as if such payment had not been made.
- Notwithstanding any other provision of this Limited Guarantee, the Company hereby agrees that (i) each of the Guarantors may assert, as a defense to, or release or discharge of, any payment or performance by such Guarantor under this Limited Guarantee any good faith claim, set-off, deduction, defense or release that Parent or Merger Sub could assert against the Company under the terms of, or with respect to, the Merger Agreement (including, without limitation, any such claim or defense that the Parent Termination Fee is not then required to be paid by Parent pursuant to the terms and conditions of the Merger Agreement) and (ii) to the extent Parent or Merger Sub is relieved of all or any portion of the Guaranteed Obligations under the Merger Agreement, the Guarantors shall likewise automatically and without any further action on the part of any Person be relieved of a corresponding portion of their obligations under this Limited Guarantee.
- Waiver of Acceptance, Presentment; Etc. Without amending or limiting the other provisions of this Limited Guarantee (including Section 6hereof), the Guarantors irrevocably waive any promptness, diligence, acceptance hereof, presentment, demand, protest and any notice of any kind not provided for herein or not required to be provided to Parent or Merger Sub under or in connection with the Merger Agreement, other than defenses that are validly available to Parent or Merger Sub (i) under the Merger Agreement, (ii) in respect of a breach by the Company of this Limited Guarantee and
- in respect of fraud of the Company or any of its Affiliates in connection with the Merger Agreement or the transactions contemplated thereby. Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.
- Sole Remedy.
- The Company acknowledges and agrees that Parent does not have any assets, other than its rights under the Merger Agreement, the Debt Commitment Letter and the Equity Commitment Letter, and that no funds are expected to be contributed to Parent unless the Offer Acceptance Time and the Closing occur, and that, except for rights against Parent to the extent expressly provided in Section 7 of the Equity Commitment Letter and Sections 8.5 and 9.13 of the Merger Agreement and subject to all of the terms, conditions and limitations herein and therein, the Company shall not have any right to cause any assets to be contributed to Parent by any Guarantor, any Guarantor Affiliate (as hereinafter below) or any other Person.
- The Company further agrees and acknowledges that no Person other than the Guarantors has any obligations hereunder and that, notwithstanding that the Guarantors may be limited partnerships, the Company does not have any remedy, recourse or right of recovery against, or contribution from, (i) any former, current or future direct or indirect general or limited partner, stockholder, holder of any equity, partnership or limited liability company interest, officer, member, manager, director, employee, agent, attorney, controlling Person, assignee or affiliate of any Guarantor,
- Parent or Merger Sub, (iii) any Lender or prospective lender, lead arranger, arranger, agent or representative of or to Parent or
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Merger Sub or (iv) any former, current or future direct or indirect general or limited partner, stockholder, holder of any equity, partnership or limited liability company interest, officer, member, manager, director, employee, agent, attorney, controlling Person, assignee or affiliate of any of the foregoing (other than Parent, Merger Sub and any of the Guarantors) (those Persons and entities described in the foregoing clauses (i) through (iv) being referred to herein collectively as "Guarantor Affiliates"), through any Guarantor, Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil or similar action, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law, by or through a claim by or on behalf of any Guarantor, Parent or Merger Sub against any Guarantor or any Guarantor Affiliate, or otherwise, except for the Retained Claims (as defined below); provided, however, that in the event any Guarantor (x) consolidates with or merges with any other Person and is not the continuing or surviving entity of such consolidation or merger or (y) transfers or conveys all or a substantial portion of its properties and other assets to any Person such that the sum of all of such Guarantor's remaining net assets plus uncalled capital commitment is less than such Guarantor's Pro Rata Percentage (as defined below) of the Parent Termination Fee, then, and in each such case, the Company may seek recourse, whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable Law, against such continuing or surviving entity or such Person (in either case, a "Successor Entity"), as the case may be, but only to the extent of the unpaid liability hereunder up to the applicable Pro Rata Percentage of the Guaranteed Obligation for which such Guarantor is liable, as determined in accordance with this Limited Guarantee. As used herein, unless otherwise specified, the term Guarantor shall include such Guarantor's Successor Entity.
- The Company hereby covenants and agrees that it shall not institute, and shall cause each of its Subsidiaries, Affiliates and their respective Representatives not to institute, directly or indirectly, any Action or bring any claim arising under, or in connection with, this Limited Guarantee, the Offer, the Merger Agreement, the Equity Commitment Letter, the Debt Commitment Letter or the transactions contemplated hereby or thereby, against any Guarantor or any Guarantor Affiliate except for (i) claims by the Company against any Guarantor or any of its permitted assigns or any Successor Entity under, in accordance with and subject to all limitations of this Limited Guarantee (the "Retained Guaranty Claims"), (ii) claims by the Company against Parent under and in accordance with and subject to all limitations set forth in the Merger Agreement (the "Retained Merger Agreement Claims"), (iii) with respect to the Confidentiality Agreement, dated May 21, 2020, between the Company and Madison Dearborn Partners, LLC, on behalf of its Fund VIII private equity funds ("MDP") (the "NDA"), claims by the Company against MDP under and in accordance with the NDA (the "Retained NDA Claims") or (iv) to the extent (but only to the extent) the Company is expressly entitled to enforce the Equity Commitment Letter in accordance with Section 7 of the Equity Commitment Letter and Section 9.13 of the Merger Agreement, and subject to all of the terms, conditions and limitations herein and therein, claims by the Company against Parent seeking to cause Parent to enforce the Equity Commitment Letter in accordance with its terms (the "Retained Equity Commitment Claims" and together with the Retained Guaranty Claims, the Retained Merger Agreement Claims and the Retained NDA Claims, the "Retained Claims"). For the avoidance of doubt, nothing herein shall be deemed or construed to constitute a waiver or release of any Retained Claims.
- Recourse (i) against each Guarantor, as applicable, solely with respect to the Retained Guaranty Claims, (ii) against Parent with respect to the Retained Merger Agreement Claims, (iii) against MDP solely with respect to the Retained NDA Claims and (iv) against Parent and the Investors (as defined in the Equity Commitment Letter) with respect to the Retained Equity Commitment Claims, shall be the sole and exclusive remedy of the Company and all of its Affiliates against any Guarantor or any Guarantor Affiliate in respect of any liabilities or obligations arising under, or in connection with, the Offer, the Merger Agreement, this Limited Guarantee, the Equity Commitment Letter and the NDA or the transactions contemplated thereby and hereby, and such recourse shall be subject to the limitations described herein and therein.
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- By its acceptance of this Limited Guarantee, to the maximum extent permitted by Law (and subject only to the specific contractual provisions of this Limited Guarantee), the Company, on its own behalf and, on behalf of each of the Company Related Parties (collectively, the "Releasing Persons") hereby waives each and every right of recovery against each Guarantor and each Guarantor Affiliate under or in connection with or related to this Limited Guarantee, the Offer, the Merger Agreement, the Equity Commitment Letter, the Debt Commitment Letter or the transactions contemplated hereby or thereby or otherwise relating thereto and hereby releases each Guarantor Affiliate from and with respect to any claim, known or unknown, now existing or hereafter arising, in connection with this Limited Guarantee, the Offer, the Merger Agreement, the Equity Commitment Letter, the Debt Commitment Letter or the transactions contemplated hereby or thereby or otherwise relating thereto, whether by or through attempted piercing of the corporate (or limited liability company or partnership) veil, by or through a claim by or on behalf of any Guarantor, Parent, Merger Sub or any other Person against any Guarantor Affiliate, or otherwise under any theory of law or equity (the "Released Claims"); providedthat the foregoing shall not limit, and the Released Claims shall not include, any of the Retained Claims.
- Subrogation. The Guarantors will not, and shall not direct or cause anyone on its behalf to, directly or indirectly, exercise any rights of subrogation or contribution against Parent, whether arising by contract or operation of Law (including, without limitation, any such right arising under bankruptcy or insolvency Laws) or otherwise, by reason of any payment by any of them pursuant to the provisions of Section 1hereof unless and until the Guaranteed Obligation have been paid in full.
- Termination.
- No Guarantor shall have any further liability or obligation under this Limited Guarantee from and after the earliest to occur of (i) the Closing, (ii) termination of the Merger Agreement in accordance with its terms (other than a termination of the Merger Agreement for which a Parent Termination Fee is, in accordance with Section 8.5 of the Merger Agreement, due and owing by Parent (any such termination for which the Parent Termination Fee is so due and owing, a "Qualifying Termination")), and (iii) the 60th day after a Qualifying Termination unless prior to the 60th day after a Qualifying Termination, the Company shall have commenced a suit, action or other Proceeding against Parent alleging a Parent Termination Fee is due and owing or against the Guarantors that amounts are due and owing from the Guarantors pursuant to Section 1hereof (a "Qualifying Suit"); providedthat if a Qualifying Termination has occurred and a Qualifying Suit is filed prior to the 60th day after a Qualifying Termination, no Guarantor shall have any further liability or obligation under this Limited Guarantee from and after the earliest of (w) the Closing, (x) a final, non-appealable resolution of such Qualifying Suit determining that either Parent does not owe a Parent Termination Fee or that the Guarantors do not owe any amount pursuant to Section 1hereof, (y) a written agreement among the Guarantors and the Company terminating the obligations and liabilities of the Guarantors pursuant to this Limited Guarantee, and (z) payment of the Guaranteed Obligation in full by the Guarantors or Parent.
- In the event that the Company, any of its Representatives or any of their respective Affiliates commences any action or other Proceeding (i) asserting that the provisions of this Limited Guarantee are illegal, invalid or unenforceable in whole or in part or that the Guarantors are liable in excess of or to a greater extent than the Parent Termination Fee, (ii) arising under, or in connection with, this Limited Guarantee, the Offer, the Merger Agreement, the Equity Commitment Letter, the Debt Commitment Letter, or the transactions contemplated hereby or thereby, other than a Retained Claim, or (iii) in respect of a Retained Claim in any jurisdiction other than Delaware, then (x) the obligations of the Guarantors under this Limited Guarantee shall terminate ab initio and be null and void, (y) if any Guarantor has previously made any payments under this Limited Guarantee, such Guarantor shall be entitled to recover such payments from the Company, and (z) none of the Guarantors, Parent nor any Guarantor Affiliate shall have any liability to the Company or any of its Affiliates under this Limited Guarantee. Upon the request of any Guarantor after any termination of the obligations and liabilities of the Guarantors pursuant to the provisions of this Section 6, the Company shall provide such Guarantor with written confirmation of such termination.
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- Continuing Guaranty. Except to the extent that the obligations and liabilities of the Guarantors are terminated pursuant to the provisions of Section 6hereof, this Limited Guarantee is a continuing one and may not be revoked and shall remain in full force and effect until the indefeasible payment in cash and satisfaction in full of the Guaranteed Obligation, shall be binding upon each Guarantor, its successors and permitted assigns, and shall inure to the benefit of, and be enforceable by, the Company and its successors and permitted transferees and assigns. All obligations to which this Limited Guarantee applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.
- Covenants. So long as this Limited Guarantee is in effect and prior to the time any Guarantor has no further liability or obligation hereunder pursuant to Section 6, each Guarantor agrees that: (a) it shall not institute, and shall cause each Guarantor Affiliate not to institute, any proceeding asserting that this Limited Guarantee or any term or conditions set forth herein is illegal, invalid or unenforceable in accordance with its terms, subject to the express terms and conditions hereof; (b) it will maintain in full force and effect all consents of any authority that are required to be obtained by it with respect to this Limited Guarantee; and (c) it will comply in all respects with all applicable Laws and orders to which it may be subject if failure to so comply would reasonably be expected to impair its ability to perform its obligations under this Limited Guarantee.
- Entire Agreement. This Limited Guarantee, together with the Merger Agreement (including all exhibits, schedules and ancillary documents contemplated thereby), the NDA and the Equity Commitment Letter, constitute the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among Parent, Merger Sub and the Guarantors or any Guarantor Affiliate, on the one hand, and the Company or any of its Affiliates, on the other hand. No representations, warranties, covenants, understandings or agreements, oral or otherwise, relating to the transactions contemplated by this Limited Guarantee exist between any of the parties hereto except as expressly set forth in this Limited Guarantee, the Equity Commitment Letter, the NDA and the Merger Agreement.
- Amendments and Waivers. No amendment or waiver of any provision of this Limited Guarantee will be valid and binding unless it is in writing and signed, in the case of an amendment, by the Guarantors and the Company, or in the case of waiver, by the party against whom the waiver is to be effective. No waiver by any party of any breach or violation of, or default under, this Limited Guarantee, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation or default hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party in exercising any right, power or remedy under this Limited Guarantee will operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right, power or remedy hereunder waive any any right, remedy or power under this Limited Guarantee.
- No Third Party Beneficiaries. Except (a) for the provisions of this Limited Guarantee which reference Guarantor Affiliates (each of which shall be for the benefit of and enforceable by each Guarantor Affiliate) and (b) each parties' respective successors and permitted assigns, the parties hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other parties hereto, in accordance with and subject to the terms of this Limited Guarantee, and this Limited Guarantee is not intended to, and does not, confer upon any Person other than the parties hereto and the Guarantor Affiliates any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.
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- Counterparts and Delivery by Electronic Transmission. This Limited Guarantee may be executed in any number of counterparts (including by facsimile or by attachment to electronic mail in portable document format (PDF)), each such counterpart being deemed to be an original instrument, and all such counterparts, taken together, shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.
- Notices. Notices, requests, instructions, waivers or other documents to be given under this Limited Guarantee shall be in writing and shall be deemed given, (a) when delivered, if delivered personally to the intended recipient, (b) when sent by email (without any "bounceback" or other notice of nondelivery) and (c) one (1) Business Day later, if sent by overnight delivery via a national courier service (providing proof of delivery), and in each case, addressed to a party at the following address for such party:
- If to any Guarantor (addressed in such Guarantor's name):
c/o Madison Dearborn Partners, LLC Three First National Plaza
Suite 4600
70 West Madison Street
Chicago, Illinois 60602
Attention: Legal Department
Email: legal@mdcp.com
with a copy to (which shall not constitute notice):
Kirkland & Ellis LLP
300 North LaSalle Street Chicago, IL 60654
Attention: Richard J. Campbell, P.C. Adam T. Clifford
Email: richard.campbell@kirkland.com adam.clifford@kirkland.com
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022 United States
Attention: Sarkis Jebejian, P.C.
Email: sarkis.jebejian@kirkland.com
(b) If to the Company:
Benefytt Technologies, Inc.
3450 Buschwood Park Drive Suite 200
Tampa, Florida 33618
Attention: Erik Helding
Email: heldinge@bfyt.com
with a copy (which shall not constitute notice) to:
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Weil, Gotshal & Manges LLP 767 Fifth Avenue
New York, New York 10153
Attention: Michael J. Aiello Eoghan P. Keenan
Email: michael.aiello@weil.com eoghan.keenan@weil.com
- Governing Law. THIS LIMITED GUARANTEE SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OR CHOICE OF LAW PRINCIPLES THEREOF.
- Jurisdiction; Venue; Service of Process. Each of the parties hereto hereby irrevocably and unconditionally (A) consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware in the event any of any dispute arising out of or related to this Limited Guarantee or any of the transactions contemplated hereby,
- agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (C) agrees that it will not, and waives any right to, bring any Action relating to or arising out of this Limited Guarantee or any of the transactions contemplated hereby in any court other than the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware, and (D) waives any objection that it may now or hereafter have to the venue of any such Action in the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware or that such Action was brought in an inconvenient forum and agrees not to plead or claim the same. Each party hereto hereby agrees that and consents to service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 13shall be effective service of process for any Action in connection with this Limited Guarantee or the transactions contemplated hereby.
- Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LIMITED GUARANTEE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LIMITED GUARANTEE, OR THE TRANSACTIONS CONTEMPLATED BY THIS LIMITED GUARANTEE. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE COMPANY (ON BEHALF ITSELF AND ITS SUBSIDIARIES) AND EACH OF THE OTHER PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO ANY DEBT FINANCING OBTAINED BY THE ISSUER, PARENT OR ANY OF ITS SUBSIDIARIES IN CONNECTION WITH THE OFFER, THE MERGER OR THE PERFORMANCE THEREOF OR THE TRANSACTIONS CONTEMPLATED THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTEE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 16.
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- Representations and Warranties. Each Guarantor hereby represents and warrants to the Company with respect to itself that (a) it is a limited partnership, validly existing and in good standing under the laws of its jurisdiction of formation and it has all limited partnership power and authority to execute, deliver and perform this Limited Guarantee; (b) the execution, delivery and performance of this Limited Guarantee by such Guarantor has been duly and validly authorized and approved by all necessary limited partnership action, and no other proceedings or actions on the part of such Guarantor are necessary therefor; (c) all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Entity necessary for the due execution, delivery and performance of this Limited Guarantee by such Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Entity or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee; (d) this Limited Guarantee has been duly and validly executed and delivered by it and constitutes a valid and legally binding obligation of it, enforceable against such Guarantor in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect affecting creditors' rights generally, or by principles governing the availability of equitable remedies; (e) the execution, delivery and performance by such Guarantor of this Limited Guarantee does not and will not (i) contravene, conflict with or result in any violation of any provision of the organizational documents of the Guarantor, (ii) contravene, conflict with or result in any violation of any applicable Law, rule, regulation, decree, order or judgment binding on such Guarantor or its assets or (iii) contravene, conflict with or result in any violation of or default (with or without notice or lapse of time or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any contract or agreement to which such Guarantor is a party; and (f) such Guarantor has, and, until the termination of this Limited Guarantee in accordance with the terms hereof, will have, the financial capacity to pay and perform its obligations under this Limited Guarantee, and all funds necessary for such Guarantor to fulfill its Guaranteed Obligation under this Limited Guarantee shall be available to such Guarantor for so long as this Limited Guarantee shall remain in effect in accordance with Section 6hereof.
- No Assignment. Neither the Guarantors nor the Company may assign their respective rights, interests or obligations hereunder to any other Person (except by operation of Law) without the prior written consent of the Company (in the case of an assignment by any Guarantor) or the Guarantors (in the case of an assignment by the Company); provided, however, that if a portion of a Guarantor's commitment under the Equity Commitment Letter is assigned in accordance with the terms thereof, then a corresponding portion of its Guaranteed Obligation hereunder may be assigned to the same assignee without the consent of the Guaranteed Party; provided, that any such permitted assignment shall not relieve such Guarantor of its Guaranteed Obligations hereunder. Any assignment or attempted assignment in violation of this Section 18shall be null and void.
- Severability. Any term or provision of this Limited Guarantee that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction; provided, however, that this Limited Guarantee may not be enforced without giving effect to the limitation of the amount payable hereunder with respect to the Guaranteed Obligation provided in Section 1hereof and to the provisions of Sections 2(e), 4, and 5hereof. No party hereto shall assert, and each party shall cause its respective Affiliates, members, securityholders and representatives not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.
- Confidentiality. This Limited Guarantee shall be treated as confidential and is being provided to the Company solely in connection with the execution and delivery of the Merger Agreement. This Limited Guarantee may not be used, circulated, quoted or otherwise referred to in any document (other than the Merger Agreement, the Equity Commitment Letter, and the Debt Commitment Letter), except with the
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written consent of the Guarantors and the Company; provided, that no such written consent shall be required (and the Guarantors, the Company and its Affiliates shall be free to release such information) in connection with (a) any Action to enforce this Limited Guarantee, the Equity Commitment Letter, or the Merger Agreement (or in any litigation in connection herewith or therewith) (b) for disclosures to such Person's respective Representatives, so long as such Persons agree to keep such information confidential on terms substantially identical to the terms contained in this Section 20and (c) in connection with any filings with any Governmental Entity made in connection with the transactions contemplated by this Limited Guarantee, the Equity Commitment Letter or the Merger Agreement. Notwithstanding the foregoing, that the Company and the Guarantors may disclose this Limited Guarantee to the extent required by Law; provided that any reference to this Limited Guarantee in any such SEC filings shall be in form and substance agreed by the Company and the Guarantors.
- Headings. The headings contained in this Limited Guarantee are for convenience purposes only and will not in any way affect the meaning or interpretation hereof.
- Relationship of the Parties; Several Liability. Each party acknowledges and agrees that (a) this Limited Guarantee is not intended to, and does not, create any agency, partnership, fiduciary or joint venture relationship between or among any of the parties hereto and neither this Limited Guarantee nor any other document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise,
- the obligations of each of the Guarantors under this Limited Guarantee are solely contractual in nature and (c) the determination of each of the Guarantors was independent of each other. Notwithstanding anything to the contrary contained in this Limited Guarantee, the liability of each Guarantor hereunder shall be several, not joint and several, based upon its respective Pro Rata Percentage and no Guarantor shall be liable for any amount hereunder in excess of its Pro Rata Percentage of the Parent Termination Fee. The "Pro Rata Percentage" for each Guarantor is as set forth below:
Madison Dearborn Capital Partners VIII-A, L.P. | 66.2399% |
Madison Dearborn Capital Partners VIII-C, L.P. | 27.8059% |
Madison Dearborn Capital Partners VIII Executive-A, L.P. | 5.9542% |
In no event shall Parent or any Guarantor be considered an "Affiliate", "member", "securityholder" or "representative" of the Company or a Releasing Person for any purpose of this Limited Guarantee. Nothing herein shall be deemed to limit, amend or release any rights of Parent under the Debt Commitment Letter.
23. Equity Commitment Letter and Debt Commitment Letter. The Company hereby acknowledges that it has received fully executed copies of the Equity Commitment Letter and the Debt Commitment Letter and acknowledges and agrees that, except as expressly and to the extent provided in the Merger Agreement and Section 7 of the Equity Commitment Letter and subject to all of the terms, conditions and limitations herein and therein, nothing contained herein or therein shall entitle the Company or any of its Affiliates to (a) enforce specifically the Equity Commitment Letter or the Debt Commitment Letter or (b) otherwise have any rights as a third party beneficiary or otherwise against the Guarantors or any other Person under the Equity Commitment Letter or the Debt Commitment Letter.
* * * * *
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IN WITNESS WHEREOF, the undersigned have executed and delivered this Limited Guarantee as of the date first written above.
GUARANTORS:
MADISON DEARBORN CAPITAL PARTNERS VIII-A,
L.P.
By: | Madison Dearborn Partners VIII-A&C, L.P. |
Its: | General Partner |
By: | Madison Dearborn Partners, LLC |
Its: | General Partner |
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII-C,
L.P.
By: | Madison Dearborn Partners VIII-A&C, L.P. |
Its: | General Partner |
By: | Madison Dearborn Partners, LLC |
Its: | General Partner |
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
MADISON DEARBORN CAPITAL PARTNERS VIII
EXECUTIVE-A, L.P.
By: | Madison Dearborn Partners VIII-A&C, L.P. |
Its: | General Partner |
By: | Madison Dearborn Partners, LLC |
Its: | General Partner |
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
Signature Page to Limited Guarantee
Accepted and agreed as of July 12, 2020
COMPANY:
BENEFYTT TECHNOLOGIES, INC.
By: /s/ Gavin Southwell
Name: Gavin Southwell
Title: President and Chief Executive Officer
Signature Page to Limited Guarantee
Exhibit (d)(7)
TENDER AND SUPPORT AGREEMENT
This TENDER AND SUPPORT AGREEMENT (this "Agreement") is made and entered into as of July 12, 2020 by and among Daylight Beta Parent Corp., a Delaware corporation ("Parent"), Daylight Beta Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and each of the undersigned stockholders (the "Stockholders") of Benefytt Technologies, Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, concurrently with the execution hereof, Parent, Merger Sub and the Company are entering into an Agreement and Plan of Merger of even date herewith (the "Merger Agreement"), which provides for, among other things, (i) the commencement by Merger Sub of a cash tender offer (such offer, as it may be extended and amended from time to time in accordance with the Merger Agreement, the "Offer") to acquire all of the
- outstanding Class A Shares at the Offer Price, net to the Person tendering such Class A Shares in cash, without interest and (B) outstanding Class B Shares at $0.00; and (ii) following the consummation of the Offer, the merger of Merger Sub with and into the Company (the "Merger"), which will be governed by Section 251(h) of the Delaware General Corporation Law (the "DGCL"), with the Company surviving the Merger as the surviving corporation and becoming a wholly owned subsidiary of Parent, upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, concurrently with the execution hereof and of the Merger Agreement, the Stockholders have entered into the Exchange Agreement as contemplated by the Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, immediately prior to the Effective Time, after giving effect to the Specified Exchange (as defined in the Exchange Agreement), each issued and outstanding Class A Share (other than Excluded Shares and Dissenting Shares) will be converted into the right to receive an amount equal to the Offer Price per Class A Share;
WHEREAS, each Stockholder is the record or beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), of such number of Class A Shares (including restricted Class A Shares granted under the Company Stock Plan), Class B Shares and Series B Membership Interests of Holdings set forth opposite such Stockholder's name on Schedule Aattached hereto; and
WHEREAS, as a condition to their willingness to enter into the Merger Agreement, Parent and Merger Sub have required the Stockholders, and in order to induce Parent and Merger Sub to enter into the Merger Agreement, each Stockholder (solely in the Stockholder's capacity as such) has agreed, to enter into this Agreement and tender all of the Subject Shares as described herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:
1. Certain Definitions. All capitalized terms that are used, but not defined, herein shall have the respective meanings ascribed to them in the Merger Agreement. For all purposes of and under this Agreement, the following terms shall have the following respective meanings:
- "Lien" shall mean any lien, hypothecation, adverse claim, charge, security interest, pledge or option, proxy, right of first refusal, preemptive right, voting trust or any other similar right.
- "Permitted Lien" shall mean (i) any Lien arising (A) hereunder (in connection therewith any restrictions on transfer or any other Lien that has been waived by appropriate consent), (B) under securities laws and (C) under the applicable grant agreement and Company Stock Plan relating to any restricted Class A Shares (if any); and (ii) any right, agreement, understanding or arrangement which represents a financial interest in cash received upon sale of the Subject Shares and not a Lien upon the Subject Shares prior to such sale.
- "Subject Shares" shall mean with respect to each Stockholder, (i) all Shares beneficially owned by such Stockholder as of the date hereof, including, without limitation, any Class A Shares that vest prior to the Effective Time; and (ii) all additional Shares of which such Stockholder acquires record or beneficial ownership during the period from the date of this Agreement through and/or on the Support Termination Date (including by way of stock dividend or distribution, split-up, recapitalization, combination, vesting of, or exchange of Shares or any Shares issued upon the exercise of or vesting of, any Company Equity Awards or other conversion of any convertible securities).
- "Support Termination Date" shall mean the earliest to occur of such date and time as (i) the Merger Agreement shall have been terminated for any reason; (ii) the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement; (iii) the acquisition by Parent of all the Subject Shares of the Stockholders, whether pursuant to the Offer, the Merger or otherwise; (iv) any amendment, change or waiver to the Merger Agreement is effected without each Stockholder's consent that decreases the amount, or changes the form or (except with respect to extensions of the Offer in accordance with the terms of the Merger Agreement) timing, of consideration payable to all of the stockholders of the Company pursuant to the terms of the Merger Agreement; (v) is agreed to in writing by Parent and each Stockholder; or (vi) the Offer shall have been terminated without acceptance for payment of the Subject Shares pursuant to the Offer.
- "Transfer" A person shall be deemed to have effected a "Transfer" of a Subject Share if such person, directly or indirectly, (i) sells, pledges, creates a Lien with respect to (other than Permitted Liens), assigns, exchanges, grants an option with respect to, transfers, gifts, disposes of or enters into any derivative arrangement with respect to such Subject Share or any interest therein or (ii) enters into an agreement or commitment providing for the sale, pledge, creation of a Lien (other than Permitted Liens), assignment, exchange, transfer, gift, disposition of or any derivative arrangement with respect to, or grant of an option with respect to, such Subject Share or any interest therein.
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- Transfer of Subject Shares.
- Transfer Restrictions. Except as expressly contemplated by this Agreement, the Exchange Agreement or the Merger Agreement, prior to the Support Termination Date, no Stockholder shall cause or permit any Transfer of any of the Subject Shares to be effected.
- Transfer of Voting Rights. Each Stockholder shall not (i) deposit (or permit the deposit of) any Subject Shares in a voting trust or grant any proxy or power of attorney or enter into any voting agreement or similar agreement with respect to any of the Subject Shares or (ii) subject to Section 3(b), take or permit any other action that would in any way restrict, limit or interfere with the performance of the Stockholder's obligations hereunder or otherwise make any representation or warranty of the Stockholder herein untrue or incorrect. Any action taken in violation of the foregoing sentence shall be null and void ab initio and such Stockholder agrees that any such prohibited action may and should be enjoined.
- Exceptions. Nothing in this Section 2shall prohibit a Transfer of Subject Shares by each Stockholder: (i) if the Stockholder is an individual, (A) pursuant to applicable laws of descent and distribution (B) to any member of Stockholder's immediate family or to a trust solely for the benefit of Stockholder or any member of Stockholder's immediate family, or (C) to a charitable entity qualified as a 501(c)(3) organization under the Code or (ii) if the Stockholder is not a natural person, to one or more partners or members of the Stockholder or to an Affiliate controlled by or under common control with the Stockholder or to any trustee or beneficiary of the trust; provided, however, that a Transfer referred to in this Section 2(c)shall be permitted only if the transferee agrees in writing, reasonably satisfactory in form and substance to Parent, to be bound by the terms of this Agreement.
- Involuntary Transfer. If any involuntary Transfer of any of the Subject Shares shall occur (including, but not limited to, a sale by a Stockholder's trustee in any bankruptcy, or a sale to a purchaser at any creditor's or court sale), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Subject Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect until valid termination of this Agreement.
- Agreement to Tender; Voting Agreement.
- Tender of Shares. Each Stockholder shall tender, pursuant to and in accordance with the terms of the Offer, the Subject Shares. In furtherance of the foregoing, promptly following the Specified Exchange (as defined in the Exchange Agreement) and in any event no later than on the Expiration Date, each Stockholder shall (a) deliver to the depositary designated in the Offer all documents or instruments reasonably required to be delivered in order to tender the Subject Shares pursuant to the terms of the Offer, and/or (b) instruct his or its broker or such other Person who is the holder of record of any Subject Shares to tender such shares for exchange in the Offer pursuant to the terms and conditions of the Offer. Prior to the Support Termination Date, each Stockholder shall not tender the Subject Shares into any exchange or tender offer commenced by a third party other than Parent or Merger Sub. Notwithstanding anything to the contrary herein, each Stockholder may withdraw such Subject Shares from the Offer at any time following the termination of this Agreement or upon the Offer being terminated in accordance with the terms of the Merger Agreement. For the avoidance of doubt, no Stockholder shall be required, for purposes of this Agreement, to exercise any unexercised Company Equity Award held by such Stockholder.
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- Voting Agreement. Unless this Agreement shall have been terminated in accordance with its terms, if applicable, (i) each Stockholder hereby agrees to vote all Subject Shares that such Stockholder is entitled to vote at the time of any vote to approve and adopt the Merger Agreement and the Merger at any meeting of the stockholders of the Company, and at any adjournment thereof, at which such Merger Agreement is submitted for the consideration and vote of the stockholders of the Company and (ii) each Stockholder hereby agrees that he, she or it will not vote any Subject Shares in favor of, and will vote such Subject Shares against the approval of, any Acquisition Proposal. Each Stockholder hereby revokes any and all previous proxies granted with respect to the Subject Shares.
- Return of Shares. If the Offer is terminated or withdrawn by Merger Sub or the Merger Agreement is terminated prior to the purchase of Subject Shares in the Offer, Parent and Merger Sub shall promptly return, and shall cause any depository or paying agent, acting on behalf of Parent and Merger Sub, to promptly return, all tendered Subject Shares to the applicable Stockholder.
- Directors and Officers. Notwithstanding any provision of this Agreement to the contrary, but without in any way limiting such Stockholder's obligations hereunder (in his, her or its capacity as stockholder) nothing in this Agreement shall (or shall require any Stockholder to attempt to) limit or restrict any Stockholder in their or its capacity as a director or officer of the Company or any designee of the Stockholder who is a director or officer of the Company from acting in such capacity or voting in such Person's sole discretion on any matter, including complying with or exercising such Stockholder's (or such designee of the Stockholder's who is a director or officer of the Company), fiduciary duties as a member of the board of directors of the Company.
- No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Parent or Merger Sub any direct or indirect ownership or incidence of ownership of or with respect to any Subject Shares. All rights, ownership and economic benefits of and relating to the Subject Shares shall remain vested in and belong to the Stockholders, and neither Parent nor Merger Sub shall have the authority by virtue of this Agreement or the transactions to be consummated pursuant hereto to manage, direct, superintend, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct the Stockholders in the voting of any of the Subject Shares to the extent such Subject Shares are entitled to be voted, except as otherwise provided herein.
- No Exercise of Appraisal Rights. Such Stockholder forever and irrevocably waives and agrees not to exercise any appraisal rights or dissenters' rights pursuant to Section 262 of the DGCL or otherwise in respect of such Stockholder's Subject Shares that may arise in connection with the Offer or the Merger.
- Documentation and Information. Such Stockholder shall not make any public announcement regarding this Agreement and the transactions contemplated hereby without the
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prior written consent of Parent (such consent not to be unreasonably withheld or delayed), except as may be required by applicable Law (provided that, other than in the case of an amendment to a Schedule 13D or 13G that discloses this Agreement, reasonable notice of any such disclosure will be provided to Parent to the extent permitted by applicable Law). Such Stockholder consents to and hereby authorizes the Company, Parent and Merger Sub or their Affiliates to publish and disclose in all documents and schedules filed with the SEC, including, without limitation, Schedule 14D-9, and any press release or other disclosure document that the Company, Parent or Merger Sub or their Affiliates reasonably determines to be necessary in connection with the Offer, the Merger and any of the other transactions contemplated by this Agreement or the Merger Agreement, in each case regarding such Stockholder's identity and ownership of the Subject Shares, the existence of this Agreement, the nature of such Stockholder's commitments and obligations under this Agreement and the Merger Agreement and any other information that Parent or the Company reasonably determines is required to be disclosed by Law, and such Stockholder acknowledges that Parent and Merger Sub may, in Parent's sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental Entity. Such Stockholder agrees to promptly give Parent any information it may reasonably request for the preparation of any such disclosure documents.
- Waiver of Certain Actions. Each Stockholder hereby agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against the Company, Parent, Merger Sub or any of their respective successors, directors or officers relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the transactions contemplated hereby or thereby, including any such claim (a) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of this Agreement or the Merger Agreement (including any claim seeking to enjoin or delay the acceptance of the Offer or the Closing) or
- alleging a breach of any duty of the board of directors of the Company in connection with this Agreement, the Merger Agreement or the transactions contemplated thereby or hereby.
- No Solicitation or Negotiation. Sections 6.2(a) (other than clause (ii)(z)) (No Solicitation or Negotiation), 6.2(c) (Notice of Acquisition Proposals) and 6.2(d) (Definitions) of the Merger Agreement are incorporated herein by reference and shall apply hereto mutatis mutandis (including, for the avoidance of doubt, that (i) any reference to the "Agreement" therein shall be construed as a reference to this Agreement, and (ii) any obligation of the "Company" set forth therein shall be construed as an obligation of the Stockholders).
- Representations and Warranties of the Stockholders. Each Stockholder represents and warrants to Parent and Merger Sub as follows:
- Power; Binding Agreement. The Stockholder has full power and authority to execute and deliver this Agreement, to perform the Stockholder's obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of his, her or its obligations hereunder and the consummation by the Stockholder of the transactions contemplated hereby have been duly and validly authorized by the Stockholder and no other actions or proceedings on the part of the Stockholder are necessary to authorize the execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of its obligations hereunder or the consummation
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by the Stockholder of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholder, and, assuming this Agreement constitutes a valid and binding obligation of Parent and Merger Sub, constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) rules of law governing specific performance and other equitable remedies.
- No Conflicts. Except for filings under the Exchange Act, no filing with, and no permit, authorization, consent, or approval of, any Governmental Entity is necessary for the execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of its obligations hereunder and the consummation by the Stockholder of the transactions contemplated hereby. None of the execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of its obligations hereunder or the consummation by the Stockholder of the transactions contemplated hereby will (i) conflict with or result in any breach of any organizational documents applicable to the Stockholder; (ii) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, loan agreement, bond, mortgage, indenture, commitment, arrangement, understanding or other agreement to which the Stockholder is a party or by which the Stockholder or any of the Stockholder's properties or assets may be bound; or (iii) violate any order, writ, injunction, decree, judgment, order, statute, rule, or regulation applicable to the Stockholder or any of the Stockholder's properties or assets, except, in the case of clauses (ii) and (iii), for such occurrences which would not, individually or in the aggregate, adversely affect in any material respect the ability of such Stockholder to perform its obligations hereunder.
- Ownership of Shares. The Stockholder (i) is the sole record or beneficial owner of the number of Class A Shares set forth opposite such Stockholder's name on Schedule A, all of which are free and clear of any Liens (other than Permitted Liens); (ii) is the sole record or beneficial owner of the number of Class B Shares set forth opposite such Stockholder's name on Schedule A, all of which are free and clear of any Liens (other than Permitted Liens); (iii) is the sole record or beneficial owner of the number of Series B Membership Interests of Holdings set forth opposite such Stockholder's name on Schedule A, all of which are free and clear of any Liens (other than Permitted Liens) and (iv) does not own, beneficially or otherwise, any securities of the Company other than those described in the preceding clauses (i)-(iv).
- Voting and Disposition Power. The Stockholder has full and sole voting power with respect to the Subject Shares and full and sole power of disposition, full and sole power to issue instructions with respect to the matters set forth herein and full and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Subject Shares. None of the Subject Shares are subject to any stockholders' agreement, proxy, voting trust or other agreement or arrangement with respect to the voting of such Subject Shares.
- Reliance. The Stockholder has been represented by or had the opportunity to be represented by independent counsel of its own choosing and has had the right and opportunity to consult with its attorney, and to the extent, if any, that such Stockholder desired, such Stockholder availed itself of such right and opportunity and such Stockholder is competent to execute this Agreement and has executed this Agreement free from coercion, duress or undue influence. The Stockholder understands and acknowledges that the Company, Parent and Merger Sub are entering into the Merger Agreement in reliance upon the Stockholder's execution, delivery and performance of this Agreement.
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- Absence of Litigation. With respect to the Stockholder, as of the date hereof, there is no action, suit, claim, proceeding, charge, arbitration or investigation pending against, or, to the knowledge of the Stockholder, threatened in writing against the Stockholder or any of the Stockholder's properties or assets (including the Subject Shares) before or by any Governmental Entity that could reasonably be expected to prevent or materially delay or impair the consummation by such Stockholder of the transactions contemplated by this Agreement or otherwise materially impair the Stockholder's ability to perform its obligations hereunder.
- Brokers. No broker, finder, financial advisor, investment banker or other Person is entitled to any brokerage, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Stockholder.
11. Representations and Warranties of Parent and Merger Sub. Parent and Merger Sub represent and warrant to the Stockholders as follows:
- Power; Binding Agreement. Each of Parent and Merger Sub has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Parent and Merger Sub of this Agreement, the performance by each of Parent and Merger Sub of its obligations hereunder and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by each of Parent and Merger Sub and no other actions or proceedings on the part of Parent or Merger Sub are necessary to authorize the execution and delivery by Parent or Merger Sub, the performance by either Parent or Merger Sub of its obligations hereunder or the consummation by Parent or Merger Sub of the transactions contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and Merger Sub, and, assuming this Agreement constitutes a valid and binding obligation of the Stockholders, constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) rules of law governing specific performance and other equitable remedies.
- No Conflicts. Except for filings under the Exchange Act, no filing with, and no permit, authorization, consent, or approval of, any Governmental Entity is necessary for the execution and delivery by Parent or Merger Sub of this Agreement, the performance by each of Parent or Merger Sub of its obligations hereunder and the consummation by Parent or Merger Sub of the transactions contemplated hereby. None of the execution and delivery by Parent or Merger Sub of this Agreement, the performance by each of Parent or Merger Sub of its obligations hereunder or the consummation by Parent or Merger Sub of the transactions contemplated hereby will (i) conflict with or result in any breach of any organizational documents applicable to Parent or Merger Sub; (ii) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, loan
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agreement, bond, mortgage, indenture, commitment, arrangement, understanding or other agreement to which Parent or Merger Sub is a party or by which Parent or Merger Sub or any of Parent's or Merger Sub's properties or assets may be bound; or (iii) violate any order, writ, injunction, decree, judgment, order, statute, rule, or regulation applicable to Parent or Merger Sub or any of Parent's or Merger Sub's properties or assets, except, in the case of clauses (ii) and (iii), for such occurrences which would not, individually or in the aggregate, adversely affect in any material respect the ability of each of Parent or Merger Sub to perform its obligations hereunder.
- Further Assurances. Subject to the terms and conditions of this Agreement, each party shall use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary to fulfill such party's obligations under this Agreement.
- Termination. This Agreement shall automatically and immediately terminate and be of no further force and effect as of the Support Termination Date, all without the need for any further action on the part of (or notice to) any Party or other Person. Notwithstanding the foregoing, nothing set forth in this Section 13or elsewhere in this Agreement shall relieve any party hereto from liability, or otherwise limit the liability of any party hereto, for any material breach of this Agreement arising prior to termination.
- Miscellaneous Provisions.
- Amendment or Supplement. This Agreement may be amended by the parties at any time by execution of an instrument in writing signed by each party to this Agreement.
- Extension of Time, Waiver, etc. Any provision of this Agreement may be waived prior to the Effective Time if, and only if, such waiver is in writing and signed by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise herein provided, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
- Entire Agreement. This Agreement, the Merger Agreement (including any exhibits hereto) and other agreements among the parties hereto as contemplated by or referred to herein and therein constitute the entire agreement, and supersede any and all other prior agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereof.
- Governing Law and Venue; Waiver of Jury Trial. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OR CHOICE OF LAW PRINCIPLES THEREOF.
- Each of the parties hereto hereby irrevocably and unconditionally (i) consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State
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of Delaware in the event any of any dispute arising out of or related to this Agreement or any of the transactions contemplated hereby, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not, and waives any right to, bring any Proceeding by or before any Governmental Entity (each, an "Action") relating to or arising out of this Agreement or any of the transactions contemplated hereby in any court other than the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware, and (iv) waives any objection that it may now or hereafter have to the venue of any such Action in the Court of Chancery of the State of Delaware or, if such court lacks subject matter jurisdiction, any federal court located in the State of Delaware or that such Action was brought in an inconvenient forum and agrees not to plead or claim the same. Each party hereto hereby agrees that and consents to service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 15(h)shall be effective service of process for any Action in connection with this Agreement or the transactions contemplated hereby.
- EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 15(f).
- Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur and that the parties would not have any adequate remedy at Law in the event that any of the obligations, undertakings, covenants or agreements of the parties to this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. Accordingly, the party seeking to enforce this Agreement against such nonperforming party under this Agreement shall be entitled to an injunction or injunctions to prevent breaches or threatened such breaches of this Agreement by the other parties, and to enforce specifically the terms and provisions of this Agreement without the necessity of proving actual harm or damages or posting a bond or other security therefor, this being in addition to any other remedy to which such party is entitled at law or in equity, and each party agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance or other equitable remedy is not an appropriate remedy for any reason at law or in equity. Without limitation of the foregoing, the parties hereby further acknowledge and agree that prior to the Closing, the each party shall be
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entitled to seek specific performance to enforce specifically the terms and provisions of, and to prevent or cure breaches of the covenants required to be performed by the other parties under this Agreement in addition to any other remedy to which such party is entitled at law or in equity and in accordance with this Agreement. Each party further agrees that it shall not take any position in any legal proceeding concerning this Agreement that is contrary to the terms of this Section 15(g).
- Notices. Notices, requests, instructions, waivers or other documents to be given under this Agreement shall be in writing and shall be deemed given, (a) when delivered, if delivered personally to the intended recipient, (b) when sent by email (without any "bounceback" or other notice of nondelivery) and (c) one (1) Business Day later, if sent by overnight delivery via a national courier service (providing proof of delivery), and in each case, addressed to a party at the following address for such party:
if to Parent or Merger Sub
c/o Madison Dearborn Partners, LLC 70 West Madison
Chicago, Illinois 60602 Attention: Legal Department Email: legal@mdcp.com
with copies to (which shall not constitute notice):
Madison Dearborn Partners, LLC 70 West Madison
Chicago, Illinois 60602 Attention: Legal Department Email: legal@mdcp.com
and
Kirkland & Ellis LLP
300 North LaSalle Street Chicago, IL 60654
Attention: Richard J. Campbell, P.C. Adam T. Clifford
Email: richard.campbell@kirkland.com adam.clifford@kirkland.com
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022 United States Attention: Sarkis Jebejian, P.C.
Email: sarkis.jebejian@kirkland.com
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if to Stockholders
16221 Villarreal de Avila Tampa, FL 33613
Attention: Michael W. Kosloske
Email: mwkosloske@gmail.com
with copies to (which shall not constitute notice):
Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103
Attention: Justin W. Chairman, Esquire
Email: justin.chairman@morganlewis.com
or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.
- Severability. The provisions of this Agreement shall be deemed severable and in the event any court of competent jurisdiction or arbitral panel finds any provision hereof to be invalid or unenforceable, such invalidity or enforceability shall not affect the validity or enforceability of the other provisions hereof so long as the economic, risk allocation, limitation of liability or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party as a result thereof. If any provision of this Agreement, or the application thereof to any person or any circumstance, is found to be invalid or unenforceable, (a) a suitable and equitable provision negotiated in good faith by the parties hereto shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not, subject to clause
- above, be affected by such invalidity or unenforceability, except as a result of such substitution, nor shall such invalidity or unenforceability affect
the validity or enforceability of such provision, or the application thereof, in any other jurisdiction, in each case, so long as the economic, risk allocation, limitation of liability or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party as a result thereof.- Construction. The Section and subsection headings or captions herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof or the interpretation thereof. Where a reference in this Agreement is made to a Section or Exhibit, such reference shall be to a Section of or exhibit to this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "or" when used in this Agreement is not exclusive. The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if". All terms defined in this
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Agreement and in the Merger Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement and in the Merger Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and the end of a period shall refer to 11:59:59 pm eastern time on the last date of such period. If the last day of any such period is a day other than a Business Day, the period in question shall instead end, and any such step shall be taken by or on, the next succeeding Business Day. The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
- Assignment. Neither this Agreement nor any of the rights, interests or obligations of the parties hereunder may be assigned, in whole or in part, by operation of law or otherwise, by any of the parties hereto without the prior written consent of the other parties hereto provided, that Parent or Merger Sub may transfer or assign its rights and obligations under this Agreement, in whole or in part, from time to time, to (a) one or more of its Affiliates, (b) to any parties providing secured debt financing, solely for purposes of creating a security interest herein or otherwise assigning this Agreement as collateral in respect of such secured debt financing, and (c) after the Effective Time, to any Person; providedthat no such assignment shall impede or delay the consummation of the transactions contemplated hereunder or otherwise impede the rights of each Stockholder. No assignment by any party shall relieve such party of any of its obligations hereunder. Subject to the immediately preceding two sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns. Any purported assignment in violation of this Section 15(k)shall be null and void ab initio.
- Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile or by attachment to electronic mail in portable document format (PDF)), each such counterpart being deemed to be an original instrument, and all such counterparts, taken together, shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.
- No Recourse. Parent and Merger Sub each acknowledge and agree that no Stockholder will be liable for claims, losses, damages, liabilities or other obligations resulting from the Company's breach of the Merger Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed to be effective as of the date first above written.
PARENT:
DAYLIGHT BETA PARENT CORP.
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title: Managing Director
MERGER SUB:
DAYLIGHT BETA CORP.
By: /s/ Vahe Dombalagian
Name: Vahe Dombalagian
Title Managing Director
[Signature Page to Tender and Support Agreement]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed to be effective as of the date first above written.
STOCKHOLDERS:
HEALTH PLAN INTERMEDIARIES, LLC
By: /s/ Michael Kosloske
Name: Michael Kosloske
Title: Authorized Signatory
HEALTH PLAN INTERMEDIARIES SUB, LLC
By: /s/ Michael Kosloske
Name: Michael Kosloske
Title: Authorized Signatory
MICHAEL KOSLOSKE
By: /s/ Michael Kosloske
Name: Michael Kosloske
[Signature Page to Tender and Support Agreement]
Schedule A
Shares of Class A | Shares of Class B | Series B | |||||
Membership | |||||||
Name of Stockholder | Common Stock | Common Stock | Interests of | ||||
of the Company | of the Company | Holdings | |||||
Health Plan Intermediaries, LLC | 531,363 | 680,701 | 680,701 | ||||
Health Plan Intermediaries Sub, LLC | 13,000 | 6,966 | 6,966 | ||||
Michael Kosloske | - | - | - |
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Benefytt Technologies Inc. published this content on 24 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2020 20:50:00 UTC
