Form SC 13E3 Inovalon Holdings, Inc. Filed by: Inovalon Holdings, Inc.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER
SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934
Inovalon Holdings, Inc.
(Name of the Issuer)
Inovalon Holdings, Inc.
Ocala Bidco, Inc.
Ocala Merger Sub, Inc.
Nordic Capital Epsilon SCA, SICAV-RAIF, on behalf of its compartment,
Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1
Keith R. Dunleavy, M.D.
Meritas Group, Inc.
Cape Capital SCSp, SICAR – Inovalon Sub-Fund
(Names of Persons Filing Statement)
Class A Common Stock, par value $0.000005 per share
Class B Common Stock, par value $0.000005 per share
(Title of Class of Securities)
Class A 45781D101
(CUSIP Number of Class of Securities)
| Jonathan Boldt Bowie, MD 20716 (301)-809-4000 |
Els Alwyn Nordic Capital Epsilon SCA, SICAV-RAIF, Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1 8 Rue Lou Hemmer L-1748 Senningerberg Grand Duchy of Luxembourg 352 661 124 125 |
Keith R. Dunleavy, M.D. Bowie, MD 20716 (301)-809-4000 |
Aleksandar Vukajlovic c/o Cape Capital Management S.à.r.l. 5 Rue Jean Monnet L-2180 Luxembourg Grand Duchy of Luxembourg 41438886064 |
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
With copies to
| David Allinson Peter Harwich Latham & Watkins LLP 1271 Avenue of the Americas New York, NY 10020 (212) 906-1200 |
David Feirstein, P.C. Armand A. Della Monica, P.C. Kirkland & Ellis LLP New York, NY 10022 (212) 446-4800 |
This statement is filed in connection with (check the appropriate box):
| a. |
☒ | The filing of solicitation materials or an information statement subject to Regulation 14A (§§240.14a-1 through 240.14b-2), Regulation 14C (§§240.14c-1 through 240.14c-101) or Rule 13e-3(c) (§240.13e-3(c)) under the Securities Exchange Act of 1934 (“the Act”). | ||
| b. |
☐ | The filing of a registration statement under the Securities Act of 1933. | ||
| c. |
☐ | A tender offer. | ||
| d. |
☐ | None of the above. | ||
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the results of the transaction: ☐
Calculation of Filing Fee
|
| ||
| Transaction Valuation* | Amount of Filing Fee** | |
| $6,400,000,000 |
$698,240 | |
|
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| ||
| * | Calculated solely for purposes of determining the filing fee. The transaction value was calculated as the sum of (A) 73,154,564 shares of Class A Common Stock multiplied by the Merger Consideration of $41.00 per share; (B) 78,081,076 shares of Class B Common Stock multiplied by the Merger Consideration of $41.00 per share; (C) 97,932 options to purchase Shares which would convert into 79, 202 issued Shares (such amount determined using a weighted average exercise price per share of $7.84 and the Merger Consideration of $41.00 per Share) multiplied by the Merger Consideration of $41.00 per share; (D) 14,549 shares of Class A Common Stock issuable upon settlement of Company RSUs multiplied by the Merger Consideration of $41.00 per share; and (E) 5,012,005 shares of Class A Common Stock issuable upon settlement of Company RS Awards multiplied by the Merger Consideration of $41.00 per share (assuming the maximum achievement of the performance goals applicable to performance-vesting Company RS Awards, and assuming the satisfaction of all other conditions to such delivery); which results in a proposed maximum aggregate value of $6,400,000,000 and a total filing fee due of $698,240. |
| ** | In accordance with Exchange Act Rule 0-11(c), the filing fee was determined by multiplying 0.0001091 by the aggregate transaction valuation. |
| ☒ | Check the box if any part of the fee is offset as provided by §240.0-11(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. |
| (1) | Amount Previously Paid: $698,240 |
| (2) | Form, Schedule or Registration Statement No.: Schedule 14A |
| (3) | Filing Party: Inovalon Holdings, Inc. |
| (4) | Date Filed: September 17, 2021 |
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction, passed upon the merits or fairness of this transaction, or passed upon the adequacy or accuracy of the disclosure in this Transaction Statement on Schedule 13E-3. Any representation to the contrary is a criminal offense.
INTRODUCTION
This Rule 13E-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (i) Inovalon Holdings, Inc. (“Inovalon” or the “Company”), a Delaware corporation and the issuer of the Class A common stock, par value $0.000005 per share (the “Class A Common Stock”) and the Class B common stock, par value $0.000005 per share (the “Class B Common Stock”, and together with the Class A Common Stock, the “Shares”), that is subject to the Rule 13e-3 transaction, (ii) Ocala Bidco, Inc., a Delaware corporation (“Parent”), (iii) Ocala Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), (iv) Nordic Capital Epsilon SCA, SICAV-RAIF, a société en commandite par actions – société d’investissement à capital variable – fonds d’investissement alternatif réservé, on behalf of its compartment, Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1, a private equity investment vehicle and an affiliate of Parent and Merger Sub (“Nordic Capital X” and, collectively with Parent and Merger Sub, the “Parent Entities”), (v) Keith R. Dunleavy, M.D., Inovalon’s Chairman and Chief Executive Officer, (vi) Meritas Group, Inc., a Delaware corporation affiliated with Dr. Dunleavy, and (vii) Cape Capital SCSp, SICAR – Inovalon Sub-Fund, a Luxembourg special limited partnership organized as an investment company in risk capital under the law of June 14, 2004 (“Cape Capital”). The Parent Entities are Filing Persons of this Transaction Statement because they may be deemed to be affiliates of the Company under a possible interpretation of the SEC rules governing “going-private” transactions.
On August 19, 2021, the Company, Parent and Merger Sub entered into an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a direct wholly owned subsidiary of Parent. Concurrently with the filing of this Schedule 13E-3, the Company is filing with the SEC a preliminary proxy statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special meeting of the stockholders of the Company (the “Special Meeting”) at which the stockholders of the Company will consider and vote upon a proposal to approve and adopt the Merger Agreement and cast a non-binding, advisory vote to approve certain items of compensation that are based on or otherwise related to the Merger and may become payable to certain named executive officers of the Company under existing agreements with the Company. The adoption of the Merger Agreement will require the affirmative vote of: (i) the holders of a majority of the voting power of the Company’s outstanding common stock, with holders of the outstanding Class A Common Stock and holders of the outstanding Class B Common Stock entitled to vote in accordance with the DGCL voting together as a single class; (ii) the holders of a majority of the outstanding shares of Class A Common Stock entitled to vote in accordance with the DGCL; (iii) the affirmative vote of holders of a majority of the outstanding shares of Class B Common Stock entitled to vote in accordance with the DGCL; and (iv) the holders of a majority of the voting power of the Company’s outstanding common stock held by the Company’s stockholders other than the Rollover Stockholders (as defined below), their respective affiliates or any executive officer or director of the Company (the “Public Stockholders”), with holders of Class A Common Stock and Class B Common Stock voting as a single class, in each case based on such shares outstanding as of the close of business on the record date for the Special Meeting. A copy of the Proxy Statement is attached hereto as Exhibit (a)(2)(i). A copy of the Merger Agreement is attached as Annex A to the Proxy Statement and incorporated herein by reference.
Under the terms of the Merger Agreement, if the Merger is completed, each Share, other than as provided below, will be converted into the right to receive $41.00 in cash (the “Merger Consideration”), without interest and less applicable withholding taxes. The following Shares will not be converted into the right to receive the per Share Merger Consideration in connection with the Merger: (i) certain shares held by Dr. Dunleavy and Cape Capital (the “Rollover Stockholders”) who will, pursuant to the terms of certain rollover agreements, dated as of August 19, 2021, exchange such shares of Company common stock for equity interests of Ocala Topco, Inc., a Delaware corporation, which in turn will be exchanged for equity interests of Ocala Topco, LP, a Delaware limited partnership, in each case subject to the terms and conditions of the applicable rollover agreement; (ii) shares held by Parent or Merger Sub (or any of their respective subsidiaries) or in the treasury of Inovalon; and (iii) shares held by a stockholder who properly exercises and perfects appraisal of his, her or its shares under
Section 262 of the General Corporation Law of the State of Delaware, a copy of which is attached as Annex F to the Proxy Statement and incorporated herein by reference.
The Merger remains subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, including the approval and adoption of the Merger Agreement by the Company’s stockholders.
The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all appendices thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the appendices thereto.
As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and/or amendment. This Schedule 13E-3 will be amended to reflect such completion or amendment of the Proxy Statement. Capitalized terms used but not expressly defined in this Schedule 13E-3 shall have the respective meanings given to them in the Proxy Statement.
The information concerning the Company contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by the Company. Similarly, all information concerning each other Filing Person contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.
While each of the Filing Persons acknowledges that the Merger is a “going private” transaction for purposes of Rule 13E-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by any Filing Person.
| Item 1. | Summary Term Sheet |
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
| Item 2. | Subject Company Information |
(a) Name and Address. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“PARTIES TO THE MERGER—The Company”
(b) Securities. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Security Ownership of Certain Beneficial Owners and Management”
(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends”
(d) Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends”
(e) Prior Public Offerings. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Prior Public Offerings”
(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares”
| Item 3. | Identity and Background of Filing Person |
(a) – (c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. Inovalon Holdings, Inc. is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“PARTIES TO THE MERGER”
“OTHER INTERESTED PARTIES IN THE MERGER”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY”
| Item 4. | Terms of the Transaction |
(a)(1) Tender Offers. Not Applicable.
(a)(2) Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS – Financing of the Merger”
“SPECIAL FACTORS – Accounting Treatment”
“INFORMATION ABOUT THE SPECIAL MEETING – Vote Required”
“THE MERGER AGREEMENT”
Annex A – Merger Agreement
(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Support Agreements”
“SPECIAL FACTORS – Rollover Agreements”
“THE MERGER AGREEMENT – Treatment of Equity Compensation Awards”
“THE MERGER AGREEMENT – Employee Matters”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
Annex A – Merger Agreement
Annex B – Support Agreements
Annex C – Rollover Agreements
(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Appraisal Rights”
“THE MERGER AGREEMENT – Dissenters’ Rights”
“INFORMATION ABOUT THE SPECIAL MEETING – Appraisal Rights”
“THE MERGER (THE MERGER PROPOSAL – PROPOSAL 1) – Appraisal Rights”
Annex A – Merger Agreement
Annex F – Section 262 of the General Corporation Law of the State of Delaware
(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Provisions for Public Stockholders”
(f) Eligibility for Listing or Trading. Not Applicable.
| Item 5. | Past Contracts, Transactions, Negotiations and Agreements |
(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Past Contracts, Transactions, Negotiations and Agreements”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A – Merger Agreement
(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Financing of the Merger”
“SPECIAL FACTORS – Limited Guarantee”
“SPECIAL FACTORS – Support Agreements”
“SPECIAL FACTORS – Rollover Agreements”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
Annex A – Merger Agreement
Annex B – Support Agreements
Annex C – Rollover Agreements
(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS – Intent of the Rollover Stockholders to Vote in Favor of the Merger”
“SPECIAL FACTORS – Financing of the Merger”
“SPECIAL FACTORS – Limited Guarantee”
“SPECIAL FACTORS – Support Agreements”
“SPECIAL FACTORS – Rollover Agreements”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A – Merger Agreement
Annex B – Support Agreements
Annex C – Rollover Agreements
| Item 6. | Purposes of the Transaction and Plans or Proposals |
(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Payment of Merger Consideration”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
(c)(1) – (8) Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS – Intent of the Rollover Stockholders to Vote in Favor of the Merger”
“SPECIAL FACTORS – Financing of the Merger”
“SPECIAL FACTORS – Limited Guarantee”
“SPECIAL FACTORS – Support Agreements”
“SPECIAL FACTORS – Rollover Agreements”
“THE MERGER AGREEMENT”
“INFORMATION ABOUT THE SPECIAL MEETING”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
Annex B – Support Agreements
Annex C – Rollover Agreements
| Item 7. | Purposes, Alternatives, Reasons and Effects |
(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Certain Effects on the Company if the Merger is Not Completed”
(c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Opinion of the Company’s Financial Advisor”
“SPECIAL FACTORS – Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
Annex D – Opinion of the Company’s Financial Advisor
Annex E – Opinion of the Special Committee’s Financial Advisor
(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“SPECIAL FACTORS – Plans for the Company After the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“SPECIAL FACTORS – Certain Effects on the Company if the Merger is not Completed”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences of the Merger”
“SPECIAL FACTORS – Fees and Expenses”
“SPECIAL FACTORS – Accounting Treatment”
“SPECIAL FACTORS – Payment of the Merger Consideration”
“THE MERGER AGREEMENT – The Merger”
“THE MERGER AGREEMENT – The Merger Consideration”
“THE MERGER AGREEMENT – Impact of Stock Splits, Etc.”
“THE MERGER AGREEMENT – Treatment of Equity Compensation Awards”
“THE MERGER AGREEMENT – Exchange Procedures and Payment Procedures”
“THE MERGER AGREEMENT – Withholding”
“THE MERGER AGREEMENT – Dissenters’ Rights”
“THE MERGER AGREEMENT – Organizational Documents, Directors and Officers of the Surviving Corporation”
“THE MERGER AGREEMENT – Delisting”
“THE MERGER AGREEMENT – Employee Matters”
“THE MERGER AGREEMENT – Indemnification; Directors’ and Officers’ Insurance”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
| Item 8. | Fairness of the Transaction |
(a), (b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Opinion of the Company’s Financial Advisor”
“SPECIAL FACTORS – Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“THE MERGER AGREEMENT – Indemnification; Directors’ and Officers’ Insurance”
Annex D – Opinion of the Company’s Financial Advisor
Annex E – Opinion of the Special Committee’s Financial Advisor
(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“THE MERGER AGREEMENT – Company Stockholder Approval”
“THE MERGER AGREEMENT – Conditions to the Completion of the Merger”
“INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum”
“INFORMATION ABOUT THE SPECIAL MEETING – Vote Required”
“INFORMATION ABOUT THE SPECIAL MEETING – Voting”
“INFORMATION ABOUT THE SPECIAL MEETING – How to Vote”
“INFORMATION ABOUT THE SPECIAL MEETING – Proxies and Revocation”
“THE MERGER (THE MERGER PROPOSAL – PROPOSAL 1)”
Annex A – Merger Agreement
(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Opinion of the Company’s Financial Advisor”
“SPECIAL FACTORS – Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS – Provisions for Public Stockholders”
(e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board”
“INFORMATION ABOUT THE SPECIAL MEETING – Voting Intentions of the Company’s Directors and Executive Officers”
“THE MERGER (THE MERGER PROPOSAL – PROPOSAL 1) – Vote Recommendation”
(f) Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“THE MERGER AGREEMENT – No Solicitation by the Company”
Annex A – Merger Agreement
| Item 9. | Reports, Opinions, Appraisals and Negotiations |
(a) – (c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference.
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Opinion of the Company’s Financial Advisor”
“SPECIAL FACTORS – Opinion of the Special Committee’s Financial Advisor”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex D – Opinion of the Company’s Financial Advisor
Annex E – Opinion of the Special Committee’s Financial Advisor
The Preliminary Discussion Materials dated May 3, 2021, which was for illustrative purposes only, and June 9, 2021, and the Fairness Opinion Presentation Materials dated August 17 and August 18, 2021, each prepared by J.P. Morgan Securities LLC and reviewed by the Company Board (as defined in the Proxy Statement), are attached hereto as Exhibits (c)(iii), (c)(iv), (c)(v) and (c)(vi), and are incorporated by reference herein.
The Preliminary Discussion Materials dated August 10, 2021 and the Fairness Opinion Presentation Materials dated August 16, 2021 and August 17, 2021, each prepared by Evercore Group L.L.C. and reviewed by the Special Committee (as defined in the Proxy Statement), are attached hereto as Exhibits (c)(vii), (c)(viii) and (c)(ix), and are incorporated by reference herein.
| Item 10. | Source and Amount of Funds or Other Consideration |
(a), (b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS – Financing of the Merger”
“SPECIAL FACTORS – Limited Guarantee”
“THE MERGER AGREEMENT – Closing of the Merger”
“THE MERGER AGREEMENT – Effective Time of the Merger”
“THE MERGER AGREEMENT – Covenants Related to the Company’s Conduct of Business”
“THE MERGER AGREEMENT – Parent Financing and Company Cooperation”
“THE MERGER AGREEMENT – Conditions to the Completion of the Merger”
Annex A – Merger Agreement
(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Fees and Expenses”
“THE MERGER AGREEMENT – Termination”
“THE MERGER AGREEMENT – Termination Fees”
“THE MERGER AGREEMENT – Expenses”
“INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses”
Annex A – Merger Agreement
(d) Borrowed Funds.
“SPECIAL FACTORS – Financing of the Merger”
“THE MERGER AGREEMENT – Parent Financing and Company Cooperation”
| Item 11. | Interest in Securities of the Subject Company |
(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Support Agreements”
“INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Security Ownership of Certain Beneficial Owners and Management”
Annex B – Support Agreements
(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Support Agreements”
“SPECIAL FACTORS – Rollover Agreements”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares”
Annex A – Merger Agreement
Annex B – Support Agreements
Annex C – Rollover Agreements
Item 12. The Solicitation or Recommendation
(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger”
“SPECIAL FACTORS – Intent of the Rollover Stockholders to Vote in Favor of the Merger”
“SPECIAL FACTORS – Support Agreements”
“INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board”
“INFORMATION ABOUT THE SPECIAL MEETING – Voting Intentions of the Company’s Directors and Executive Officers”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Security Ownership of Certain Beneficial Owners and Management”
Annex B – Support Agreements
(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger”
“SPECIAL FACTORS – Position of the Rollover Stockholders as to the Fairness of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Rollover Stockholders for the Merger”
“INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board”
| Item 13. | Financial Statements |
(a) Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Selected Historical Consolidated Financial Data”
“OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Book Value per Share”
“WHERE YOU CAN FIND MORE INFORMATION”
(b) Pro Forma Information. Not Applicable.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used
(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS – Fees and Expenses”
“INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses”
(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS – Background of the Merger”
“SPECIAL FACTORS – Purpose and Reasons of the Company for the Merger; Recommendation of the Company Board and the Special Committee; Fairness of the Merger”
“INFORMATION ABOUT THE SPECIAL MEETING”
“INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses”
Item 15. Additional Information
(b) The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTOR – Interests of Executive Officers and Directors of the Company in the Merger”
“SPECIAL FACTORS – Certain Effects of the Merger”
“THE MERGER AGREEMENT”
“MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE GOLDEN PARACHUTE PROPOSAL – PROPOSAL 2)”
Annex A – Merger Agreement
(c) Other Material Information. The entirety of the Proxy Statement, including all appendices thereto, is incorporated herein by reference.
| Item 16. | Exhibits |
The following exhibits are filed herewith:
| Exhibit No. |
Description | |
| (a)(2)(i) | Preliminary Proxy Statement of Inovalon Holdings, Inc. (included in the Schedule 14A filed on September 17, 2021 and incorporated herein by reference) (the “Preliminary Proxy Statement”). | |
| (a)(2)(ii) | Form of Proxy Card (included in the Preliminary Proxy Statement and incorporated herein by reference). | |
| (a)(2)(iii) | Letter to Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference). | |
| (a)(2)(iv) | Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference). | |
| (a)(5)(i) | Press Release, dated August 19, 2021 (incorporated by reference to Exhibit 99.1 to Inovalon Holding, Inc.’s Form 8-K filed August 19, 2021). | |
| (a)(5)(ii) | Associate FAQs, dated August 19, 2021 (included in the Schedule 14A filed on August 19, 2021 and incorporated herein by reference) | |
| (a)(5)(iii) | Letter to Associates from the Chief Executive Officer of Inovalon, dated August 19, 2021 (included in the Schedule 14A filed on August 19, 2021 and incorporated herein by reference) | |
| (a)(5)(iv) | Letter to Customers, dated August 19, 2021 (included in the Schedule 14A filed on August 19, 2021 and incorporated herein by reference) | |
| (a)(5)(v) | Letter to Vendor Partners, dated August 19, 2021 (included in the Schedule 14A filed on August 19, 2021 and incorporated herein by reference) | |
| (a)(5)(vi) | Social Media Posts dated August 19, 2021 (included in the Schedule 14A filed on August 19, 2021 and incorporated herein by reference) | |
| (b)(i) | Commitment Letter, dated August 19, 2021, executed by Blackstone Alternative Credit Advisors LP (together with funds and accounts managed or advised by it or its affiliates), Owl Rock Capital Advisors LLC (together with its affiliates and its and their managed funds and accounts) and Apollo Global Funding LLC and Apollo Capital Management, L.P., on behalf of one or more investment funds, separate accounts, and other entities owned (in whole or in part), controlled, managed, and/or advised by it or its affiliates and accepted by Ocala Bidco, Inc. | |
| (c)(i) | Opinion of J.P. Morgan Securities LLC, dated August 19, 2021 (included as Annex D to the Preliminary Proxy Statement, and incorporated herein by reference). | |
| (c)(ii) | Opinion of Evercore Group L.L.C., dated August 18, 2021 (included as Annex E to the Preliminary Proxy Statement, and incorporated herein by reference). | |
| (c)(iii) | Preliminary Discussion Materials, dated May 3, 2021, which was for illustrative purposes only, of J.P. Morgan Securities LLC prepared for the Company Board (as defined in the Proxy Statement). | |
| (c)(iv) | Preliminary Discussion Materials, dated June 9, 2021, of J.P. Morgan Securities LLC prepared for the Company Board (as defined in the Proxy Statement). | |
| (c)(v) | Fairness Opinion Presentation Materials, dated August 17, 2021, of J.P. Morgan Securities LLC prepared for the Company Board (as defined in the Proxy Statement). | |
| (c)(vi) | Fairness Opinion Presentation Materials, dated August 18, 2021, of J.P. Morgan Securities LLC prepared for the Company Board (as defined in the Proxy Statement). | |
| (c)(vii) | Preliminary Discussion Materials, dated August 10, 2021, of Evercore Group L.L.C. prepared for the Special Committee (as defined in the Proxy Statement). | |
| Exhibit No. |
Description | |
| (c)(viii) | Fairness Opinion Presentation Materials, dated August 16, 2021, of Evercore Group L.L.C. prepared for the Special Committee (as defined in the Proxy Statement). | |
| (c)(ix) | Fairness Opinion Presentation Materials, dated August 17, 2021, of Evercore Group L.L.C. prepared for the Special Committee (as defined in the Proxy Statement). | |
| (d)(i) | Agreement and Plan of Merger, dated August 19, 2021, by and among Inovalon Holdings, Inc., Ocala Bidco, Inc. and Ocala Merger Sub, Inc. (included as Annex A to the Preliminary Proxy Statement, and incorporated herein by reference). | |
| (d)(ii) | Voting and Support Agreement, dated August 19, 2021, by and among Ocala Bidco, Inc., Keith R. Dunleavy Management Trust u/a dated December 22, 2008, as amended, Meritas Holdings, LLC and Meritas Group, Inc. (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference). | |
| (d)(iii) | Voting and Support Agreement, dated August 19, 2021, by and among Ocala Bidco, Inc., André Hoffmann and Cape Capital SCSp, SICAR – Inovalon Sub-Fund (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference). | |
| (d)(iv) | Rollover Agreement, dated August 19, 2021, by and among Ocala Topco, LP, Ocala Topco, Inc. and Meritas Group, Inc. (included as Annex C to the Preliminary Proxy Statement and incorporated herein by reference). | |
| (d)(v) | Rollover Agreement, dated August 19, 2021, by and among Ocala Topco, LP, Ocala Topco, Inc. and Cape Capital SCSp, SICAR – Inovalon Sub-Fund (included as Annex C to the Preliminary Proxy Statement and incorporated herein by reference). | |
| (d)(vi) | Limited Guarantee, dated August 19, 2021, by Nordic Capital Epsilon SCA, SICAV-RAIF, on behalf of its compartment, Nordic Capital Epsilon SCA, SICAV-RAIF – Compartment 1, and each other guarantor party thereto, in favor of Inovalon Holdings, Inc. | |
| (d)(vii) | Equity Commitment Letter, dated August 19, 2021, by and among Nordic Capital Epsilon SCA, SICAV-RAIF, on behalf of its compartment, Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1, Ocala Bidco, Inc. and each other equity investor party thereto. | |
| (f) | Section 262 of the General Corporation Law of the State of Delaware (included as Annex F to the Proxy Statement, and incorporated herein by reference). | |
| (g) | Not Applicable. | |
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| INOVALON HOLDINGS, INC. | ||
| By: | /s/ Jonathan Boldt | |
| Name: | Jonathan Boldt | |
| Title: | Chief Financial Officer | |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| OCALA BIDCO, INC. | ||
| By: | /s/ Aditya Desaraju | |
| Name: | Aditya Desaraju | |
| Title: | President | |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| OCALA MERGER SUB, INC. | ||
| By: | /s/ Aditya Desaraju | |
| Name: | Aditya Desaraju | |
| Title: | President | |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
NORDIC CAPITAL EPSILON SCA, SICAV-RAIF
(acting through its general partner NORDIC CAPITAL EPSILON GP SARL)
for and on behalf of its compartment NORDIC CAPITAL EPSILON SCA, SICAV-RAIF-COMPARTMENT 1
| By: | /s/ Ian Charoub | |
| Name: | Ian Charoub | |
| Title: | Class A Manager |
Date: September 17, 2021
| By: | /s/ Monica Morsch | |
| Name: | Monica Morsch | |
| Title: | Class B Manager |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| KEITH R. DUNLEAVY, M.D. | ||
| By: | /s/ Keith R. Dunleavy, M.D. | |
| Name: | Keith R. Dunleavy, M.D. | |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| MERITAS GROUP, INC. | ||
| By: | /s/ Keith R. Dunleavy, M.D. | |
| Name: | Keith R. Dunleavy, M.D. | |
| Title: | President | |
Date: September 17, 2021
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
CAPE CAPITAL SCSP, SICAR – INOVALON SUB-FUND
(by the General Partner CAPE CAPITAL MANAGEMENT S.À.R.L)
| By: | /s/ Rolf Johan Holgersson | |
| Name: | Rolf Johan Holgersson | |
| Title: | Member of the Board of Managers |
Date: September 17, 2021
| By: | /s/ Véronique Trausch | |
| Name: | Véronique Trausch | |
| Title: | Member of the Board of Managers | |
Date: September 17, 2021
Exhibit (b)(i)
EXECUTION VERSION
CONFIDENTIAL
August 19, 2021
| BLACKSTONE ALTERNATIVE 345 Park Avenue New York, New York 10154 |
OWL ROCK CAPITAL 399 Park Avenue, 38th New
York, New York |
APOLLO CAPITAL APOLLO GLOBAL 9 West 57th Street New York, NY 10019 |
Ocala Bidco, Inc.
c/o Nordic Capital X Limited
26 Esplanade,
St. Helier, Jersey JE2 3QA
Channel Islands
Project Ocala
Commitment Letter
Ladies and Gentlemen:
You have advised Blackstone Alternative Credit Advisors LP (together with funds and accounts managed or advised by it or its affiliates, “Blackstone”), Owl Rock Capital Advisors LLC (together with its affiliates and its and their managed funds and accounts, “Owl Rock”), and APOLLO GLOBAL FUNDING, LLC (“AGF”) and APOLLO CAPITAL MANAGEMENT, L.P., on behalf of one or more investment funds, separate accounts, and other entities owned (in whole or in part), controlled, managed, and/or advised by it or its affiliates (in such capacity, “ACM” and together with AGF, “Apollo”, and together with Blackstone and Owl Rock, the “Commitment Parties”, “us” or “we”) that you intend to acquire, directly or indirectly, the Target (as defined on Exhibit A hereto) and consummate the other transactions described on Exhibit A hereto. Capitalized terms used but not otherwise defined herein are used with the meanings assigned to such terms in the Exhibits hereto.
| 1. | Commitments. |
In connection with the Transactions contemplated hereby, (i) (a) each of Blackstone, Owl Rock and ACM (the “Initial Term Lenders”) hereby commits, on a several but not joint basis, to provide $1,287.0 million, $526.5 million and $526.5 million, respectively, of the entire principal amount of the Initial Term Facility, (b) each of Blackstone, Owl Rock and ACM hereby commits, on a several but not joint basis, to provide $137.5 million, $56.25 million and $56.25 million, respectively, of the entire principal amount of the Revolving Facility, (c) each of Blackstone, Owl Rock and ACM hereby commits, on a several but not joint basis, to provide $137.5 million, $56.25 million and $56.25 million, respectively, of the entire principal amount of the Delayed Draw Term Loan Facility and (d) each of Blackstone, Owl Rock and ACM (the “Second Lien PIK Lenders” and together with the Initial Term Lenders, each, an “Initial Lender” and, collectively, the “Initial Lenders”), on a several but not joint basis, hereby commit to provide $260.70 million, $250.80 million and $148.50 million of the entire principal amount of the Second Lien PIK Term Facility upon the terms set forth or referred to in this letter, the Transaction Summary attached as Exhibit A hereto and the Summary of Terms and Conditions attached as Exhibit B hereto and (ii) the initial funding of which is subject only to the conditions (the “Financing Conditions”) set forth on Exhibit C hereto (such Exhibits A through C, including the annexes thereto, the “Term Sheets” and together with this letter, collectively, this “Commitment Letter”).
Notwithstanding anything set forth herein to the contrary, (a) no Commitment Party shall be relieved, released or novated from its obligations hereunder (including its obligation to fund its applicable percentage of the Credit Facilities on the Closing Date) in connection with any assignment or other transfer until after the initial funding of the Credit Facilities on the Closing Date, (b) no such assignment or other transfer shall become effective with respect to any portion of the Commitment Parties’ commitments in respect of the Credit Facilities until the initial funding of the Credit Facilities on the Closing Date, and (c) unless the Borrower agrees in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Credit Facilities, including all rights with respect to consents, waivers, modifications, supplements and amendments, until the Closing Date has occurred.
| 2. | Titles and Roles. |
It is agreed that:
| (a) | Owl Rock Capital Advisors LLC and AGF will act as joint lead arrangers and joint bookrunners for the Unitranche Facilities (acting in such capacities, the “Lead Arrangers”); |
| (b) | a third-party with customary agency capabilities appointed by you and reasonably acceptable to the Commitment Parties will act as sole administrative agent and as sole collateral agent for the Unitranche Facilities (the “Unitranche Agent”); and |
| (c) | Owl Rock Capital Corporation will act as sole administrative agent and as sole collateral agent for the Second Lien PIK Term Facility (the “Second Lien Agent”). |
You agree that no other agents, co-agents, arrangers, managers or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated in this Commitment Letter, the fee letter dated the date hereof and delivered in connection herewith (the “Fee Letter”) and the arranger fee letter dated the date hereof and delivered in connection herewith (the “Arranger Fee Letter” and, together with the Fee Letter, the “Fee Letters”) will be paid in order to obtain any commitments with respect to the Credit Facilities unless you and we shall so reasonably agree.
| 3. | Information. |
You hereby represent and warrant that (to your knowledge with respect to the Target and its subsidiaries) (a) all written information and written data concerning Holdings, you and your subsidiaries and the Target and its subsidiaries, other than any projections, other forward-looking information and information of a general economic or industry-specific nature, that has been or will be made available to any of us by Holdings, you, the Sponsor or any of your and their respective representatives on your or their behalf in connection with the transactions contemplated hereby (the “Information”), when taken as a whole, is correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections that have been or will be made available to any of us by Holdings, you, the Sponsor or any of your and their respective representatives on your or their behalf have been or will
2
be prepared in good faith based upon assumptions believed by you to be reasonable at the time made and at the time such Projections are furnished to us (it being recognized by the Commitment Parties that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which are beyond your control, that no assurance can be given that any particular financial projections will be realized, that actual results may differ from projected results and that 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 incorrect in any material respect if the Information or the Projections were being furnished and such representations and warranties were being made at such time, you will (or with respect to Information and Projections concerning the Target and its subsidiaries, you will, subject to any applicable limitations on your rights as set forth in the Acquisition Agreement, use commercially reasonable efforts to) promptly supplement the Information and the Projections so that (to your knowledge with respect to the Target and its subsidiaries) the representations and warranties in the preceding sentence remain true in all material respects. Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letters, none of the making of any representation under this Section 3, the making of any supplementation thereof, or the accuracy of any such representation shall constitute a condition precedent to the availability and initial funding of the Credit Facilities on the Closing Date.
| 4. | Fee Letters. |
As consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to pay or cause to be paid the fees and closing payments described in the Fee Letters on the terms and subject to the conditions (including as to timing and amount) set forth therein.
| 5. | Certain Funds Provision. |
Notwithstanding anything in this Commitment Letter, the Fee Letters, the Credit Documentation or any other letter agreement or other undertaking concerning the financing of the transactions contemplated hereby to the contrary, (a) the only representations and warranties the accuracy of which shall be a condition to the availability and initial funding of the Credit Facilities on the Closing Date, shall be (i) such of the representations made by or on behalf of the Target (as defined in Exhibit A), its subsidiaries or their respective businesses in the Acquisition Agreement as are material to the interests of the Commitment Parties (the “Specified Acquisition Agreement Representations”), it being agreed that the failure of a Specified Acquisition Agreement Representation shall not result in the failure of a condition to the availability and initial funding of the Credit Facilities unless you or your affiliates have the right to terminate your or their obligations under the Acquisition Agreement or such failure results in a failure of a condition precedent to your or your affiliates obligation to consummate the Acquisition pursuant to the terms of the Acquisition Agreement and (ii) the Specified Representations (as defined below), (b) the terms of the Credit Documentation shall be in a form such that they do not impair the availability or the initial funding of the Credit Facilities on the Closing Date if the conditions set forth on Exhibit C hereto are satisfied or waived, it being understood that, to the extent any Collateral (including the creation or perfection of any security interest) is not or cannot be provided on the Closing Date (other than, to the extent required under the Term Sheet, (i) a lien on Collateral that may be perfected by the filing of a financing statement under the UCC and (ii) a pledge of the equity interests of the Borrower and the Subsidiary Guarantors organized under the laws of the United States with respect to which a lien may be perfected by the delivery of a physical stock or equivalent certificate (together with a stock power or similar instrument of transfer endorsed in blank) to the extent, in the case of Subsidiary Guarantors that are subsidiaries of the Target, received from the Target on or prior to the Closing Date after your use of commercially reasonable efforts to do so without undue burden or expense) after your use of commercially reasonable efforts to do so without undue burden or expense, then the provision and/or perfection of such Collateral shall not constitute a condition precedent to the availability and initial funding of the Credit Facilities on the Closing Date but may instead be delivered and/or perfected within 90 days (or such longer period as the
3
Unitranche Required Lenders (as defined in Exhibit B) may reasonably agree in their discretion) after the Closing Date pursuant to arrangements to be mutually agreed by the parties hereto acting reasonably, and (c) the only conditions (express or implied) to the availability of the Credit Facilities on the Closing Date are those expressly set forth on Exhibit C hereto, such conditions shall be subject in all respects to the provisions of this paragraph and upon satisfaction (or waiver) of the such conditions, each of the Commitment Parties will execute the Credit Documentation to which it is a party and the initial funding of term loans and provision of revolving commitments under Credit Facilities will occur. For purposes hereof, “Specified Representations” means the representations and warranties set forth in the Credit Documentation relating to: corporate power or other organizational existence of the Loan Parties; organizational power and authority (as it relates to due authorization, execution, delivery and performance of the Credit Documentation) of the Loan Parties; due authorization, execution and delivery of the relevant Credit Documentation by the Loan Parties, and enforceability, in each case as it relates to the entering into and performance of the relevant Credit Documentation by the Loan Parties; solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries taken as a whole (in form and scope consistent with the solvency certificate to be delivered pursuant to paragraph 1(b) of Exhibit C hereto); no conflicts of the Credit Documentation with the charter documents of the Loan Parties; Federal Reserve margin regulations; the Investment Company Act; the PATRIOT Act; use of proceeds not violating OFAC, FCPA and other applicable anti-corruption and anti-terrorism laws and laws relating to sanctioned persons; and the creation, validity, perfection and priority of security interests in the Collateral (subject in all respects to security interests and liens permitted under the Credit Documentation and to the foregoing provisions of this paragraph). This paragraph, and the provisions contained herein, shall be referred to as the “Certain Funds Provision”.
| 6. | Indemnification; Expenses. |
You agree (a) to indemnify and hold harmless each of the Commitment Parties, their respective affiliates and controlling persons and their respective directors, officers, managers, members, employees, partners, agents, advisors and other representatives of each of the foregoing and their successors and permitted assigns (each, an “indemnified person”) from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any such indemnified person may become subject arising out of, resulting from or in connection with this Commitment Letter, the Fee Letter, the Credit Facilities, the use of the proceeds thereof and the Acquisition and the Transactions, or any claim, dispute, litigation, investigation or proceeding relating to any of the foregoing (a “Proceeding”), regardless of whether any indemnified person is a party thereto or whether such Proceeding is brought by you, any of your affiliates or any third party, and to reimburse each indemnified person within thirty (30) days following written demand therefor (together with reasonable backup documentation supporting such reimbursement request) for any reasonable and documented legal fees or other 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 external counsel to such indemnified persons taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional external counsel to all affected indemnified persons, taken as a whole (and, if reasonably necessary, of one local external counsel in any relevant jurisdiction to all such persons, taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional external local counsel to all affected indemnified persons, taken as a whole, in each such relevant jurisdiction)); provided, that 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 or gross negligence of, or material breach of a funding obligation of this Commitment Letter, the Fee Letters or the Credit Documentation by, such indemnified person (or any of its Related Parties (as defined below)), in each case as determined by a final non-appealable judgment of a court of competent jurisdiction or (ii) any disputes solely among indemnified persons (other than any claims against any Commitment Party in its capacity or in fulfilling its role as an administrative agent or any similar role under any facility) and not arising out of any act or omission of
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Holdings, you, the Sponsor any of your or their respective affiliates, and (b) if the Closing Date occurs, to reimburse the Commitment Parties on the Closing Date (to the extent an invoice therefor is received by the Invoice Date) or, if invoiced after the Invoice Date, within thirty (30) days, for all reasonable and documented out-of-pocket fees and expenses (including, but not limited to, due diligence expenses, travel expenses, and legal fees and expenses (but limited to, in the case of legal expenses, the reasonable fees, charges and disbursements of (x) one external counsel to the Commitment Parties and, if reasonably necessary, of one local external counsel in any relevant jurisdiction), (y) one external counsel to the Unitranche Agent pursuant to arrangement to be agreed between the Unitranche Agent and you, and, if reasonably necessary, of one local external counsel for the Unitranche Agent in any relevant jurisdiction and (z) one external counsel to the Second Lien Agent pursuant to arrangement to be agreed between the Second Lien Agent and you, and, if reasonably necessary, of one local external counsel for the Second Lien Agent in any relevant jurisdiction)), incurred in connection with each of the Credit Facilities and any related documentation (including this Commitment Letter, the Fee Letters and the Credit Documentation). No indemnified person or any other party hereto shall be liable for any damages arising from the use by any person of Information or other materials obtained through electronic, telecommunications or other information transmission systems, except to the extent any such damages arise from the gross negligence, bad faith or willful misconduct of such indemnified person (or any of its Related Parties), in each case as determined by a final non-appealable judgment of a court of competent jurisdiction. None of the indemnified persons, Holdings, you, the Investors, the Target, the Sellers or any of your or their respective affiliates or the respective directors, officers, employees, agents, advisors or other representatives of any of the foregoing shall be liable for any special, indirect, consequential or punitive damages in connection with this Commitment Letter, the Fee Letters or the Credit Facilities (including the use or intended use of the proceeds of the Credit Facilities) or the transactions contemplated hereby; provided, that nothing contained in this sentence shall limit your indemnification obligations to the extent set forth herein to the extent such special, indirect, consequential or punitive damages are included in any third party claim in connection with which such indemnified person is entitled to indemnification hereunder. You shall not be liable for any settlement of any Proceeding effected by any indemnified person without your consent (which consent shall not be unreasonably withheld, conditioned or delayed), but if settled with your written consent, or if there is a final non-appealable judgment of a court of competent jurisdiction against an indemnified person in any such Proceeding, you agree to indemnify and hold harmless such indemnified person 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 such settlement (a) includes an unconditional release of such indemnified person from all liability or claims that are the subject matter of such Proceeding and (b) does not include any statement as to any admission of fault or culpability. Notwithstanding the foregoing, each indemnified person shall be obligated to refund or return any and all amounts paid by you under this paragraph to such indemnified person for any losses, claims, damages, liabilities and expenses to the extent such indemnified person is not entitled to payment of such amounts in accordance with the terms hereof as determined by a court of competent jurisdiction in a final non-appealable judgment. For purposes hereof, “Related Party” and “Related Parties” of an indemnified person mean (a) any controlling person or controlled affiliate of such indemnified person, (b) the respective directors, officers or employees of such indemnified person or any of its controlling persons or controlled affiliates and (c) the respective agents or representatives of such indemnified person or any of its controlling persons or controlled affiliates, in the case of this clause (c), acting on behalf of, or at the express instructions of, such indemnified person, controlling person or such controlled affiliate.
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| 7. | Sharing of Information, Absence of Fiduciary Relationship. |
Each Commitment Party, together with its respective affiliates, may be, or may be affiliated with, a full service financial firm and as such from time to time may (a) effect transactions for its own account or the account of customers, and hold long or short positions in debt or equity securities or loans of companies that may be the subject of the transactions contemplated hereby or (b) provide debt financing, equity capital or other services (including without limitation, financing activities and financial planning and benefits counseling) to other companies in respect of which you, the Sponsor or the Target and your and their respective Subsidiaries may have conflicting interests. We will not furnish confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or our other relationships with you to other companies (except as permitted by Section 8 below). You also acknowledge that the Commitment Parties and their respective 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 acknowledge and agree that (a)(i) the commitments by the Commitment Parties hereunder are arm’s-length transactions between you and your affiliates, on the one hand, and the Commitment Parties, on the other hand, that do not directly or indirectly give rise to, nor do you rely on, any fiduciary duty on the part of the Commitment Parties and you waive, to the fullest extent permitted by law, any claims you may have against us for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated hereby and agree that we will have no liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on your behalf, including equity holders, employees or creditors, (ii) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate and you are not relying on the Commitment Parties for such advice and (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby; and (b) in connection with the transactions contemplated hereby, (i) each Commitment Party and its affiliates has been, is, and will be acting solely as a principal and, except as otherwise expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for you or any of your affiliates and (ii) no Commitment Party nor any Commitment Party’s affiliates has any obligation to you or your affiliates except those obligations expressly set forth in this Commitment Letter and any other agreement with you or any of your affiliates. You agree that you will not assert that any Commitment Party or any of their respective 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 such transaction or the process leading thereto.
The Commitment Parties and their respective affiliates may have economic interests that conflict with those of Holdings, Target or the Borrower and may provide financing or other services to parties whose interests’ conflict with yours. In the ordinary course of business, each Commitment Party may acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, you, the Borrower, the Sponsor, the Target or your and their respective subsidiaries and other companies with which you, the Borrower, the Sponsor, the Target or your and their respective subsidiaries may have commercial or other relationships. With respect to any securities and/or financial instruments so held by any Commitment Party, its affiliates or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion. Additionally, you acknowledge and agree that we are not advising you as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction (including, without limitation, with respect to any consents needed in connection with the transactions contemplated hereby).
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| 8. | Confidentiality. |
This Commitment Letter is entered into on the understanding that neither this Commitment Letter (prior to your acceptance thereof) nor the Fee Letters nor any of their terms or substance shall be disclosed by you, directly or indirectly, to any other person except (a) your subsidiaries, the Investors (or any prospective Investors) and to your and their respective directors, officers, employees, affiliates, members, partners, stockholders, attorneys, accountants, independent auditors, agents and other advisors and those of the Target and its subsidiaries and the Target itself, in each case, on a confidential basis (provided, that any disclosure of the Fee Letters or its contents to the Target or its subsidiaries or their respective directors, officers, employees, affiliates, members, partners, stockholders, attorneys, accountants, independent auditors, agents or other advisors (other than the Investors and their respective directors, officers, employees, affiliates, members, partners, stockholders, attorneys, accountants, independent auditors, agents and other advisors) shall be redacted in a customary manner to be reasonably agreed upon), (b) in any legal, judicial or administrative proceeding or as otherwise required by applicable law, rule or regulation or as requested by any governmental, regulatory or self-regulatory authority (in which case you agree, to the extent permitted by law and reasonably practicable to do so, to inform us promptly in advance thereof), (c) to the extent reasonably necessary or advisable in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter and/or the Fee Letters, (d) this Commitment Letter, including the existence and contents of this Commitment Letter (but not the Fee Letters or the contents thereof, other than the existence thereof and the aggregate amount of the fees payable thereunder) therein as part of projections, pro forma information and a generic disclosure of aggregate sources and uses to the extent customary in marketing materials and other disclosures) may be disclosed in any proxy statement or similar public filing related to the Acquisition or in connection with any public filing requirement and (e) any prospective Replacement Revolving Provider and their respective affiliates on a confidential basis. The foregoing restrictions shall cease to apply in respect of the existence and contents of this Commitment Letter (but not in respect of the Fee Letters and its contents) on the second anniversary of the earlier of the Closing Date and the date of termination of this Commitment Letter in accordance with its terms.
The Commitment Parties shall use all information received by them from you, the Sponsor, the Target or your or their respective affiliates and representatives in connection with the Acquisition and the related transactions (including any information obtained by them based on a review of the books and records relating to Holdings, you or the Target or any of your or their respective subsidiaries or affiliates) solely for the purposes of providing the commitments that are the subject of this Commitment Letter and shall treat confidentially all such information and the terms and contents of this Commitment Letter, the Fee Letters and the Credit Documentation and shall not publish, disclose or otherwise divulge such information; provided, however, that nothing herein shall prevent any Commitment Party from disclosing any such information (a) to any actual or potential Lenders, participants or derivative counterparties, current and prospective financing sources or investors (other than Disqualified Institutions and persons to whom you have affirmatively denied to provide your consent to the assignment thereto), (b) subject to the final proviso of this sentence, to any Lenders or participants or prospective Lenders or participants (or any of their respective advisors) (in each case, other than a Disqualified Institution unless you otherwise consent in writing in your sole and absolute discretion), (c) to the extent compelled by any legal, judicial or administrative proceedings, in any such legal, judicial or administrative proceedings or otherwise as required by applicable law, rule or regulation (in which case such Commitment Party shall, except with respect to any audit or examination conducted by bank accountants or any governmental, regulatory, or self-regulatory authority exercising examination, governmental or regulatory authority, to the extent permitted by law and reasonably practicable to do so, inform you promptly in advance thereof and use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (d) upon the request or demand of any governmental, regulatory or self-regulatory authority having jurisdiction over such Commitment Party or its
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affiliates, such as the National Association of Insurance Commissioners (in which case such Commitment Party shall except with respect to any audit or examination conducted by bank accountants or any governmental, regulatory or self-regulatory authority exercising examination, governmental or regulatory authority, to the extent permitted by law and reasonably practicable to do so, notify you promptly in advance thereof), (e) to the directors (or equivalent managers), officers, employees, legal counsel, independent auditors or other advisors (collectively, the “Representatives”) of such Commitment Party on a “need to know” basis solely in connection with the transactions contemplated hereby and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential, (f) to any other Commitment Party or any of its affiliates, limited partners, lenders investors, managed accounts, related funds and managed funds and their respective Representatives on a “need to know” basis solely in connection with the transactions contemplated hereby and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep such information confidential; provided, that such Commitment Party shall be responsible for its affiliates’ and their Representatives’ compliance with this paragraph; provided, further, that unless you otherwise consent in your sole and absolute discretion, no such disclosure shall be made by the Commitment Parties, their respective affiliates or any of its or their respective Representatives working on the financing contemplated by this Commitment Letter to Disqualified Institutions, (g) to the extent any such information is or becomes publicly available other than by reason of disclosure by such Commitment Party, its affiliates or its or their respective Representatives in breach of this Commitment Letter, (h) to the extent applicable and reasonably necessary or advisable, for purposes of establishing a “due diligence” or similar defense or enforcing its rights under this Commitment Letter, the Fee Letters or the Credit Documentation, (i) subject to the final proviso of this sentence, to any direct or indirect contractual counterparty to any credit default swap or similar derivative product (other than a Disqualified Institution), to potential or prospective Lenders, hedge providers, participants or assignees (or any of their respective advisors), (j) to the extent any such information is received by such Commitment Party from a third party that is not, to the Commitment Party’s knowledge, subject to confidentiality obligations to you, any of the Sponsor or the Target, (k) to the extent independently developed by such Commitment Party or its affiliates based exclusively on information the disclosure of which would not otherwise be restricted by this paragraph, (l) to any tax authority to the extent reasonably required for the purposes of the tax affairs of a party or its direct or indirect owners, and in connection with the filing of a tax return by a party or its direct or indirect owners, (m) to rating agencies and (n) to the extent reasonably necessary or advisable in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter and/or the Fee Letters; provided, further, that the disclosure of any such information pursuant to clauses (b) and (i) above shall be made subject to the acknowledgment and acceptance by such recipient 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 each Commitment Party, including, without limitation, as set forth in any confidential information memorandum or other marketing materials) in accordance with the market standards for dissemination of such type of information, which may in any event include “click through” or similar action on the part of the recipient to access such confidential information and acknowledge its confidentiality obligations in respect thereof. Each Commitment Party’s obligations under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the Credit Documentation upon the execution and delivery thereof and in any event shall terminate on the date that is two (2) years following the date of this Commitment Letter.
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| 9. | Miscellaneous. |
This Commitment Letter shall not be assignable by any party hereto (except (x) by you to one or more of your affiliates that is a newly formed domestic “shell” company controlled, directly or indirectly, by the Sponsor to effect the consummation of the Acquisition prior to or substantially concurrently with (and to the Target substantially concurrently with) the consummation of the closing of the Acquisition, (y) as to any Replacement Revolving Provider) or (z) by Blackstone, Owl Rock or Apollo to one or more of their respective affiliates and funds, accounts and clients managed or advised by any of them or any investor to which such Commitment Party provides certain administrative services) without the prior written consent of each other party 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, to the extent expressly set forth in Section 6 above, 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, to the extent expressly set forth in Section 6 above, the indemnified persons. Subject to the second paragraph of Section 1 above, the Commitment Parties reserve the right to employ the services of their affiliates in fulfilling their obligations contemplated hereby. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and each Commitment Party. Any provision of this Commitment Letter that provides for requires or otherwise contemplates any consent, approval, agreement or determination by the Borrower on or prior to the Closing Date shall be construed as providing for, requiring or otherwise contemplating your consent, approval, agreement or determination. This Commitment Letter and the Fee Letters are the only agreements that have been entered into among us and you with respect to the matters set forth herein and therein relating to the Credit Facilities and set forth the entire understanding of the parties with respect hereto and thereto, and supersede all prior agreements and understandings related to the subject matter hereof.
This Commitment Letter may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Commitment Letter by telecopier or in .pdf or similar format by electronic mail shall be effective as delivery of an original executed counterpart of this Commitment Letter. The words “execution,” “execute”, “signed,” “signature,” and words of like import in this Commitment Letter or any amendment or other modification hereof shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
This Commitment Letter, and any claim, controversy or dispute arising under or related to this Commitment Letter, whether in tort, contract (at law or in equity) or otherwise, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York; provided, however, that (a) the interpretation of the definition of Material Adverse Effect (and whether or not a Material Adverse Effect has occurred, including, for purposes of the conditions to funding the credit facilities) or any other term used herein that is defined by reference to the Acquisition Agreement, (b) the determination of the accuracy of any Specified Acquisition Agreement Representations and whether as a result of any inaccuracy of any Specified Acquisition Agreement Representations there has been a failure of a condition to funding the Credit Facilities and (c) the determination of whether the Acquisition has been consummated and whether the Acquisition has been consummated in accordance with the terms of the Acquisition Agreement shall, in each case, be governed by, and construed in accordance with, the laws of the state of Delaware as applied to the Acquisition Agreement, without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any other jurisdiction. Each of the parties hereto irrevocably agrees to waive all right to trial by jury in any suit, action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of the Acquisition, this Commitment Letter, the Fee Letters or the performance by us or any of our affiliates of the services contemplated hereby or thereby.
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Each of the parties hereto agrees that each of this Commitment Letter and the Fee Letters is a binding and enforceable agreement with respect to the subject matter herein or therein (including an obligation to negotiate in good faith); it being acknowledged and agreed that the funding of the Credit Facilities is subject to the conditions specified herein, including the execution and delivery of the Credit Documentation by the parties hereto in a manner consistent with this Commitment Letter (including the Documentation Considerations); it being acknowledged and agreed that the commitment provided hereunder is subject only to those conditions set forth on Exhibit C hereto; provided, that (i) without limiting your obligations under Section 4 of the Fee Letters, nothing contained in this Commitment Letter obligates you or any of your affiliates to consummate the Acquisition or to draw down any portion of the Credit Facilities and (ii) you shall be entitled to replace the Revolving Facility with a Replacement Revolving Facility.
Each of the parties hereto irrevocably and unconditionally (a) submits to the exclusive jurisdiction of any state or federal court sitting in the Borough of Manhattan in the City of New York (or any appellate court therefrom) over any suit, action or proceeding arising out of or relating to this Commitment Letter or the Fee Letters, (b) 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, federal court and (c) agrees that a final judgment in any such action may be enforced in other jurisdictions in any manner provided by law. You and we agree that service of any process, summons, notice or document by registered mail addressed to such person shall be effective service of process against such person for any suit, action or proceeding brought in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum.
Each of the Commitment Parties hereby notifies 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) (the “PATRIOT Act”) and the requirements of the beneficial ownership certification required by 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), it is required to obtain, verify and record information that identifies the Borrower and each Guarantor, which information includes names, addresses, tax identification numbers and other information that will allow each Lender to identify the Borrower and each Guarantor in accordance with the PATRIOT Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the PATRIOT Act and is effective for the Commitment Parties and each Lender.
The Fee Letters, the indemnification, confidentiality, jurisdiction, governing law, sharing of information, no agency or fiduciary duty, waiver of jury trial, service of process and venue provisions contained herein shall remain in full force and effect regardless of whether the Credit Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the commitments hereunder; provided, that your obligations under this Commitment Letter, and other than those relating to confidentiality and absence of advisory or fiduciary duty shall, to the extent covered by the Credit Documentation, automatically terminate and be superseded by the Credit Documentation upon the initial funding under the Credit Facilities and you shall no longer have any liability hereunder in connection therewith at such time. Subject to the preceding sentence, you may terminate this Commitment Letter (in whole but not in part as to any Credit Facility) upon written notice to the Commitment Parties at any time.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of our offer as set forth in this Commitment Letter and the Fee Letters by returning to us executed counterparts of this Commitment Letter and of the Fee Letters not later than 11:59 p.m., New York City time, on August 19, 2021 (at which point, for the avoidance of doubt, that certain commitment letter dated as of August 6, 2021 and executed by the Commitment Parties shall be superseded and replaced in its entirety by this Commitment Letter and the commitments thereunder shall automatically
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terminate). Such offer will remain available for acceptance until such time, but will automatically expire at such time if we have not received such executed counterparts in accordance with the preceding sentence. On the earliest of (a) 11:59 p.m., New York City time on the date that is five business days after the End Date (as defined in the Acquisition Agreement as in effect on the date of this Commitment Letter), (b) the date of the termination of the Acquisition Agreement by you or with your written consent, in each case prior to the closing of the Acquisition and (c) the date of the closing of the Acquisition without the use of the Credit Facilities (other than, in the case of the Revolving Facility, to the extent replaced with any Replacement Revolving Facility; provided that our commitment in respect of the Revolving Facility shall automatically terminate in connection with any Replacement Revolving Facility as specified herein), this Commitment Letter and the commitments hereunder shall automatically terminate unless we shall, in our sole discretion, agree to an extension; provided, that 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 that occurred prior to any such termination.
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We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.
| Very truly yours, | ||
| BLACKSTONE ALTERNATIVE CREDIT ADVISORS LP | ||
| By: |
/s/ Marisa Beeney | |
| Name: Marisa Beeney | ||
| Title: Authorized Signatory | ||
| OWL ROCK CAPITAL ADVISORS LLC, on behalf of its affiliated advisors and its and their managed funds and accounts | ||
| By: |
/s/ Jon ten Oever | |
| Name: Jon ten Oever | ||
| Title: Authorized Signatory | ||
| OWL ROCK CAPITAL CORPORATION | ||
| By: |
/s/ Jon ten Oever | |
| Name: Jon ten Oever | ||
| Title: Authorized Signatory | ||
| APOLLO CAPITAL MANAGEMENT, L.P. | ||
| By: APOLLO CAPITAL MANAGEMENT GP, LLC, its general partner | ||
| By: |
/s/ Joseph D. Glatt | |
| Name: Joseph D. Glatt | ||
| Title: Vice President | ||
| APOLLO GLOBAL FUNDING, LLC | ||
| By: |
/s/ Matt Manin | |
| Name: Matt Manin | ||
| Title: Vice President | ||
[Signature Page to Commitment Letter – Project Ocala]
| Accepted and agreed to as of the date first above written: | ||
| OCALA BIDCO, INC. | ||
| By: | /s/ Aditya Desaraju | |
| Name: Aditya Desaraju | ||
| Title: President | ||
[Signature Page to Commitment Letter – Project Ocala]
EXHIBIT A
Project Ocala
Transaction Summary
The Sponsor (as defined below) and other investors, if any, which may include members of management of the Target (as defined below) and its subsidiaries (together with the Sponsor, the “Investors”) intend, directly or indirectly, to acquire (the “Acquisition”) a company previously identified to you as “Ocala”, a Delaware corporation (the “Target”), all as set forth in the Acquisition Agreement (as defined on Exhibit C hereto). In connection therewith:
| (a) | Ocala Bidco, Inc., a Delaware corporation (the “Company”), Ocala MidCo, Inc., a Delaware corporation (“Holdings”), and the Target, will enter into the Acquisition Agreement; |
| (b) | the Investors will make cash (or, in the case of members of management of the Target and its subsidiaries, if any, and certain existing Investors cash or non-cash) equity contributions (which shall be in the form of common equity, “qualified preferred” equity or other equity (such “qualified preferred” equity or other equity to be on terms reasonably satisfactory to the Commitment Parties)), directly or indirectly, to Holdings, which, in the case of cash equity, will in turn be contributed as cash common equity to the Borrower (to the extent not applied to finance the Acquisition) and, which cash equity, when combined with equity of members of management of the Target and its subsidiaries and the Sponsor and certain existing Investors that will be retained, rolled over or converted, if any, will constitute an aggregate amount not less than 50% of the total consolidated pro forma debt and equity of the Borrower (as defined on Exhibit B) and its subsidiaries on the Closing Date (as defined below) after giving effect to the Transactions (as defined below) (but without giving effect to any outstanding Revolving Loans incurred to fund any working capital needs on the Closing Date) (the “Equity Contribution”); |
| (c) | the Borrower will obtain (i) a senior secured term loan facility in an aggregate principal amount equal to $2,340 million (the “Initial Term Facility”), (ii) a $250 million super senior secured revolving credit facility (the “Revolving Facility”), (iii) a senior secured delayed draw term loan facility in an aggregate principal amount equal to $250 million (the “Delayed Draw Term Loan Facility”, together with the Initial Term Facility and the Revolving Facility, the “Unitranche Facilities”) and (iv) a second lien PIK term loan facility in an aggregate principal amount equal to $660 million (the “Second Lien PIK Term Facility”, together with the Unitranche Facilities, the “Credit Facilities”); |
| (d) | all indebtedness of the Target and its subsidiaries under that certain Credit Agreement, dated April 2, 2018 (as such agreement was amended, amended and restated, supplemented or otherwise modified prior to the date hereof) among the Target, the lenders from time to time party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent (the “Existing Credit Agreement”) will be repaid, redeemed, defeased, discharged, refinanced or terminated and all commitments thereunder terminated (the “Refinancing”); |
| (e) | the fees, closing payments, premiums, expenses and other transaction costs incurred in connection with the Transactions, including to fund any OID, upfront fees and closing payments (the “Transaction Costs”) will be paid; and |
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| (f) | the proceeds of the Equity Contribution and the Credit Facilities will be used to pay the consideration and other amounts owing in connection with the Acquisition under the Acquisition Agreement, to effect the Refinancing and to pay all or a portion of the Transaction Costs. |
The transactions described above are collectively referred to as the “Transactions”. For purposes of the Commitment Letter and the Fee Letters, “Closing Date” shall mean the date of the consummation of the Acquisition and the satisfaction (or waiver by the Commitment Parties) of the relevant conditions set forth on Exhibit C and the initial funding of the relevant Credit Facilities.
As used herein, “Sponsor” or “Nordic Capital” means (a) (i) Nordic Capital X Alpha, L.P, Nordic Capital X Beta, L.P., Nordic Capital X Alpha, SCSp, Nordic Capital X Beta, SCSp, NC X Gamma Investor, SCSp and/or any additional parallel, feeder or side investment vehicles that may be established from time to time as part of Nordic Capital Fund X (“Fund X”), (ii) any downstream funds, aggregator vehicles or other investment vehicles through which Fund X acquires or gains exposure to portfolio companies, (iii) any co-investment vehicles established to invest alongside Fund X and/or (iv) any continuation fund or successor of any of the foregoing, (b) any other Nordic Capital branded and/or associated funds or products (the “NC Products”) and their portfolio companies, (c) any vehicles through which NC Products acquire or gain exposure to portfolio companies, (d) the general partners and/or investment managers of the NC Products (the “GPs”), (e) the GP’s respective non-discretionary sub-advisers, and/or (f) any affiliated entities of the foregoing.
A-2
EXHIBIT B
Project Ocala
Credit Facilities
Summary of Terms and Conditions
Set forth below is a summary of the principal terms and conditions for the Credit Facilities. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Commitment Letter to which this Exhibit B is attached or on Exhibits A or C (including the Annexes hereto and thereto) attached thereto.
PARTIES
| Borrower: |
Ocala Bidco, Inc., a Delaware corporation (the “Borrower”); provided, that the Borrower may, in its sole discretion (but subject to the delivery of customary “know your customer” information (including applicable certificates regarding beneficial ownership required by 31 C.F.R. § 1010.230) to each Lender who requests such information through the Unitranche Agent or Second Lien Agent, as applicable), designate one or more of its direct or indirect wholly-owned subsidiaries organized under the laws of the United States of America, any state thereof or the District of Columbia as co-borrowers or additional borrowers. | |
| Guarantors: |
All obligations of the Borrower under the Credit Facilities and, at the Borrower’s option, under any currency, interest rate protection or other hedging agreement (the “Secured Hedging Agreements”) and any cash management arrangement, in each case entered into with the Unitranche Agent (as defined below), with a Lender (as defined below) or any person designated by the Borrower (collectively, the “Borrower Obligations”) will be unconditionally guaranteed on a senior basis (the “Guaranty”) by (i) prior to any Qualifying IPO (to be defined consistent with the Documentation Considerations) of the Borrower, the direct parent company of the Borrower (“Holdings”) and (ii) each of the Borrower’s wholly-owned domestic Restricted Subsidiaries (as defined below) (the “Subsidiary Guarantors”; and together with Holdings, collectively, the “Guarantors”; the Borrower and the Guarantors, collectively, the “Loan Parties”) other than (unless the Borrower otherwise elects in its sole discretion; provided that any subsidiary that is a Loan Party pursuant to such an election by the Borrower shall not be considered a CFC or a CFC Holdco):
(a)immaterial subsidiaries subject to individual and aggregate thresholds to be agreed (“Immaterial Subsidiaries”),
(b)any subsidiary that is prohibited by law, regulation or contractual obligation in effect on the Closing Date or at the time of the acquisition of such Subsidiary and not incurred in contemplation of such acquisition from providing such Guaranty or that would require a governmental (including regulatory) consent, approval, license or authorization in order to provide such Guaranty or where the provision | |
B-1
| of such Guaranty would result in material adverse tax consequences as reasonably determined
(c) any direct or
indirect subsidiary that holds no material assets other than the equity of one
(d) any domestic subsidiary that is a direct or indirect subsidiary of a Foreign Subsidiary that
(e) not-for-profit subsidiaries, captive insurance subsidiaries and special purpose
entities used
(f) solely in the
case of any obligation under any Secured Hedging Agreement that constitutes
(g) any
Restricted Subsidiary acquired pursuant to a Permitted Acquisition (as defined below)
(h) any subsidiary to the extent that the burden or cost of providing such Guaranty outweighs
For purposes of the Credit Documentation (as defined below), (a) “Foreign Subsidiary” |
B-2
| Unitranche Administrative Agent and Collateral Agent: |
A third-party with customary agency capabilities appointed by you and reasonably acceptable to the Commitment Parties will act as the sole and exclusive administrative agent and collateral agent for the Unitranche Lenders referred to below (the “Unitranche Agent”). The Unitranche Agent will be compensated by the Borrower pursuant to separate arrangement to be agreed with the Unitranche Agent. | |
| Second Lien PIK Administrative Agent and Collateral Agent: |
Owl Rock Capital Corporation will act as the sole and exclusive administrative agent and collateral agent for the Second Lien PIK Lenders referred to below (the “Second Lien Agent”). The Second Lien Agent will be compensated by the Borrower pursuant to separate arrangement to be agreed with the Second Lien Agent. | |
| Unitranche Joint Lead Arrangers and Joint Bookrunners: |
Owl Rock Capital Advisors LLC and AGF will act as joint lead arrangers and joint bookrunners for the Unitranche Facilities. | |
| Unitranche Lenders: |
The Commitment Parties providing commitments under the Unitranche Facility (together with any party that becomes a lender by assignment as set forth under the heading “Assignments and Participations” below, together the “Unitranche Lenders”). | |
| Second Lien PIK Lenders: |
The Commitment Parties providing commitments under the Second Lien PIK Term Facility (together with any party that becomes a lender by assignment as set forth under the heading “Assignments and Participations” below, together the “Second Lien PIK Lenders” and together with the Unitranche Lenders, the “Lenders”). | |
| TYPES AND AMOUNTS OF FACILITIES | ||
| Initial Term Facility: |
A 7-year senior secured term loan facility denominated in U.S. dollars, in an aggregate principal amount equal to $2,340 million (the “Initial Term Facility”) (the loans thereunder, the “Initial Term Loans”). | |
| Revolving Facility: |
A 5-year revolving credit facility (the “Revolving Facility”; and the commitments under the Revolving Facility, the “Revolving Commitments”) denominated in U.S. dollars, and other currencies to be mutually agreed in an aggregate principal amount of $250 million (the loans thereunder, together with (unless the context otherwise requires) the Swingline Loans referred to below, the “Revolving Loans”). | |
| Delayed Draw Term Loan Facility: |
A 7-year senior secured term loan facility denominated in U.S. dollars in an aggregate principal amount of $250 million (the “Maximum DDTL Amount”) (the “Delayed Draw Term Loan Facility” and, together with the Initial Term Facility, the “Term Facility”, and further, the Term Facility, together with the Revolving Facility, the “Unitranche Facilities”). The loans under the Delayed Draw Term Loan Facility are referred to as the “Delayed Draw Term Loans” (together with the Initial Term Loans, the “Unitranche Term Loans” and together with the Revolving Loans, the “Unitranche Loans”). | |
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| Second Lien PIK Term Facility: |
A 12-year PIK term loan facility denominated in U.S. dollars in an aggregate principal amount equal to $660 million (the “Second Lien PIK Term Facility”) (the loans thereunder, the “Second Lien PIK Term Loans” and together with the Unitranche Term Loans, the “Term Loans”). | |
| Replacement Revolving Facility: |
The Borrower may appoint one or more persons other than the Commitment Parties (any such person appointed pursuant to this sentence, an “Replacement Revolving Provider”), and/or confer additional titles to such Replacement Revolving Providers, to provide a revolving facility in an aggregate principal amount not to exceed $250 million (the “Replacement Revolving Facility”) in lieu of the Revolving Facility (an “Alternate Revolving Placement”) on or prior to the Closing Date on terms to be agreed between you and the Replacement Revolving Provider (notwithstanding the willingness on the part of the Commitment Parties to provide the Revolving Facility), it being understood that: (a) any Replacement Revolver Facility may be secured by a lien on the Collateral on a pari passu or “super senior” basis to the other Credit Facilities at the Borrower’s discretion, (b) such Replacement Revolving Facility shall be subject to customary voting, remedial and inter-lender provisions to be agreed among the Replacement Revolving Provider, the Commitment Parties and the Borrower (it being understood that such terms set forth in the Documentation Precedent are satisfactory to the Commitment Parties and shall not require further consent of the Commitment Parties); (c) the Replacement Revolving Provider shall be commercial banking institutions or otherwise reasonably satisfactory to the Commitment Parties; (d) the Borrower shall have the sole discretion to determine the economics (including the pricing terms and fees) and financial covenant associated with such Replacement Revolver Facility so long as the economics do not exceed the economics allocated to the Revolving Facility under this Term Sheet; (e) the other terms of the Replacement Revolving Facility shall be determined by the Borrower and the Replacement Revolving Providers and shall be on customary terms reasonably satisfactory to the Commitment Parties; and (f) you shall promptly notify the Commitment Parties upon entering into commitments with respect to any Replacement Revolving Placement and upon providing such notice, the commitment amounts of the Commitment Parties in respect of the Revolving Facility will be reduced to $0 automatically and, to the extent such notice is provided and such commitments are provided on or prior to the Closing Date, the economics under the Fee Letters allocated to the Commitment Parties as of the date of this Commitment Letter in respect of the Revolving Facility will be reduced to $0 automatically. | |
| Maturity and Amortization: |
Initial Term Facility: The Initial Term Facility shall be payable in full on the Initial Term Loan Maturity Date (as defined below). The Initial Term Facility will not amortize and will mature on the date which is seven (7) years following the Closing Date (the “Initial Term Loan Maturity Date”); provided, that the | |
B-4
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|
Credit Documentation shall provide the right for individual Lenders to agree to extend the maturity date of the outstanding Initial Term Loans held by such Lenders upon the request of the Borrower and without the consent of any other Lender (and as further described below).
Revolving Facility: The Revolving Commitments shall terminate and the Revolving Loans will mature on the date that is five (5) years following the Closing Date (the “Revolving Termination Date”); provided, that the Credit Documentation shall provide the right of individual Lenders to agree to extend the maturity of their Revolving Commitments upon the request of the Borrower and without the consent of any other Lender (and as further described below).
Delayed Draw Term Loan Facility: The Delayed Draw Term Loans shall have a maturity date of 7 years following the Closing Date, with no amortization and shall be payable in full on the Initial Term Loan Maturity Date; provided that the Credit Documentation shall provide the right for individual Lenders to agree to extend the maturity date of the outstanding Delayed Draw Term Loans held by such Lenders upon the request of the Borrower and without the consent of any other Lender (and as further described below).
Second Lien PIK Term Facility: The Second Lien PIK Term Facility will be payable in full on the Second Lien PIK Maturity Date (as defined below) with no amortization. The Second Lien PIK Term Facility will mature on the date that is twelve years following the Closing Date (the “Second Lien PIK Maturity Date”); provided, that the Second Lien Credit Documentation shall provide the right for individual Lenders to agree to extend the maturity date of the outstanding Second Lien PIK Term Loans held by such Lenders upon the request of the Borrower and without the consent of any other Lender (and as further described below).
Notwithstanding anything to the contrary set forth herein, the Unitranche Credit Documentation and the Second Lien Credit Documentation shall provide that the Borrower may at any time and from time to time request that all or a portion of any loans of the Borrower be converted to extend the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of such loans (any such loans which have been so converted, “Extended Loans”) and upon such request of the Borrower any individual Lender shall have the right (but not the obligation) to agree to extend the maturity date of its commitments under the Revolving Facility and outstanding Revolving Loans or Term Loans held by such Lender without the consent of any other Lender. The terms of Extended Loans shall be substantially similar to the loans of the existing class from which they are converted except for interest rates, prepayment premiums, fees, OID, amortization (which may result in a longer (but not shorter) weighted average life than the existing class), final maturity date (which may be later than the existing class), provisions permitting optional and mandatory prepayments to be directed first to the non-extended loans prior to |
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|
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being applied to Extended Loans and certain other customary provisions to be agreed. Extended Loans shall not be subject to any “default stopper”, financial tests or the MFN Provisions. | |
| Availability: |
The Initial Term Loans and the Second Lien PIK Term Loans shall be made in a single drawing on the Closing Date. Repayments and prepayments of the Initial Term Loans and the Second Lien PIK Term Loans may not be reborrowed.
The Revolving Facility shall be available on a revolving basis during the period commencing on the Closing Date and ending on the Revolving Termination Date; provided, that Revolving Loans may be made on the Closing Date as set forth under the heading “Use of Proceeds” below.
The Delayed Draw Term Loan Facility will be made available to the Borrower in multiple drawings (each such drawing date, a “Delayed Draw Date”), each in a minimum amount of no less than an amount to be agreed, after the Closing Date until the earlier to occur of the date on which the Maximum DDTL Amount has been drawn and the date that is 30 months after the Closing Date (such date or, if earlier, the date the commitments under the Delayed Draw Term Loan Facility are terminated pursuant to the last sentence off this paragraph, the “Delayed Draw Termination Date”); provided that the Delayed Draw Term Loans may be only made on or after the Closing Date as set forth under the heading “Use of Proceeds” below. Amounts borrowed under the Delayed Draw Term Facility that are repaid or prepaid may not be reborrowed. Once funded, the Delayed Draw Term Loans shall have the same terms and provisions (including, without limitation, pricing, maturity and amortization) as the Initial Term Loans; it being understood that the Delayed Draw Term Loans and the Initial Term Loans shall be treated in the same manner for all purposes of the Credit Documentation except that (x) the Delayed Draw Term Loans and the Initial Term Loans may be assigned or participated on a non-pro rata basis and (y) they shall not be required to be “fungible” for U.S. federal income tax purposes. At any time and from time to time upon notice to the Unitranche Agent, the Borrower may elect to reduce or terminate the Lenders’ commitments under the Delayed Draw Term Loan Facility without fees (other than (i) the payment of the Delayed Draw Unused Commitment Fees accrued to the date of termination and (ii) the Delayed Draw Term Loan Facility Funding Fee (as defined in the Fee Letters)) or penalties. | |
| Use of Proceeds: |
The proceeds of the Initial Term Loans and the Second Lien PIK Term Loans will be used to (i) finance a portion of the Transactions (including working capital and/or purchase price adjustments payable on the Closing Date and the payment of Transaction Costs) and (ii) to fund cash on the balance sheet of the Borrower on the Closing Date, which may be used to consummate Permitted Acquisitions and other general corporate purposes of the Borrower and its subsidiaries after the Closing Date. | |
B-6
|
|
The proceeds of the Delayed Draw Term Loan Facility may be used after the Closing Date (and until the Delayed Draw Termination Date), by the Borrower and its subsidiaries for capital expenditures, Permitted Acquisitions and similar investments, funding earn-outs and fees and expenses incurred in connection with each of the above and the repayment of Revolving Loans and replenishment of cash on hand used solely for such purposes.
The proceeds of the Revolving Loans may be used (a) on the Closing Date, (i) to fund ordinary course working capital needs and working capital adjustments (as certified to be ordinary course by a responsible officer of the Borrower) and (ii) to finance a portion of the Transaction Costs in an amount for this clause (ii) not to exceed $30 million in the aggregate and (b) after the Closing Date, to finance working capital needs and other general corporate purposes of the Borrower and its subsidiaries (including for capital expenditures, acquisitions, working capital and/or purchase price adjustments, the payment of transaction fees and expenses (in each case, including in connection with the Acquisition), other investments, restricted payments and any other purpose not prohibited by the Credit Documentation). | |
| Closing Date Total Leverage Ratio: |
The Total Leverage Ratio (as defined below) of the Borrower on the Closing Date after giving effect to the consummation of the Transactions (the “Closing Date Total Leverage Ratio”) shall be calculated by:
(i) including in Consolidated EBITDA denominator (x) the total amount of EBITDA set forth in the QoE Report (which, for the avoidance of doubt, is $252 million) plus (y) the LTM EBITDA attributable to all acquisitions consummated after the date of the Commitment Letter and on and prior to the Closing Date plus (z) all pro forma adjustments to the EBITDA amount set forth in clause (y), in each case of clauses (y) and (z), by applying the same methods and making the same type of adjustments used in preparing the QoE Report (provided that such adjustments shall be subject to the cap of 30% of Consolidated EBITDA set forth in the definition thereof for the adjustments in subclauses (x)(ii) and (x)(iii) and shall not be excluded from such cap by virtue of subclause (x)(i)); and
(ii) allowing unlimited cash netting with respect to the proceeds of the Initial Term Loans if funded to the balance sheet of the Borrower. | |
| Letters of Credit: |
A portion of the Revolving Facility in an amount to be agreed shall be available for the issuance of standby letters of credit denominated in U.S. dollars, the other currencies available under the Revolving Facility and such other currencies to be mutually agreed between the Borrower, the Unitranche Agent and the applicable Issuing Lender (the “Letters of Credit”), by each Commitment Party (or its designee) and/or one or more | |
B-7
|
|
other Unitranche Lender (or their designee) that is willing to accept its appointment as such and is reasonably acceptable to the Borrower (in such capacity, each an “Issuing Lender”); provided that each Commitment Party that holds commitments under the Revolving Facility shall have a letter of credit commitment that is proportionate with its commitment under the Revolving Facility; provided, further, that any Issuing Lender that is an Initial Lender shall only be required to issue standby letters of credit; provided, further, that none of Blackstone, Owl Rock or ACM shall be an Issuing Lender. No Letter of Credit shall have an expiration date after the earlier of (a) one (1) year after the date of issuance or such longer period of time as may be agreed to by the applicable Issuing Lender and (b) five (5) business days prior to the Revolving Termination Date; provided, that any Letter of Credit with a one (1) year tenor may provide for automatic or “evergreen” renewal thereof for additional one (1) year periods (which shall in no event extend beyond the date referred to in clause (b) above unless cash collateralized or backstopped pursuant to arrangements reasonably satisfactory to the Issuing Lender thereof).
Drawings under any Letter of Credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of Revolving Loans) within one (1) business day after notice of such drawing is received by the Borrower from the relevant Issuing Lender. To the extent that the Borrower does not so reimburse the Issuing Lender within such time period, the Unitranche Lenders under the Revolving Facility shall be irrevocably and unconditionally obligated to fund participations in the reimbursement obligations on a pro rata basis based on their respective Revolving Commitments.
Letters of Credit may be issued on the Closing Date in the ordinary course of business and to backstop, replace or provide credit support for any existing letters of credit (including by “grandfathering” such existing letters of credit into the Revolving Facility). For the avoidance of doubt, none of Owl Rock, Apollo or any Blackstone Related Lender (as defined below) will be an Issuing Lender. “Blackstone Related Lenders” means Blackstone and/or one or more of its affiliates and funds, accounts and clients managed or advised by any of them or any investor to which Blackstone provides certain administrative services. | |
| Swingline Loans: |
A portion of the Revolving Facility in an amount to be agreed shall be available for swingline loans in U.S. dollars (the “Swingline Loans”) from the Unitranche Agent (in such capacity, the “Swingline Lender”) on same-day notice. Any Swingline Loans will reduce availability under the Revolving Facility on a dollar-for-dollar basis. Each Unitranche Lender under the Revolving Facility shall be irrevocably and unconditionally obligated to purchase, under certain circumstances, a participation in each Swingline Loan on a pro rata basis based on its respective Revolving Commitment. In lieu of the swingline facility, the definitive documentation may provide that U.S. dollar ABR borrowings shall be made available under the Revolving Facility on same day notice to the extent they can be provided by a Lender under the Revolving Facility. For the avoidance of doubt, none of Owl Rock, Apollo or any Blackstone Related Lender will be a Swingline Lender. | |
B-8
| Unitranche Incremental Facilities: | The Borrower or any Foreign Subsidiary will have the right, from time to time, on one or more occasions, to (a) add one or more incremental term facilities and/or, solely in the case of the Borrower, increase the Term Facility (each, an “Incremental Unitranche Term Facility”) and/or (b) add one or more incremental revolving facilities and/or increase commitments under the Revolving Facility (each, an “Incremental Unitranche Revolving Facility” and together with any Incremental Term Facilities, each an “Incremental Unitranche Facility”, and collectively, the “Incremental Unitranche Facilities”) in an aggregate principal amount (x) not to exceed the greater of (i) $252 million and (ii) an amount equal to 100% of Consolidated EBITDA (as defined below), on a pro forma basis after giving effect to the incurrence of such additional amount, any acquisition or investment consummated in connection therewith and all other appropriate pro forma adjustments, as of the most recent test period (the “Incremental Unitranche Starter Basket”) plus the unused portion, if any, of the General Debt Basket (less the aggregate principal amount of (i) Incremental Unitranche Facilities and Unitranche Incremental Equivalent Debt, in each case, issued and/or incurred in reliance on the Incremental Unitranche Starter Basket, (ii) Incremental Second Lien Facilities (as defined below) and Second Lien Incremental Equivalent Debt (as defined below), in each case issued and/or incurred in reliance on the Incremental Second Lien Starter Basket (as defined below) and (iii) any indebtedness incurred under the Ratio Debt Free and Clear Amount and the Incurred Debt Free and Clear Amount (amounts incurred under clauses (i)-(iii) collectively, the “Free and Clear Amounts”), plus (y) all voluntary prepayments, repurchases or redemptions of the Initial Term Facility, Delayed Draw Term Loan Facility, Second Lien PIK Term Facility, Incremental Unitranche Facilities, Incremental Second Lien Facilities, Unitranche Incremental Equivalent Debt or Second Lien Incremental Equivalent Debt so applied in prepayment thereof and in each case, secured on a pari passu basis with the Initial Term Facility, Delayed Draw Term Loan Facility and permanent commitment reductions or cancellations of the Revolving Facility, in each case, prior to such time (including assignments to and purchases by the Borrowers or any restricted subsidiary, but excluding prepayments or repurchases made with the proceeds of long-term indebtedness (other than the Revolving Facility or other revolving loans)), and, in each case, limited to the amount actually paid in cash for such prepayment, repurchase or redemption, plus (z) an unlimited amount so long as in the case of this clause (z) after giving effect to such Incremental Unitranche Facility or Unitranche Incremental Equivalent Debt and after giving pro forma effect to any acquisition or investment consummated in connection therewith, (i) in the case of Incremental Unitranche Facilities secured on the Collateral on a pari passu basis with the Term Facility, the First Lien Leverage Ratio does not exceed 9.30:1.00, (ii) in the case of Incremental Unitranche Facilities secured on a junior basis with the Unitranche |
B-9
| Facilities, the Total Leverage Ratio (as defined below) does not exceed 11.90:1.00 and (iii) in the case of any unsecured Incremental Unitranche Facilities or Incremental Unitranche Facilities secured by assets not constituting Collateral, the Total Leverage Ratio does not exceed 12.15:1.00 (in the case of the foregoing clause (z), calculated on a pro forma basis as of the most recently completed four consecutive fiscal quarters for which financial statements are internally available (so long as such financial statements are subsequently delivered to the Unitranche Agent and the Lenders prior to or concurrently with the incurrence of any such indebtedness), including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental Unitranche Facility or any other concurrent incurrence of debt, provided that to the extent the proceeds of any such Incremental Unitranche Facility are to be used to repay indebtedness, there shall be no limit to the Borrower’s ability to give pro forma effect to such repayment of indebtedness), giving pro forma effect to any related transaction in connection therewith and all customary pro forma events and adjustments and assuming, in the case of any Incremental Unitranche Revolving Facility, a full drawing of such Incremental Unitranche Revolving Facility) (the “Incremental Unitranche Incurrence Test” and together with clauses (x) and (y) above, the “Available Unitranche Incremental Amount”) (it being understood that (A) the Borrower shall be deemed to have used amounts under clause (z) prior to utilization of amounts under clause (x) or (y), and the Borrower shall be deemed to have used amounts under clause (y) (to the extent compliant therewith) prior to utilization of amounts under clause (x), (B) loans may be incurred under clauses (x), (y) and (z) above, and proceeds from any such incurrence under clauses (x), (y) and (z) above, may be utilized in a single transaction by first calculating the incurrence under clause (z) above and then calculating the incurrence under clause (x) and (y) above), in each case on terms and conditions agreed by the Borrower and the relevant Incremental Unitranche Facility lenders and (C) any portion of any Incremental Unitranche Facility incurred under the Incremental Unitranche Starter Basket or any other provision of the Available Unitranche Incremental Amount shall be automatically reclassified as incurred under the Incremental Unitranche Incurrence Test if the Borrower meets the applicable leverage ratio under the Incremental Unitranche Incurrence Test on a pro forma basis ratio at any time subsequent to the incurrence of such Incremental Unitranche Facility; provided, that, at the time of the addition thereof:
(i) except to the extent provided below if the proceeds of any Incremental Unitranche Facility are being used to finance a Limited Condition Transaction (as defined below), no event of default under the Unitranche Credit Documentation exists or would exist after giving effect thereto; |
B-10
| (ii) any Incremental Unitranche Term Facility will have a final maturity date no earlier than any then-existing Initial Term Loan Maturity Date; | ||
| (iii) the weighted average life to maturity applicable to each Incremental Unitranche Term Facility shall not be shorter than the weighted average life to maturity of the then-existing Term Facility (without giving effect to any prepayments that would otherwise modify the weighted average life to maturity of the Term Facility); provided, that up to the greater of $63 million and 25% of Consolidated EBITDA of indebtedness under the Available Unitranche Incremental Amount, Unitranche Incremental Equivalent Debt, the Available Second Lien Incremental Amount, Second Lien Incremental Equivalent Debt, Permitted Ratio Debt (that is unsecured or secured on a pari passu or junior basis to the Second Lien PIK Term Facility) or Incurred Acquisition Debt (that is unsecured or secured on a pari passu or junior basis to the Second Lien PIK Term Facility) may be incurred without regard to the foregoing provisions of clause (ii) above and this clause (iii) (such amounts, the “Inside Maturity Baskets”); | ||
| (iv) the interest rate, prepayment premiums, interest rate floor (if any), currency, fees (if any) and (subject to clause (iii)) amortization schedule applicable to any Incremental Unitranche Facility will be determined by the Borrower and the lenders providing such Incremental Unitranche Facility and, in the case of any Incremental Unitranche Facility or Unitranche Incremental Equivalent Debt (as defined below) in the form of Indebtedness that is pari passu with the Term Loans in right of payment and with respect to security on the Collateral (the “Qualifying Unitranche Indebtedness”), the resulting yield will not be more than 0.50% higher than the corresponding yield applicable to the Initial Term Facility or the Delayed Draw Term Loan Facility, as applicable, unless the yield with respect to the Initial Term Facility or the Delayed Draw Term Loan Facility, as applicable, is adjusted to be equal to the yield with respect to the relevant Incremental Unitranche Facility, minus, 0.50%; provided, that in determining the applicable yield: (w) OID or upfront fees paid by the Borrower in connection with such Incremental Unitranche Facility or the Term Facility, as the case may be (based on a four (4) year average life to maturity) shall be included, (x) arrangement, commitment, structuring and underwriting fees and any amendment fees paid or payable to the Arrangers (or their affiliates) in their respective capacities as such in connection with the applicable existing Term Facility or to one or more arrangers (or their affiliates) in their capacities as such applicable to such Term Facility shall be excluded and (y) if such Incremental Unitranche Facility includes any “LIBOR” interest rate floor greater than that applicable to the applicable Term Facility on the date of determination, such excess amount shall be equated to interest margin for determining the increase (the provisions of this clause (iv) are herein referred to as the “MFN Provisions”); | ||
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| (v) any Incremental Unitranche Facility will rank pari passu or junior in right of payment and pari passu or junior with respect to security on the Collateral with the Term Facility or may be unsecured (and to the extent secured or subordinated in right of payment or security, will be subject to intercreditor arrangements reasonably satisfactory to the Unitranche Required Lenders); | ||
| (vi) (A) any Incremental Unitranche Revolving Facility will mature no earlier than, and will require no scheduled amortization or differing mandatory commitment reduction prior to, the then-existing Revolving Termination Date and all other material terms (other than with respect to margin, pricing, maturity, currency or fees shall be substantially identical to the Revolving Facility or otherwise reasonably acceptable to the Unitranche Required Lenders (it being understood that (x) the Unitranche Credit Documentation will contain certain provisions to govern the pro rata payment, borrowing, participation and commitment reduction of the Revolving Facility and any Incremental Unitranche Revolving Facility and (y) terms not substantially identical to the Revolving Facility which are applicable only after the then-existing Revolving Termination Date are acceptable, subject, solely as to administrative matters to the consent of the Unitranche Agent (such consent not to be unreasonably withheld, conditioned or delayed)) and (B)(i) any Incremental Unitranche Term Facility that is pari passu in right of payment and security on the Collateral shall share ratably in any prepayments of the Term Facility unless the Borrower and the lenders in respect of such Incremental Unitranche Term Facility elect lesser payments and (ii) any other Incremental Unitranche Term Facility shall have prepayment terms no more favorable than the Term Facility; | ||
| (vii) except as provided above, any Incremental Unitranche Facility shall be on terms agreed with the lenders under such Incremental Unitranche Facility and pursuant to documentation consistent with the applicable Credit Facility or otherwise reasonably acceptable to the Unitranche Required Lenders and Unitranche Agent (it being understood that no consent shall be required from the Unitranche Required Lenders and Unitranche Agent for terms or conditions that are more restrictive than the applicable Credit Facility); and | ||
| (viii) any Incremental Unitranche Facility and Unitranche Incremental Equivalent Debt shall not be guaranteed by any subsidiaries of the Borrower other than the Subsidiary Guarantors (unless such subsidiary shall substantially concurrently become a Subsidiary Guarantor) and, if secured, shall not be secured by any assets other than the Collateral and to the extent Incremental Unitranche Facility or any Unitranche Incremental Equivalent Debt is issued or incurred by a Foreign Subsidiary, then (A) such Foreign Subsidiary shall have joined the Credit Documentation as a Loan Party (or shall substantially concurrently become a Loan Party) by providing a guarantee of the Borrower Obligations and granting a security interest in its assets to secure the Borrower Obligations and (B) such Incremental Unitranche Facility or Unitranche Incremental Equivalent Debt may be secured by assets of Foreign Subsidiaries and guaranteed by | ||
B-12
| Foreign Subsidiaries to the extent agreed between such Foreign Subsidiary and the lenders providing such Incremental Unitranche Facility or Unitranche Incremental Equivalent Debt and solely to the extent such Foreign Subsidiary provides a concurrent guarantee of the Credit Facilities. | ||
| (ix) Any Incremental Unitranche Facility may be provided by existing Unitranche Lenders or other persons who become Unitranche Lenders in connection therewith if such consent would be required under the heading “Assignments and Participations” below for assignments or participations of Loans or commitments, as applicable, to such person; provided, that Unitranche Lenders on the Closing Date shall be offered in the first instance a right to participate in such Incremental Unitranche Facility (to be offered at least 15 Business Days prior to the proposed funding date and accepted within 5 Business Days thereafter) as long as such Unitranche Lenders collectively hold more than 50% of all outstanding Loans and/or commitments provided for hereunder (the “Unitranche Right of First Refusal”); no such Unitranche Lender will be obligated to provide any such Incremental Unitranche Facility; provided further, that the Unitranche Right of First Refusal shall not apply to an incurrence of Unitranche Incremental Equivalent Debt. | ||
| The proceeds of any Incremental Unitranche Facility may be used by the Borrower and its subsidiaries for working capital and other general corporate purposes, including the financing of Permitted Acquisitions (as defined below) and other investments and any other use not prohibited by the Unitranche Credit Documentation. | ||
| In addition, the Borrower or any Foreign Subsidiary may, in lieu of adding Incremental Unitranche Facilities, utilize any part of the Available Unitranche Incremental Amount at any time by issuing or incurring Unitranche Incremental Equivalent Debt (as defined below), subject to no event of default (except to the extent provided below if the proceeds of any Unitranche Incremental Equivalent Debt are being used to finance a Limited Condition Transaction) and entering into intercreditor documentation reasonably acceptable to the Unitranche Agent, the Unitranche Required Lenders and the Borrower, if applicable. | ||
| “Unitranche Incremental Equivalent Debt” means indebtedness of the Borrower or any Restricted Subsidiary in an aggregate principal amount not to exceed (and which shall constitute usage of) the then-available Available Unitranche Incremental Amount, consisting of senior secured first lien notes and/or term loans or junior lien term loans or notes, subordinated term loans or notes or senior unsecured term loans or notes, or any bridge facility, in each case, issued or incurred in (x) a public offering, Rule 144A or other private placement or (y) a bridge facility or in a syndicated loan financing or otherwise in lieu of an Incremental Facility, in each case, on terms and conditions that are customary as of the date of incurrence thereof; provided, that (a) such Unitranche Incremental Equivalent Debt (other than Qualifying Unitranche | ||
B-13
| Indebtedness) will not be subject to the MFN Provisions or the Unitranche Right of First Refusal, (b) subject to the Inside Maturity Baskets, the maturity date of such Unitranche Incremental Equivalent Debt will be no earlier than the maturity date of the Term Facility, (c) subject to the Inside Maturity Basket, the weighted average life to maturity of such Unitranche Incremental Equivalent Debt may not be shorter than the remaining weighted average life to maturity of the Term Facility, (d) if such Unitranche Incremental Equivalent Debt (i) is secured equally and ratably with the Term Facility or by liens that are junior to the liens securing the Term Facility, such Unitranche Incremental Equivalent Debt will be subject to customary intercreditor arrangements consistent with the Documentation Considerations or otherwise reasonably satisfactory to the Unitranche Required Lenders, the Unitranche Agent and the Borrower, (ii) is guaranteed, except as set forth in clause (iii) below, such Unitranche Incremental Equivalent Debt may not be guaranteed by any subsidiary which is not a Loan Party and (iii) to the extent any Unitranche Incremental Equivalent Debt is issued or incurred by a Foreign Subsidiary, then such Unitranche Incremental Equivalent Debt may be secured by assets of Foreign Subsidiaries and guaranteed by Foreign Subsidiaries to the extent agreed between such Foreign Subsidiary and the lenders providing such Unitranche Incremental Equivalent Debt and (e) if such Unitranche Incremental Equivalent Debt is secured equally and ratably with the Term Facility, the other terms and conditions (excluding those referenced in clauses (a) through (d) above) of such Unitranche Incremental Equivalent Debt shall be substantially similar to those applicable to the Term Loans or otherwise reasonably acceptable to the Unitranche Required Lenders; provided, that the covenants, events of default and mandatory prepayments of such Unitranche Incremental Equivalent Debt, if not consistent with the terms of the Term Loans, either (x) shall not be more restrictive to the Loan Parties (as determined in good faith by the Borrower), when taken as a whole, than the terms of the Term Loans (other than with respect to economic terms and redemption provisions) unless the Borrower offers to include such more restrictive terms in the Term Facility or any such provisions apply after the latest final maturity date of the relevant Term Loans existing at the time such Unitranche Incremental Equivalent Debt is incurred or (y) shall otherwise be on market terms (as reasonably determined by the Borrower in good faith). | ||
| As used herein, the “Total Leverage Ratio” means the ratio of (i) consolidated debt (comprised of third party debt for borrowed money, purchase money indebtedness, unreimbursed drawings under letters of credit and capital lease obligations, in each case, of the Borrower and its Restricted Subsidiaries), net of (x) unrestricted cash and cash equivalents of the Borrower and its Restricted Subsidiaries and (y) cash and cash equivalents of the Borrower and its Restricted Subsidiaries restricted in favor of the Credit Facilities (which may also include cash and cash equivalents of the Borrower and its Restricted Subsidiaries securing other indebtedness for borrowed money secured by a lien on the Collateral along with the Credit Facilities so long | ||
B-14
| as such lien is subject to an intercreditor agreement consistent with the Documentation Considerations), in each case, such unrestricted cash and restricted cash and cash equivalents to be determined in accordance with generally accepted accounting principles) to (ii) trailing four-quarter Consolidated EBITDA. | ||
| As used herein, the “First Lien Leverage Ratio” means the ratio of (i) consolidated first lien debt (comprised of third party debt for borrowed money, purchase money indebtedness, capitalized lease obligations and unreimbursed drawings under letters of credit, in each case, of the Borrower and its Restricted Subsidiaries that are secured on a first priority basis by the Collateral), net of (x) unrestricted cash and cash equivalents of the Borrower and its Restricted Subsidiaries and (y) cash and cash equivalents of the Borrower and its Restricted Subsidiaries restricted in favor of the Credit Facilities (which may also include cash and cash equivalents of the Borrower and its Restricted Subsidiaries securing other indebtedness for borrowed money secured by a lien on the Collateral along with the Credit Facilities so long as such lien is subject to an intercreditor agreement consistent with the Documentation Considerations), in each case, such unrestricted cash and restricted cash and cash equivalents to be determined in accordance with generally accepted accounting principles) to (ii) trailing four-quarter Consolidated EBITDA. | ||
| For purposes of the Credit Documentation, “Consolidated EBITDA” (and component definitions, including, without limitation, consolidated net income) will be defined giving effect to the Documentation Considerations (as defined below), and will include, without limitation and without duplication, add-backs (and corresponding deductions, to the extent applicable) for: | ||
| (a) interest, taxes, depreciation and amortization, | ||
| (b) any impairment charge or asset write-off or write-down and the amortization of intangibles, | ||
| (c) non-cash gains/charges (provided, that if any such non-cash charge represents an accrual or reserve for potential cash items in any future period, (i) the Borrower may determine not to add back such non-cash charge in the current period and (ii) to the extent the Borrower does decide to add back such non-cash charge, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA), | ||
| (d) extraordinary, unusual or non-recurring items (including, without limitation, costs of and payments of legal settlements, fines, judgments or orders), | ||
B-15
| (e) losses/gains on sales or dispositions of assets outside the ordinary course of business (including, without limitation, asset retirement costs), | ||
| (f) the amount of any one-time restructuring charge or reserve including, without limitation, in connection with (i) acquisitions after the Closing Date and (ii) the consolidation or closing of facilities, | ||
| (g) expected cost savings, capacity increases, capacity utilization increases, efficiency improvements, operating expense reductions and enhancements and synergies (net of the amount of actual amounts realized) reasonably identifiable and factually supportable (as certified by a chief financial officer or chief executive officer of the Borrower) related to (i) the Transactions and (ii) after the Closing Date, permitted asset sales, mergers or other business combinations, acquisitions, investments, dispositions or divestitures, capacity increases, capacity utilization increases, efficiency improvements, operating improvements, restructurings, cost saving initiatives, restructurings, reorganizations, the acquisition, opening, launch, regulatory approval and/or development of any site, facility, product line or operation and certain other similar initiatives and specified transactions taken, commenced, committed or expected to be taken within eighteen (18) months after the end of the Relevant Period, calculated on a “run rate” basis such that the full recurring benefit associated therewith is taken into account (without double counting the amount of actual benefits realized in connection therewith); provided the aggregate amounts added back to Consolidated EBITDA for any Relevant Period pursuant to this clause (g), clause (h), subclause (x)(ii) and subclause (x)(iii) below shall not exceed 30% of Consolidated EBITDA on a pro forma basis after giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments, | ||
| (h) costs, charges, accruals, reserves or expenses attributable to the undertaking and/or implementation of cost savings initiatives, capacity increases, capacity utilization increases, efficiency improvements, operating expense reductions, integration, transition, facilities opening and pre-opening, business optimization and other restructuring costs, charges, accruals, reserves and expenses (including, without limitation, inventory optimization programs, software development costs and costs related to the closure or consolidation of facilities (without duplication of amounts in clause (f) above) and curtailments, costs related to entry into new markets, consulting and other professional fees, signing costs, retention or completion bonuses, relocation expenses, severance payments, modifications to or losses on settlement of pension and post-retirement employee benefit plans, new systems design and implementation costs and project startup costs); provided the aggregate amounts added back to Consolidated EBITDA for any Relevant Period pursuant to this clause (h), clause (g) above, subclause (x)(ii) and subclause (x)(iii) below shall not exceed 30% of Consolidated EBITDA on a pro forma basis after giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments, | ||
B-16
| (i) the amount of any permitted management, monitoring, consulting, transaction or advisory fees and related expenses paid to the Investors (or their respective affiliates or management companies), | ||
| (j) (i) the Transaction Costs and (ii) transaction fees, costs and expenses incurred (A) in connection with the consummation of any transaction (or any transaction proposed and not consummated) including, without limitation, equity issuances, investments, acquisitions, dispositions, recapitalizations, mergers, option buyouts or the incurrence or repayment of indebtedness or similar transactions, (B) in connection with any IPO (whether or not consummated) or (C) to the extent reimbursable by third parties pursuant to indemnification provisions or similar agreements or insurance; provided, in respect of any fees, costs and expenses incurred pursuant to this clause (C), the Borrower in good faith expects to receive reimbursement for such fees, costs and expenses within the next four (4) fiscal quarters (it being understood that to the extent not actually received within such fiscal quarters, such reimbursement amounts shall be deducted in calculating Consolidated EBITDA for such fiscal quarters), | ||
| (k) earn-out and contingent consideration obligations incurred or accrued in connection with any Permitted Acquisition or other investment and paid or accrued during the applicable period and on similar acquisitions completed prior to the Closing Date, to the extent such earn-out is deducted in calculating consolidated net income, | ||
| (l) to the extent not otherwise included in consolidated net income, business interruption insurance proceeds in an amount representing the earnings for the applicable period that such proceeds are intended to replace (whether or not yet received so long as the Borrower in good faith expects to receive the same within the next four (4) fiscal quarters (it being understood that to the extent not actually received within such fiscal quarters, such proceeds shall be deducted in calculating Consolidated EBITDA for such fiscal quarters)), | ||
| (m) unrealized net gains/losses in the fair market value of any hedge arrangements and losses, charges and expenses attributable to the early extinguishment or conversion of indebtedness, hedge arrangements or other derivative instruments (including deferred financing expenses written off and premiums paid), | ||
| (n) the amount of any expense or deduction associated with any Restricted Subsidiary attributable to non-controlling interests or minority interests of third parties, | ||
B-17
| (o) (A) any charges or expenses incurred pursuant to any management equity plan or stock option plan or other management or employee benefit plan or agreement, pension plan, any stock subscription or shareholder agreement or any distributor equity plan or agreement and (B) any charges, costs, expenses, accruals or reserves in connection with the rollover, acceleration or payout of equity interests held by management, in each case, to the extent such charges, costs, expenses, accruals or reserves are funded with net cash proceeds contributed to the Borrower as a capital contribution or as a result of the sale or issuance of equity (other than disqualified equity) of the Borrower, | ||
| (p) unrealized or realized net foreign currency translation or transaction gains or losses impacting consolidated net income (including, without limitation currency remeasurements of indebtedness and any net gains or losses resulting from hedge agreements for currency exchange risk associated with the above or any other currency related risk), | ||
| (q) with respect to investments in any person (other than a subsidiary of the Borrower), net gains during such period to the extent received in cash or cash equivalents during such period (and not otherwise included in consolidated net income), | ||
| (r) effects of adjustments (including, without limitation, the effects of such adjustments pushed down to the Borrower and the Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including, without limitation, in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof (other than any purchase accounting adjustments related to above-market or below-market leases), | ||
| (s) any one-time reduction in Consolidated EBITDA resulting from the Borrower’s one-time change in revenue recognition from a “milestone or completion basis” to a “straight-line recognition model,” | ||
| (t) any expense, charge, cost, accrual, reserve or loss in connection with any single or one-time event, | ||
| (u) any fees, costs and expenses incurred in connection with the implementation of ASC 606 and any non-cash losses or charges resulting from the application of ASC 606, | ||
| (v) any capitalized development costs, | ||
| (w) the net increase in consolidated deferred revenue less the net decrease in consolidated deferred revenue, and | ||
B-18
| (x) other add-backs and adjustments for (i) items set forth in the Projections (as defined below) and quality of earnings report delivered to the Commitment Parties on July 27, 2021 (the “QoE Report”), (ii) items of the type set forth in the Projections and the QoE Report (other than those items included in the immediately preceding subclause (i)) and (iii) items of the type set forth in any quality of earnings report prepared by an accounting firm of national standing (or other accounting firm reasonably acceptable to the Unitranche Required Lenders) delivered to the Unitranche Agent for acquisitions or similar investments following the Closing Date; provided the aggregate amounts added back to Consolidated EBITDA for any Relevant Period pursuant to clause (g) above, clause (h) above, subclause (x)(ii) and subclause (x)(iii), shall not exceed 30% of Consolidated EBITDA on a pro forma basis after giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments; | ||
| For purposes of the Credit Documentation, any obligation of a person under a lease that is not (or would not be) required to be classified and accounted for as a capitalized lease on a balance sheet of such person under GAAP as in effect prior to December 31, 2018, shall not be treated as a capitalized lease as a result of the adoption of changes in GAAP or changes in the application of GAAP. | ||
| For purposes of calculating the Financial Covenant and other financial ratios (including any component definitions thereof), (a) pro forma effect will be given to acquisitions, investments, certain dispositions and specified transactions, including the Acquisition, restructurings, reorganizations, new or revised contracts, the acquisition, opening, launch, regulatory approval and/or development of any site, facility, product line or operation and certain other similar initiatives, (b) pro forma adjustments (certified by the chief financial officer or other equivalent officer) will be included for operating improvements, capacity increases, capacity utilization increases, efficiency improvements, restructurings, cost savings and similar initiatives and synergies in accordance with the definition of Consolidated EBITDA and subject to the limitations set forth therein, (c) Consolidated EBITDA shall include any pro forma EBITDA attributable to any person, property, business or asset acquired or to be acquired in connection with any permitted acquisition or similar investment beginning on the date any the definitive documentation with respect to such permitted acquisition or similar investment is executed and (d) the principal amount of any indebtedness not denominated in USD shall be converted into USD at the following exchange rates: (i) with respect to any indebtedness for which the Group has entered into interest rate and/or cross currency derivative, at the rate or level adjusted to take into account the effect of such derivative or (ii) with respect to all other indebtedness, the interest rate and/or exchange rate shall be consistent with the exchange rate methodology applied in the financial statements delivered by the Borrower; provided the Borrower shall in any event be entitled to utilize the same exchange rates as utilized in the calculation of Consolidated EBITDA for such Relevant Period. | ||
B-19
| Second Lien Incremental Facilities: | The Borrower or any Foreign Subsidiary will have the right, from time to time, on one or more occasions, to add one or more incremental term facilities and/or, solely in the case of the Borrower, increase the Second Lien PIK Term Facility (each, an “Incremental Second Lien Facility” and together with the Incremental Unitranche Facilities, the “Incremental Facilities”) in an aggregate principal amount (x) not to exceed the greater of (i) $252 million and (ii) an amount equal to 100% of Consolidated EBITDA, on a pro forma basis after giving effect to the incurrence of such additional amount, any acquisition or investment consummated in connection therewith and all other appropriate pro forma adjustments, as of the most recent test period (the “Incremental Second Lien Starter Basket”) plus the unused portion, if any, of the General Debt Basket (less the aggregate principal amount of the Free and Clear Amounts), plus (y) all voluntary prepayments, repurchases or redemptions and commitment reductions of the Second Lien PIK Term Facility, Incremental Second Lien Facilities or Second Lien Incremental Equivalent Debt so applied in prepayment thereof and in each case, secured on a pari passu basis with the Second Lien PIK Term Facility prior to such time (including assignments to and purchases by the Borrowers or any restricted subsidiary, but excluding prepayments or repurchases made with the proceeds of long-term indebtedness (other than revolving loans)), and, in each case, limited to the amount actually paid in cash for such prepayment, repurchase or redemption, plus (z) an unlimited amount so long as in the case of this clause (z) after giving effect to such Incremental Second Lien Facility or Second Lien Incremental Equivalent Debt and after giving pro forma effect to any acquisition or investment consummated in connection therewith, (i) in the case of Incremental Second Lien Facilities or Second Lien Incremental Equivalent Debt, in each case, secured on the Collateral on a pari passu basis with the Second Lien PIK Term Facility or on a junior basis to the Second Lien PIK Term Facility, the Total Leverage Ratio does not exceed 11.90:1.00 and (ii) in the case of any unsecured Incremental Second Lien Facilities or Incremental Second Lien Facilities secured by assets not constituting Collateral, the Total Leverage Ratio does not exceed 12.15:1.00 (in the case of the foregoing clause, (z), calculated on a pro forma basis as of the most recently completed four consecutive fiscal quarters for which financial statements are internally available (so long as such financial statements are subsequently delivered to the Second Lien Agent prior to or concurrently with the incurrence of any such indebtedness), including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental Second Lien Facility or any other concurrent incurrence of debt, provided that to the extent the proceeds of any such Incremental Second Lien Facility are to be used to repay indebtedness, there shall be no limit to the Borrower’s ability to give pro forma effect to such repayment of indebtedness), giving pro forma effect to any related transaction in connection therewith and all customary pro forma events and adjustments and assuming, in the case of any Incremental Unitranche Revolving Facility, a full drawing of such Incremental Unitranche Revolving Facility) (the “Incremental Second Lien Incurrence Test” and together with clauses |
B-20
| (x) and (y) above, the “Available Second Lien Incremental Amount”)) (it being understood that (A) the Borrower shall be deemed to have used amounts under clause (z) prior to utilization of amounts under clause (x) or (y), and the Borrower shall be deemed to have used amounts under clause (y) (to the extent compliant therewith) prior to utilization of amounts under clause (x), (B) loans may be incurred under clauses (x), (y) and (z) above, and proceeds from any such incurrence under clauses (x), (y) and (z) above, may be utilized in a single transaction by first calculating the incurrence under clause (z) above and then calculating the incurrence under clause (x) and (y) above), in each case on terms and conditions agreed by the Borrower and the relevant Incremental Second Lien Facility lenders and (C) any portion of any Incremental Second Lien Facility incurred under the Incremental Second Lien Starter Basket or any other provision of the Available Second Lien Incremental Amount shall be automatically reclassified as incurred under the Incremental Second Lien Incurrence Test if the Borrower meets the applicable leverage ratio under the Incremental Second Lien Incurrence Test on a pro forma basis ratio at any time subsequent to the incurrence of such Incremental Second Lien Facility; provided, that, at the time of the addition thereof: | ||
| (i) except to the extent provided below if the proceeds of any Incremental Second Lien Facility are being used to finance a Limited Condition Transaction (as defined below), no event of default under the Second Lien Credit Documentation exists or would exist after giving effect thereto; | ||
| (ii) subject to the Inside Maturity Baskets, any Incremental Second Lien Facility will have a final maturity date no earlier than any then- existing Second Lien PIK Term Loan Maturity Date; | ||
| (iii) subject to the Inside Maturity Baskets, the weighted average life to maturity applicable to each Incremental Second Lien Facility shall not be shorter than the weighted average life to maturity of the then- existing Second Lien PIK Term Facility (without giving effect to any prepayments that would otherwise modify the weighted average life to maturity of the Second Lien PIK Term Facility); | ||
| (iv) the interest rate, prepayment premiums, interest rate floor (if any), currency, fees (if any) and (subject to clause (iii)) amortization schedule applicable to any Incremental Second Lien Facility will be determined by the Borrower and the lenders providing such Incremental Second Lien Facility and, in the case of any Incremental Second Lien Facility or Second Lien Incremental Equivalent Debt (as defined below) in the form of Indebtedness that is pari passu with the Second Lien PIK Term Loans in right of payment and with respect to security on the Collateral (the “Qualifying Second Lien Indebtedness”), the resulting yield will not be more than 0.50% higher than the corresponding yield applicable to the Second Lien PIK Term Loans, as applicable, unless the yield with respect to the Second Lien PIK Term Loans is adjusted to be equal to the | ||
B-21
| yield with respect to the relevant Incremental Second Lien Facility, minus, 0.50%; provided, that in determining the applicable yield: (w) OID or upfront fees paid by the Borrower in connection with such Incremental Second Lien Facility or the Second Lien PIK Term Facility, as the case may be (based on a four (4) year average life to maturity) shall be included, (x) arrangement, commitment, structuring and underwriting fees and any amendment fees paid or payable to the Arrangers (or their affiliates) in their respective capacities as such in connection with the applicable existing Second Lien PIK Term Facility or to one or more arrangers (or their affiliates) in their capacities as such applicable to such Second Lien PIK Term Facility shall be excluded and (y) if such Incremental Second Lien Facility includes any “LIBOR” interest rate floor greater than that applicable to the applicable Second Lien PIK Term Facility on the date of determination, such excess amount shall be equated to interest margin for determining the increase; | ||
| (v) any Incremental Second Lien Facility will rank pari passu or junior in right of payment and pari passu or junior with respect to security on the Collateral with the Second Lien PIK Term Facility or may be unsecured (and to the extent secured or subordinated in right of payment or security, will be subject to intercreditor arrangements reasonably satisfactory to the Second Lien Required Lenders); | ||
| (vi) except as provided above or below, any Incremental Second Lien Facility shall be on terms agreed with the lenders under such Incremental Facility and pursuant to documentation consistent with the Second Lien PIK Term Facility or otherwise reasonably acceptable to the Second Lien Required Lenders (it being understood that no consent shall be required from the Second Lien Required Lenders for terms or conditions that are more restrictive than the Second Lien PIK Term Facility if the existing lenders receive the benefit of such terms or conditions or to the extent that they apply solely to periods after the latest final maturity date of the relevant Second Lien PIK Term Loans existing at the time such Incremental Second Lien Facility is incurred); and | ||
| (vii) any Incremental Second Lien Facility and Second Lien Incremental Equivalent Debt shall not be guaranteed by any subsidiaries of the Borrower other than the Subsidiary Guarantors (unless such subsidiary shall substantially concurrently become a Subsidiary Guarantor) and, if secured, shall not be secured by any assets other than the Collateral to the extent any Incremental Second Lien Facility or any Second Lien Incremental Equivalent Debt is issued or incurred by a Foreign Subsidiary, then (A) such Foreign Subsidiary shall have joined the Credit Documentation as a Loan Party (or shall substantially concurrently become a Loan Party) by providing a guarantee of the Borrower Obligations and granting a security interest in its assets to secure the Borrower Obligations and (B) such Incremental Second Lien Facility or Second Lien Incremental Equivalent Debt may be secured by assets of Foreign Subsidiaries and guaranteed by Foreign Subsidiaries to the extent agreed between such Foreign Subsidiary and the lenders providing such | ||
B-22
| Incremental Second Lien Facility or Second Lien Incremental Equivalent Debt and solely to the extent such Foreign Subsidiary provides a concurrent guarantee of the Second Lien PIK Term Facility. | ||
| (viii) Any Incremental Second Lien Facility may be provided by existing Second Lien PIK Lenders or other persons who become Second Lien PIK Lenders in connection therewith if such consent would be required under the heading “Assignments and Participations” below for assignments or participations of Second Lien PIK Term Loans or commitments, as applicable, to such person; provided, that Second Lien PIK Lenders on the Closing Date shall be offered in the first instance a right to participate in such Incremental Second Lien Facility (to be offered at least 15 Business Days prior to the proposed funding date and accepted within 5 Business Days thereafter) as long as such Second Lien PIK Lenders collectively hold more than 50% of all outstanding Loans provided for hereunder (the “Second Lien Right of First Refusal”); no such existing Second Lien PIK Lender will be obligated to provide any such Incremental Second Lien Facility; provided further, that the Second Lien Right of First Refusal shall not apply to an incurrence of Second Lien Incremental Equivalent Debt. | ||
| The proceeds of any Incremental Second Lien Facility may be used by the Borrower and its subsidiaries for working capital and other general corporate purposes, including the financing of Permitted Acquisitions (as defined below) and other investments and any other use not prohibited by the Second Lien Credit Documentation. | ||
| In addition, the Borrower or any Foreign Subsidiary may, in lieu of adding Incremental Second Lien Facilities, utilize any part of the Available Second Lien Incremental Amount at any time by issuing or incurring Second Lien Incremental Equivalent Debt (as defined below), subject to no event of default (except to the extent provided below if the proceeds of any Second Lien Incremental Equivalent Debt are being used to finance a Limited Condition Transaction) and entering into intercreditor documentation reasonably acceptable to the Second Lien Required Lenders and the Borrower, if applicable. | ||
| “Second Lien Incremental Equivalent Debt” means indebtedness of the Borrower or any Restricted Subsidiary in an aggregate principal amount not to exceed (and which shall constitute usage of) the then-available Available Second Lien Incremental Amount, consisting of senior secured first lien notes and/or term loans or junior lien term loans or notes, subordinated term loans or notes or senior unsecured term loans or notes, or any bridge facility, in each case, issued or incurred in (x) a public offering, Rule 144A or other private placement or (y) a bridge facility or in a syndicated loan financing or otherwise in lieu of an Incremental Second Lien Facility, in each case, on terms and conditions that are customary as of the date of incurrence thereof; provided, that (a) such Second Lien Incremental Equivalent Debt (other than Qualifying | ||
B-23
| Second Lien Indebtedness) will not be subject to the MFN Provisions or the Second Lien Right of First Refusal, (b) subject to the Inside Maturity Baskets, the maturity date of such Second Lien Incremental Equivalent Debt will be no earlier than the maturity date of the Second Lien PIK Term Facility, (c) subject to the Inside Maturity Baskets, the weighted average life to maturity of such Second Lien Incremental Equivalent Debt may not be shorter than the remaining weighted average life to maturity of the Second Lien PIK Term Facility, (d) if such Second Lien Incremental Equivalent Debt (i) is secured equally and ratably with the Second Lien PIK Term Facility or by liens that are junior to the liens securing the Second Lien PIK Term Facility, such Second Lien Incremental Equivalent Debt will be subject to customary intercreditor arrangements consistent with the Second Lien Documentation Considerations or otherwise reasonably satisfactory to the Second Lien Required Lenders and the Borrower, (ii) is guaranteed, except as set forth in clause (iii) below, such Second Lien Incremental Equivalent Debt may not be guaranteed by any subsidiary which is not a Loan Party and (iii) to the extent any Second Lien Incremental Equivalent Debt is issued or incurred by a Foreign Subsidiary, then such Second Lien Incremental Equivalent Debt may be secured by assets of Foreign Subsidiaries and guaranteed by Foreign Subsidiaries to the extent agreed between such Foreign Subsidiary and the lenders providing such Second Lien Incremental Equivalent Debt and (e) if such Second Lien Incremental Equivalent Debt (i) is secured equally and ratably with the Second Lien PIK Term Facility, the other terms and conditions (excluding those referenced in clauses (a) through (d) above) of such Second Lien Incremental Equivalent Debt shall be substantially similar to those applicable to the Second Lien PIK Term Loans or otherwise reasonably acceptable to the Second Lien Required Lenders; provided, that the covenants, events of default and mandatory prepayments of such Second Lien Incremental Equivalent Debt, if not consistent with the terms of the Second Lien PIK Term Loans, either (x) shall not be more restrictive to the Loan Parties (as determined in good faith by the Borrower), when taken as a whole, than the terms of the Second Lien PIK Term Loans (other than with respect to economic terms and redemption provisions) unless the Borrower offers to include such more restrictive terms in the Second Lien PIK Term Facility or any such provisions apply after the latest final maturity date of the relevant Second Lien PIK Term Loans existing at the time such Second Lien Incremental Equivalent Debt is incurred or (y) shall otherwise be on market terms (as reasonably determined by the Borrower in good faith). | ||
| Unitranche Refinancing Facility: |
The Borrower shall have the right to refinance and/or replace the Loans under the Term Facility (and loans under any Incremental Unitranche Term Facility) and/or Loans and commitments under the Revolving Facility (and loans and commitments under any Incremental Unitranche Revolving Facility) in whole or in part with (x) one or more new term facilities (each, a “Unitranche Refinancing Term Facility”) or new | |
B-24
| revolving credit facilities (each, a “Unitranche Refinancing Revolving Facility” and, together with any Unitranche Refinancing Term Facility, a “Unitranche Refinancing Facility” or the “Unitranche Refinancing Facilities”) under the Unitranche Credit Documentation with the consent of the Borrower and the institutions providing such Unitranche Refinancing Facility and/or (y) one or more series of notes or loans, in the case of each of clauses (x) and (y), that will be pari passu or junior in right of payment and be secured by the Collateral on a pari passu or junior basis with the remaining portion of the Credit Facilities or be unsecured (such notes or loans, the “Unitranche Refinancing Notes”); provided, that (a) any Unitranche Refinancing Facility or issue of Unitranche Refinancing Notes that is pari passu or junior with respect to the security on the Collateral shall be subject to a customary intercreditor agreement consistent with the Documentation Considerations, (b) no Unitranche Refinancing Term Facility or Unitranche Refinancing Notes shall mature prior to the latest maturity date of the Credit Facilities being refinanced or replaced, and, in the case of the Term Facility, no Unitranche Refinancing Term Facility or Unitranche Refinancing Notes shall have a shorter weighted average life to maturity than the Loans under such Unitranche Facility being refinanced or replaced, (c) no Unitranche Refinancing Revolving Facility shall mature (or require commitment reductions) prior to the maturity date of the Revolving Loans or commitments being refinanced, (d) such Unitranche Refinancing Facility or Unitranche Refinancing Notes shall have pricing (including interest, fees and premiums), optional prepayment and redemption terms as may be agreed to by the Borrower and the lenders party thereto, (e) if any such Unitranche Refinancing Facility or series of Unitranche Refinancing Notes is secured, it shall not be secured by any assets other than the Collateral (unless such assets substantially concurrently become a part of the Collateral), (f) if any such Unitranche Refinancing Facility or series of Unitranche Refinancing Notes is guaranteed, it shall not be guaranteed by any subsidiaries of the Borrower other than the Subsidiary Guarantors (unless such subsidiary shall substantially concurrently become a Subsidiary Guarantor), (g) the other terms and conditions (excluding those referenced in clauses (b) through (f) above) of such Refinancing Facility or Unitranche Refinancing Notes shall be substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower) to the lenders providing such Unitranche Refinancing Facility or Unitranche Refinancing Notes than, those applicable to the Term Loans or commitments being refinanced or replaced (except for covenants or other provisions applicable only to periods after the latest final maturity date of the relevant Term Loans or commitments existing at the time of such refinancing or replacement) or such terms shall be on current market terms for such type of indebtedness, (h) the aggregate principal amount of any Unitranche Refinancing Facility or any Unitranche Refinancing Notes shall not exceed the aggregate principal amount of indebtedness and commitments being refinanced or replaced therewith, plus interest, premiums, underwriting discounts, commissions, fees and expenses or to the extent otherwise permitted under the Unitranche Credit Documentation (including any such additional amount constituting a utilization of a then available basket) and (i) the Unitranche Credit Documentation will contain certain provisions to govern the pro rata payment, borrowing, participation and commitment reduction of any Unitranche Refinancing Revolving Facility and any Incremental Unitranche Revolving Facility then existing. |
B-25
| Second Lien Refinancing Facility: |
The Borrower shall have the right to refinance and/or replace the Second Lien PIK Term Loans (and loans under any Incremental Second Lien Facility) in whole or in part with (x) one or more new term facilities (each, a “Second Lien Refinancing Facility”) under the Second Lien Facility Documentation with the consent of the Borrower and the institutions providing such Second Lien Refinancing Facility and/or (y) one or more series of notes or loans, in the case of each of clauses (x) and (y), that will be pari passu or junior in right of payment and be secured by the Collateral on a pari passu or junior basis with the remaining portion of the Second Lien PIK Term Facility or be unsecured (such notes or loans, the “Second Lien Refinancing Notes”); provided that (a) any Second Lien Refinancing Facility or issue of Second Lien Refinancing Notes that is pari passu or junior with respect to the security shall be subject to a customary intercreditor agreement the material terms of which shall be reasonably acceptable to the Second Lien Agent and the Borrower, (b) no Second Lien Refinancing Facility or Second Lien Refinancing Notes shall mature prior to the latest maturity date of the Second Lien PIK Term Facility being refinanced or replaced and no Second Lien Refinancing Facility or Second Lien Refinancing Notes shall have a shorter weighted average life to maturity than the Second Lien PIK Term Loans under such Second Lien PIK Term Facility being refinanced or replaced, (c) such Second Lien Refinancing Facility or Second Lien Refinancing Notes shall have pricing (including interest, fees and premiums), optional prepayment and redemption terms as may be agreed to by the Borrower and the lenders party thereto, (d) if any such Second Lien Refinancing Facility or series of Second Lien Refinancing Notes is secured, it shall not be secured by any assets other than the Collateral (unless such assets substantially concurrently become a part of the Collateral), (e) if any such Second Lien Refinancing Facility or series of Second Lien Refinancing Notes is guaranteed, it shall not be guaranteed by any subsidiaries of the Borrower other than the Subsidiary Guarantors (unless such subsidiary shall substantially concurrently become a Subsidiary Guarantor), (f) the other terms and conditions (excluding those referenced in clauses (b) through (e) above) of such Second Lien Refinancing Facility or Second Lien Refinancing Notes shall be substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower) to the lenders providing such Second Lien Refinancing Facility or Second Lien Refinancing Notes than, those applicable to the Second Lien PIK Term Loans being refinanced or replaced (except for covenants or other provisions applicable only to periods after the latest final maturity date of the relevant Second Lien PIK Term Loans existing at the time of such refinancing or replacement) or such terms shall be current market terms for such type of indebtedness and (g) the aggregate principal amount of any Second Lien Refinancing Facility or any Second Lien Refinancing Notes shall not exceed the aggregate principal amount of indebtedness and commitments being refinanced or replaced therewith, plus interest, premiums, underwriting discounts, commissions, fees and expenses or to the extent otherwise permitted under the Second Lien Credit Documentation (including any such additional amount constituting a utilization of a then available basket). | |
B-26
CERTAIN PAYMENT PROVISIONS
| Interest Rates Provisions: | As set forth on Annex I hereto. | |||
| Closing Fees and Closing Payments: |
As set forth in the Fee Letters. | |||
| Optional Prepayments and Commitment Reductions: | Loans may be prepaid and commitments may be reduced, in whole or in part, without premium or penalty (except as set forth under the heading “Prepayment Premium” below), in minimum amounts to be agreed, at the option of the Borrower at any time upon one (1) business day’s (or, in the case of a prepayment of Eurodollar Loans (as defined on Annex I hereto), three (3) business days’) prior notice, subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Eurodollar Loans prior to the last day of the relevant interest period. Optional prepayments of the Term Loans shall be applied to the installments of the Term Loans as directed by the Borrower (or in the absence of direction from the Borrower, in the direct order of maturity). | |||
| Prepayment Premium: | Term Facility: | |||
| Prior to the second anniversary of the Closing Date, all optional prepayments of Unitranche Term Loans and all mandatory prepayments of Unitranche Term Loans (x) set forth in paragraphs (a) and (b) of the section entitled “Mandatory Prepayment” below, (y) in the case of any mandatory assignment pursuant to the “yank-a-bank” provisions in connection with any amendment to waive the Call Premium or (z) pursuant to an acceleration of the Obligations for any reason, in whole or in part, will be subject to the following “prepayment” premiums (expressed as a percentage of the outstanding principal amount of the Term Facility so prepaid, repaid, accelerated or subject to such “yank- a-bank” provisions) (the “Call Premium”): | ||||
| Period | Percentage | |||
| Prior to first anniversary of the Closing Date: | 3.00% | |||
B-27
| On or after the first anniversary of the Closing Date and prior to the second anniversary of the Closing Date: | 1.00% | |||
| Thereafter: | None | |||
| Second Lien PIK Term Facility: | ||||
| Prior to the third anniversary of the Closing Date, all optional prepayments of Second Lien PIK Term Loans and all mandatory prepayments of Second Lien PIK Term Loans (x) set forth in paragraphs (a) and (b) of the section entitled “Mandatory Prepayment” below, (y) in the case of any mandatory assignment pursuant to the “yank-a-bank” provisions in connection with any amendment to waive the Call Premium or (z) pursuant to an acceleration of the Obligations for any reason, in whole or in part, will be subject to the following “prepayment” premiums (expressed as a percentage of the outstanding principal amount of the Term Facility so prepaid, repaid, accelerated or subject to such “yank-a-bank” provisions) (the “Call Premium”): | ||||
| Period | Percentage | |||
| Prior to second anniversary of the Closing Date: |
Make Whole Amount | |||
| On or after the second anniversary of the Closing Date and prior to the third anniversary of the Closing Date: | 2.00% | |||
| Thereafter: | None | |||
| “Make-Whole Amount” means an amount equal to the aggregate of (a) the sum of all interest payments (including interest at the Default Rate if an Event of Default has occurred and is continuing at the time the Make-Whole Amount becomes due) that would have accrued or been due on the Loans prepaid, repaid, accelerated or subject to “yank-a- bank” provisions from and including the applicable date up to and including the two-year anniversary of the Closing Date, discounted to such applicable date on a quarterly basis (assuming a 360-day year and actual days elapsed) at a rate equal to the sum of the Treasury Rate (to be defined in accordance with the Documentation Considerations) plus 0.50% plus (b) an amount equal to 2.00% of the aggregate amount of Loans so prepaid, repaid, accelerated or subject to “yank-a-bank” provisions. | ||||
B-28
| Mandatory Prepayments: | The following amounts shall be applied to prepay the Term Loans, in each case with carve-outs and exceptions consistent with the Documentation Considerations: | |
| (a) 100% of the net cash proceeds of any incurrence of debt by the Borrower and its Restricted Subsidiaries (other than debt otherwise permitted under the Credit Documentation (other than indebtedness incurred pursuant to a Unitranche Refinancing Facility, Unitranche Refinancing Notes, Second Lien Refinancing Facility or Second Lien Refinancing Notes)); | ||
| (b) 100% of the net cash proceeds (above a threshold to be agreed per fiscal year) of any non-ordinary course sale or other disposition of assets (including as a result of casualty or condemnation) by the Borrower or any of its Restricted Subsidiaries, except for (i) sales or other dispositions of inventory in the ordinary course, (ii) sales or other dispositions of obsolete or worn-out property in the ordinary course, (iii) sales or other dispositions of property no longer useful in such person’s business in the ordinary course, and (iv) other customary exceptions to be agreed upon (subject to reinvestment of such proceeds in the business of the Borrower or its subsidiaries, including in acquisitions, investments or capital expenditures (or committed to be reinvested) (1) within 18 months following receipt (or if the Borrower or its subsidiaries have committed to reinvest such proceeds within such 18 month period reinvestment within six (6) months following such 18 month period) and (2) the 18 month period prior to the receipt of such proceeds); provided, that the foregoing percentage shall be reduced to (x) if, on the date the Borrower or its restricted subsidiaries receive such net cash proceeds, the First Lien Leverage Ratio as of the end of the most recent test period, on a pro forma basis but excluding the proceeds of such asset sale, is greater than or equal 8.55:1.00 but less than 8.80:1.00, 50% and (y) if, on the date the Borrower or its restricted subsidiaries receive such net cash proceeds, the First Lien Leverage Ratio as of the end of the most recent test period, on a pro forma basis but excluding the proceeds of such asset sale, is less than 8.55:1.00, 0%; and | ||
| (a) commencing with the first full fiscal year ending after the Closing Date, 50% of Excess Cash Flow (to be defined in accordance with the Documentation Precedent but in any event to take into account the provisions described below) for each fiscal year of the Borrower; provided, that (i) the foregoing percentage shall be reduced to 25% and 0% for any fiscal year with respect to which the First Lien Leverage Ratio (at the time of the respective payment) is equal to or less than 8.80:1.00 and 8.30:1.00, respectively, (ii) at the option of the Borrower, the amount of such required Excess Cash Flow prepayment amount shall be reduced dollar-for-dollar by the amount of voluntary prepayments of the Unitranche Term Loans, any Incremental Unitranche Facility, the Revolving Facility and any permitted indebtedness ranking pari passu with the Term Loans (including assignments to and purchases by the Borrower or any restricted subsidiary (which shall, in the case of below par buybacks, be credited in the amount of cash paid) and in the case of any revolving facility, to the extent accompanied by a permanent reduction of the relevant commitment), in each case made prior to any Excess Cash Flow prepayment date (but without duplication in any other Excess Cash Flow period and with carry-forward for any amounts in excess of the required Excess Cash Flow payment required for such period), and except to the extent financed with long-term indebtedness (other than revolving indebtedness), and (iii) at the option of the Borrower, the amount of such required Excess Cash Flow prepayment amount shall be reduced dollar-for-dollar by amounts used for capital expenditures, Permitted Acquisitions and certain other permitted investments (including investments in joint ventures) and, at the option of the Borrower, made prior to the date of such Excess Cash Flow prepayment (but without duplication in any other Excess Cash Flow period) or committed to be made during such fiscal year or prior to the date of such Excess Cash Flow prepayment (it being understood that to the extent such capital expenditure, acquisition, investment or restricted payment is not actually made as committed in the subsequent four (4) fiscal quarters, such amount shall increase the Excess Cash Flow prepayment for such subsequent four (4) fiscal quarters on a dollar for dollar basis) (except to the extent financed with long-term indebtedness (other than revolving indebtedness)); provided, further, that prepayments shall only be required under this clause (c) if the required Excess Cash Flow prepayment amount, after giving effect to the deductions above, is in excess of $10 million (with only amounts in excess of $5 million required to be prepaid); provided, further, that for purposes of determining the applicable Excess Cash Flow percentage above, the First Lien Leverage Ratio, shall be recalculated to give pro forma effect to all such prepayments and expenditures set forth in clauses (ii) and (iii) above that are made after the end of the applicable fiscal year but prior to the making of such Excess Cash Flow prepayment. | ||
B-29
| The Second Lien Credit Documentation will provide that the step- downs with respect to the percentage of Excess Cash Flow and asset sale proceeds required to be used to prepay the Second Lien PIK Term Loans will be based on the Senior Secured Leverage Ratio (with step- downs to (x) in the case of clause (b) above, 50% and 0% at 8.80:1.00 and 8.55:1.00, respectively, and (y) in the case of clause (c) above, 25% and 0% at 8.80:1.00 and 8.30:1.00, respectively) rather than the First Lien Leverage Ratio. As used herein, “Senior Secured Leverage Ratio” means the ratio of (i) consolidated senior secured debt (comprised of third party debt for borrowed money, purchase money indebtedness, capitalized lease obligations and unreimbursed drawings under letters of credit of the Borrower and its Restricted Subsidiaries that are secured by the Collateral) net of (x) unrestricted cash and cash equivalents (whether or not held in a pledged account) and (y) cash and cash equivalents restricted in favor of the Credit Facilities (which may also include cash and cash equivalents securing other indebtedness for borrowed money secured by a lien on the Collateral along with the Credit Facilities so long as such lien is subject to an intercreditor agreement consistent with the Documentation Considerations), in each case, in respect of the Borrower and its Restricted Subsidiaries and such unrestricted cash and restricted cash and cash equivalents to be determined in accordance with generally accepted accounting principles to (ii) trailing four-quarter Consolidated EBITDA. | ||
B-30
| Mandatory prepayments (other than from proceeds of any Second Lien Refinancing Facility or Second Lien Refinancing Notes, which shall at all times be applied to repay Second Lien PIK Term Loans) of the Unitranche Term Loans shall be applied without premium or penalty (except as provided above), subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Eurodollar borrowings other than on the last day of the relevant interest period, on a pro rata basis to the Unitranche Term Loans and any Incremental Unitranche Term Facility and to the installments thereof as directed by the Borrower (or in the absence of direction from the Borrower in the direct order of maturity). | ||
| No mandatory prepayments of the Second Lien PIK Term Loans shall be required until amounts outstanding under the Term Facility (and any Incremental Unitranche Facilities or Unitranche Refinancing Facilities) have been paid in full and all commitments thereunder terminated, other than with Declined Proceeds as described below. | ||
| All mandatory prepayments, to the extent attributable to Foreign Subsidiaries, are subject to permissibility under local law (e.g., financial assistance, corporate benefit, restrictions on up-streaming of cash intra group and the fiduciary and statutory duties of the directors of the relevant subsidiaries); provided, that the Borrower shall use commercially reasonable efforts to take all actions required by applicable local law to permit such repatriation. Further, if the Borrower and its Restricted Subsidiaries determine in good faith that they would incur a material and adverse tax liability (including any withholding tax) if all or a portion of the amounts described in clause (b) or (c) of the first paragraph of this section (Mandatory Prepayments) attributable to a Foreign Subsidiary were up-streamed or transferred as a distribution or dividend (a “Restricted Amount”), the amount the Borrower will be required to mandatorily prepay shall be reduced by the Restricted Amount until such time as upstreaming or transferring such Restricted Amount would no longer result in a material and adverse tax liability. | ||
| Any Unitranche Lender (each a “Unitranche Declining Lender”) may elect not to accept any mandatory prepayment, but in the case of clause (a) above, solely to the extent not representing a refinancing of the Unitranche Term Loans. Any prepayment amount declined by a Unitranche Declining Lender shall be offered to the Lenders under the Second Lien PIK Term Facility. Any Second Lien PIK Lender (each a “Second Lien Declining Lender”) may elect not to accept any mandatory prepayment (including any offer resulting from prepayments declined by Unitranche Declining Lenders), but solely to the extent not representing a refinancing of the Second Lien PIK Term Loans. Any prepayment amount declined by a Second Lien Declining Lender may be retained by the Borrower as “Declined Proceeds” and will be an addition to the Available Basket. | ||
B-31
| The Revolving Loans and Swingline Loans shall be prepaid and the Letters of Credit shall be cash collateralized or otherwise “backstopped” or replaced to the extent all such extensions of credit under the Revolving Facility exceed the Revolving Commitments. | ||
| COLLATERAL: | Subject to the Certain Funds Provision and the provisions of the immediately following paragraphs, the Borrower Obligations and the obligations of each other Loan Party under the Guaranty shall be secured by: a perfected first-priority (in the case of the Unitranche Facilities and the Guarantees in respect thereof) or second priority (in the case of the Second Lien PIK Term Facility and the Guarantees in respect thereof) security interest (subject to permitted liens and other exceptions to be set forth in the Credit Documentation, including, without limitation, liens expressly permitted to exist on the Closing Date pursuant to the Acquisition Agreement after giving effect to the Refinancing and otherwise set forth below) in substantially all of the Loan Parties’ tangible and intangible assets now owned or hereafter acquired (including, without limitation, a pledge of (i) prior to any Qualifying IPO of the Borrower, the capital stock of the Borrower owned by Holdings and (ii) the capital stock of each Loan Party’s wholly-owned direct subsidiaries, but limited, in the case of voting capital stock of CFCs or CFC Holdcos, to a pledge of 65% of such voting capital stock) (the “Collateral”). | |
| Notwithstanding the foregoing, the Collateral will exclude (a) all leasehold interests in real property, (b) all fee-owned real property with a fair market value of less than an amount to be agreed (such fair market value to be as reasonably estimated by the Borrower), (c) interests in partnerships, joint ventures and non-wholly-owned subsidiaries which cannot be pledged without the consent of one or more third parties, other than Holdings and its Subsidiaries (after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law), (d) the capital stock of Immaterial Subsidiaries (except to the extent perfection can be achieved with a UCC-1 financing statement), captive insurance subsidiaries, not-for-profit subsidiaries, special purpose entities used for permitted securitization facilities and Unrestricted Subsidiaries, (e) margin stock, (f) security interests to the extent the same would result in materially adverse tax consequences, as reasonably determined by the Borrower, (g) any property and assets the pledge of which would require governmental consent, approval, license or authorization (to the extent not obtained and after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law), (h) all foreign intellectual property (except with respect to any Foreign Subsidiary that is or becomes a Loan Party or to the extent perfection can be achieved with a UCC-1 financing statement) and any “intent-to-use” trademark applications prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law, (i) [reserved], (j) motor vehicles and other assets subject to certificates of title to the extent a lien therein cannot be perfected by the filing of a UCC financing statement, letter of credit rights (other than to the extent perfection of the security interest therein is accomplished by the filing of a UCC financing statement) and commercial tort claims below an agreed threshold, and (k) other exceptions to be agreed consistent with the Documentation Considerations (as defined below) and reasonably satisfactory to the Unitranche Required Lenders and the Second Lien Required Lenders, as applicable, and the Borrower. | ||
B-32
| Notwithstanding anything to the contrary contained herein, (a) the Loan Parties shall not be required to grant a security interest in any asset or perfect a security interest in any Collateral to the extent (i) the cost, burden, difficulty or consequence of obtaining or perfecting a security interest therein outweighs the benefit of the security afforded thereby as reasonably determined by the Borrower and the Unitranche Required Lenders or the Second Lien Required Lenders, as applicable, or (ii) the granting of a security interest in such asset would be prohibited by enforceable anti-assignment provisions of contracts binding on such asset at the time of its acquisition and not entered into in contemplation of such acquisition or applicable law or, in the case of assets consisting of licenses, agreements or similar contracts, to the extent the grant of security therein would violate the terms of such license, agreement or similar contract relating to such asset (in each case, after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law), (b) other than with respect to any Foreign Subsidiary that is or becomes a Loan Party, no actions shall be required in order to create or perfect any security interest outside of the United States in any assets located outside of the United States and no foreign law security or pledge agreements, foreign law mortgages or deeds or foreign intellectual property filings or searches shall be required, (c) any required mortgages will be permitted to be delivered after the Closing Date in accordance with the Certain Funds Provision, (d) the Loan Parties shall not be required to seek or obtain any landlord lien waiver, estoppel, warehouseman waiver or other collateral access or similar letter or agreement and (e) no actions shall be required to be taken to perfect in: (i) assets requiring perfection through control agreements or other control arrangements (other than control of pledged capital stock and pledged debt to the extent otherwise required above), it being understood and agreed that the Loan Parties shall not be required to take any actions or enter into any control agreements, with respect to cash and cash equivalents, deposit, securities and commodities accounts (including securities entitlements and related assets); (ii) vehicles and any other assets subject to certificates of title; (iii) commercial tort claims below an agreed threshold; and (iv) letter of credit rights to the extent not perfected by the filing of a UCC financing statement. | ||
B-33
| In addition to the Intercreditor Agreement (as defined below) with respect to the Second Lien PIK Term Facility, the Credit Documentation will provide for customary intercreditor arrangements (a) that will allow (at the Borrower’s option) for additional debt that is permitted to be incurred and secured under the Unitranche Credit Documentation to be secured by a lien on the Collateral on a pari passu or junior basis with the Unitranche Facilities, subject to the limitations contained herein and (b) the material terms of such intercreditor arrangements shall be consistent with the Documentation Considerations. | ||
| Intercreditor Agreements: | The lien priority, relative rights and other creditors’ rights issues in respect of the Unitranche Facilities and the Second Lien PIK Facility will be set forth in a customary intercreditor agreement which shall be no worse for the Unitranche Lenders and the Second Lien PIK Lenders than the precedent identified to the Unitranche Lenders and the Second Lien PIK Lenders as “eRT” or such other precedent of recent similar transactions of portfolio companies of the Sponsor as may be mutually agreed between the Borrower, the Unitranche Lenders and the Second Lien PIK Lenders and is consistent with the Documentation Considerations (the “Intercreditor Agreement”), and which shall be reasonably satisfactory to the Borrower, the Unitranche Required Lenders and the Second Lien Required Lenders; provided that the following changes from the eRT precedent shall be made: the proviso at the end of “Enforcement Action” shall be removed. | |
| Priority: | The Credit Documentation shall provide that the Revolving Facility, any Incremental Unitranche Revolving Facility (as permitted above) and any pari passu Unitranche Refinancing Revolving Facility in respect thereof, secured hedge obligations up to $125 million and secured cash management obligations up to $85 million shall constitute super senior obligations (“Super Senior Obligations”) and shall be repaid in full in cash before the repayment of the Term Loans in substantially the same manner as set forth in the Documentation Precedent. In addition, the Unitranche Credit Documentation shall include a DIP financing cap in an amount up to 110% of the Super Senior Obligations permitted to be incurred under the Credit Documentation without the consent of any Term Lender. | |
| CERTAIN CONDITIONS |
||
| Post-Closing Conditions: | The making of each Revolving Loan and the issuance, amendment, modification, renewal or extension of a Letter of Credit (other than any amendment, modification, renewal or extension of a Letter of Credit which does not increase the face amount of such Letter of Credit) after the Closing Date, in each case, shall be conditioned upon (a) the accuracy in all material respects of all representations and warranties in the Credit Documentation (except to the extent qualified by materiality, in which case such representations and warranties shall be true and correct in all respects), (b) there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit and (c) delivery of a customary borrowing notice or request for issuance of a Letter of Credit, as applicable, subject to, in the case of clauses (a) and (b), the limitations set forth in the section entitled “Limited Condition Transactions” hereof to the extent the proceeds of any Revolving Loan are being used to finance a Limited Condition Transaction. | |
B-34
| The only conditions to the funding of the Delayed Draw Term Loans shall be (a) the accuracy in all material respects of all representations and warranties in the Credit Documentation (subject to customary “SunGard” limitations in connection with any borrowing to finance an acquisition or similar investment), (b) there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit (limited to no payment or bankruptcy event of default at the time of, or after giving effect to the making of, such extension of credit in connection with any borrowing to finance an acquisition or similar investment), (c) delivery of a customary borrowing notice at least five (5) business days prior to the requested funding date (for purposes of each such borrowing notice, “business day” means any day other than a day on which commercial banks in New York, London or Luxembourg are permitted to be closed), subject to, in the case of clauses (a) and (b), the limitations set forth in the section entitled “Limited Condition Transactions” hereof to the extent the proceeds of any Delayed Draw Term Loan are being used to finance a Limited Condition Transaction, (d) payment of any Delayed Draw Unused Commitment Fees, as applicable, and (e) the Borrower being in compliance with a First Lien Leverage Ratio, on a pro forma basis, no greater than 9.30:1.00 (calculated without “netting” the cash proceeds thereof or any other incurrence of debt). | ||
| DOCUMENTATION | ||
| Unitranche Credit Documentation: |
The definitive financing documentation for the Unitranche Facilities (the “Unitranche Credit Documentation”) shall be negotiated in good faith by the Borrower and the Unitranche Lenders and shall contain the terms and conditions set forth in the Commitment Letter and such other terms as the Borrower and the Unitranche Lenders shall agree; it being understood and agreed that the Unitranche Lenders Credit Documentation shall: (a) not be subject to any conditions to the availability and initial funding of the Credit Facilities on the Closing Date other than as set forth on Exhibit C; (b) contain only those mandatory prepayments, representations and warranties, affirmative, financial and negative covenants and events of default expressly set forth in this Exhibit B, in each case, applicable to the Borrower and its Restricted Subsidiaries (and Holdings in certain limited circumstances) and with standards, qualifications, thresholds and exceptions for materiality or otherwise and “baskets” and grace periods and cure periods, in each case, consistent (where applicable) with the Documentation Considerations (it being understood that certain exceptions that are subject to a monetary cap shall include a “builder” component based on a percentage of Consolidated EBITDA that is equivalent to the initial monetary cap on the Closing Date); (c) give due | |
B-35
| regard to (i) the operational and strategic requirements of the Borrower, the Target, and their respective subsidiaries in light of their consolidated capital structure and size (including, without limitation, the leverage profile and projected free cash flow generation of the Borrower, the Target and their respective subsidiaries), in each case, after giving effect to the Transactions, (ii) the model delivered by the Sponsor on July 14, 2021 (as adjusted for changes reasonably agreed with the Commitment Parties) (the “Projections”), (iii) recent similar facilities or indebtedness involving affiliates of the Sponsor or other recent similar facilities or indebtedness for leveraged affiliates of top-tier sponsors and (iv) the geography of the Loan Parties; (d) give due regard to the provisions applicable to the Borrower and its subsidiaries in the Targets’ Existing Credit Agreement, (e) contain J Crew blockers (with respect to transfer of material IP from the Borrower and its Restricted Subsidiaries to Unrestricted Subsidiaries) and Chewy blockers (with respect to release of Guarantors as a result of such Guarantor becoming non-wholly owned subsidiaries not as a result of a bona fide transaction (it being understood and agreed that a bona fide transaction is where such Restricted Subsidiary becomes a bona fide joint venture where the other person taking an equity interest in such Restricted Subsidiary is not an Affiliate of the Borrower (other than as a result of such joint venture), and that any such release shall constitute an investment by the Borrower therein in an amount equal to the portion of the fair market value of the net assets of such Restricted Subsidiary attributable to the Borrowers’ equity interest therein (as reasonably estimated by the Borrowers)) and (f) be initially drafted by counsel to the Borrower and be substantially consistent with that certain First Lien Credit Agreement, dated as of February 4, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof) by and among, inter alios, Explorer Holdings, Inc., eResearchTechnology, Inc., and Goldman Sachs Bank USA, as the administrative agent (and the related guarantee agreements, security agreements and intellectual property security agreements executed and/or delivered in connection therewith) (the “Unitranche Documentation Precedent”) and negotiated in good faith by the Borrower and the Commitment Parties to finalize such Unitranche Credit Documentation, giving effect to the Certain Funds Provisions, as promptly as practicable after the acceptance of the Commitment Letter; provided that the Unitranche Documentation Precedent will be modified to remove (i) the contribution debt basket in Section 7.03(s) thereof, (ii) the proviso to Section 8.01(c) thereof providing that the administrative agent shall not be entitled to notify the Borrower of a default for actions taken and reported by the Borrower to the administrative agent and the lender more than two years prior to such notice of default and no default or event of default can occur as a result thereof and (iii) the net short provisions in Section 10.01 thereof (collectively, the “Documentation Considerations”). | ||
| The definitive documentation for the Second Lien PIK Term Facility (the “Second Lien Credit Documentation” and, together with the Unitranche Credit Documentation, the “Credit Documentation”) will be substantially identical to the Unitranche Credit Documentation; provided, that (i) the dollar baskets and dollar thresholds for negative covenants and events of default in the Second Lien Credit Documentation shall be set with a cushion of 25% to the corresponding dollar baskets and dollar thresholds for the same negative covenants and events of default under the Unitranche Facilities and (ii) each incurrence-based test conditioned upon the First Lien Leverage Ratio, the Senior Secured Leverage Ratio and/or the Total Leverage Ratio will be set at a level that is 0.25x greater than the level applicable to such ratio in the Unitranche Credit Documentation (except, to the extent such incurrence based test pertains to indebtedness or liens that are secured on a senior or pari passu basis to the Second Lien PIK Term Facility). | ||
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| Representations and Warranties: |
Limited to the following: organizational existence, qualification and power; organizational power and authority; due authorization, execution and delivery of the Credit Documentation; enforceability of the Credit Documentation; no conflicts of the Credit Documentation with applicable law, organizational documents or contractual obligations; compliance with laws; financial statements; no Material Adverse Effect (as defined below); capitalization of subsidiaries as of the Closing Date; compliance with law; governmental and third party approvals and consents (as such approvals and consents pertain to the Credit Documentation); environmental matters; employee benefit plans; litigation; ownership of property (including intellectual property/license); liens; taxes; subsidiaries/equity interests; Federal Reserve margin regulations; Investment Company Act; disclosure; OFAC and other sanctions matters; FCPA and other anti-bribery matters; the PATRIOT Act and anti-terrorism laws; use of proceeds; accuracy of disclosure as of the Closing Date; solvency (to be defined in a manner consistent with Annex I to Exhibit C) of the Borrower and its subsidiaries, taken as a whole, on the Closing Date; and the creation, validity, perfection and priority of security interests; but in all respects limited on the Closing Date to the Specified Acquisition Agreement Representations and the Specified Representations. | |
| The foregoing representations and warranties shall apply to the Borrower and its Restricted Subsidiaries and, in the case of certain representations and warranties, Holdings, and (except with respect to organizational existence of the Borrower, organizational power and authority of the Borrower, due authorization, execution and delivery of the Credit Documentation, enforceability of the Credit Documentation, no conflicts of the Credit Documentation with organizational documents, financial statements, capitalization of subsidiaries as of the Closing Date, Federal Reserve margin regulations, Investment Company Act, OFAC and other sanctions matters, FCPA and other anti-bribery matters, the PATRIOT Act, anti-terrorism laws, use of proceeds, accuracy of disclosure as of the Closing Date, solvency of the Borrower and its subsidiaries, taken as a whole, on the Closing Date and the creation, validity and perfection of security interests) shall be subject to exceptions that would not reasonably be expected to have a Material Adverse Effect. | ||
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| “Material Adverse Effect” means (a) on the Closing Date, a Company Material Adverse Effect (as defined in the Acquisition Agreement) and (b) after the Closing Date, a material adverse effect on (i) the business, assets, financial condition or results of operations, in each case, of Holdings, the Borrower and its Restricted Subsidiaries, taken as a whole, (ii) the rights and remedies (taken as a whole) of the Unitranche Agent or the Second Lien Agent, as applicable or the Collateral Agent under the Unitranche Credit Documentation or Second Lien Credit Documentation, as applicable or (iii) the ability of the Borrower and the Guarantors (taken as a whole) to perform their payment obligations under the Unitranche Credit Documentation or Second Lien Credit Documentation, as applicable. | ||
| Affirmative Covenants: |
Limited to the following: deliver annual audited financial statements within 180 days after December 31, 2021 and December 31, 2022, and thereafter, deliver audited annual financial statements within 120 days after the end of each fiscal year, in each case, accompanied by an opinion of an independent accounting firm that is not subject to qualifications as to scope of such audit, but that may contain a “going concern” statement that is due to (i) the impending maturity within twelve (12) months of any indebtedness, (ii) the breach or impending breach of any financial covenant or (iii) the activities, operations, financial results, assets or liabilities of any unrestricted subsidiary; delivery of quarterly unaudited financial statements (for each of the first three (3) fiscal quarters of each fiscal year) within 75 days of the end of the first four fiscal quarters following the Closing Date and thereafter, 60 days following the end of each fiscal quarter (together, in the case of such annual and quarterly financial statements, with customary management discussion and analysis narratives with respect to such audited or unaudited financial statements); delivery of an annual budget within 120 days of the end of each fiscal year (or within 180 days for the fiscal year ending December 31, 2021 and December 31, 2022); delivery of compliance certificates, delivery of customary officers’ certificates and other information reasonably requested by a Lender, as the case may be; notices of default and certain other events that would reasonably be expected to have a Material Adverse Effect; maintenance of books and records; maintenance of existence; compliance with laws (including ERISA and environmental laws); OFAC and other sanctions matters; FCPA and other anti-bribery matters; the PATRIOT Act and anti-terrorism laws; maintenance of property (subject to casualty, condemnation and normal wear and tear) and customary insurance (but not, for the avoidance of doubt, flood insurance except to the extent required by applicable law); payment of material taxes; right of the Unitranche Agent at the direction of the Unitranche Required Lenders or the Second Lien Agent at the direction of the Second Lien Required Lenders, as the case may be, to inspect property and books and records (subject to frequency and | |
B-38
| cost reimbursement limitations); use of proceeds; designation of Unrestricted Subsidiaries; quarterly lender calls (it being understood that there shall be one quarterly call for Lenders under both the Unitranche Facilities and the Second Lien PIK Term Facility); and further assurances on guaranty and Collateral matters (including, without limitation, with respect to additional guarantees and security interests in after-acquired property), subject to the parameters set forth under “COLLATERAL” above. | ||
| The foregoing affirmative covenants shall apply to the Borrower and its Restricted Subsidiaries and, in the case of certain affirmative covenants, Holdings, and shall be subject to exceptions and qualifications consistent with the Documentation Considerations. | ||
| Financial Covenant: | Term Facility and Second Lien PIK Term Facility: None. | |
| Revolving Facility: A maximum Super Senior Net Leverage Ratio shall be applicable to the Revolving Facility only under the circumstances set forth below (the “Financial Covenant”). | ||
| The Financial Covenant shall be tested only in the event that on the last day of each fiscal quarter of the Borrower, the aggregate amount of outstanding Revolving Loans (including the Swingline Loans and letters of credit, but excluding, (i) cash collateralized letters of credit, (ii) other outstanding undrawn letters of credit in an aggregate amount of $5 million, and/or (iii) for purposes of the first three testing quarters following the Closing Date, any Revolving Loans drawn on the Closing Date to fund the Transactions) exceed 42.5% of the Revolving Commitments (with measurement to commence with the third full fiscal quarter after the Closing Date and to be determined as of the last day of each fiscal quarter thereafter, in each case, to the extent applicable). The Financial Covenant level will be set at 2.00:1.00 with no step-downs. | ||
| The cash proceeds of a sale of, or contribution to, equity (which equity shall be common equity, “qualified” preferred equity or other equity (such “qualified” preferred equity or other equity to be on terms reasonably acceptable to the Unitranche Required Lenders) of Holdings (contributed, in turn, as cash common equity to the Borrower) on or after the beginning of the applicable fiscal quarter and on or prior to the day that is ten (10) business days after the day on which financial statements are required to be delivered for such fiscal quarter will, at the request of the Borrower, be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenant at the end of such fiscal quarter and applicable subsequent periods which include such fiscal quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”); provided, that (a) in each 4 consecutive fiscal quarter period, there shall be no more than 2 fiscal quarters in which a Specified Equity Contribution is made, (b) no more than 5 Specified Equity Contributions may be made in the aggregate, | ||
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| (c) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrower to be in compliance with the Financial Covenant and (d) the Specified Equity Contribution shall be counted only as Consolidated EBITDA and solely for the purpose of compliance with the Financial Covenant and shall not be included for any other purposes during any fiscal quarter in which it is otherwise included in Consolidated EBITDA (including by netting cash or by increasing availability under any baskets) except that any actual reduction of the principal amount of indebtedness with proceeds of Specified Equity Contributions after the applicable fiscal period with respect to which such Specified Equity Contributions are made shall be given effect; provided further that there shall be no requirement to apply such Specified Equity Contributions, if any, to the prepayment of any indebtedness. The Credit Documentation will contain a standstill provision with regard to the exercise of remedies related solely to any breach of the Financial Covenant default during the period in which any Specified Equity Contribution will be made after delivery of written notice to the Unitranche Agent of the Borrower’s intention to cure the Financial Covenant with the proceeds of the Specified Equity Contribution; provided that no borrowings under the Revolving Facility shall be made and no letters of credit shall be issued during such period until such Specified Equity Contribution is actually made.
“Super Senior Net Leverage Ratio” means the ratio of (i) Revolving Loans and other revolving loans under the Credit Documentation constituting Super Senior Obligations net of (x) unrestricted cash and cash equivalents of the Borrower and its Restricted Subsidiaries and (y) cash and cash equivalents of the Borrower and its Restricted Subsidiaries restricted in favor of the Credit Facilities (which may also include cash and cash equivalents of the Borrower and its Restricted Subsidiaries securing other indebtedness for borrowed money secured by a lien on the Collateral along with the Credit Facilities so long as such lien is subject to an intercreditor agreement consistent with the Documentation Considerations), in each case, such unrestricted cash and restricted cash and cash equivalents to be determined in accordance with generally accepted accounting principles) to (ii) trailing four-quarter Consolidated EBITDA. | ||
| Limited Condition Transactions: | In the case of the incurrence of any indebtedness (including, for the avoidance of doubt, in connection with the incurrence of any Incremental Facility or Delayed Draw Term Loans) or liens or the making of any Permitted Acquisitions or other investments, restricted payments, Restricted Debt Payments or asset sales in connection with a Limited Condition Transaction (as defined below), at the Borrower’s option, the relevant ratios and baskets shall be determined, and any default or event of default blocker shall be tested, (A) in the case of any acquisition or similar investment, as of the date either (i) the definitive acquisition agreements for such Limited Condition Transaction are entered into or (ii) solely in connection with an acquisition to which the United Kingdom City Code on Takeovers and Mergers or other foreign statutes of similar import | |
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| applies, the date of which a “Rule 2.7 announcement” or announcement of similar import of a firm or otherwise binding intention to make an offer (a “Binding Offer”) in respect of a target of a Limited Condition Transaction and, in each case, calculated as if the acquisition and other pro forma events in connection therewith were consummated on such date, (B) in the case of any restricted payment, at the time of the declaration of such restricted payment after giving effect to the relevant restricted payment on a pro forma basis, (C) in the case of any indebtedness or lien in connection therewith, at the time of entry into the commitment for such indebtedness or lien after giving effect to the relevant indebtedness on a pro forma basis and/or (D) in the case of any restricted debt payment, at the time of delivery of notice (which may be conditional) with respect to such restricted debt payment after giving effect to the relevant restricted debt payment on a pro forma basis; provided, that if the Borrower has made such an election, in connection with the calculation of any ratio (other than for purposes of calculating compliance with the Financial Covenant) or basket with respect to the incurrence of any debt (including any Incremental Facilities or Delayed Draw Term Loans) or liens, or the making of any Permitted Acquisitions or other investments, restricted payments, Restricted Debt Payments or asset sales on or following such date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the definitive agreement or, as applicable, the offer in respect of a Binding Offer for such Limited Condition Transaction is terminated, any such ratio shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other pro forma events in connection therewith (including any incurrence of indebtedness) have been consummated.
As used herein, “Limited Condition Transaction” means (x) any acquisition or other investment by the Borrower or one or more of its restricted subsidiaries permitted pursuant to the Credit Facilities Documentation whose consummation is not conditioned on the availability of, or on obtaining, third party financing, (y) any redemption, repurchase, defeasance, satisfaction and discharge or repayment of indebtedness requiring irrevocable notice in advance of such redemption, repurchase, satisfaction and discharge or repayment and (z) any restricted payment requiring irrevocable notice in advance thereof (to the extent such restricted payment is paid within 60 days of such notice). | ||
| Permitted Debt Exchanges: | The Borrower will be permitted to incur indebtedness in the form of one or more additional series of senior unsecured notes or loans or senior secured notes or loans that will be secured by the Collateral on a pari passu basis or by senior secured notes or loans that will be secured on a junior basis with the Unitranche Facilities and the Second Lien PIK Term Facility, senior subordinated notes or loans, or subordinated notes or loans (any such notes or loans, “Permitted Debt Exchange Notes”); provided, that (i) such Permitted Debt Exchange Notes shall be issued in exchange for Term Loans through an offering made to all Lenders under | |
B-41
| the applicable Term Facility on a pro rata basis and pursuant to procedures reasonably acceptable to the Unitranche Required Lenders or Second Lien Required Lenders, as applicable, (ii) such Permitted Debt Exchange Notes shall not be in a principal amount that exceeds the amount of Term Loans subject to such exchange, plus fees, expenses, commissions, underwriting discounts and premiums payable in connection therewith, (iii) such Permitted Debt Exchange Notes do not mature prior to the maturity date of, or have a shorter weighted average life than, the Term Loans subject to such exchange, (iv) customary intercreditor agreements are entered into, (v) none of the Borrower’s restricted subsidiaries is a borrower or guarantor with respect to any Permitted Debt Exchange Notes unless such restricted subsidiary is a Guarantor which shall have previously or substantially concurrently Guaranteed the Borrower Obligations, (vi) any Permitted Debt Exchange Notes are not secured by any assets not previously securing the Borrower Obligations unless such assets substantially concurrently secure the Borrower Obligations and (vii) the terms and conditions of such Permitted Debt Exchange Notes (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the loans and commitments subject to such exchange) reflect market terms and conditions at the time of incurrence or issuance. | ||
| Negative Covenants: | Limited to the following and applicable to the Borrower and its Restricted Subsidiaries (except that clause (m) below shall be applicable to Holdings): | |
|
(a) indebtedness (including guarantee obligations in respect of indebtedness), with exceptions for, among other things, | ||
| (i) the Unitranche Facilities, the Second Lien PIK Term Facility, Incremental Unitranche Facilities and any permitted refinancing thereof, | ||
| (ii) purchase money indebtedness (for the avoidance of doubt, excluding deferred consideration described in clause (a)(xv)) and capital leases in an aggregate outstanding principal amount not to exceed the greater of $51 million and 20% of Consolidated EBITDA , | ||
| (iii) Permitted Surviving Debt (to be defined in a manner consistent with Documentation Considerations), | ||
| (iv) [reserved], | ||
| (v) indebtedness incurred in connection with any (A) Unitranche Refinancing Facility and/or in connection with any Unitranche Refinancing Notes and (B) Second Lien Refinancing Facility and/or in connection with any Second Lien Refinancing Notes, (vi) intercompany indebtedness among the Borrower and its Restricted Subsidiaries without limitation (but subject to the investment covenant limitations), | ||
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| (vii) indebtedness incurred by non-Loan Parties in an aggregate outstanding principal amount not to exceed the greater of $63 million and 25% of Consolidated EBITDA , | ||
| (viii) indebtedness of Foreign Subsidiaries secured by assets not constituting Collateral and otherwise non-recourse to the Borrower or any Guarantor, | ||
| (ix) indebtedness assumed in connection with a Permitted Acquisition or other investment not prohibited by the Credit Documentation (“Assumed Acquisition Debt”) so long as (A) such debt was not incurred in contemplation of such acquisition or other investment and (B) any liens in respect of such indebtedness shall be limited to liens on the assets acquired in connection with such acquisition or other investment and the proceeds and products thereof; provided that the amount of Permitted Ratio Debt, Assumed Acquisition Debt, Incurred Acquisition Debt incurred by non-Loan Parties will be limited to the greater of $101 million and 40% of Consolidated EBITDA (“Non-Loan Party Debt Cap”); | ||
| (x) Unitranche Incremental Equivalent Debt, Second Lien Incremental Equivalent Debt and Permitted Debt Exchanges, | ||
| (xi) subject to the Non-Loan Party Debt Cap, additional indebtedness in an amount not to exceed the greater of $252 million and either 100% of Consolidated EBITDA (the “Ratio Debt Free and Clear Amount”) (less the aggregate principal amount of debt incurred under the other Free and Clear Amounts), plus additional unlimited amounts so long as (A) to the extent such indebtedness is secured by liens on the Collateral that are pari passu to the liens securing the Term Facility, the First Lien Leverage Ratio, on a pro forma basis, does not exceed 9.30:1.00, (B) to the extent such indebtedness is secured by liens that are junior to the liens securing the Term Facility, the Total Leverage Ratio, on a pro forma basis, does not exceed 11.90:1.00 or (C) to the extent such indebtedness is secured by assets not constituting Collateral or unsecured, the Total Leverage Ratio, on a pro forma basis, does not exceed 12.15:1.00 (any such indebtedness incurred pursuant to the foregoing clauses (A),(B) and (C), “Permitted Ratio Debt”); provided that (a) such Permitted Ratio Debt will be subject to the MFN Provisions to the extent constituting Qualifying Unitranche Indebtedness or Qualifying Second Lien Indebtedness, (b) subject to the Inside Maturity Baskets, the maturity date of such Permitted Ratio Debt will be no earlier than the maturity date of the relevant Credit Facility, (c) subject to the Inside Maturity Baskets, the weighted average life to maturity of such Permitted Ratio Debt may not be shorter than the remaining weighted average life to maturity of the relevant Credit Facility, (d) if such Permitted Ratio Debt (i) is secured equally and ratably with the Credit Facilities or by liens on the Collateral | ||
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| that are junior to the liens securing the Credit Facilities, such Permitted Ratio Debt will be subject to customary intercreditor arrangements consistent with the Documentation Considerations and (ii) is incurred or guaranteed by the Borrower or a Guarantor, such Permitted Ratio Debt may not be guaranteed by any subsidiary which is not a Loan Party, and (e) the other terms and conditions (excluding those referenced in clauses (a) through (d) above) of such Permitted Ratio Debt shall be substantially similar to those applicable to any loans or commitments under Credit Facilities that rank pari passu with such Permitted Ratio Debt (if any) or otherwise on market terms and conditions at the time such indebtedness is incurred (as reasonably determined by the Borrower in good faith) or otherwise reasonably acceptable to the Unitranche Required Lenders or Second Lien Required Lenders, as applicable; provided that the covenants, events of default and mandatory prepayments of such Permitted Ratio Debt, if not consistent with the terms of the applicable Credit Facility, shall either (x) not be more restrictive to the Loan Parties (as determined in good faith by the Borrower), when taken as a whole, than the terms of the applicable Credit Facility (other than with respect to economic terms and redemption provisions) unless the Borrower offers to include such more restrictive terms in the applicable Credit Facility or any such provisions apply after the latest final maturity date of the relevant Term Loans existing at the time such Permitted Ratio Debt is incurred or (y) such terms are on market terms as reasonably determined by the Borrower in good faith; | ||
| (xii) [reserved]; | ||
| (xiii) subject to the Non-Loan Party Debt Cap, indebtedness incurred in connection with any acquisition permitted under the Unitranche Credit Documentation, so long as no payment or bankruptcy event of default then exists, in an amount not to exceed (x) $252 million and 100% of Consolidated EBITDA (the “Incurred Debt Free and Clear Amount”) (less the aggregate principal amount of debt incurred under the other Free and Clear Amounts) plus (y) unlimited amounts so long as, in the case of this clause (y), after giving effect pro forma effect thereto, either (A) if such indebtedness is secured by a lien that is pari passu with the lien securing the Term Facility, the First Lien Leverage Ratio does not exceed 9.30:1.00; (B) if such indebtedness is secured by liens that are junior to the liens securing the Term Facility, the Total Leverage Ratio does not exceed 11.90:1.00 or (C) if such indebtedness is secured by assets not constituting Collateral or unsecured, the Total Leverage Ratio does not exceed 12.15:1.00 (this clause (xiii), the “Incurred Acquisition Debt Basket” and such indebtedness “Incurred Acquisition Debt”); provided, that (x) such Incurred Acquisition Debt will be subject to the MFN provisions to the extent constituting Qualifying Unitranche Indebtedness or Qualifying Second Lien Indebtedness, (y) such ratios shall be calculated on a pro forma basis, giving effect to such acquisition, as of the most recently completed four consecutive fiscal | ||
B-44
| quarters for which financial statements have been delivered to the Unitranche Agent (or at the option of the Borrower, the most recently completed four consecutive fiscal quarters or twelve months for which financial statements have been delivered), including the application of the proceeds thereof (without “netting” the cash proceeds thereof provided that to the extent the proceeds of any such Incremental Facility are to be used to repay indebtedness, there shall be no limit to the Borrower’s ability to give pro forma effect to such repayment of indebtedness), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments and (y) such indebtedness satisfies the requirements in clauses (a), (b), (c), (d) and (e) in the first proviso to clause (xi) as though such indebtedness were Permitted Ratio Debt; | ||
| (xiv) a general debt basket in an aggregate outstanding principal amount not to exceed the greater of $126 million and 50% of Consolidated EBITDA (the “General Debt Basket”), which may be secured to the extent permitted by exceptions to the liens covenant; provided, that in the case of non-Loan Parties, the amount of such indebtedness will be limited to an amount not to exceed an amount to be agreed (including a “grower” component); and | ||
| (xv) indebtedness consisting of obligations of the Borrower or any Restricted Subsidiary under deferred consideration (e.g., earn outs, seller notes, indemnifications, incentive non-competes and other contingent obligations) or other similar arrangements incurred by such Person in connection with the Transactions or any Permitted Acquisition or other permitted investments; | ||
| (b) liens with exceptions for, among other things, | ||
| (i) liens on the Collateral securing a Unitranche Refinancing Term Facility, Unitranche Refinancing Notes, Second Lien Refinancing Facility and/or Second Lien Refinancing Notes, | ||
| (ii) liens securing the Unitranche Facilities, Second Lien PIK Term Facility, Incremental Unitranche Facilities, Unitranche Incremental Equivalent Debt and Second Lien Incremental Equivalent Debt subject, to the extent applicable, to customary intercreditor terms to be agreed, and any permitted refinancing thereof contemplated hereby, | ||
| (iii) liens in respect of taxes or materialmen’s, supplier’s or similar statutory liens that (x) are not more than thirty (30) days overdue, (y) are being contested in good faith and for which there are appropriate reserves to the extent required under GAAP or (z) the non-payment of which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, | ||
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| (iv) liens securing permitted purchase money indebtedness (for the avoidance of doubt, excluding deferred consideration described in clause (a)(xv)) and capital leases limited to the assets acquired, | ||
| (v) liens securing Permitted Surviving Debt to the extent secured on the date hereof, | ||
| (vi) liens on acquired assets, assets of acquired entities and the stock of the acquired entities, securing permitted indebtedness assumed in connection with any permitted acquisition so long as such liens were not created in contemplation of such acquisition and such liens are secured solely by such acquired assets, | ||
| (vii) liens securing Permitted Ratio Debt to the extent permitted above, | ||
| (viii) liens securing Unitranche Incremental Equivalent Debt and Second Lien Incremental Equivalent Debt, | ||
| (ix) liens on assets owned by non-Loan Parties, securing permitted debt of non-Loan Parties, | ||
| (x) a general lien basket in an aggregate outstanding principal amount not to exceed the greater of $126 million and 50% of Consolidated EBITDA; | ||
| (c) mergers, consolidations, liquidations and dissolutions (which will include the flexibility for a “successor borrower” subject to customary conditions set forth in the Credit Facilities Documentation); | ||
| (d) sales, dispositions or transfers (“Dispositions”) of assets, with exceptions for, among other things, | ||
| (i) Dispositions of inventory, obsolete or worn out property and property no longer useful in the business, | ||
| (ii) Dispositions of any assets on an unlimited basis for fair market value so long as (x) with respect to Dispositions in excess of amount not to exceed (i) the greater of $25 million and 10% of Consolidated EBITDA for any individual transaction or (ii) the greater of $38 million and 15% of Consolidated EBITDA for any fiscal year (with unlimited carryforward of unused amounts), at least 75% of the consideration consists of cash or cash equivalents and Designated Non-Cash Consideration (to be defined giving effect to the Documentation Considerations) not to exceed the greater of $25 million and 10% of Consolidated EBITDA, (y) such Disposition is subject to the terms set forth in the mandatory prepayment requirements in the Unitranche Credit Documentation and (z) no event of default exists on the date on which the agreement governing the relevant Disposition is executed, | ||
B-46
| (iii) any Disposition of any asset made in order to comply with an order of any agency of state, authority or other regulatory body or any applicable law or regulation; provided, that such Disposition shall be for fair-market value and to the extent otherwise required, the net cash proceeds of any such Disposition shall be applied as a mandatory prepayment to the Term Loans, | ||
| (iv) any other Dispositions of assets not to exceed the greater of $25 million and 10% of Consolidated EBITDA per fiscal year (with any unused capacity being applied to permit Dispositions in subsequent fiscal years), which such Dispositions shall not be subject to the mandatory prepayment requirements; and | ||
| (v) sale leaseback transactions subject to limitations to be agreed; | ||
| (e) dividends or distributions on, or redemptions or repurchases of, the capital stock of the Borrower or any of its restricted subsidiaries (“Restricted Payments”), with exceptions for, among other things, | ||
| (i) payments of dividends following a qualified initial public offering in an amount of up to 6% per annum of net proceeds received by the Borrower in a qualified initial public offering and 7% per annum of market capitalization of the Borrower following a qualified initial public offering, subject to the absence of a continuing event of default at the time of declaration thereof, | ||
| (ii) (A) for any taxable year for which the Borrower is a member, or disregarded as separate from a member, of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Borrower is the common parent, customary distributions to enable such parent company to pay the portion of its consolidated income tax liabilities attributable to the taxable income of the Borrower and its applicable subsidiaries in an amount not to exceed the amount of such tax that would be payable if the Borrower and its applicable subsidiaries were a standalone corporate tax group for all taxable years ending after the Closing Date; provided that distributions in respect of an Unrestricted Subsidiary shall be permitted only to the extent that cash distributions were made by such Unrestricted Subsidiary to the Borrower or any Guarantor for such purpose and (B) distributions to pay operating expenses in the ordinary course and other corporate overhead of Holdings (or such direct or indirect parent) attributable to the ownership of the Borrower and its Restricted Subsidiaries, franchise and similar taxes necessary to maintain organizational existence, and fees and expenses of debt or equity offerings (whether or not successful), | ||
| (iii) distributions to Holdings to fund (or to make distributions to any direct or indirect parent of Holdings to fund) the repurchase or redemption of the capital stock of Holdings, or its direct or indirect parent companies, in each case, held by future, current or former directors, officers, employees, members of management and consultants and/or their respective estates, heirs, family members, spouses, domestic partners, former spouses or former domestic partners in an amount not to exceed the greater of $38 million and 15% of Consolidated EBITDA in any fiscal year (increasing to $60 million following a qualified initial public offering) (with unused amounts carried forward to the subsequent two (2) fiscal years); | ||
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| (iv) any other Restricted Payments so long as the Total Leverage Ratio (calculated on a pro forma basis) does not exceed 6.30:1.00 and no event of default shall then exist or result therefrom; | ||
| (v) a general restricted payment basket in an aggregate amount not to exceed the greater of $63 million and 25% of Consolidated EBITDA (the “General Restricted Payment Basket”) minus the amount of the General Restricted Payment Basket utilized pursuant to the General Investment Basket or the General Restricted Debt Payments Basket, so long as no event of default shall then exist or result therefrom; and | ||
| (vi) to the extent constituting a Restricted Payment, the consummation of the Transactions; | ||
| (f) acquisitions, investments, loans and advances (“Investments”), with exceptions for, among other things, | ||
| (i) Permitted Acquisitions, | ||
| (ii) Investments (i) in the Borrower and any Restricted Subsidiaries that are Loan Parties and (ii) by Restricted Subsidiaries that are not Loan Parties in the Borrower or any Restricted Subsidiary; | ||
| (iii) Investments by Loan Parties in non-Loan Parties in an aggregate amount not to exceed (together the aggregate consideration of Permitted Acquisitions made for acquisition of non-Loan Parties) the greater of $38 million and 15% of Consolidated EBITDA; | ||
| (iv) any other Investments so long as the First Lien Leverage Ratio (calculated on a pro forma basis) does not exceed 9.30:1.00 and no event of default shall then exist or result therefrom; | ||
| (v) Investments in joint ventures and Unrestricted Subsidiaries in an aggregate amount not to exceed the greater of $126 million and 50% of Consolidated EBITDA; | ||
| (vi) Investment in a Similar Business (to be defined in a manner consistent with the Documentation Considerations) in an aggregate amount not to exceed the greater of $126 million and 50% of Consolidated EBITDA; and | ||
| (vii) a general Investment basket in an aggregate outstanding amount not to exceed the greater of $126 million and 50% of Consolidated EBITDA (the “General Investment Basket”), plus additional amounts based on unused capacity under the General Restricted Payment Basket and General Restricted Debt Payment Basket; | ||
B-48
| (g) (i) payments in cash on certain subordinated debt or junior secured debt (including, without limitation, the Second Lien PIK Term Loans) in excess of the greater of the corresponding dollar amount and 25% of Consolidated EBITDA (other than (A) regularly scheduled interest payments and payment of fees, expenses and indemnification obligations, (B) refinancings or exchanges of such debt for like or junior debt that is subordinated in payment and/or collateral to at least the same extent, subject to conditions to be agreed, (C) payments with, or conversions to, equity (other than “disqualified equity”), (D) payments as part of an “AHYDO catch-up payment”, (E) any other such payments and prepayments so long as the First Lien Leverage Ratio (calculated on a pro forma basis) does not exceed 6.30:1.00 and no event of default shall then exist or result therefrom, (F) payments and prepayments in an amount not to exceed the greater of the corresponding dollar amount and 30% of Consolidated EBITDA (the “General Restricted Debt Payment Basket”) minus General Restricted Debt Payment Basket utilized for other purposes and (G) other payments of such debt in a manner to be mutually agreed) (any such payment, a “Restricted Debt Payment”) and (ii) modifications of the terms of any such debt that are materially adverse to the Lenders (it being understood that the foregoing limitation shall not otherwise prohibit debt refinancing or replacing or in exchange for the foregoing debt subject to limitations to be agreed); | ||
| (h) burdensome agreements (negative pledge clauses and restrictions on subsidiary distributions); | ||
| (i) changes in business; | ||
| (j) transactions with affiliates (with exceptions to permit, among others, (i) (x) payment of management, monitoring, consulting, transaction, oversight, advisory and similar fees pursuant to the management or similar agreement entered into by the Borrower on the Closing Date in an annual amount not to exceed an amount to be agreed, subject to the absence of a payment or bankruptcy event of default (it being understood that such fees shall continue to accrue during such payment or bankruptcy event of default) and (y) payment of all of the expenses and indemnification claims in connection with the performance of such services under such management or similar agreement and (ii) transactions among the Borrower and its Restricted Subsidiaries and/or any subsidiary that will become a Restricted Subsidiary as a result of such transaction); | ||
| (k) changes in fiscal year; | ||
| (l) amendments of organizational documents of the Loan Parties that are materially adverse to the Lenders; | ||
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| (m) passive holding company; and | ||
| (n) with respect to the Second Lien Credit Documentation only, a customary anti-layering covenant; | ||
| provided, that the negative covenants will be subject, in the case of each of the foregoing covenants to exceptions, qualifications and “baskets” to be set forth in the Credit Documentation consistent with the Documentation Considerations; provided, further, that fixed dollar baskets in the Credit Documentation will contain corresponding growth components based on a corresponding percentage of Consolidated EBITDA (each, a “grower” component) consistent with Documentation Considerations; provided, further, that notwithstanding the foregoing, the limitations on Investments, Restricted Payments and Restricted Debt Payments referenced above shall be subject to a carve-out (so long as (x) no payment or bankruptcy event of default shall then exist or result therefrom and (y) with respect to such Restricted Payments and Restricted Debt Payments made in reliance on clause (b) below, at the time the making thereof, the First Lien Leverage Ratio (calculated on a pro forma basis) shall be no less than 9.30:1.00) in the amount of a building basket (the “Available Basket”) in a cumulative amount equal to (a) the greater of (x) $126 million and (y) 50% of Consolidated EBITDA (as defined below), plus (b) 100% of retained Excess Cash Flow; provided, that the retained portion of Excess Cash Flow for any fiscal year shall not be less than zero, plus (c) the proceeds (other than proceeds received from a subsidiary) of equity issuances of the Borrower after the Closing Date (other than Excluded Contributions (as defined below), Specified Equity Contributions and issuances of “disqualified stock”), plus (d) the fair market value of capital contributions (other than capital contributions received from a subsidiary) to the Borrower after the Closing Date (other than Excluded Contributions, Specified Equity Contributions and “disqualified stock”), plus (e) the proceeds (other than the proceeds received from a subsidiary) of debt and “disqualified stock” issued after the Closing Date that have been exchanged or converted into equity (other than “disqualified stock”) of the Borrower, together with the fair market value of any property received (other than from a subsidiary) upon such exchange or conversion, plus (f) the net proceeds of sales of investments after the Closing Date made using the Available Basket (in an amount not to exceed the original investment), plus (g) returns, profits, distributions and similar amounts received on investments made using the Available Basket (up to the amount of the original investment), plus (h) the investments of the Borrower and its Restricted Subsidiaries in any Unrestricted Subsidiary to the extent made using the Available Basket that has been redesignated as a Restricted Subsidiary or that has been merged or consolidated into the Borrower or any of its Restricted Subsidiaries or the fair market value of the assets of any Unrestricted Subsidiary that have been transferred to the Borrower or any of its Restricted Subsidiaries (in an amount not to exceed the original investment), plus (i) any Declined Proceeds to the extent not applied to repay the Second Lien PIK Term Loans. The covenants shall also include an Available Excluded Contribution Amount. | ||
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| For purposes of the Credit Documentation, “Available Excluded Contribution Amount” means a cumulative amount equal to the net cash proceeds or fair market value of property or assets (including cash) contributed after the Closing Date to the Borrower as a capital contribution or as a result of the sale or issuance of equity of the Borrower (other than “disqualified equity”), in each case to the extent designated an excluded contribution (an “Excluded Contribution”) by the Borrower (excluding Specified Equity Contributions and only including amounts not otherwise applied). The Available Excluded Contribution Amount from any Excluded Contribution may be used for, among other things, Investments, Restricted Payments and Restricted Debt Payments, so long as it is so used within 12 months of such designation. | ||
| The Credit Documentation will permit the Borrower and its Restricted Subsidiaries to make acquisitions of all or substantially all of the assets of any person or any line of business or division thereof, or of a majority of the equity interests of any person, in each case, to the extent such person is or substantially concurrently becomes a Restricted Subsidiary or such assets are owned by a Restricted Subsidiary or a person who substantially concurrently becomes a Restricted Subsidiary (but in any event to include any Investments in a Restricted Subsidiary which serves to increase the Borrower’s or its Restricted Subsidiaries’ respective equity ownership therein) (each, a “Permitted Acquisition”), in each case so long as (i) there is no payment or bankruptcy event of default, subject to the limitations set forth in the section entitled “Limited Condition Transactions” hereof, (ii) after giving effect thereto, the Borrower is in compliance with the permitted lines of business covenant, (iii) solely to the extent required by, and subject to the limitations set forth in, “Guarantees” and “Security” above, the acquired company and its subsidiaries will become Guarantors and pledge their Collateral to the Unitranche Agent and the Second Lien Agent, as applicable and (iv) the aggregate consideration paid for acquisitions of Restricted Subsidiaries that do not become Guarantors, together with investments in non-Loan Parties pursuant to clause (f)(iii) above, shall not exceed the greater of $38 million and 15% of Consolidated EBITDA. | ||
| The Credit Documentation will contain provisions pursuant to which, subject to customary limitations on Investments in Unrestricted Subsidiaries and subject to a pro forma First Lien Leverage Ratio that does not exceed 9.30:1.00, the Borrower will, subject to no payment or bankruptcy event of default, be permitted to designate (or re-designate) any existing or subsequently acquired or organized Restricted Subsidiary as an “unrestricted subsidiary” (each, an “Unrestricted Subsidiary”) and designate (or re-designate) any such Unrestricted Subsidiary as a Restricted Subsidiary. The designation of any subsidiary as an Unrestricted Subsidiary shall constitute an investment for purposes of the negative covenants described under the | ||
B-51
| heading “Negative Covenants” herein). Unrestricted Subsidiaries (and the sale of any equity interests therein or assets thereof) will not be subject to the mandatory prepayment, representations and warranties, affirmative or negative covenants, Financial Covenant or event of default provisions of the Credit Documentation. No Restricted Subsidiary may be designated as an Unrestricted Subsidiary under the Unitranche Credit Documentation if after such designation it will be a “Restricted Subsidiary” under the Second Lien Credit Documentation. No Subsidiary may be designated as an Unrestricted Subsidiary if it owned material intellectual property at the date of designation and no such material intellectual property may be subsequently transferred to any Unrestricted Subsidiary by the Borrower or a Restricted Subsidiary. | ||
| In the event that any action or transaction meets the criteria of one or more than one of the categories of exceptions, thresholds or baskets pursuant to any applicable negative covenants, the Credit Documentation shall permit such action or transaction (or portion thereof) to be divided and classified and later (on one or more occasions) be re-divided and/or reclassified under one or more of such exceptions, thresholds or baskets within such negative covenant as the Borrower may elect from time to time, including reclassifying any utilization of fixed (subject to “grower components”) exceptions, thresholds or baskets (“fixed baskets”) as incurred under any available incurrence- based exception, threshold or basket (“incurrence-based baskets”) within such negative covenant (but, for the avoidance of doubt, not across separate covenants) and if any applicable ratios or financial tests for such incurrence-based baskets would be satisfied in any subsequent fiscal quarter, such reclassification shall be deemed to have automatically occurred whether or not elected by the Borrower. | ||
| In the event any fixed baskets are intended to be utilized together with any incurrence-based baskets in a single transaction or series of related transactions that occur substantially contemporaneously with one another, the Credit Documentation shall provide that (i) compliance with or satisfaction of any applicable financial ratios or tests for the portion of such indebtedness or other applicable transaction or action to be incurred under any incurrence-based baskets shall first be calculated without giving effect to amounts being utilized pursuant to any fixed baskets, but giving full pro forma effect to all applicable and related transactions (including, subject to the foregoing with respect to fixed baskets, any incurrence and repayments of indebtedness) and all other permitted pro forma adjustments (except that the incurrence of any debt under revolving facilities immediately prior to or in connection therewith shall be disregarded) and (ii) thereafter, incurrence of the portion of such indebtedness or other applicable transaction or action to be incurred under any fixed baskets shall be calculated. | ||
B-52
| Events of Default: | Limited to the following: nonpayment of principal when due; nonpayment of interest, fees or other amounts after five (5) business days; material inaccuracy of a representation or warranty when made or deemed made (subject to a 30-day grace period in the case of misrepresentations that are capable of being cured); violation of a covenant (subject, in the case of affirmative covenants (other than failure to preserve corporate existence of the Borrower), to a grace period of 30 days following written notice from the Unitranche Agent or Second Lien Agent, as applicable); cross-payment default (solely with respect to the failure to pay principal at maturity) and cross acceleration to material indebtedness in excess of the greater of $76 million and 30% of Consolidated EBITDA; bankruptcy events with respect to the Borrower or a material restricted subsidiary (with a customary grace period for involuntary actions); ERISA events subject to a Material Adverse Effect; material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof, actual (or assertion by a Loan Party in writing of the) invalidity of the credit agreement any material guarantee or material security document or lien; and a change of control (subject to the paragraph below). | |
| Notwithstanding the foregoing, a breach of the Financial Covenant shall not constitute an event of default for purposes of the Term Facility unless the lenders under the Revolving Facility have accelerated the Revolving Facility and/or terminated the Revolving Commitments as a result of such breach. | ||
| The definition of “change of control” will require majority ownership of voting stock by Permitted Holders (as defined below) prior to any initial public offering and, thereafter a “change of control” will be triggered if another person or group (other than any employee benefit plan and/or person acting as the trustee, agent or other fiduciary or administrator) acquires more than the greater of 35% of the outstanding voting common stock of Holdings and the percentage of then outstanding voting common stock of Holdings held, directly or indirectly, by the Permitted Holders. A “change of control” will also be triggered if Holdings ceases to own 100% of the outstanding voting common stock of the Borrower other than as a result of an initial public offering of the Borrower’s stock. A “change of control” shall also include a “change of control” as defined in other material debt. “Permitted Holders” means the collective reference to the Investors as of the Closing Date and their respective Control Investment Affiliates (as defined below) (but excluding any operating portfolio companies of the foregoing), co-investors on the Closing Date, managers and members of management of Holdings (or any direct or indirect parent entity of Holdings which does not hold equity interests in any other Person (except for any other such direct or indirect parent entity) (each such entity, a “Parent Holding Company”) and its subsidiaries that have ownership interests in Holdings (or such Parent Holding Company) (for so long as the ownership interests held by such managers or members of management and the co-investors in the aggregate are less than the ownership interests held by the Sponsor). “Control Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose of making equity investments in one or more companies. | ||
B-53
| Voting: | Amendments and waivers of the Credit Documentation will require the approval of Lenders (that are non-defaulting Lenders) holding more than 50% of the aggregate amount of the Loans and, without duplication, the commitments under the Unitranche Facilities (the “Unitranche Required Lenders”) or the Second Lien PIK Term Facility (the “Second Lien Required Lenders”), as the case may be, (provided that, if at such time any Unitranche Lender (together with its affiliates and Approved Funds) or any Second Lien PIK Lender (together with its affiliates and Approved Funds), as applicable, holds more than 50% of the aggregate amount of the Unitranche Loans or the Second Lien PIK Term Loans, as applicable, then the Unitranche Required Lenders or the Second Lien Required Lenders shall be composed of at least two non-affiliated Unitranche Lenders or Second Lien PIK Lenders, respectively) except that (a) the consent of each Lender directly and adversely affected thereby (but not the Unitranche Required Lenders or the Second Lien Required Lenders, as the case may be) shall be required with respect to (i) reductions in the principal amount of any Loan owed to such Lender, (ii) extensions of the final maturity of any Loan owed to such Lender or the due date of any interest or fee payment or any scheduled amortization payment thereof or extension of the Delayed Draw Termination Date, (iii) reductions in the rate of interest (other than a waiver of default interest) or the amount of any fees owed to such Lender (it being understood that any change in the definitions of any ratio used in the calculation of such rate of interest or fees (or the component definitions) shall not constitute a reduction in any rate of interest or fees), (iv) increases in the amount (other than with respect to any Incremental Facility to which such Lender has agreed to provide) of such Lender’s commitment (it being understood that a waiver of any condition precedent or the waiver of any default, event of default or mandatory prepayment shall not constitute an increase of any commitment of any Lender), (v) extensions of the expiry date of such Lender’s commitment (it being understood that a waiver of any condition precedent or the waiver of any default, event of default or mandatory prepayment shall not constitute an extension of any commitment of any Lender) and (vi) provide that the consent of each Lender directly and adversely affected thereby shall be required with respect to any amendment that would result in the contractual subordination of the liens securing the Unitranche Term Loans or the Second Lien PIK Term Loans to any liens securing other indebtedness or with respect to any amendment which would result in the contractual payment subordination of the Unitranche Term Loans or Second Lien PIK Term Loans to other indebtedness, other than, in each case, in connection with a debtor-in-possession facility or the use of cash collateral, in each case approved by the applicable bankruptcy court in an insolvency proceeding, unless each such Lender directly and adversely affected thereby was provided with a bona fide opportunity to |
B-54
| provide such other indebtedness on the same terms and conditions (including receipt of fees and other similar benefits on a pro rata basis based on the Unitranche Term Loans or Second Lien PIK Term Loans, as applicable), (b) the consent of 100% of the Lenders shall be required with respect to (i) reductions of any of the voting percentages, (ii) modifications to the pro rata sharing and payment provisions or the waterfall provisions, (iii) releases of all or substantially all of the Collateral and (iv) releases of all or substantially all of the value of the Guaranty (other than, in the cases of clauses (iii) and (iv) above, in accordance with the Credit Documentation), (c) the consent of Lenders holding Revolving Commitments in excess of 50% of the aggregate Revolving Commitments may amend any of the terms of or waive any breach of or requirement to comply with the Financial Covenant (or may amend, modify or waive any component definition thereof and/or any provisions relating to any Specified Equity Contributions to the extent applicable thereto) without the consent of any other Lender (including, for the avoidance of doubt, the Unitranche Required Lenders) and (d) the consent of each Issuing Lender, the Swingline Lender and/or the Unitranche Agent shall, as applicable, be required with respect to any amendment that adversely affects their respective rights and duties. | ||
| The Unitranche Credit Documentation will contain provisions to be agreed to permit the amendment and extension and/or replacement of the Unitranche Facilities (including any Incremental Unitranche Facility), which may be provided by the existing Lenders or, subject to the reasonable consent of the Unitranche Required Lenders (and, in the case of any Revolving Facility, the Swingline Lender and each Issuing Lender) if required under the heading “Assignments and Participations” below, other persons who become Unitranche Lenders in connection therewith, in each case without the consent of any other Unitranche Lender. | ||
| The Credit Documentation will permit the Unitranche Agent or Second Lien Agent, as applicable, and the Borrower to enter into one or more amendments thereto to incorporate the provisions of any Incremental Unitranche Facility or the Incremental Second Lien Facility, as the case may be, made available without any Unitranche Lender’s or Second Lien PIK Lender’s, as applicable, consent, so long as the purpose of such amendment is solely to incorporate the appropriate provisions for such Incremental Unitranche Facility or Incremental Second Lien Facility in the Credit Documentation. | ||
| The Credit Documentation shall contain provisions allowing the Borrower to replace a Lender or terminate the commitment of a Lender and prepay such Lender’s outstanding Loans in connection with amendments and waivers requiring the consent of all Lenders or of all Lenders directly affected thereby (so long as the Unitranche Required Lenders or the Second Lien Required Lenders, as the case may be, consent), increased costs, indemnified taxes, etc. and “defaulting” or insolvent Lenders. | ||
B-55
| Assignments and Participations: | After the Closing Date, the Lenders shall be permitted to assign all or a portion of their Loans and Commitments (other than to any Disqualified Institution (as defined below) (to the extent the list of Disqualified Institutions is made available to any requesting Lender upon request), a natural person or, except as expressly provided hereunder (including with respect to Debt Fund Affiliates), Holdings and its affiliates) with the consent of (a) the Borrower (not to be unreasonably withheld), unless (w) a payment or bankruptcy (with respect to the Borrower) event of default has occurred and is continuing, (x) such assignment is to a Lender, an affiliate of a Lender or an Approved Fund (as defined below) (but if in respect of the Revolving Facility, only to another Lender under the Revolving Facility), (y) in the case of Blackstone, to a Blackstone Entity or its Related Fund (as defined in the Documentation Precedent) or (z) in the case of Owl Rock, to any of its affiliates or funds, accounts and clients managed or advised by any of them or their Related Funds; provided, that, with respect to assignments of Term Loans only, the Borrower shall be deemed to have consented to any assignment unless it shall have objected there to by written notice to the Unitranche Agent or Second Lien Agent, as the case may be, within ten (10) Business Days following the receipt of written notice thereof, (b) the Unitranche Agent or Second Lien Agent, as the case may be, (not to be unreasonably withheld) unless such assignment is to a Lender, an affiliate of a Lender or an Approved Fund, or in the case of Blackstone, to a Blackstone Entity or its Related Fund, and (c) with respect to Loans and Commitments under the Revolving Facility, any Issuing Lender and Swingline Lender (not to be unreasonably withheld). Non-pro rata assignments shall be permitted. In the case of partial assignments (other than to another Lender, an affiliate of a Lender or an Approved Fund), the minimum assignment amount shall be $1 million in the case of any Term Loan and $5 million in the case of the Revolving Facility, in each case unless otherwise agreed by the Borrower and the Unitranche Agent or Second Lien Agent, as the case may be. The Unitranche Agent or Second Lien Agent, as the case may be, shall receive a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Unitranche Agent or Second Lien Agent, as applicable) in connection with all assignments, unless such assignment is to Blackstone, to a Blackstone Entity or its Related Fund or is to Owl Rock, any of its affiliates or funds, accounts and clients managed or advised by any of them or their Related Funds. The Lenders shall also have the right to sell participations in their Loans to other persons (other than any Disqualified Institutions (to the extent the list of Disqualified Institutions is made available to any requesting Lender upon request), a natural person or, except with respect to Debt Fund Affiliates, Holdings and its affiliates). Participants shall have the same benefits as the Lenders with respect to yield protection and increased cost provisions subject to customary limitations and restrictions. Voting rights of participants shall be limited to those matters set forth in clauses (a) and (b) of the first paragraph under “Voting” with respect to which the affirmative vote of the Lender from which it purchased its participation would be required. Pledges of Loans in accordance with applicable law shall be permitted without restriction other |
B-56
| than to Disqualified Institutions. For purposes hereof, “Blackstone Entities” shall mean Blackstone, any of its Affiliates, and, without limitation, each Blackstone Credit Investor (as defined below) and certain funds, accounts and clients managed, or advised by Blackstone or any of its Affiliates, as the context may require. “Blackstone Credit Investor” shall mean any investor (or an Affiliate of such inventor) of a fund managed or advised by Blackstone, to which investor Blackstone is providing certain administrative or other services. | ||
|
“Approved Fund” means, with respect to any Lender, any person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities and is administered, advised or managed by (i) such Lender, (ii) an affiliate of such Lender or (iii) an entity or an affiliate of an entity that administers, advises or manages such Lender, or is a Related Fund of any of the foregoing.
“Related Fund” in relation to a fund and/or managed account or person or entity which is an Affiliate of a fund and/or managed account and/or other corporate entity (the “first fund”), means a fund and/or managed account and/or other corporate entity (and/or an Affiliate thereof) which is managed or advised by the same investment manager or investment adviser as the first fund or whose board of directors is the same as the first fund or if employees of the investment manager or investment advisor or an affiliate thereof of the first fund comprise the majority of its board of directors or, if it is managed by a different investment manager or investment adviser, a fund and/or managed account and/or other corporate entity whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund, or a fund and/or managed account and/or other corporate entity which is under common investment control as the first fund.
“Disqualified Institution” means (a) any person identified by name in writing to the Commitment Parties on or prior to the date hereof, (b) any other person identified in writing to the Commitment Parties after the date hereof to the extent such person is or becomes a competitor or is or becomes an affiliate of a competitor of you, your subsidiaries, the Target or the Target’s subsidiaries, which designations shall be in the form of a list provided to the Unitranche Agent and the Commitment Parties but which designations shall not apply retroactively to disqualify any persons that have previously validly acquired an assignment or participation interest in the Loans and (c) any affiliate of any person referred to in clauses (a) or (b) above so long as such affiliate is identified in writing by you from time to time or such affiliate is reasonably identifiable solely on the basis of its name; provided, that a “competitor” or an affiliate of a competitor shall not include any bona fide debt fund or investment vehicle (other than any person referred to in clause (a) above and its affiliates) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business which is managed, sponsored or advised by any |
B-57
| person controlling, controlled by or under common control with such competitor or affiliate thereof, as applicable, and for which no personnel involved with the investment of such competitor or affiliate thereof, as applicable, makes any investment decisions relating to the Targets (or, after the Closing Date, Holdings or the Borrower) or any entity that forms a part of the Targets’ (or, after the Closing Date, Holdings’ or the Borrower’s) business (including subsidiaries of the Targets) (or, after the Closing Date, Holdings or the Borrower). | ||
|
The Agents shall not, in their capacities as Unitranche Agent and Second Lien Agent, respectively, be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Agents shall not, in their capacities as Agent and Second Lien Agent, respectively, (x) be obligated to ascertain, monitor or inquire as to whether any Lender or participant or prospective Lender or participant is a Disqualified Institution or (y) have any liability with respect to or arising out of any assignment or participation of loans and commitments under the Credit Facilities, or disclosure of confidential information, to any Disqualified Institution.
The Credit Documentation shall provide that Term Loans may be purchased by and assigned to (a) any Non-Debt Fund Affiliate (as defined below) and/or (b) Holdings and/or any subsidiary of Holdings (the persons in clauses (a) and (b) above, collectively, but excluding any Debt Fund Affiliate, “Affiliated Lenders”) on a non-pro rata basis through Dutch auctions open to all Unitranche Lenders holding Unitranche Term Loans or Second Lien PIK Lenders holding Second Lien PIK Term Loans, as the case may be, in accordance with customary procedures to be agreed and/or open market purchases, notwithstanding any consent requirements set forth above; provided, that (i) Unitranche Term Loans and Second Lien PIK Term Loans owned or held by an Affiliated Lender shall be disregarded in the determination of any Unitranche Required Lender or Second Lien Required Lender, as the case may be, votes (and such Unitranche Term Loans or Second Lien PIK Term Loans, as the case may be, shall be deemed to be voted pro rata to the non-Affiliated Lenders), (ii) Unitranche Term Loans owned or held by an Affiliated Lender shall not, in the aggregate, exceed 25% of the aggregate outstanding Unitranche Term Loans at any time (after giving effect to any substantially simultaneous cancellations thereof) and Second Lien PIK Term Loans owned or held by an Affiliated Lender shall not, in the aggregate, exceed 25% of the aggregate outstanding Second Lien PIK Term Facility at any time (after giving effect to any substantially simultaneous cancellations thereof), (iii) subject to exceptions to be agreed, no Affiliated Lender, solely in its capacity as such, shall be permitted to attend any “lender-only” conference calls or meetings or receive any related “lender-only” information, (iv) in the case of any Dutch auction or open market purchase |
B-58
| conducted by Holdings, the Borrower or any of its subsidiaries, no default or event of default has occurred and is continuing at the time of acceptance of bids for the Dutch auction or open market purchase and no proceeds from the Revolving Facility or any Incremental Unitranche Revolving Facility shall be used to fund the relevant assignment or purchase, (v) any Term Loans acquired by Holdings, the Borrower or any of its subsidiaries shall be immediately cancelled and (vi) the relevant Affiliated Lender and assigning Lender shall have executed a customary “Affiliate Lender assignment and assumption agreement”, which shall contain customary “big boy” representations. Notwithstanding the foregoing, (a) the Credit Documentation shall permit (but not require) any Non-Debt Fund Affiliate to contribute such Term Loans to Holdings, the Borrower or any of their respective subsidiaries for purposes of cancellation of such debt, (b) each Affiliated Lender shall have the right to vote on any amendment, modification, waiver or consent that would require the vote of all Lenders, or the vote of all Unitranche Lenders or Second Lien PIK Lenders, as the case may be, or the vote of all Unitranche Lenders or Second Lien PIK Lenders, as the case may be, directly and adversely affected thereby and (c) no amendment, modification, waiver or consent shall affect any Affiliated Lender (in its capacity as a Unitranche Lender or Second Lien PIK Lender, as the case may be) in a manner that is disproportionate to the effect on any Unitranche Lender or Second Lien PIK Lender, as the case may be, of the same class or that would deprive such Affiliated Lender of its pro rata share of any payments to which it is entitled.
In addition, the Credit Documentation shall provide that Term Loans may be purchased by and assigned to any Debt Fund Affiliate, notwithstanding any consent requirements set forth above, through (a) Dutch auctions open to all Unitranche Lenders or Second Lien PIK Lenders, as the case may be, in accordance with customary procedures and/or (b) open market purchases on a non-pro rata basis; provided, that for any Unitranche Required Lender vote or Second Lien Required Lender vote, as the case may be, Debt Fund Affiliates cannot, in the aggregate, account for more than 49.9% of the amounts included in determining whether the Unitranche Required Lenders or Second Lien Required Lender, as the case may be, have consented to any amendment, waiver or other action. The provisions of the immediately preceding paragraph shall not apply to a Debt Fund Affiliate and each Lender shall be permitted to assign or participate all or a portion of such Lender’s Term Loans to any Debt Fund Affiliate without regard to such foregoing provisions (but subject to the proviso set forth in the immediately preceding sentence).
“Non-Debt Fund Affiliate” means any affiliate of the Sponsor other than any Debt Fund Affiliate.
“Debt Fund Affiliate” means any affiliate of the Sponsor (other than a natural person) that is primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course. |
B-59
| Successor Agents: | The Unitranche Agent and/or Second Lien Agent may resign (a) upon ten (10) days’ notice by the applicable party and (b) subject to the appointment of a successor administrative agent (although if no successor administrative agent is appointed within 30 days, such resignation will still be effective). Unless the Borrower otherwise agrees, such successor agent must be (i) a commercial bank with a combined capital and surplus of at least $1 billion, (ii) a Lender or affiliate or related fund of a Lender or (iii) a third party of national standing that provides agency services in the ordinary course of business, and unless a payment or bankruptcy (with respect to the Borrower) event of default has occurred and is continuing, shall be reasonably acceptable to the Borrower (provided, that no Disqualified Institution shall be a successor agent).
| |
| Yield Protection and Taxes: | The Credit Documentation shall contain customary provisions:
(a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, capital adequacy and other requirements of law (provided, that (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in the case of each of clauses (i) and (ii) above, be deemed to constitute a change in requirements of law, regardless of the date enacted, adopted, issued, or implemented but solely to the extent the relevant increased costs or loss of yield would have been included if they had been imposed under applicable increased cost provisions but, in each case, only to the extent the applicable Lender is requiring reimbursement therefor from similarly situated borrowers under comparable circumstances in other syndicated credit facilities to the extent it is entitled to do so), in each case, subject to customary limitations and exceptions (it being understood that requests for payments on account of increased costs resulting from market disruptions shall be limited to circumstances generally affecting the banking market and when the Unitranche Required Lenders or Second Lien Required Lenders, as applicable, have made a request therefor) and
(b) indemnifying the Lenders for “breakage costs” incurred in connection with, among other things, any prepayment of a Eurodollar Loan on a day other than the last day of an interest period with respect thereto. The Credit Documentation shall contain a customary tax gross up. The Credit Documentation shall contain customary provisions regarding the timing for asserting a claim in respect of yield protection, but such limitations shall not apply in respect of the tax gross-up. |
B-60
| Expenses and Indemnification: | The Borrower shall pay:
(a) if the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Commitment Parties incurred on or after the Closing Date within 30 days of a written demand therefor (or such later date as such person seeking reimbursement may agree), together with backup documentation supporting such reimbursement request, associated with the preparation, execution, delivery and administration of the Credit Documentation and any amendment or waiver with respect thereto (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of (i) one external counsel to the Unitranche Agent and, if necessary, of one external local counsel in any relevant jurisdiction to the Unitranche Agent, (ii) one external counsel to the Unitranche Lenders, taken as a whole, and, if necessary, of one external local counsel in any relevant jurisdiction to the Unitranche Lenders, taken as a whole and (iii) one external counsel to the Second Lien Agent and the Second Lien PIK Lenders, taken as a whole, and, if necessary, of one external local counsel in any relevant jurisdiction to such persons, taken as a whole); and
(b) if the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Agents and the Lenders within 30 days of a written demand therefor (or such later date as such person seeking reimbursement may agree), together with backup documentation supporting such reimbursement request (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of (i) one external counsel to the Unitranche Agent and, if necessary, of one external local counsel in any relevant jurisdiction to the Unitranche Agent, (ii) one external counsel to the Unitranche Lenders, taken as a whole, and, if necessary, of one external local counsel in any relevant jurisdiction to the Unitranche Lenders, taken as a whole and (iii) one external counsel to each of the Second Lien Agent and the Second Lien PIK Lenders and, if necessary, one external local counsel in any relevant jurisdiction to such persons, taken as a whole) in connection with the enforcement of the Credit Documentation.
The Commitment Parties (and their respective affiliates and controlling persons and their respective directors, officers, managers, members, employees, partners, agents, advisors and other representatives) (each, an “indemnified person”) will be indemnified for and held harmless by the Borrower and the Guarantors against, any losses, claims, damages, liabilities or expenses (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one |
B-61
| external counsel to all indemnified persons taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional external counsel to all affected indemnified persons taken as a whole, and, if reasonably necessary, one external local counsel in any relevant jurisdiction to all indemnified persons, taken as a whole and, solely in the case of an actual or potential conflict of interest, one additional external local counsel to all affected indemnified persons, taken as a whole, in each such relevant jurisdiction) arising out of, resulting from or incurred in respect of the Credit Facilities or the use or the proposed use of proceeds thereof, except to the extent they arise from the gross negligence, bad faith or willful misconduct of, or material breach of a funding obligation under the Credit Documentation by, such indemnified person, in each case as determined by a final non-appealable judgment of a court of competent jurisdiction or any dispute solely among the indemnified persons (other than any claims against any Commitment Party in its capacity or in fulfilling its role as an administrative agent or any similar role under any facility) and not arising out of any act or omission of the Sponsor, Holdings, the Borrower, or any of its subsidiaries. Notwithstanding the foregoing, each indemnified person shall be obligated to refund and return any and all amounts paid by the Borrower to such indemnified person for fees, expenses or damages to the extent such indemnified person is not entitled to payment of such amounts in accordance with the terms hereof.
In addition, it is understood and agreed that the Borrower will enter into fee and expense reimbursement arrangements with the Agent to compensate for the services provided by the Agent. | ||
| Governing Law and Forum: | New York. | |
| Counsel to the Commitment Parties: | Cahill Gordon & Reindel LLP. | |
B-62
Annex I
to Exhibit B
INTEREST AND CERTAIN FEES
| Interest Rate Options: | The Borrower may elect that the Loans comprising each borrowing bear interest at a rate per annum equal to (a) the ABR (as defined below) plus the Applicable Margin (as defined below) or (b) the Eurodollar Rate (as defined below) plus the Applicable Margin; provided, that all Swingline Loans shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.
As used herein:
“ABR” means the highest of (a) the rate last quoted by The Wall Street Journal (or another national publication selected by the Unitranche Agent or Second Lien Agent, as applicable) as the U.S. prime rate (the “Prime Rate”), (b) the federal funds effective rate from time to time plus 0.50% per annum and (c) the Eurodollar Rate (as defined below) (if calculated based on clause (a) therein, based on the 1-month Published LIBOR Rate) plus 1.00% per annum.
“ABR Loans” means Loans bearing interest based upon the ABR.
“Applicable Margin” means:
(a) with respect to Revolving Loans held by any lender other than an Initial Lender, at the option of the Borrower, (i) 2.50% in the case of ABR Loans (including Swingline Loans) and (ii) 3.50% in the case of Revolving Loans that are Eurodollar Loans (as defined below);
(b) subject to the PIK Election below, with respect to the Unitranche Term Loans and Revolving Loans (if, in the case of the Revolving Loans, held by the Initial Lender), at the option of the Borrower, (i) 4.75% in the case of ABR Loans and (ii) 5.75% in the case of Eurodollar Loans;
(c) with respect to the Second Lien PIK Term Loans, at the option of the Borrower, (i) 9.50% in the case of ABR Loans and (ii) 10.50% in the case of Eurodollar Loans, in which 100% of the interest due on the Second Lien PIK Term Loans shall be paid in kind by being capitalized and added to the aggregate principal amount of the Second Lien PIK Term Loans.
For the first three years of interest periods during the term of the Term Facility and the Revolving Facility (if, in the case of the Revolving Loans, held by the Initial Lender), at the Borrower’s option, up to 100% of the interest due on the Term Loans and the Revolving Loans may be paid (i) in cash at the Cash Rate plus (ii) in kind at the PIK Rate by being capitalized and added to the aggregate principal amount of the applicable Term Loans or such Revolving Loans, as applicable (“PIK Election”). “Cash Rate” means an Applicable Margin of, at the option of the Borrower, (i) 2.50% in the case of ABR Loans and (ii) 3.50% in the case of Eurodollar Loans. “PIK Rate” means 2.75%. | |
B-I-1
| There shall be no stepdowns with regard to the Applicable Margin.
“Eurodollar Rate” means the higher of (a) the rate for eurodollar deposits for a period equal to 1, 3, 6, or, if agreed to by all relevant affected Lenders, 12 months or a shorter period (as selected by the Borrower) appearing on the applicable Bloomberg screen page (the “Published LIBOR Rate”) (as adjusted for statutory reserve requirements for eurocurrency liabilities) and (b) 0.75% per annum.
The Credit Documentation shall contain LIBOR successor language in line with the ARRC recommended “hardwired” approach.
“Eurodollar Loans” means Loans bearing interest based upon the Eurodollar Rate. | ||
| Interest Payment Dates: | In the case of ABR Loans, quarterly in arrears and at maturity.
In the case of Eurodollar Loans, on the last day of each relevant interest period and, in the case of any interest period longer than three (3) months, on each successive date three (3) months after the first day of such interest period and at maturity. | |
| Commitment and Unused Fees: | The Borrower shall pay a commitment fee (the “Revolving Facility Commitment Fee”) calculated at a rate per annum equal to 1.00% on the average daily unused portion of the commitments of non-defaulting Lenders under the Revolving Facility, payable quarterly in arrears and at maturity.
With respect to the Delayed Draw Term Loan Facility, the Borrower shall pay an unused commitment fee equal to 1.00% per annum on the average daily unused portion of the commitments of non-defaulting Lenders under the Delayed Draw Term Loan Facility, payable quarterly in arrears commencing from the Closing Date and calculated based on the actual number of days elapsed in a 360-day year. The foregoing commitment fees, the “Delayed Draw Unused Commitment Fees”. | |
| Letter of Credit Fees: | The Borrower shall pay a fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility on the face amount of each such Letter of Credit. Such fees shall be shared ratably among the Lenders participating in the Revolving Facility, and shall be payable quarterly in arrears and at maturity.
A fronting fee in an amount to be agreed (but in any event not to exceed 0.125% per annum) on the then available face amount of each Letter of Credit shall be payable quarterly in arrears and at maturity to the relevant Issuing Lender for its own account. In addition, the Borrower shall pay customary issuance and administration fees to the Issuing Lender in connection with the Letters of Credit issued by it. | |
B-I-2
| Default Rate: | At any time when a payment event of default (with respect to any principal, interest or fees) under the Credit Facilities exists, such overdue amounts shall bear interest, to the fullest extent permitted by law, at (i) in the case of principal or interest, 2.00% per annum above the rate then borne by (in the case of such principal) such borrowings or (in the case of interest) the borrowings to which such overdue amount relates or (ii) in the case of fees, 2.00% per annum in excess of the rate otherwise applicable to ABR Loans from time to time. | |
| Rate and Fee Basis: | All per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of ABR Loans and Loans denominated in other currencies to the extent customary for such currencies and the interest payable on which is then based on the Prime Rate) for actual days elapsed. | |
B-I-3
EXHIBIT C
CONDITIONS
The availability and initial funding of the Credit Facilities shall be subject to the satisfaction (or waiver) of solely the following conditions (subject to the Certain Funds Provision). Capitalized terms used but not otherwise defined herein have the meanings assigned to such terms in the Commitment Letter to which this Exhibit C is attached or on Exhibits A and B (including the Annexes thereto) attached thereto.
| 1. | In each case subject to the Certain Funds Provision, each Loan Party shall have executed and delivered the relevant Credit Documentation to which it is a party, and the Commitment Parties shall have received: |
| (a) | customary closing certificates, customary evidence of authority, customary officers’ certificates, good standing certificates (to the extent applicable) in the respective jurisdictions of organization of the Borrower and the Guarantors, certified charter documents of the Borrower and Guarantors, resolutions of the Borrower and the Guarantors, borrowing notices, and, for purposes of each such borrowing notice, “business day” means any day other than a day on which commercial banks in New York, London or Luxembourg are permitted to be closed) and customary legal opinions for the Loan Parties; and |
| (b) | a certificate of the chief financial officer (or other officer with reasonably equivalent responsibilities) of the Borrower in the form attached as Annex I hereto, certifying that the Borrower and its subsidiaries, taken as a whole, after giving effect to the Transactions, are solvent. |
| 2. | The Specified Acquisition Agreement Representations shall be true and correct to the extent required by the Certain Funds Provision and the Specified Representations shall be true and correct in all material respects (except in the case of any Specified Acquisition Agreement Representation or Specified Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided, that to the extent that any of the Specified Representations are qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification, the definition thereof shall be a Company Material Adverse Effect (as defined in the Acquisition Agreement) for purposes of any such representations and warranties made or deemed made on, or as of, the Closing Date (or any date prior thereto). |
| 3. | Prior to or substantially concurrently with the funding of the initial borrowings under the Credit Facilities contemplated by the Commitment Letter, the Borrower shall have received (or will receive) the Equity Contribution, as may be adjusted pursuant to paragraph 4 below (to the extent not otherwise applied to the Transactions). |
| 4. | The Acquisition shall have been consummated, or substantially concurrently with the initial funding of the Credit Facilities, shall be consummated, in each case, in all material respects in accordance with the terms of the Agreement and Plan of Merger (together with the exhibits and disclosure schedules thereto, the “Acquisition Agreement”), dated as of August 19, 2021 among the Borrower, Ocala Merger Sub, Inc., and the Target, but without giving effect to any amendments, waivers or consents by Holdings or the Borrower that are materially adverse to the interests of the Initial Lenders in their respective capacities as such without the consent of the Initial Lenders, such consent not to be unreasonably withheld, delayed or conditioned (it being understood that (a) any modification, amendment, consent or waiver to or under the definition of |
C-1
| Material Adverse Effect in the Acquisition Agreement shall be deemed to be material and adverse to the interests of the Initial Lenders, (b) any decrease in the purchase price shall not be materially adverse to the interests of the Initial Lenders or the Lead Arrangers so long as such decrease is first allocated to reduce the Equity Contribution such that the Equity Contribution shall equal 50% of the pro forma capitalization calculated pursuant to Exhibit A hereto and thereafter, allocated to reduce on a pro rata basis the Equity Contribution, the Unitranche Term Loan Facility and the Second Lien PIK Term Facility, on a dollar-for-dollar basis, (c) any increase in the purchase price shall not be materially adverse to the Initial Lenders so long as such increase is funded by amounts permitted to be drawn under the Revolving Facility or the Equity Contribution (without reducing the percentage otherwise required to be contributed pursuant to the definition thereof) and (d) other than as set forth in clause (a) above, the granting of any consent under the Acquisition Agreement that is not materially adverse to the interests of the Initial Lenders shall not otherwise constitute an amendment or waiver). |
| 5. | The Refinancing shall have been or shall be consummated substantially concurrently with the initial borrowing under the Credit Facilities on the Closing Date. |
| 6. | Since the date of the Acquisition Agreement, there shall not have occurred any Company Material Adverse Effect (as defined in the Acquisition Agreement) that would result in you or your affiliates having the right to terminate your or their obligations under the Acquisition Agreement or a failure of a condition precedent to your or your affiliates’ obligation to consummate the Acquisition pursuant to the terms of the Acquisition Agreement. |
| 7. | All documents and instruments necessary to establish that each of the Unitranche Agent and the Second Lien Agent will have valid and perfected security interests (subject to liens permitted under the Credit Documentation) in the Collateral under the Credit Facilities shall have been delivered and, if applicable, is in proper form for filing; provided, however, that the condition in this paragraph 7 shall be subject in all respects to the Certain Funds Provision. |
| 8. | (a) All fees and closing payments required to be paid on the Closing Date pursuant to the Fee Letters and (b) all expenses required to be paid on the Closing Date pursuant to the Commitment Letter to the extent invoiced at least three (3) business days prior to the Closing Date (the “Invoice Date”), shall have been paid (which amounts may, at the Borrower’s option, be offset against the proceeds of the initial drawings under the Credit Facilities). |
| 9. | The Unitranche Agent and the requesting Commitment Parties shall have received, no later than three (3) business days in advance of the Closing Date, (i) all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act and (ii) to the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a customary certification for the Borrower regarding the beneficial ownership in relation to the Borrower, in each case, that has been reasonably requested by the Commitment Parties at least ten (10) days in advance of the Closing Date. |
| 10. | The Closing Date shall not occur prior to the date that is 45 days after the date of the Acquisition Agreement. |
C-2
Annex I
to Exhibit C
FORM OF SOLVENCY CERTIFICATE
[•], 20[•]
This Solvency Certificate is being executed and delivered pursuant to Section [•] of that certain [•] (the “Credit Agreement”; the terms defined therein being used herein as therein defined).
I, [•], the [Chief Financial Officer/equivalent officer] of the Borrower, in such capacity and not in an individual capacity, hereby certify as follows:
| 1. | I am generally familiar with the businesses and assets of the Borrower and its Subsidiaries, taken as a whole, and am duly authorized to execute this Solvency Certificate on behalf of the Borrower pursuant to the Credit Agreement; and |
| 2. | 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, that (i) the sum of the debt (including contingent liabilities) of the Borrower and its Subsidiaries, taken as a whole, does not exceed the fair value of the present assets of the Borrower and its Subsidiaries, taken as a whole; (ii) the present fair saleable value of the assets of the Borrower and its Subsidiaries, taken as a whole, is not less than the amount that will be required to pay the probable liabilities (including contingent liabilities) of the Borrower and its Subsidiaries, taken as a whole, on their debts as they become absolute and matured; (iii) the capital of the Borrower and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Borrower or its Subsidiaries, taken as a whole, contemplated as of the date hereof; and (iv) the Borrower and its Subsidiaries, taken as a whole do not intend to incur, or believe that they will incur, debts (including current obligations and contingent liabilities) beyond their ability to pay such debts 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. |
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first written above.
| By: | ||
| Name: [•] Title: [Chief Financial Officer/equivalent officer] |
Exhibit C.III Discussion materials May 2021 0Exhibit C.III Discussion materials May 2021 0
The JPMorgan Team dedicated to Inovalon Banking Coverage Mergers & Acquisitions Madhu Namburi Stas Byhovsky Scott Glowinski Drago Rajkovic Eric Rabinowitz Kyu Ha Lim Head of Global Technology Managing Director Managing Director Vice Chairman of Managing Director Executive Director Investment Banking Mergers & Acquisitions Equity-Linked Equity Capital Markets Leveraged Finance Capital Markets Greg Chamberlain Alejandra Fernandez Bianca Buck Santosh Sreenivasan Bradford Garvey Head of Technology Equity Executive Director Vice President Managing Director Managing Director Capital Markets 1The JPMorgan Team dedicated to Inovalon Banking Coverage Mergers & Acquisitions Madhu Namburi Stas Byhovsky Scott Glowinski Drago Rajkovic Eric Rabinowitz Kyu Ha Lim Head of Global Technology Managing Director Managing Director Vice Chairman of Managing Director Executive Director Investment Banking Mergers & Acquisitions Equity-Linked Equity Capital Markets Leveraged Finance Capital Markets Greg Chamberlain Alejandra Fernandez Bianca Buck Santosh Sreenivasan Bradford Garvey Head of Technology Equity Executive Director Vice President Managing Director Managing Director Capital Markets 1
JPMorgan has led more software equity deals than any other bank Software equity since 2016 (160 deals) Lead-Left 90 90 Software equity 75 deals since 2016 69 $43bn 44 Proceeds raised 41 JPM+GS JPM+MS 67% Market share 2 Source: Dealogic; excludes bought deals, REITs, and deals <$50mm
JPMorgan is the leading M&A advisor to technology companies 2019–’21 Global Tech M&A deals Select marquee JPMorgan technology advisory transactions Volume No. of April 2021 December 2021 March 2021 February 2021 February 2021 January 2021 Rank Advisor ($mm) deals $52,000,000,000 $9,500,000,000 $7,000,000,000 $2,100,000,000 $5,340,000,000 $2,250,000,000 October 2018 1 JPMorgan 559,017 168 $34,000,000,000 Acquired Spin-off of its Has been Has Has Has been Has October 2020 81% stake in acquired by acquired acquired acquired by acquired 2 Goldman Sachs 600,108 163 Spun off Managed Infrastructure Services Unit 3 Morgan Stanley 471,103 121 August 2020 July 2020 December 2020 December 2020 December 2020 November 2020 July 2020 $11,000,000,000 $21,400,000,000 $7,200,000,000 $1,150,000,000 $1,000,000,000 $1,600,000,000 $925,000,000 4 BofA Securities 393,885 101 Has been acquired from Has merged Has been Has been Has been Has been Has 5 Citi 189,486 66 with acquired by acquired by acquired by acquired by acquired by & 2021 YTD Global Tech M&A deals December 2019 August 2019 July 2020 May 2020 December 2019 December 2019 December 2019 Volume No. of $16,000,000,000 $10,700,000,000 $4,400,000,000 Undisclosed $1,028,000,000 $4,400,000,000 $1,950,000,000 Rank Advisor ($mm) deals 1 JPMorgan 143,223 40 Has Has acquired Has been Has Has Has been Has been spun off acquired by acquired acquired acquired by acquired by 2 Goldman Sachs 111,968 35 3 Morgan Stanley 52,2849 17 May 2019 October 2020 November 2019 October 2019 August 2019 June 2019 March 2019 $25,700,000,000 $9,900,000,000 $5,400,000,000 $3,900,000,000 $4,800,000,000 €9,000,000,000 $7,300,000,000 4 BofA Securities 28,717 16 Has merged Has Has Has been Has acquired Has acquired Has been with acquired acquired acquired by acquired by 5 Jefferies 25,511 13 & Source: Dealogic, JPMorgan Note: Data as of 4/15/2021; rank eligible deals greater than equal to $100mm with any (target, acquiror, divestor) 3JPMorgan is the leading M&A advisor to technology companies 2019–’21 Global Tech M&A deals Select marquee JPMorgan technology advisory transactions Volume No. of April 2021 December 2021 March 2021 February 2021 February 2021 January 2021 Rank Advisor ($mm) deals $52,000,000,000 $9,500,000,000 $7,000,000,000 $2,100,000,000 $5,340,000,000 $2,250,000,000 October 2018 1 JPMorgan 559,017 168 $34,000,000,000 Acquired Spin-off of its Has been Has Has Has been Has October 2020 81% stake in acquired by acquired acquired acquired by acquired 2 Goldman Sachs 600,108 163 Spun off Managed Infrastructure Services Unit 3 Morgan Stanley 471,103 121 August 2020 July 2020 December 2020 December 2020 December 2020 November 2020 July 2020 $11,000,000,000 $21,400,000,000 $7,200,000,000 $1,150,000,000 $1,000,000,000 $1,600,000,000 $925,000,000 4 BofA Securities 393,885 101 Has been acquired from Has merged Has been Has been Has been Has been Has 5 Citi 189,486 66 with acquired by acquired by acquired by acquired by acquired by & 2021 YTD Global Tech M&A deals December 2019 August 2019 July 2020 May 2020 December 2019 December 2019 December 2019 Volume No. of $16,000,000,000 $10,700,000,000 $4,400,000,000 Undisclosed $1,028,000,000 $4,400,000,000 $1,950,000,000 Rank Advisor ($mm) deals 1 JPMorgan 143,223 40 Has Has acquired Has been Has Has Has been Has been spun off acquired by acquired acquired acquired by acquired by 2 Goldman Sachs 111,968 35 3 Morgan Stanley 52,2849 17 May 2019 October 2020 November 2019 October 2019 August 2019 June 2019 March 2019 $25,700,000,000 $9,900,000,000 $5,400,000,000 $3,900,000,000 $4,800,000,000 €9,000,000,000 $7,300,000,000 4 BofA Securities 28,717 16 Has merged Has Has Has been Has acquired Has acquired Has been with acquired acquired acquired by acquired by 5 Jefferies 25,511 13 & Source: Dealogic, JPMorgan Note: Data as of 4/15/2021; rank eligible deals greater than equal to $100mm with any (target, acquiror, divestor) 3
#1 software M&A franchise generating the highest premium in sell-sides 1 2 Global software advisory volume 2018 – 2020 ($bn) Average tech sell-side premiums since 2013 $277 41% $223 $221 38% 37% 35% 35% 31% 1-day 1-month 1-day 1-month 1-day 1-month Source: JPMorgan, Dealogic (M&A Analytics); Note: Premium calculated based on offer price at announcement compared to the 1-day and 1-month unaffected pre-announcement trading price 1 2 Rank eligible deals greater than equal to $100mm with any (target, acquiror, divestor); Includes technology sell-side transactions with deal value greater than $500mm involving a U.S. public target 4#1 software M&A franchise generating the highest premium in sell-sides 1 2 Global software advisory volume 2018 – 2020 ($bn) Average tech sell-side premiums since 2013 $277 41% $223 $221 38% 37% 35% 35% 31% 1-day 1-month 1-day 1-month 1-day 1-month Source: JPMorgan, Dealogic (M&A Analytics); Note: Premium calculated based on offer price at announcement compared to the 1-day and 1-month unaffected pre-announcement trading price 1 2 Rank eligible deals greater than equal to $100mm with any (target, acquiror, divestor); Includes technology sell-side transactions with deal value greater than $500mm involving a U.S. public target 4
JPMorgan has the leading Healthcare practice Recent JPMorgan Healthcare Technology Advisory Deals 2014-2020 healthcare M&A advisory rankings October 2020 $1.4bn June 2020 $4.9bn January 2021 $1.4bn Rank Advisor Volume ($bn) Number of deals 1 JPMorgan $1,190 293 Financial advisor to Talkspace on Financial advisor to Allscripts on its sale Advisor and Lead Left Bookrunner on $1.4bn merger with Hudson Executive 40%+ more Investment Corp of CarePort Health acquisition financing to acquire Cotiviti than 2 Goldman Sachs $1,252 204 nearest May 2020 $1.1bn March 2020 $5.0bn February 2020 $1.8bn competitor 3 Morgan Stanley $1,000 136 Financial advisor and Lead Left Sole advisor to DXC on the sale of its Sole advisor to Agfa on the sale of its Bookrunner on Gainwell’s acquisition Medicaid technology business to HCIT business to Dedalus financing of HMS Veritas Citi 4 $533 111 January 2020 $1.1bn September 2019 $1.0bn July 2019 $2.7bn Barclays 5 $364 110 Advisor to Waystar on its sale of a Sole advisor to InTouch on sale to Sole advisor to CitiusTech on its sale to majority equity stake to EQT and Teladoc Baring Private Equity Asia CPPIB 6 BofA Securities $327 75 March 2019 $1.4bn December 2018 Undisclosed November 2018 $5.7bn 7 Lazard $363 72 Advisor on sale of TRANZACT to Willis Advisor on sale of Allscripts stake to GI Lead Left Bookrunner on Veritas’ 8 Centerview Partners $468 68 Towers Watson Partners and TA Associates acquisition financing of Athena Health August 2018 Undisclosed Jefferies 9 $80 67 Rothschild 10 $67 58 Advisor to GoodRx on recapitalization by Silver Lake and Francisco Partners Source: Dealogic Notes: Target industry is Healthcare; 2014–present; tombstones are mentioned as of completion year 5JPMorgan has the leading Healthcare practice Recent JPMorgan Healthcare Technology Advisory Deals 2014-2020 healthcare M&A advisory rankings October 2020 $1.4bn June 2020 $4.9bn January 2021 $1.4bn Rank Advisor Volume ($bn) Number of deals 1 JPMorgan $1,190 293 Financial advisor to Talkspace on Financial advisor to Allscripts on its sale Advisor and Lead Left Bookrunner on $1.4bn merger with Hudson Executive 40%+ more Investment Corp of CarePort Health acquisition financing to acquire Cotiviti than 2 Goldman Sachs $1,252 204 nearest May 2020 $1.1bn March 2020 $5.0bn February 2020 $1.8bn competitor 3 Morgan Stanley $1,000 136 Financial advisor and Lead Left Sole advisor to DXC on the sale of its Sole advisor to Agfa on the sale of its Bookrunner on Gainwell’s acquisition Medicaid technology business to HCIT business to Dedalus financing of HMS Veritas Citi 4 $533 111 January 2020 $1.1bn September 2019 $1.0bn July 2019 $2.7bn Barclays 5 $364 110 Advisor to Waystar on its sale of a Sole advisor to InTouch on sale to Sole advisor to CitiusTech on its sale to majority equity stake to EQT and Teladoc Baring Private Equity Asia CPPIB 6 BofA Securities $327 75 March 2019 $1.4bn December 2018 Undisclosed November 2018 $5.7bn 7 Lazard $363 72 Advisor on sale of TRANZACT to Willis Advisor on sale of Allscripts stake to GI Lead Left Bookrunner on Veritas’ 8 Centerview Partners $468 68 Towers Watson Partners and TA Associates acquisition financing of Athena Health August 2018 Undisclosed Jefferies 9 $80 67 Rothschild 10 $67 58 Advisor to GoodRx on recapitalization by Silver Lake and Francisco Partners Source: Dealogic Notes: Target industry is Healthcare; 2014–present; tombstones are mentioned as of completion year 5
Situation overview 6Situation overview 6
Inovalon 3.0 – dramatic progress to-date Company view Market view • Established the company as the industry-leading • Market perception of Inovalon story has 1 1 technology platform in healthcare dramatically improved over the last year • Significantly strengthened technology platform 2 • Increasing recognition of Inovalon as the premier 2 and go-to-market capabilities technology platform in health care • Reached leading client presence across all 3 3 • Increasing belief in long-term growth potential healthcare verticals • Dramatically improved financial model dynamics • Valuation trajectory has improved and continues 4 4 to be consistent with leading software companies to trend up • Executed several strategic acquisitions and 5 • Increasing participation of software investors in 5 delivered strong return on invested capital shareholder base 6 • Delevered balance sheet 7• Rebuilt strong dialogue with investors 7Inovalon 3.0 – dramatic progress to-date Company view Market view • Established the company as the industry-leading • Market perception of Inovalon story has 1 1 technology platform in healthcare dramatically improved over the last year • Significantly strengthened technology platform 2 • Increasing recognition of Inovalon as the premier 2 and go-to-market capabilities technology platform in health care • Reached leading client presence across all 3 3 • Increasing belief in long-term growth potential healthcare verticals • Dramatically improved financial model dynamics • Valuation trajectory has improved and continues 4 4 to be consistent with leading software companies to trend up • Executed several strategic acquisitions and 5 • Increasing participation of software investors in 5 delivered strong return on invested capital shareholder base 6 • Delevered balance sheet 7• Rebuilt strong dialogue with investors 7
Since introducing Inovalon 2.0, the stock has outperformed the broader markets and is currently trading close to an all-time high Stock price performance since launch of Inovalon 2.0 FV / 1-year forward EBITDA multiple evolution 300% 25.0x Since 1M 6M 1 year 2 year High: 21.4x 1 INOV 2.0 Low: 12.4x 22.0% 54.4% 62.6% 117.7% 136.3% INOV 13.4% 27.2% 43.3% 43.1% 58.9% 250% S&P 500 INOV 136.3% 20.6x 200% 20.0x SP50 150% 58.9% 100% 15.0x 50% 0% 10.0x Dec-18 Mar-19 Jul-19 Nov-19 Feb-20 Jun-20 Sep-20 Jan-21 Apr-21 Dec-18 Apr-19 Jul-19 Nov-19 Feb-20 Jun-20 Sep-20 Jan-21 Apr-21 8 Source: FactSet as of 04/29/21; Equity research 1 As of 12/12/18 investor day
Inovalon, positioned as a technology story, has further upside potential 4 Revenue Growth Gross margin EBITDA Margin FV / Revenue FV / EBITDA FV / uFCF FV / Target uFCF Firm value ($bn) 2022E 2022E 2022E 2022E 2022E 2022E 2022E 2 3 15% 67% 72–75% 37% 6.6x 22.6x 27.9x N/A $5.6 11% 18.0x $44.4 18% 53% 40% 18.1x 44.9x 56.3x 53.0x $21.4 27% 69% 47% 25.7x 54.9x 61.7x 57.2x 46.2x $16.8 68% 34% 16.2x 47.8x 61.7x 41.7x 9% 63% 36% 10.4x 28.6x 47.8x $65.8 Median: 17.2x Median: 46.4x Median: 59.0x Median: 49.6x 18% 65% 23% 11.0x 47.4x 52.5x 36.7x $64.8 1 7.4x 21.3x 19% 63% 25% 29.4x 39.9x $239.1 14% 78% 49% 14.1x 28.7x 34.1x 31.4x $249.9 Median: 11.0x Median: 29.4x Median: 39.9x Median: 31.4x Target 9 1 2 3 Source: Company Filings, Factset as of 04/29/21; Note: Sorted by 2022E FV / EBITDA; Pro forma for Slack acquisition; Burdened by $64mm in estimated capitalized software development costs; Inovalon 2022E uFCF calculated using 2021E uFCF 4 target margin of 24% applied to 2022E revenue; Calculated by applying target uFCF margin to 2022E revenue Large Cap Software Healthcare technology / DaaSInovalon, positioned as a technology story, has further upside potential 4 Revenue Growth Gross margin EBITDA Margin FV / Revenue FV / EBITDA FV / uFCF FV / Target uFCF Firm value ($bn) 2022E 2022E 2022E 2022E 2022E 2022E 2022E 2 3 15% 67% 72–75% 37% 6.6x 22.6x 27.9x N/A $5.6 11% 18.0x $44.4 18% 53% 40% 18.1x 44.9x 56.3x 53.0x $21.4 27% 69% 47% 25.7x 54.9x 61.7x 57.2x 46.2x $16.8 68% 34% 16.2x 47.8x 61.7x 41.7x 9% 63% 36% 10.4x 28.6x 47.8x $65.8 Median: 17.2x Median: 46.4x Median: 59.0x Median: 49.6x 18% 65% 23% 11.0x 47.4x 52.5x 36.7x $64.8 1 7.4x 21.3x 19% 63% 25% 29.4x 39.9x $239.1 14% 78% 49% 14.1x 28.7x 34.1x 31.4x $249.9 Median: 11.0x Median: 29.4x Median: 39.9x Median: 31.4x Target 9 1 2 3 Source: Company Filings, Factset as of 04/29/21; Note: Sorted by 2022E FV / EBITDA; Pro forma for Slack acquisition; Burdened by $64mm in estimated capitalized software development costs; Inovalon 2022E uFCF calculated using 2021E uFCF 4 target margin of 24% applied to 2022E revenue; Calculated by applying target uFCF margin to 2022E revenue Large Cap Software Healthcare technology / DaaS
Strong capital markets backdrop Strong equity issuance in 2020 with 2021 YTD off to a strong start ($bn) $382 IPOs Follow-ons $215 $229 $212 $79 $129 $74 $114 $107 $47 $43 $167 $150 $32 $104 $138 $21 $25 $29.5 $64 $11 2020 2021 YTD Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Debt rates are at their multi-year lows Equity markets are at all time highs JPMorgan HY index yields 12% BB Yield 9% 10-year average: 5.09% 6% 3.59% 3% 0% Apr-11 Feb-12 Dec-12 Oct-13 Aug-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18 Jul-19 May-20 Feb-21 10 Source: Dealogic, Factset as of 04/29/21Strong capital markets backdrop Strong equity issuance in 2020 with 2021 YTD off to a strong start ($bn) $382 IPOs Follow-ons $215 $229 $212 $79 $129 $74 $114 $107 $47 $43 $167 $150 $32 $104 $138 $21 $25 $29.5 $64 $11 2020 2021 YTD Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Debt rates are at their multi-year lows Equity markets are at all time highs JPMorgan HY index yields 12% BB Yield 9% 10-year average: 5.09% 6% 3.59% 3% 0% Apr-11 Feb-12 Dec-12 Oct-13 Aug-14 May-15 Mar-16 Jan-17 Nov-17 Sep-18 Jul-19 May-20 Feb-21 10 Source: Dealogic, Factset as of 04/29/21
Recent equity issuance Recent marketed follow-ons (deal size > $500mm) Price performance (%) JPMorgan led deals Pricing date Issuer name Size ($mm) Mkt cap ($mm) % of mkt cap % sec File / offer Offer / Current Technology 03/18/21 Skillz $768 $10,347 7% 47% (22%) (25%) 03/02/21 Cardlytics 501 4,249 12% - (8%) 7% 02/18/21 Twilio 1,833 64,118 3% - (4%) (12%) 02/18/21 Chegg 476 14,548 3% - (9%) (10%) 02/11/21 Varonis Systems 518 6,832 8% - (3%) (72%) 02/09/21 Lightspeed POS 676 9,357 7% - (3%) (0%) 02/05/21 Allegro Microsystems 586 5,997 10% 100% (5%) (16%) 02/04/21 Opendoor 771 16,318 5% - (5%) (23%) 01/13/21 Lemonade 796 10,578 8% 32% (10%) (44%) 01/12/21 Zoom Video 2,000 104,127 2% - 1% (6%) 12/10/20 Sea 2,960 71,423 4% - (4%) 32% 12/09/20 Fiserv 2,254 76,819 3% 100% (5%) 9% 12/03/20 Shift4 Payments 511 1,677 30% 100% (10%) 76% 12/01/20 ZoomInfo Technologies 647 3,319 19% 100% (8%) 16% 11/18/20 Pinduoduo 4,126 151,819 3% - (12%) 10% Mean $1,295 $36,769 8% 34% (7%) (4%) Median $768 $10,578 7% 0% (5%) (6%) Healthcare 04/20/21 Zai Lab $857 $14,133 6% - (9%) 12% 04/07/21 Maravai LifeSciences 563 3,137 18% 100% (10%) 22% 03/17/21 Sotera 675 7,848 9% 100% (5%) (5%) 03/01/21 Syneos Health 525 8,068 7% 100% (3%) 11% 02/10/21 Oak Street Health 690 13,833 5% 100% 4% 10% 02/04/21 Veracyte 633 5,168 12% - 0% (34%) 02/02/21 Argenx 1,068 16,535 6% - 1% (9%) 01/27/21 CureVac 518 17,661 3% - (14%) 28% 11/30/20 Elanco Animal Health 1,896 14,436 13% 100% (3%) 6% 10/27/20 Mirati Therapeutics 1,002 10,275 10% 8% 3% (19%) 04/20/21 Zai Lab 857 14,133 6% - (9%) 12% 04/07/21 Maravai LifeSciences 563 3,137 18% 100% (10%) 22% 03/17/21 Sotera 675 7,848 9% 100% (5%) (5%) 03/01/21 Syneos Health 525 8,068 7% 100% (3%) 11% 02/10/21 Oak Street Health 601 13,833 4% 100% 4% 10% Mean $803 $11,574 9% 62% (4%) 5% Median $675 $12,054 8% 100% (4%) 11% 11 Source: Dealogic, Factset as of 4/29/21Recent equity issuance Recent marketed follow-ons (deal size > $500mm) Price performance (%) JPMorgan led deals Pricing date Issuer name Size ($mm) Mkt cap ($mm) % of mkt cap % sec File / offer Offer / Current Technology 03/18/21 Skillz $768 $10,347 7% 47% (22%) (25%) 03/02/21 Cardlytics 501 4,249 12% - (8%) 7% 02/18/21 Twilio 1,833 64,118 3% - (4%) (12%) 02/18/21 Chegg 476 14,548 3% - (9%) (10%) 02/11/21 Varonis Systems 518 6,832 8% - (3%) (72%) 02/09/21 Lightspeed POS 676 9,357 7% - (3%) (0%) 02/05/21 Allegro Microsystems 586 5,997 10% 100% (5%) (16%) 02/04/21 Opendoor 771 16,318 5% - (5%) (23%) 01/13/21 Lemonade 796 10,578 8% 32% (10%) (44%) 01/12/21 Zoom Video 2,000 104,127 2% - 1% (6%) 12/10/20 Sea 2,960 71,423 4% - (4%) 32% 12/09/20 Fiserv 2,254 76,819 3% 100% (5%) 9% 12/03/20 Shift4 Payments 511 1,677 30% 100% (10%) 76% 12/01/20 ZoomInfo Technologies 647 3,319 19% 100% (8%) 16% 11/18/20 Pinduoduo 4,126 151,819 3% - (12%) 10% Mean $1,295 $36,769 8% 34% (7%) (4%) Median $768 $10,578 7% 0% (5%) (6%) Healthcare 04/20/21 Zai Lab $857 $14,133 6% - (9%) 12% 04/07/21 Maravai LifeSciences 563 3,137 18% 100% (10%) 22% 03/17/21 Sotera 675 7,848 9% 100% (5%) (5%) 03/01/21 Syneos Health 525 8,068 7% 100% (3%) 11% 02/10/21 Oak Street Health 690 13,833 5% 100% 4% 10% 02/04/21 Veracyte 633 5,168 12% - 0% (34%) 02/02/21 Argenx 1,068 16,535 6% - 1% (9%) 01/27/21 CureVac 518 17,661 3% - (14%) 28% 11/30/20 Elanco Animal Health 1,896 14,436 13% 100% (3%) 6% 10/27/20 Mirati Therapeutics 1,002 10,275 10% 8% 3% (19%) 04/20/21 Zai Lab 857 14,133 6% - (9%) 12% 04/07/21 Maravai LifeSciences 563 3,137 18% 100% (10%) 22% 03/17/21 Sotera 675 7,848 9% 100% (5%) (5%) 03/01/21 Syneos Health 525 8,068 7% 100% (3%) 11% 02/10/21 Oak Street Health 601 13,833 4% 100% 4% 10% Mean $803 $11,574 9% 62% (4%) 5% Median $675 $12,054 8% 100% (4%) 11% 11 Source: Dealogic, Factset as of 4/29/21
Recent transaction activity in Healthcare Technology Strategic rationale n Accelerates Microsoft’s healthcare industry cloud strategy n Builds upon the commercial partnership established between the companies in October 2019 to accelerate delivery of ambient intelligence technologies in the doctor’s office Transaction date: April 2021 Transaction size: $17.3 billion Transaction multiple: 12.2x Revenue / 44.8x EBITDA n Doubles Microsoft’s healthcare provider TAM, bringing the company’s total healthcare TAM to nearly $500 billion Percentage premium: 23% n Creates a true integrated, end-to-end business platform for the life sciences industry n Combines Medidata’s leading position in clinical trials and commercialization solutions with Dassault’s life sciences Transaction date: June 2019 solutions on the 3DEXPERIENCE collaborative platform Transaction size: $5.8 billion Transaction multiple: 7.8x Revenue / 31.2x EBITDA n Facilitates new therapeutic innovations by leveraging combined company’s knowledge and know-how Percentage premium: 21% n Complementary capabilities help customers more effectively connect and simplify core clinical, administrative and payment processes n Enhances clinicians’ ability to make the most informed and clinically advanced patient care decisions, more quickly Transaction date: January 2021 and easily Transaction size: $13.1 billion n Accelerates healthcare industry’s movement to a more modern, real-time and transparent payment system for Transaction multiple: 4.3x Revenue / 14.7x EBITDA payers, providers and consumers Percentage premium: 41% Note: Based on 1-yr fwd multiples 12Recent transaction activity in Healthcare Technology Strategic rationale n Accelerates Microsoft’s healthcare industry cloud strategy n Builds upon the commercial partnership established between the companies in October 2019 to accelerate delivery of ambient intelligence technologies in the doctor’s office Transaction date: April 2021 Transaction size: $17.3 billion Transaction multiple: 12.2x Revenue / 44.8x EBITDA n Doubles Microsoft’s healthcare provider TAM, bringing the company’s total healthcare TAM to nearly $500 billion Percentage premium: 23% n Creates a true integrated, end-to-end business platform for the life sciences industry n Combines Medidata’s leading position in clinical trials and commercialization solutions with Dassault’s life sciences Transaction date: June 2019 solutions on the 3DEXPERIENCE collaborative platform Transaction size: $5.8 billion Transaction multiple: 7.8x Revenue / 31.2x EBITDA n Facilitates new therapeutic innovations by leveraging combined company’s knowledge and know-how Percentage premium: 21% n Complementary capabilities help customers more effectively connect and simplify core clinical, administrative and payment processes n Enhances clinicians’ ability to make the most informed and clinically advanced patient care decisions, more quickly Transaction date: January 2021 and easily Transaction size: $13.1 billion n Accelerates healthcare industry’s movement to a more modern, real-time and transparent payment system for Transaction multiple: 4.3x Revenue / 14.7x EBITDA payers, providers and consumers Percentage premium: 41% Note: Based on 1-yr fwd multiples 12
What should Inovalon do next? Continue on standalone path Combine with larger platform n Capitalize on scarcity of healthcare n Leverage combined strengths to solidify technology platforms, performance leading position in healthcare technology momentum and high historical valuation n Capitalize on scarcity of healthcare technology platform and high market n Organic growth valuation n Aggressive M&A strategy n Next Steps n Next steps n Consider strategic dialogue with potential n Raise offensive capital buyers 13What should Inovalon do next? Continue on standalone path Combine with larger platform n Capitalize on scarcity of healthcare n Leverage combined strengths to solidify technology platforms, performance leading position in healthcare technology momentum and high historical valuation n Capitalize on scarcity of healthcare technology platform and high market n Organic growth valuation n Aggressive M&A strategy n Next Steps n Next steps n Consider strategic dialogue with potential n Raise offensive capital buyers 13
Raise offensive capital – discussion 14
Capital structure is in line with growth SaaS technology players Summary observations üLeverage down to 3.2x from ~5.5x at üDebt matures in 2025 and trades üStrong balance sheet time of Ability acquisition close to par Estimated capitalization Loan trading levels ($) As of 12/31/2020 Amount ($mm) xEBITDA $102.00 $101.00 Cash and cash equivalents $129 $100.00 $99.25 $100mm Revolving Credit Facility - $99.00 Yield: 3.12% Secured debt $886 3.7x $98.00 Total debt $915 3.8x $97.00 Net debt $786 3.2x $96.00 $95.00 03/31/21 LTM Adj. EBITDA $242 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 15 Source: Company filingsCapital structure is in line with growth SaaS technology players Summary observations üLeverage down to 3.2x from ~5.5x at üDebt matures in 2025 and trades üStrong balance sheet time of Ability acquisition close to par Estimated capitalization Loan trading levels ($) As of 12/31/2020 Amount ($mm) xEBITDA $102.00 $101.00 Cash and cash equivalents $129 $100.00 $99.25 $100mm Revolving Credit Facility - $99.00 Yield: 3.12% Secured debt $886 3.7x $98.00 Total debt $915 3.8x $97.00 Net debt $786 3.2x $96.00 $95.00 03/31/21 LTM Adj. EBITDA $242 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 15 Source: Company filings
Raise offensive capital – capital markets alternatives Common stock Convert Debt nnn Opportunity for Management to fully Low cost debt financing for issuers Cheapest form of capital Discussion market the story and attract software n Equity sold at a premium if convertedn Strong track record as existing issuer growth investors n Net-share settlement feature can n Receptive debt markets n Increase daily liquidity and technicals significantly reduce dilution n Great track record of deploying capital – n 1-2 week execution timeline both organically and for acquisitions n Significant embedded upside for investors n Preserves balance sheet flexibility for future financing needs n 1-2 weeks of preparation; target offering post earnings NDR and analyst day n Dilutionn Debt on balance sheet à refinancing n Software investors typically see leverage Considerations obligation at maturity if not converted at up to 3.0-3.5x nn May add friction costs in change of control May be best option for an identified situation acquisition n Size: $400 - $700mmn Size: $500mmn L+325-350 with 0 floor at 99-99.50 at 5.0x Illustrative gross leverage nn Discount: mid-single digits Coupon: 0.25% - 0.75% terms n Premium / share price: 30.0% - 35.0% / $39.75 n Call spread: 2.00% coupon / 100% conversion premium @ $60.00 16Raise offensive capital – capital markets alternatives Common stock Convert Debt nnn Opportunity for Management to fully Low cost debt financing for issuers Cheapest form of capital Discussion market the story and attract software n Equity sold at a premium if convertedn Strong track record as existing issuer growth investors n Net-share settlement feature can n Receptive debt markets n Increase daily liquidity and technicals significantly reduce dilution n Great track record of deploying capital – n 1-2 week execution timeline both organically and for acquisitions n Significant embedded upside for investors n Preserves balance sheet flexibility for future financing needs n 1-2 weeks of preparation; target offering post earnings NDR and analyst day n Dilutionn Debt on balance sheet à refinancing n Software investors typically see leverage Considerations obligation at maturity if not converted at up to 3.0-3.5x nn May add friction costs in change of control May be best option for an identified situation acquisition n Size: $400 - $700mmn Size: $500mmn L+325-350 with 0 floor at 99-99.50 at 5.0x Illustrative gross leverage nn Discount: mid-single digits Coupon: 0.25% - 0.75% terms n Premium / share price: 30.0% - 35.0% / $39.75 n Call spread: 2.00% coupon / 100% conversion premium @ $60.00 16
Roadmap for a successful equity offering for Inovalon Use proceeds to Attract new growth accelerate growth plan tech-oriented investors n Every acquisition significantly n Only 4 out of Inovalon’s top 20 outperformed expectations and shareholders are top holders of delivered strong return on invested technology SaaS peers capital Improve liquidity and trading technicals to facilitate building Highlight significant upside on a positions relative valuation basis ! n ADTV is only $16mm, 0.4% of market n Trades at a discount to SaaS peers cap and 0.7% of float 17Roadmap for a successful equity offering for Inovalon Use proceeds to Attract new growth accelerate growth plan tech-oriented investors n Every acquisition significantly n Only 4 out of Inovalon’s top 20 outperformed expectations and shareholders are top holders of delivered strong return on invested technology SaaS peers capital Improve liquidity and trading technicals to facilitate building Highlight significant upside on a positions relative valuation basis ! n ADTV is only $16mm, 0.4% of market n Trades at a discount to SaaS peers cap and 0.7% of float 17
Majority of Inovalon’s investors have been increasing positions 4Q 20 Change in position - shares (000's) 4Q 18 Investor Style Rank % O/S Position 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 Position % O/S Rank Black Creek IM Growth 1 5.0% 3,843 906 (1,548) (207) (791) (1,827) (1,329) (10) (475) 9,123 12.7% 1 È Neuberger Berman IA Growth 2 3.3% 2,521 283 (310) (49) (300) (139) (382) 36 (281) 3,665 5.1% 3 È Fidelity Growth 3 2.8% 2,144 (1,486) 947 (1,562) (1,884) (765) 411 357 (577) 6,702 9.3% 2 È Bernzott Capital Advisors Growth 4 2.2% 1,708 Ç (353) 440 178 (29) 48 11 1,414 - - 0.0% - Pura Vida Investments Hedge Fund 5 1.9% 1,429 Ç 297 85 (57) 396 633 75 - - - 0.0% - Tikvah Mgmt Hedge Fund 6 1.6% 1,245 È - - - (609) - - - 290 1,564 2.2% 4 Redwood Investments Growth 7 1.2% 950 Ç 1 (50) 999 - - - - - - 0.0% - Invesco CM GARP 8 1.1% 871 Ç 236 (62) 68 577 (867) 919 - (57) 57 0.1% 35 Arrowstreet Capital GARP 9 1.1% 851 È (35) (182) - 171 871 25 (18) 18 - 0.0% - Eaton Vance Mgmt GARP 10 0.9% 684 Æ - - - - - - - - 684 1.0% 7 Teachers Advisors GARP 11 0.8% 636 Ç (18) (2) 83 0 272 159 7 - 136 0.2% 21 Goldman Sachs AM GARP 12 0.8% 602 Ç 43 96 211 (47) (15) 55 60 (9) 208 0.3% 15 Charles Schwab IM GARP 13 0.7% 559 Ç 8 (41) 78 52 27 18 15 14 390 0.5% 10 Samjo Capital Hedge Fund 14 0.6% 460 Ç 460 - - - - - - - - 0.0% - BlackRock Advisors Growth 15 0.6% 430 Ç 2 3 9 (2) 163 103 46 6 102 0.1% 27 Dimensional Fund Advisors Value 16 0.6% 426 Ç 7 8 14 89 22 29 131 - 124 0.2% 22 Point72 AM Hedge Fund 17 0.5% 424 È 424 - - - - - (738) (290) 1,028 1.4% 6 TIAA-CREF IM GARP 18 0.5% 422 Ç 18 104 27 60 15 (3) 53 (7) 157 0.2% 19 Millennium Mgmt Hedge Fund 20 0.5% 389 Ç 149 40 139 (92) 152 (445) (172) 617 - 0.0% - Spence AM Growth 21 0.5% 376 Ç (1) 377 - - - - - - - 0.0% - Top 20 active investors 27.2% 20,976 1,113 (150) (211) (2,306) (1,562) 165 1,354 (1,369) 23,942 33.3% 18 Source: CFIT, FactSet as of 12/31/20 filings; Active investors excludes Broker/Dealers and index investors; Note: Shading represents increase in shares in 2020 compared to end of 2019Majority of Inovalon’s investors have been increasing positions 4Q 20 Change in position - shares (000's) 4Q 18 Investor Style Rank % O/S Position 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 Position % O/S Rank Black Creek IM Growth 1 5.0% 3,843 906 (1,548) (207) (791) (1,827) (1,329) (10) (475) 9,123 12.7% 1 È Neuberger Berman IA Growth 2 3.3% 2,521 283 (310) (49) (300) (139) (382) 36 (281) 3,665 5.1% 3 È Fidelity Growth 3 2.8% 2,144 (1,486) 947 (1,562) (1,884) (765) 411 357 (577) 6,702 9.3% 2 È Bernzott Capital Advisors Growth 4 2.2% 1,708 Ç (353) 440 178 (29) 48 11 1,414 - - 0.0% - Pura Vida Investments Hedge Fund 5 1.9% 1,429 Ç 297 85 (57) 396 633 75 - - - 0.0% - Tikvah Mgmt Hedge Fund 6 1.6% 1,245 È - - - (609) - - - 290 1,564 2.2% 4 Redwood Investments Growth 7 1.2% 950 Ç 1 (50) 999 - - - - - - 0.0% - Invesco CM GARP 8 1.1% 871 Ç 236 (62) 68 577 (867) 919 - (57) 57 0.1% 35 Arrowstreet Capital GARP 9 1.1% 851 È (35) (182) - 171 871 25 (18) 18 - 0.0% - Eaton Vance Mgmt GARP 10 0.9% 684 Æ - - - - - - - - 684 1.0% 7 Teachers Advisors GARP 11 0.8% 636 Ç (18) (2) 83 0 272 159 7 - 136 0.2% 21 Goldman Sachs AM GARP 12 0.8% 602 Ç 43 96 211 (47) (15) 55 60 (9) 208 0.3% 15 Charles Schwab IM GARP 13 0.7% 559 Ç 8 (41) 78 52 27 18 15 14 390 0.5% 10 Samjo Capital Hedge Fund 14 0.6% 460 Ç 460 - - - - - - - - 0.0% - BlackRock Advisors Growth 15 0.6% 430 Ç 2 3 9 (2) 163 103 46 6 102 0.1% 27 Dimensional Fund Advisors Value 16 0.6% 426 Ç 7 8 14 89 22 29 131 - 124 0.2% 22 Point72 AM Hedge Fund 17 0.5% 424 È 424 - - - - - (738) (290) 1,028 1.4% 6 TIAA-CREF IM GARP 18 0.5% 422 Ç 18 104 27 60 15 (3) 53 (7) 157 0.2% 19 Millennium Mgmt Hedge Fund 20 0.5% 389 Ç 149 40 139 (92) 152 (445) (172) 617 - 0.0% - Spence AM Growth 21 0.5% 376 Ç (1) 377 - - - - - - - 0.0% - Top 20 active investors 27.2% 20,976 1,113 (150) (211) (2,306) (1,562) 165 1,354 (1,369) 23,942 33.3% 18 Source: CFIT, FactSet as of 12/31/20 filings; Active investors excludes Broker/Dealers and index investors; Note: Shading represents increase in shares in 2020 compared to end of 2019
Top 30 institutional holders of peers Only 4 of Inovalon’s top holders are also top holders of the technology SaaS peers AUM Peers Total Peers Investor ($bn) Inovalon ($mm) GoodRx ($mm) Veeva ($mm) ZoomInfo ($mm) $mm # held Morgan Stanley IM $124 - $48 $3,446 $225 $3,719 3 / 3 T. Rowe Price 1,139 1 - 2,720 5 2,725 2 / 3 Fidelity 1,355 62 85 1,229 381 1,695 3 / 3 Artisan Partners 131 - - 1,652 - 1,652 1 / 3 Franklin Advisers 189 - - 800 105 905 2 / 3 Brown CM 15,934 - - 656 - 656 1 / 3 William Blair IM 718 - - 548 - 548 1 / 3 AllianceBernstein 2,643 3 - 464 7 471 2 / 3 Baron Capital 497 - 27 226 209 461 3 / 3 Wells CM 1,151 2 - 370 73 443 2 / 3 Norges Bank IM 10,192 2 - 381 56 436 2 / 3 Jackson Square Partners 256 - - 417 - 417 1 / 3 BlackRock IM (UK) 5,477 5 21 207 169 397 3 / 3 Allianz GI U.S. 773 - - 46 348 394 2 / 3 Federated Global IM 237 - - 325 69 394 2 / 3 Invesco Advisers 3,359 - 80 142 172 393 3 / 3 JPM IM 4,637 - - 380 8 388 3 / 3 Fred Alger Mgmt 415 - - 377 - 377 1 / 3 Capital Research World 908 - - - 297 297 1 / 3 Wellington Mgmt 670 - - 47 248 294 2 / 3 Arrowstreet Capital 85 25 - 252 - 252 1 / 3 American Century IM 167 - - 232 - 232 1 / 3 Winslow CM 26 - - 226 - 226 1 / 3 Discovery Value Fund (IM) 4 - - 225 - 225 1 / 3 Dragoneer Investment 8 - 51 - 167 218 2 / 3 Capital Research & Mgmt (GI) 622 - - - 211 211 1 / 3 Goldman Sachs AM 317 18 - 209 - 209 1 / 3 TIAA-CREF IM 239 12 19 133 - 152 2 / 3 Columbia Mgmt IA 296 6 - 144 - 144 1 / 3 Tiger Global Mgmt 46 - 84 - 7 92 2 / 3 19 Source: FactSet as of 12/31/20 filingsTop 30 institutional holders of peers Only 4 of Inovalon’s top holders are also top holders of the technology SaaS peers AUM Peers Total Peers Investor ($bn) Inovalon ($mm) GoodRx ($mm) Veeva ($mm) ZoomInfo ($mm) $mm # held Morgan Stanley IM $124 - $48 $3,446 $225 $3,719 3 / 3 T. Rowe Price 1,139 1 - 2,720 5 2,725 2 / 3 Fidelity 1,355 62 85 1,229 381 1,695 3 / 3 Artisan Partners 131 - - 1,652 - 1,652 1 / 3 Franklin Advisers 189 - - 800 105 905 2 / 3 Brown CM 15,934 - - 656 - 656 1 / 3 William Blair IM 718 - - 548 - 548 1 / 3 AllianceBernstein 2,643 3 - 464 7 471 2 / 3 Baron Capital 497 - 27 226 209 461 3 / 3 Wells CM 1,151 2 - 370 73 443 2 / 3 Norges Bank IM 10,192 2 - 381 56 436 2 / 3 Jackson Square Partners 256 - - 417 - 417 1 / 3 BlackRock IM (UK) 5,477 5 21 207 169 397 3 / 3 Allianz GI U.S. 773 - - 46 348 394 2 / 3 Federated Global IM 237 - - 325 69 394 2 / 3 Invesco Advisers 3,359 - 80 142 172 393 3 / 3 JPM IM 4,637 - - 380 8 388 3 / 3 Fred Alger Mgmt 415 - - 377 - 377 1 / 3 Capital Research World 908 - - - 297 297 1 / 3 Wellington Mgmt 670 - - 47 248 294 2 / 3 Arrowstreet Capital 85 25 - 252 - 252 1 / 3 American Century IM 167 - - 232 - 232 1 / 3 Winslow CM 26 - - 226 - 226 1 / 3 Discovery Value Fund (IM) 4 - - 225 - 225 1 / 3 Dragoneer Investment 8 - 51 - 167 218 2 / 3 Capital Research & Mgmt (GI) 622 - - - 211 211 1 / 3 Goldman Sachs AM 317 18 - 209 - 209 1 / 3 TIAA-CREF IM 239 12 19 133 - 152 2 / 3 Columbia Mgmt IA 296 6 - 144 - 144 1 / 3 Tiger Global Mgmt 46 - 84 - 7 92 2 / 3 19 Source: FactSet as of 12/31/20 filings
Investor targets for Inovalon equity offering Peers held Peers held Inovalon Inovalon Institution Growth PM Tech Healthcare pos $mm # $mm Institution Growth PM Tech Healthcare pos $mm # $mm Ash Shah, Ryan Justin Livengood, - Armistead Nash Jason Yeung - 3 $3,719 - - 3 $393 Dolan Henry Wu Rouven Wool- Matt Cohen, Chris Alan Tu, Sam - Joe Wilson - 3 388 - Lewis, Ziad Bakri, 1 2 2,725 Carter Johnson Nina Xu Will Danoff, Steve - Kyle Chen Teresa McRoberts - 1 377 Will Walker, Marly Eddie Yoon, Amy Wymer Kyle 62 3 1,695 Morgus Ge, Justin Segalini Weaver - Julien Gaertner Danyaal Farooqui - 1 297 Research - Ashish Rao Dan Reagan - 1 1,652 Jeff Wantman, - - - 2 294 Michael Carmen Jonathan Curtis, Gary Ko, Brad - - 2 905 Dan Searle Carris Marc Stad Jared Middleman Eric Jones - 2 218 - Sam Lau Wen-Tse Tseng 3 2 471 Nalin - - - 1 217 Yogasundram, Ashim Mehra, Adam Lieb Susan Robbins - 3 461 Scott Marolf Kimberly Wong, Mathews Cherian, Rich Wolf, Diana - - 1 211 - Brandon Oak Rohan Dighe - 2 443 World Mishaan Mehta Wagner, Sunny Kwak Anant Phillip Shefter 2 2 436 - Greg Tuorto 18 1 209 Padmanabhan Tony Kim, Will Erin Xie, Jeff Lee, - 5 3 397 - Terry Kontos Joanne Pigassou 12 2 152 Abecassis Arslan Mian Larry Lin, Daniel - Steve Abrahamson Vivian Wohl - 2 394 - Israel Hernandez 6 1 144 Kurland 20 Source: FactSet as of 12/31/20 filings Peers held: Veeva, GoodRx, ZoomInfo
Illustrative sizing analysis for Inovalon equity offering INOV current trading details Recent marketed follow-ons (deal size > $500mm) Price performance (%) (as of 04/29/21) Pricing Size Mkt cap % of mkt File/ Offer/ date Issuer name ($mm) ($mm) cap % sec offer Current Stock price $29.78 Technology 03/18/21 Skillz $768 $10,347 7% 47% (22%) (25%) % of 52-week high 96.78% 03/02/21 Cardlytics 501 4,249 12% - (8%) 7% 02/18/21 Twilio 1,833 64,118 3% - (4%) (12%) 02/18/21 Chegg 476 14,548 3% - (9%) (10%) Mkt cap ($mm / shs) $4,626mm /155.9mm 02/11/21 Varonis Systems 518 6,832 8% - (3%) (72%) 02/09/21 Lightspeed POS 676 9,357 7% - (3%) (0%) Float ($mm / shs) $2,195mm/74.3mm 02/05/21 Allegro Microsystems 586 5,997 10% 100% (5%) (16%) 02/04/21 Opendoor 771 16,318 5% - (5%) (23%) 01/13/21 Lemonade 796 10,578 8% 32% (10%) 30-day ADTV ($mm / shs) $12.9mm /449k (44%) 01/12/21 Zoom Video 2,000 104,127 2% - 1% (6%) Mean $892 $24,647 6% 20% (7%) (20%) $722 $10,463 7% 0% (5%) (14%) Median Sizing analysis at current price level Healthcare 04/20/21 Zai Lab $857 $14,133 6% - (9%) 12% Offering size ($mm) $400 $500 $600 $700 04/07/21 Maravai LifeSciences 563 3,137 18% 100% (10%) 22% 03/17/21 Sotera 675 7,848 9% 100% (5%) (5%) 13.4 16.8 20.1 23.5 Offering size (shs) 03/01/21 Syneos Health 525 8,068 7% 100% (3%) 11% 02/10/21 Oak Street Health 690 13,833 5% 100% 4% 10% 02/04/21 Veracyte 633 5,168 12% - 0% (34%) 9% 11% 13% 15% % of mkt cap 02/02/21 Argenx 1,068 16,535 6% - 1% (9%) 01/27/21 CureVac 518 17,661 3% - (14%) 28% 18% 23% 27% 32% 11/30/20 Elanco Animal Health 1,896 14,436 13% 100% (3%) 6% % of float 10/27/20 Mirati Therapeutics 1,002 10,275 10% 8% 3% (19%) Mean $842 $11,722 9% 53% (4%) 1% 30-day ADTV mult. 29.9x 37.4x 44.9x 52.4x Median $675 $13,833 8% 71% (3%) 6% JPMorgan led deals 21 Source: Dealogic, Factset as of 4/29/21
Recent JPMorgan-led equity transactions have outperformed the market January 2021 February 2021 February 2021 $2.0bn $690mm $1.8bn Follow-on Follow-on Follow-on Sole Underwriter & Lead Left Bookrunner & Lead Bookrunner Stabilization Agent Stabilization Agent ü Largest software follow-on… everü Upsized 24% from launch ü Priced at tight (4.2%) discount to last trade ü Priced at a premium to launch: 0.7% ü 167% premium to IPO price, and 22% to FFO 2 months prior ü Raised $5bn+ since IPO in 2016 ü Priced at a premium to launch: 4.4% 22Recent JPMorgan-led equity transactions have outperformed the market January 2021 February 2021 February 2021 $2.0bn $690mm $1.8bn Follow-on Follow-on Follow-on Sole Underwriter & Lead Left Bookrunner & Lead Bookrunner Stabilization Agent Stabilization Agent ü Largest software follow-on… everü Upsized 24% from launch ü Priced at tight (4.2%) discount to last trade ü Priced at a premium to launch: 0.7% ü 167% premium to IPO price, and 22% to FFO 2 months prior ü Raised $5bn+ since IPO in 2016 ü Priced at a premium to launch: 4.4% 22
Inovalon equity offering can be completed in 1–2 weeks Deal phase Key action items Deal considerations n Organizational call n Earnings release 4/28 n Due-diligence Preparation 1 n Non-deal roadshow following earnings release n Prepare legal documents, roadshow presentation, 1 week press releases n Target ~20 accounts n IR targeting discussion n ~10 new investors, 10 existing investors n Launch follow-on via press release / file preliminary n Analyst day 5/18 pro-sup with SEC n Research analyst teach-in n Presenting at JPMorgan conference 5/25 n Management call with underwriters’ salesforce Launch / execution n Launch aftermarket on 5/25 or 5/26 2 n Investor calls 1-2 days n Price transaction with management team and Pricing April 2021 May 2021 June 2021 Committee M T W T F M T W T F M T W T F 1 2 3 4 5 6 7 1 2 3 4 n Execute Underwriting Agreement and issue pricing 5 6 7 8 9 10 11 12 13 14 7 8 9 10 11 press release 12 13 14 15 16 18 19 20 21 14 15 16 17 18 17 19 20 21 22 23 24 25 26 27 28 21 22 23 24 25 Close (Post-pricing) n Finalize and file final prospectus with SEC 26 27 28 29 30 31 28 29 30 3 n Closing and settlement 3 days Holiday Execution window Inovalon earnings 23Inovalon equity offering can be completed in 1–2 weeks Deal phase Key action items Deal considerations n Organizational call n Earnings release 4/28 n Due-diligence Preparation 1 n Non-deal roadshow following earnings release n Prepare legal documents, roadshow presentation, 1 week press releases n Target ~20 accounts n IR targeting discussion n ~10 new investors, 10 existing investors n Launch follow-on via press release / file preliminary n Analyst day 5/18 pro-sup with SEC n Research analyst teach-in n Presenting at JPMorgan conference 5/25 n Management call with underwriters’ salesforce Launch / execution n Launch aftermarket on 5/25 or 5/26 2 n Investor calls 1-2 days n Price transaction with management team and Pricing April 2021 May 2021 June 2021 Committee M T W T F M T W T F M T W T F 1 2 3 4 5 6 7 1 2 3 4 n Execute Underwriting Agreement and issue pricing 5 6 7 8 9 10 11 12 13 14 7 8 9 10 11 press release 12 13 14 15 16 18 19 20 21 14 15 16 17 18 17 19 20 21 22 23 24 25 26 27 28 21 22 23 24 25 Close (Post-pricing) n Finalize and file final prospectus with SEC 26 27 28 29 30 31 28 29 30 3 n Closing and settlement 3 days Holiday Execution window Inovalon earnings 23
Strategic discussion 24Strategic discussion 24
Inovalon is the only true technology platform in healthcare Technology Healthcare Empowering data-driven healthcare Cloud-based, highly integrated at scale platform Marquee client base across all major Comprehensive and constantly healthcare verticals expanding data asset Unique ability to generate actionable insights Powerful analytics capabilities Full technology stack to enable industry transition to value based care Superior tech infrastructure Unique ability to create comprehensive Continuous innovation patient and population based data views Leading client footprint across Modern technology Data as a service all healthcare verticals 25Inovalon is the only true technology platform in healthcare Technology Healthcare Empowering data-driven healthcare Cloud-based, highly integrated at scale platform Marquee client base across all major Comprehensive and constantly healthcare verticals expanding data asset Unique ability to generate actionable insights Powerful analytics capabilities Full technology stack to enable industry transition to value based care Superior tech infrastructure Unique ability to create comprehensive Continuous innovation patient and population based data views Leading client footprint across Modern technology Data as a service all healthcare verticals 25
Tech M&A activity has picked up significantly U.S. Tech M&A deal volume ($bn) 2017–2021YTD software M&A volume ($bn) Strategics Sponsors $445 $432 $362 147 169 83 $215 $209 34 $167 $533bn 42 285 279 276 $324 181 125 $31 21 10 '17 '18 '19 '20 '20YTD '21YTD # of deals: 206 208 202 222 47 75 median 36% 24% 30% 38% 23% 28% 1 premium : ~40% all software M&A % sponsor since 2017 has been completed by sponsors 25% 23% 34% 38% 67% 16% deals: Source: Dealogic (as of 4/15/2021), any U.S. party involvement, only includes deals greater than $100mm with final stake >50%; FactSet 1 1-month median premium 26Tech M&A activity has picked up significantly U.S. Tech M&A deal volume ($bn) 2017–2021YTD software M&A volume ($bn) Strategics Sponsors $445 $432 $362 147 169 83 $215 $209 34 $167 $533bn 42 285 279 276 $324 181 125 $31 21 10 '17 '18 '19 '20 '20YTD '21YTD # of deals: 206 208 202 222 47 75 median 36% 24% 30% 38% 23% 28% 1 premium : ~40% all software M&A % sponsor since 2017 has been completed by sponsors 25% 23% 34% 38% 67% 16% deals: Source: Dealogic (as of 4/15/2021), any U.S. party involvement, only includes deals greater than $100mm with final stake >50%; FactSet 1 1-month median premium 26
Select software transactions – strategic buyers NTM FV / revenue < 20% revenue growth 20–30% revenue growth 1-day 23% 14% 21% 40% 63% 12% 55% 19% 3% premium paid 26.9x 19.5x 14.0x¹ 13.5x 12.2x 12.0x 12.0x 11.6x 11.1x 10.9x 11.0x 9.3x 8.5x 8.1x 7.8x 7.8x 7.5x 6.0x Target Acquirer Announce Apr-21 Apr-21 Aug-20 Aug-19 Jun-19 Jun-19 Oct-18 Jan-18 Jan-21 Dec-20 Nov-20 May-20 Nov-18 Oct-18 Oct-18 Sep-18 Jun-18 May-18 Date Firm value $8.5 $17.3 $11.0 $2.1 $5.8 $15.7 $33.4 $2.3 $2.3 $28.0 $2.8 $1.0 ~$8.0 $1.8 $2.3 $4.8 $1.6 $1.7 (bn) NTM rev. 8% 9% 15% 14% 17% 18% 15% 18% 30% 25% 30% ~30% ~25% 23% 21% 22% 22% 25% growth FV / NTM 33.0x 44.8x 24.4x – 31.2x NM 34.1x 45.9x – – – – NM – – – – – EBITDA 27 Source: Company filings, Wall Street research, Renaissance reports, FactSet; ¹ Quote from CFO at Morgan Stanley TMT conference 11/16/2018Select software transactions – strategic buyers NTM FV / revenue < 20% revenue growth 20–30% revenue growth 1-day 23% 14% 21% 40% 63% 12% 55% 19% 3% premium paid 26.9x 19.5x 14.0x¹ 13.5x 12.2x 12.0x 12.0x 11.6x 11.1x 10.9x 11.0x 9.3x 8.5x 8.1x 7.8x 7.8x 7.5x 6.0x Target Acquirer Announce Apr-21 Apr-21 Aug-20 Aug-19 Jun-19 Jun-19 Oct-18 Jan-18 Jan-21 Dec-20 Nov-20 May-20 Nov-18 Oct-18 Oct-18 Sep-18 Jun-18 May-18 Date Firm value $8.5 $17.3 $11.0 $2.1 $5.8 $15.7 $33.4 $2.3 $2.3 $28.0 $2.8 $1.0 ~$8.0 $1.8 $2.3 $4.8 $1.6 $1.7 (bn) NTM rev. 8% 9% 15% 14% 17% 18% 15% 18% 30% 25% 30% ~30% ~25% 23% 21% 22% 22% 25% growth FV / NTM 33.0x 44.8x 24.4x – 31.2x NM 34.1x 45.9x – – – – NM – – – – – EBITDA 27 Source: Company filings, Wall Street research, Renaissance reports, FactSet; ¹ Quote from CFO at Morgan Stanley TMT conference 11/16/2018
Select software transactions – financial sponsors NTM FV / revenue < 20% revenue growth 20–30% revenue growth 1-day 34% 8% 54% 19% 53% 31% 21% 30% 68% premium paid 12.0x 9.0x 8.0x 7.9x 7.5x 7.1x 7.0x 6.6x 6.6x 6.6x 6.5x 5.5x Target Acquirer Announce Apr-21 Dec-20 Nov-20 Oct-19 Feb-19 Nov-18 Dec-20 Dec-20 Nov-20 Dec-19 Feb-19 Dec-18 Date Firm value $12.3bn $3.5 $1.7 $3.9 $10.7 $1.8 $1.2 $9.5 $1.1 $1.9 $1.9 $1.9 (bn) NTM rev. 15% 13% 8% ~10% 19% 17% ~30% ~20% 22% ~20% ~20% 25% growth FV / NTM 46.0x NM 16.7x 30.8x 33.2x NM – 26.3x – – 23.0x NM EBITDA 28 Source: Company filings, Wall Street research, Renaissance reports, FactSetSelect software transactions – financial sponsors NTM FV / revenue < 20% revenue growth 20–30% revenue growth 1-day 34% 8% 54% 19% 53% 31% 21% 30% 68% premium paid 12.0x 9.0x 8.0x 7.9x 7.5x 7.1x 7.0x 6.6x 6.6x 6.6x 6.5x 5.5x Target Acquirer Announce Apr-21 Dec-20 Nov-20 Oct-19 Feb-19 Nov-18 Dec-20 Dec-20 Nov-20 Dec-19 Feb-19 Dec-18 Date Firm value $12.3bn $3.5 $1.7 $3.9 $10.7 $1.8 $1.2 $9.5 $1.1 $1.9 $1.9 $1.9 (bn) NTM rev. 15% 13% 8% ~10% 19% 17% ~30% ~20% 22% ~20% ~20% 25% growth FV / NTM 46.0x NM 16.7x 30.8x 33.2x NM – 26.3x – – 23.0x NM EBITDA 28 Source: Company filings, Wall Street research, Renaissance reports, FactSet
Control premiums in US technology transactions % Control premiums 2016 – 2021YTD; US Technology Median Mean 1st quartile 49% 44% 38% 37% 33% 30% 1-day 1-month 29 Source: DealogicControl premiums in US technology transactions % Control premiums 2016 – 2021YTD; US Technology Median Mean 1st quartile 49% 44% 38% 37% 33% 30% 1-day 1-month 29 Source: Dealogic
Preliminary Inovalon valuation summary For illustrative purposes only Sponsor 52-week Analyst Trading Premiums Discounted Discounted Transaction ability to pay² range price targets multiples equity value¹ cash flow multiples paid $55.00 $54.25 $53.75 $48.50 $47.75 $44.75 $35.00 $39.75 $38.75 $31.00 $35.25 $35.00 $34.25 $34.50 Current share price: $29.78 $22.00 $15.25 Metrics '22E EBITDA ($mm) '23E–'24E EBITDA ($mm) Discount rate NTM Revenue ($mm) Revenue CAGR ('20A-'26E) Current share price $321 $382–$431 7.5%–8.5% $789 11.0%–15.0% $29.78 Multiples (x) '22E FV / EBITDA '22E FV / EBITDA Terminal growth FV / NTM Revenue EBITDA margin ('26E) 1-day premiums paid 20.0–25.0x 20.0–25.0x 2.5%–3.5% 8.0–12.0x 40.0%–45.0% 30%–60% to current At 22.5x exit multiple and 20% required IRR 30 Note: Share prices rounded to the nearest $0.25; Current share price reflects as of 4/29/21; Based on adjusted street case; ¹ Assumes 8.0% discount rate; ² Assumes transaction entry date of 12/31/21 and exit of 12/31/26, 7.5x max pro forma net debtPreliminary Inovalon valuation summary For illustrative purposes only Sponsor 52-week Analyst Trading Premiums Discounted Discounted Transaction ability to pay² range price targets multiples equity value¹ cash flow multiples paid $55.00 $54.25 $53.75 $48.50 $47.75 $44.75 $35.00 $39.75 $38.75 $31.00 $35.25 $35.00 $34.25 $34.50 Current share price: $29.78 $22.00 $15.25 Metrics '22E EBITDA ($mm) '23E–'24E EBITDA ($mm) Discount rate NTM Revenue ($mm) Revenue CAGR ('20A-'26E) Current share price $321 $382–$431 7.5%–8.5% $789 11.0%–15.0% $29.78 Multiples (x) '22E FV / EBITDA '22E FV / EBITDA Terminal growth FV / NTM Revenue EBITDA margin ('26E) 1-day premiums paid 20.0–25.0x 20.0–25.0x 2.5%–3.5% 8.0–12.0x 40.0%–45.0% 30%–60% to current At 22.5x exit multiple and 20% required IRR 30 Note: Share prices rounded to the nearest $0.25; Current share price reflects as of 4/29/21; Based on adjusted street case; ¹ Assumes 8.0% discount rate; ² Assumes transaction entry date of 12/31/21 and exit of 12/31/26, 7.5x max pro forma net debt
Illustrative valuation at various prices Current Share price $40.00 $42.00 $44.00 $46.00 $48.00 $50.00 $29.78 Firm value ($mm)¹ Metric ($mm) $5,591 $7,250 $7,575 $7,875 $8,200 $8,525 $8,850 Premium to current – 34% 41% 48% 54% 61% 68% Premium to 90-day VWAP 17% 57% 65% 72% 80% 88% 96% FV / Revenue 2021E Revenue $761 7.4x 9.5x 10.0x 10.4x 10.8x 11.2x 11.6x 2022E Revenue $875 6.4x 8.3x 8.7x 9.0x 9.4x 9.7x 10.1x FV / EBITDA (no synergies) 2021E EBITDA $271 20.6x 26.8x 28.0x 29.1x 30.3x 31.5x 32.7x 2022E EBITDA $321 17.4x 22.6x 23.6x 24.5x 25.6x 26.6x 27.6x FV / PF EBITDA ($50mm illustrative synergies) 2021E PF EBITDA $321 17.4x 22.6x 23.6x 24.6x 25.6x 26.6x 27.6x 2022E PF EBITDA $371 15.1x 19.5x 20.4x 21.2x 22.1x 23.0x 23.9x Source: Company filings; FactSet as of 4/29/21; Based on adjusted street case; Note: Firm values rounded to the nearest $25mm; ¹ Reflects fully diluted firm value 31
Potential strategic partners Key investment themes Tier 1 1 n Significant emphasis on vertical-focused data/AI opportunities 2n Most players are actively analyzing angles to enter and disrupt the healthcare ecosystem at scale Tier 2 3n Increasing focus on customer 360 degree platform 4 n Cloud infrastructure providers are targeting select verticals with a strategy of market segment ownership 32Potential strategic partners Key investment themes Tier 1 1 n Significant emphasis on vertical-focused data/AI opportunities 2n Most players are actively analyzing angles to enter and disrupt the healthcare ecosystem at scale Tier 2 3n Increasing focus on customer 360 degree platform 4 n Cloud infrastructure providers are targeting select verticals with a strategy of market segment ownership 32
Potential financial sponsor partners Key investment themes Sponsors n Strong appetite for software assets, especially platforms with 1 high margin potential and sticky customer bases n Increasing focus on high-growth healthcare / healthcare 2 technology n Making larger, more concentrated bets in high-quality market 3 leaders n Premiums paid for platform assets with clear strategic 4 potential to drive highly accretive M&A 33Potential financial sponsor partners Key investment themes Sponsors n Strong appetite for software assets, especially platforms with 1 high margin potential and sticky customer bases n Increasing focus on high-growth healthcare / healthcare 2 technology n Making larger, more concentrated bets in high-quality market 3 leaders n Premiums paid for platform assets with clear strategic 4 potential to drive highly accretive M&A 33
Illustrative sponsor ability to pay analysis Street '20A–'23E CAGR: 12% Street '23E margin: 38% Illustrative pro forma cap. at $40 / share (~35% premium), $mm Illustrative sources and uses at $40 / share (~35% premium), $mm Leverageable Sources Uses Amount % cap EBITDA Existing cash $129 Existing debt $915 Cash $50 1% Revolver – – – Transaction debt 2,250 Purchase equity 6,455 Term Loan B 1,500 23% 5.0x New equity 5,121 Minimum cash 50 Senior unsecured 750 11% 2.5x Total debt $2,250 34% 7.5x Transaction costs 80 New equity $5,121 78% 17.1x Total sources $7,499 Total uses $7,499 Total capitalization $6,598 100% 22.0x Revenue CAGR vs. EBITDA margin Exit EBITDA multiple vs. EBITDA margin n 20% required IRRn 20% required IRR n 22.5x exit EBITDA multiplen 13.0% revenue CAGR (2020A–2026E) Implied offer price / offer premium Implied offer price / offer premium Revenue CAGR 2020A–2026E FV / EBITDA exit multiple (1-ye Fa V r /fo EB rw Ia TrD dA ) exit multiple (1-year forward) 11.0% 13.0% 15.0% 20.0x 22.5x 25.0x 40.0% $34.50 / 16% $38.75 / 30% $43.50 / 46% 40.0% $35.00 / 18% $38.75 / 30% $42.50 / 43% 42.5% 36.50 / 23% 41.00 / 38% 46.00 / 54% 42.5% 37.00 / 24% 41.00 / 38% 45.00 / 51% 45.0% 38.50 / 29% 43.25 / 45% 48.50 / 63% 45.0% 39.00 / 31% 43.25 / 45% 47.50 / 60% 34 Note: Share prices rounded to the nearest $0.25; Based on adjusted street case; Offer premiums reflect with respect to share price as of 4/29/21 Assumes transaction entry date of 12/31/21 and exit of 12/31/26, leverageable EBITDA of $300mm 2026E EBITDA margin 2026E EBITDA marginIllustrative sponsor ability to pay analysis Street '20A–'23E CAGR: 12% Street '23E margin: 38% Illustrative pro forma cap. at $40 / share (~35% premium), $mm Illustrative sources and uses at $40 / share (~35% premium), $mm Leverageable Sources Uses Amount % cap EBITDA Existing cash $129 Existing debt $915 Cash $50 1% Revolver – – – Transaction debt 2,250 Purchase equity 6,455 Term Loan B 1,500 23% 5.0x New equity 5,121 Minimum cash 50 Senior unsecured 750 11% 2.5x Total debt $2,250 34% 7.5x Transaction costs 80 New equity $5,121 78% 17.1x Total sources $7,499 Total uses $7,499 Total capitalization $6,598 100% 22.0x Revenue CAGR vs. EBITDA margin Exit EBITDA multiple vs. EBITDA margin n 20% required IRRn 20% required IRR n 22.5x exit EBITDA multiplen 13.0% revenue CAGR (2020A–2026E) Implied offer price / offer premium Implied offer price / offer premium Revenue CAGR 2020A–2026E FV / EBITDA exit multiple (1-ye Fa V r /fo EB rw Ia TrD dA ) exit multiple (1-year forward) 11.0% 13.0% 15.0% 20.0x 22.5x 25.0x 40.0% $34.50 / 16% $38.75 / 30% $43.50 / 46% 40.0% $35.00 / 18% $38.75 / 30% $42.50 / 43% 42.5% 36.50 / 23% 41.00 / 38% 46.00 / 54% 42.5% 37.00 / 24% 41.00 / 38% 45.00 / 51% 45.0% 38.50 / 29% 43.25 / 45% 48.50 / 63% 45.0% 39.00 / 31% 43.25 / 45% 47.50 / 60% 34 Note: Share prices rounded to the nearest $0.25; Based on adjusted street case; Offer premiums reflect with respect to share price as of 4/29/21 Assumes transaction entry date of 12/31/21 and exit of 12/31/26, leverageable EBITDA of $300mm 2026E EBITDA margin 2026E EBITDA margin
Process to discover change of control value = JPMorgan to proactively reach out to key potential strategic partners and have a discussion around a transformation of the business, strategic fit and desirability of the asset – Company to continue its current dialogue with strategics = JPMorgan will also have a dialogue with a couple of the key financial sponsors as to their view on Inovalon as a go-private possibility and understand the exact thinking of this group of potential partners = All of these conversations will be “banker style” conversations, not as part of any formal or attributed process = Depending on reactions / feedback from these meetings, JPM will make connections with the management team and catalyze further discussion if / as appropriate = Articulation of strong interest / proposal will provide a platform to broadly test this path for the company Main objective is to catalyze one of the parties to express interest and submit a formal proposal 35Process to discover change of control value = JPMorgan to proactively reach out to key potential strategic partners and have a discussion around a transformation of the business, strategic fit and desirability of the asset – Company to continue its current dialogue with strategics = JPMorgan will also have a dialogue with a couple of the key financial sponsors as to their view on Inovalon as a go-private possibility and understand the exact thinking of this group of potential partners = All of these conversations will be “banker style” conversations, not as part of any formal or attributed process = Depending on reactions / feedback from these meetings, JPM will make connections with the management team and catalyze further discussion if / as appropriate = Articulation of strong interest / proposal will provide a platform to broadly test this path for the company Main objective is to catalyze one of the parties to express interest and submit a formal proposal 35
M&A process can be executed in ~12 weeks Management involvement required Information / materials required Post n JPM to connect with key decision makers at tier 1 strategics earnings – Initial buyer education phase and select sponsors Buyer education and n Target to filter down to highly probable 3–5 strategics and 2 Low n Investor day presentation materials discover sponsors and set up introductory meeting with management n Short form of management presentation of interest Medium n Shareholder approach End of n Key KPIs and financial projections May High n Management meetings with serious interested parties only Management meetings Further engagement if n Post meetings, receive indications of valuen Phase 1: 15–20 page presentation based on – serious interest public information / investor day materials materializes End of n Phase 2: 2–3 hour presentation based on June – n If indications are compelling, perform market check in a internal information including projections tight process High n Phase 3: Functional meetings including n Due diligence and access to dataroom Launch formal product, GTM, financials process with n Negotiation of legal documentation High several parties n Sign and announce End of – Dataroom July n To cover product, R&D, sales / GTM / n Regulatory approvals Medium customers, financials / accounting, HR, IT, legal Required n Shareholder approval – approvals September / October 36M&A process can be executed in ~12 weeks Management involvement required Information / materials required Post n JPM to connect with key decision makers at tier 1 strategics earnings – Initial buyer education phase and select sponsors Buyer education and n Target to filter down to highly probable 3–5 strategics and 2 Low n Investor day presentation materials discover sponsors and set up introductory meeting with management n Short form of management presentation of interest Medium n Shareholder approach End of n Key KPIs and financial projections May High n Management meetings with serious interested parties only Management meetings Further engagement if n Post meetings, receive indications of valuen Phase 1: 15–20 page presentation based on – serious interest public information / investor day materials materializes End of n Phase 2: 2–3 hour presentation based on June – n If indications are compelling, perform market check in a internal information including projections tight process High n Phase 3: Functional meetings including n Due diligence and access to dataroom Launch formal product, GTM, financials process with n Negotiation of legal documentation High several parties n Sign and announce End of – Dataroom July n To cover product, R&D, sales / GTM / n Regulatory approvals Medium customers, financials / accounting, HR, IT, legal Required n Shareholder approval – approvals September / October 36
Market cap: $236bn Strategics buyer insights – Salesforce FV / ’22E Rev.: 7.4x FV / ’22E uFCF: 39.9x Key decision makers Bret Taylor John Somorjai JPMorgan Marc Benioff President and COO EVP relationship Chairman & CEO Salesforce Corporate Development Highly aligned with Salesforce’s increasing focus and investor messaging around a more fulsome suite of healthcare solutions = Increased sales point connectivity and cross sell of solutions = Strategic = Natural alignment with embedded Tableau capabilities to get a better perspective of both customers and patients rationale Further leverage Vlocity’s healthcare industry cloud beachhead and connectivity capabilities to expand customer access = = Favourably positioned to monetize robust data access across a wide base of healthcare constituents Primarily valuation methodology is a DCF, giving credit to synergies = How they assess value Jun ’16 Notable Dec ’20 Aug ’20 Jun ’19 Apr ’19 Mar ’18 8.9x rev Jun ’13 23.9x rev $1.4bn 9.0x rev $300mm 13.2x rev $2.7bn 5.5x rev M&A deals Channel-based SaaS operations $14.7bn non-profit $5.8bn e-commerce $2.3bn JPM advised messaging management Data visualization social enterprise API development platform e-mail marketing 37 Company filings; press releases; FactSet as of 4/29/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $176bn Strategics buyer insights – SAP FV / ’22E Rev.: 5.1x FV / ’22E uFCF: 24.4x Key decision makers JPMorgan Hasso Plattner Christian Klein Luka Mucic Chairman relationship CEO CFO Major entry point into healthcare with unprecedented, highly functional data = Immediate exposure to all major constituent bases in healthcare = Strategic = Strengthens SAP’s push to cloud model rationale Likely will require time to get conviction on the space = = Look at synergized DCF and transaction comps, with a focus on SAP’s prior deals vs. market comps How they EPS and balance sheet sensitive = assess value May ’12 Nov ’18 Sep ’18 Jan ’18 7.5x Dec ’11 Notable Jan ’21 27.6x 8.5x 7.4x Jun ’13 $4.6bn 7.6x Jan ’21 $1.0bn $8.0bn $7.2bn $2.5bn $1.5bn Business $3.1bn M&A deals $1.8bn Business process Experience Travel Online training eCommerce commerce Human capital JPM advised Spin-off IPO management management management management software software management 38 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwiseMarket cap: $176bn Strategics buyer insights – SAP FV / ’22E Rev.: 5.1x FV / ’22E uFCF: 24.4x Key decision makers JPMorgan Hasso Plattner Christian Klein Luka Mucic Chairman relationship CEO CFO Major entry point into healthcare with unprecedented, highly functional data = Immediate exposure to all major constituent bases in healthcare = Strategic = Strengthens SAP’s push to cloud model rationale Likely will require time to get conviction on the space = = Look at synergized DCF and transaction comps, with a focus on SAP’s prior deals vs. market comps How they EPS and balance sheet sensitive = assess value May ’12 Nov ’18 Sep ’18 Jan ’18 7.5x Dec ’11 Notable Jan ’21 27.6x 8.5x 7.4x Jun ’13 $4.6bn 7.6x Jan ’21 $1.0bn $8.0bn $7.2bn $2.5bn $1.5bn Business $3.1bn M&A deals $1.8bn Business process Experience Travel Online training eCommerce commerce Human capital JPM advised Spin-off IPO management management management management software software management 38 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $1,902bn Strategics buyer insights – Microsoft FV / ’22E Rev.: 9.6x FV / ’22E uFCF: 28.9x Key decision makers JPMorgan Satya Nadella Amy Hood CEO CFO relationship = Establish scaled moat with two of the most significant healthcare technology assets of scale Microsoft / Nuance AI capabilities highly complementary to Inovalon’s data access = Strategic rationale = Combined platform would have unparalled patient insight capabilities = Meaningful cross sell potential DCF with synergies = How they = Precedent transactions with a similar financial profile assess value (Devices & Services) Jun ’16 Jun ’18 Apr’ 21 $26.3bn Notable $7.5bn $17.3bn Sep ‘20 6.8x rev Sep ’14 Jun ’12 May ’11 20.3x rev May ’07 12.2x rev $7.5bn 25.4x EBITDA $2.5bn $1.2bn $8.5bn Jan ’08 M&A deals Software $5.9bn 44.8x EBITDA Video game Employment- 5.0x rev Sep ’13 ~10x rev 8.3x rev $1.2bn development 7.4x rev Conversational developer oriented Video game $7.2bn Intra-enterprise 32.2x LTM 6x rev JPM advised AI & publisher version control social media development Smartphones social networking EBITDA 57.0x EBITDA 28.4x EBITDA 39 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwiseMarket cap: $1,902bn Strategics buyer insights – Microsoft FV / ’22E Rev.: 9.6x FV / ’22E uFCF: 28.9x Key decision makers JPMorgan Satya Nadella Amy Hood CEO CFO relationship = Establish scaled moat with two of the most significant healthcare technology assets of scale Microsoft / Nuance AI capabilities highly complementary to Inovalon’s data access = Strategic rationale = Combined platform would have unparalled patient insight capabilities = Meaningful cross sell potential DCF with synergies = How they = Precedent transactions with a similar financial profile assess value (Devices & Services) Jun ’16 Jun ’18 Apr’ 21 $26.3bn Notable $7.5bn $17.3bn Sep ‘20 6.8x rev Sep ’14 Jun ’12 May ’11 20.3x rev May ’07 12.2x rev $7.5bn 25.4x EBITDA $2.5bn $1.2bn $8.5bn Jan ’08 M&A deals Software $5.9bn 44.8x EBITDA Video game Employment- 5.0x rev Sep ’13 ~10x rev 8.3x rev $1.2bn development 7.4x rev Conversational developer oriented Video game $7.2bn Intra-enterprise 32.2x LTM 6x rev JPM advised AI & publisher version control social media development Smartphones social networking EBITDA 57.0x EBITDA 28.4x EBITDA 39 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $219bn Strategics buyer insights – Oracle FV / ’22E Rev.: 6.4x FV / ’22E uFCF: 16.7x Key decision makers JPMorgan Larry Ellison Safra Catz Chairman & CTO relationship CEO Have been highly active searching for the right asset in healthcare = Highly aligned with Oracle Cloud for Healthcare capabilities and positioned to provide in-depth customer insights Strategic = rationale = Some potential enterprise solution cross sell in certain segments Would likely require significant time to establish conviction; sizeable transaction relative to historical activity = DCF-based valuation giving credit for synergies = How they = Assess value looking at cash-on-cash returns analysis assess value Dec ’17 Notable 7.5x rev Apr ’17 Jul ’16 Dec ’14 Jun ’14 Mar ’05 $1.2bn $850mm 7.9x rev $1.2bn 3.0x rev 3.0x rev M&A deals Mobile Online $8.8bn Marketing $4.5bn Dec ’08 $500mm JPM advised collaboration advertising Cloud computing services Healthcare CRM $550mmC Retail software 40 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $1,750bn Strategics buyer insights – Amazon FV / ’22E Rev.: 3.2x FV / ’22E uFCF: 33.8x Key decision makers Adam Selipsky Peter Krawiec JPMorgan Andy Jassy CEO, VP, Worldwide CEO, Amazon relationship Amazon Web Services Corporate Development Further demonstrates commitment to build out healthcare platform = Strategic = Data access to further expand both telehealth and PillPack customer connectivity and capabilities rationale Strategic position and access poised to inform next leg of stool in healthcare = = Extremely valuation disciplined How they Only willing to step in absolute must own situations = = Utilizes DCF and trading comparables to support valuation assess value Assess standalone valuation as well as PF value within Amazon = Notable Jun ’17 Jun ’20 Sep ’20 Feb ’18 Jun ’18 9.9x EBITDA M&A deals $1.2bn $450mm¹ Apr ’19 Feb ’19 $900mm $753mm $13.5bn JPM advised Autonomous mobility Connected fitness Autonomous delivery Autonomous delivery Home security Online pharmacy Grocery 41 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise; JPM provided financing with respect to the Whole Foods transaction; ¹ Amazon participated in the $450mm Series C investmentMarket cap: $1,750bn Strategics buyer insights – Amazon FV / ’22E Rev.: 3.2x FV / ’22E uFCF: 33.8x Key decision makers Adam Selipsky Peter Krawiec JPMorgan Andy Jassy CEO, VP, Worldwide CEO, Amazon relationship Amazon Web Services Corporate Development Further demonstrates commitment to build out healthcare platform = Strategic = Data access to further expand both telehealth and PillPack customer connectivity and capabilities rationale Strategic position and access poised to inform next leg of stool in healthcare = = Extremely valuation disciplined How they Only willing to step in absolute must own situations = = Utilizes DCF and trading comparables to support valuation assess value Assess standalone valuation as well as PF value within Amazon = Notable Jun ’17 Jun ’20 Sep ’20 Feb ’18 Jun ’18 9.9x EBITDA M&A deals $1.2bn $450mm¹ Apr ’19 Feb ’19 $900mm $753mm $13.5bn JPM advised Autonomous mobility Connected fitness Autonomous delivery Autonomous delivery Home security Online pharmacy Grocery 41 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise; JPM provided financing with respect to the Whole Foods transaction; ¹ Amazon participated in the $450mm Series C investment
Market cap: $1,508bn Strategics buyer insights – Alphabet FV / ’22E Rev.: 5.8x FV / ’22E uFCF: 24.9x Key decision makers Don Harrison JPMorgan Sanjay Kapoor Bill Ready President Head of Corporate relationship President of Commerce Partnership & Corp Dev Development Major entry point into healthcare with unprecedented, highly functional data = Immediate exposure to all major constituent bases in healthcare Strategic = rationale = Cross functionality with data to both sell into healthcare channel and use across broader user base Commercial / product opportunity most important valuation driver = How they = Use precedent transaction multiples and long-term investment IRRs as support assess value Notable Nov ’19 July ’20 Jan ’20 1.1x rev Jun ’19 Nov ’15 Nov ’15 M&A deals $4.7bn $163mm $1.6bn $2.6bn $380mm $380mm JPM advised Network Search Wearables Business intelligence Enterprise applications Enterprise applications 42 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwiseMarket cap: $1,508bn Strategics buyer insights – Alphabet FV / ’22E Rev.: 5.8x FV / ’22E uFCF: 24.9x Key decision makers Don Harrison JPMorgan Sanjay Kapoor Bill Ready President Head of Corporate relationship President of Commerce Partnership & Corp Dev Development Major entry point into healthcare with unprecedented, highly functional data = Immediate exposure to all major constituent bases in healthcare Strategic = rationale = Cross functionality with data to both sell into healthcare channel and use across broader user base Commercial / product opportunity most important valuation driver = How they = Use precedent transaction multiples and long-term investment IRRs as support assess value Notable Nov ’19 July ’20 Jan ’20 1.1x rev Jun ’19 Nov ’15 Nov ’15 M&A deals $4.7bn $163mm $1.6bn $2.6bn $380mm $380mm JPM advised Network Search Wearables Business intelligence Enterprise applications Enterprise applications 42 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $63.3bn Strategics buyer insights – Dassault Systems / Medidata FV / ’22E Rev.: 10.4x FV / ’22E uFCF: 47.8x Key decision makers Pascal Daloz Bernard Charles Tarek Shelif JPMorgan COO & CFO CEO CEO & Co-founder, Medidata Corporate Strategy Officer relationship Extend Dassault’s life sciences business as its core competency to become its largest business segment in the company = = Immediately access Inovalon’s massive primary-source datasets to enhance Dassault / Medidata’s cloud-based data & analytics capabilities Strategic = Enable Dassault’s expansion into other key segments of healthcare, including payers and providers rationale = Cross-sell opportunities and synergies with Inovalon platform Notable M&A deals Jun ’19 Dec ’18 Sep ’17 $5.8bn $425mm $400mm Life Sciences lifecycle Manufacturing ERP Product engineering management software software 43 Company filings; press releases; FactSet as of 4/29/21 Note: All transaction multiples reflect NTM, unless noted otherwiseMarket cap: $63.3bn Strategics buyer insights – Dassault Systems / Medidata FV / ’22E Rev.: 10.4x FV / ’22E uFCF: 47.8x Key decision makers Pascal Daloz Bernard Charles Tarek Shelif JPMorgan COO & CFO CEO CEO & Co-founder, Medidata Corporate Strategy Officer relationship Extend Dassault’s life sciences business as its core competency to become its largest business segment in the company = = Immediately access Inovalon’s massive primary-source datasets to enhance Dassault / Medidata’s cloud-based data & analytics capabilities Strategic = Enable Dassault’s expansion into other key segments of healthcare, including payers and providers rationale = Cross-sell opportunities and synergies with Inovalon platform Notable M&A deals Jun ’19 Dec ’18 Sep ’17 $5.8bn $425mm $400mm Life Sciences lifecycle Manufacturing ERP Product engineering management software software 43 Company filings; press releases; FactSet as of 4/29/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Market cap: $45.1bn Strategics buyer insights – IQVIA FV / ’22E Rev.: 3.9x FV / ’22E uFCF: 27.8x Key decision makers Ari Bousbib Ron Bruehlman JPMorgan Chairman & CEO CFO relationship = Combination of leading end-to-end data & analytics solutions for clinical research with the industry’s largest primary-source real world data repository Strategic = Meaningful synergy potential across key life sciences verticals rationale = Unmatched scale across key healthcare constituents with significant cross-sell potential Notable M&A deals Apr ’21 May ’16 April ’14 May ’13 $1.9bn $23.0bn $1.3bn $0.9bn Clinical lab services Merger of equals Initial public offering Initial public offering 44 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwiseMarket cap: $45.1bn Strategics buyer insights – IQVIA FV / ’22E Rev.: 3.9x FV / ’22E uFCF: 27.8x Key decision makers Ari Bousbib Ron Bruehlman JPMorgan Chairman & CEO CFO relationship = Combination of leading end-to-end data & analytics solutions for clinical research with the industry’s largest primary-source real world data repository Strategic = Meaningful synergy potential across key life sciences verticals rationale = Unmatched scale across key healthcare constituents with significant cross-sell potential Notable M&A deals Apr ’21 May ’16 April ’14 May ’13 $1.9bn $23.0bn $1.3bn $0.9bn Clinical lab services Merger of equals Initial public offering Initial public offering 44 Company filings; press releases; FactSet as of 4/19/21 Note: All transaction multiples reflect NTM, unless noted otherwise
Additional potential strategic partners 2022E 2022E 2022E 2022E Company Key management Market cap ($bn) Revenue growth EBITDA margin FV / Revenue FV / uFCF Hock Tan (President, CEO) Broadcom $190bn 5% 60% 8.1x 15.4x Kirsten Separs (CFO / CAO) David Henshall, (President, CEO) Citrix $16bn 8% 35% 4.7x 14.6x Arlen Shenkman (CFO, EVP) Will Lansing (President, CEO) FICO $16bn 10% 40% 11.2x NA Michael McLaughlin (CFO, EVP) James Lico, (President, CEO) Fortive $25bn 5% 25% 5.3x 26.5x Charles McLaughlin, (CFO) Arvind Krishna, (Chairman, CEO) IBM $129bn 1% 25% 2.4x 14.3x James Kavanaugh, (CFO, SVP) Yo Honma (President) NTT $22bn 3% 16% 1.2x 25.3x Toshi Fujiwara (CFO, CTO) Laurence Hunn (President, CEO) Roper $47bn 5% 36% 8.4x 26.0x Robert Crisci (CFO, EVP) Douglas Merritt (CEO) Splunk $21bn 24% 4% 6.9x 44.1x Jason Child (CFO, SVP) Peter Gassner (Founder, CEO) Veeva $46bn 18% 40% 18.1x 56.3x Brent Bowman (CFO) Aneel Bhusri (Chairman, Co-CEO) Workday $47bn 17% 24% 10.2x 49.5x Robynne Sisco (Co-President, CFO) Henry Shuck (Chairman, CEO) Zoominfo $5bn 27% 47% 12.0x 29.0x Cameron Hyzer (CFO) 45 Source: Company filings, FactSet as of 4/29/21Additional potential strategic partners 2022E 2022E 2022E 2022E Company Key management Market cap ($bn) Revenue growth EBITDA margin FV / Revenue FV / uFCF Hock Tan (President, CEO) Broadcom $190bn 5% 60% 8.1x 15.4x Kirsten Separs (CFO / CAO) David Henshall, (President, CEO) Citrix $16bn 8% 35% 4.7x 14.6x Arlen Shenkman (CFO, EVP) Will Lansing (President, CEO) FICO $16bn 10% 40% 11.2x NA Michael McLaughlin (CFO, EVP) James Lico, (President, CEO) Fortive $25bn 5% 25% 5.3x 26.5x Charles McLaughlin, (CFO) Arvind Krishna, (Chairman, CEO) IBM $129bn 1% 25% 2.4x 14.3x James Kavanaugh, (CFO, SVP) Yo Honma (President) NTT $22bn 3% 16% 1.2x 25.3x Toshi Fujiwara (CFO, CTO) Laurence Hunn (President, CEO) Roper $47bn 5% 36% 8.4x 26.0x Robert Crisci (CFO, EVP) Douglas Merritt (CEO) Splunk $21bn 24% 4% 6.9x 44.1x Jason Child (CFO, SVP) Peter Gassner (Founder, CEO) Veeva $46bn 18% 40% 18.1x 56.3x Brent Bowman (CFO) Aneel Bhusri (Chairman, Co-CEO) Workday $47bn 17% 24% 10.2x 49.5x Robynne Sisco (Co-President, CFO) Henry Shuck (Chairman, CEO) Zoominfo $5bn 27% 47% 12.0x 29.0x Cameron Hyzer (CFO) 45 Source: Company filings, FactSet as of 4/29/21
Financial sponsor buyer universe Fund size Key Contact Select software transactions Select healthcare transactions n Bryan Taylor, Managing Director $18bn n Lauren Young, Managing Director $9bnn David Humphrey, Managing Director n Joseph Baratta, Global Head of Private Equity $25bn n Martin Brand, Head of U.S. Private Equity n Dipanjan (DJ) Deb, Co-Founder and CEO $8bn n David Tunnell, Managing Partner $16bnn Tarim Wasim, Partner n Sameer Narang, Partner n Brian Ruder, Partner $11bn n Henry Minello, Partner $20bnn Greg Mondre, Co-CEO n Orlando Bravo, Founder & Managing Partner n Holden Spaht, Managing Partner $18bn n Seth Boro, Managing Partner n Todd Sisitsky, Managing Partner $11bn n Nehal Raj, Partner 46 Source: Press releases, company filings: Note: Fund size reflects size of most recent flagship fundFinancial sponsor buyer universe Fund size Key Contact Select software transactions Select healthcare transactions n Bryan Taylor, Managing Director $18bn n Lauren Young, Managing Director $9bnn David Humphrey, Managing Director n Joseph Baratta, Global Head of Private Equity $25bn n Martin Brand, Head of U.S. Private Equity n Dipanjan (DJ) Deb, Co-Founder and CEO $8bn n David Tunnell, Managing Partner $16bnn Tarim Wasim, Partner n Sameer Narang, Partner n Brian Ruder, Partner $11bn n Henry Minello, Partner $20bnn Greg Mondre, Co-CEO n Orlando Bravo, Founder & Managing Partner n Holden Spaht, Managing Partner $18bn n Seth Boro, Managing Partner n Todd Sisitsky, Managing Partner $11bn n Nehal Raj, Partner 46 Source: Press releases, company filings: Note: Fund size reflects size of most recent flagship fund
47
Exhibit C.IV Discussion materials June 9, 2021 0Exhibit C.IV Discussion materials June 9, 2021 0
Topics for discussion 1 Update on equity offering and upsize of the Revolving Credit Facility 2 Update on exploration of interest in Ocala 3 Valuation update 1Topics for discussion 1 Update on equity offering and upsize of the Revolving Credit Facility 2 Update on exploration of interest in Ocala 3 Valuation update 1
Update on equity offering and upsize of the Revolving Credit Facility 2Update on equity offering and upsize of the Revolving Credit Facility 2
Public market snapshot Year-to-date price performance Public market overview Summary price performance to date $mm, except per share data YTD 5/3 Board Investor Day INOV 76% 5% 4% 200% Share price as of 06/08/21 $32.02 S&P 500 13% 1% 2% 5/3 5/18 As % of 52-week high 99% Board Meeting Investor Day Diluted shares (mm) 156 +76% 175% Market cap $5,000 Firm value $5,786 150% FYE 12/31 CY20A CY21E CY22E Revenue $668 $764 $860 % growth 4% 15% 12% 125% Adj. EBITDA¹ $231 $271 $311 +13% % margin 35% 35% 36% 100% Trading multiples CY21E CY22E FV / Revenue 7.6x 6.7x FV / Adj. EBITDA¹ 21.4x 18.6x 75% Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 3 Source: FactSet as of 06/08/21; Company filings ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items Public market snapshot Year-to-date price performance Public market overview Summary price performance to date $mm, except per share data YTD 5/3 Board Investor Day INOV 76% 5% 4% 200% Share price as of 06/08/21 $32.02 S&P 500 13% 1% 2% 5/3 5/18 As % of 52-week high 99% Board Meeting Investor Day Diluted shares (mm) 156 +76% 175% Market cap $5,000 Firm value $5,786 150% FYE 12/31 CY20A CY21E CY22E Revenue $668 $764 $860 % growth 4% 15% 12% 125% Adj. EBITDA¹ $231 $271 $311 +13% % margin 35% 35% 36% 100% Trading multiples CY21E CY22E FV / Revenue 7.6x 6.7x FV / Adj. EBITDA¹ 21.4x 18.6x 75% Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 3 Source: FactSet as of 06/08/21; Company filings ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Transaction overview Issuer: Inovalon Holdings, Inc. Ticker / Listing exchange: INOV / Nasdaq Security type: Common equity Offering size: [$400-700mm] Share composition: [100% primary] Greenshoe: 15% (100% primary) Use of proceeds General corporate purposes, including working capital and capital expenditures Bookrunners: J.P. Morgan, [ ] Stabilization: J.P. Morgan Logistics, billing & delivery: J.P. Morgan Lock-up agreement: 90 days for company, directors, officers and selling shareholders (if any) Company counsel: [TBD] Underwriter counsel: [TBD] Auditor: [Deloitte] 4Transaction overview Issuer: Inovalon Holdings, Inc. Ticker / Listing exchange: INOV / Nasdaq Security type: Common equity Offering size: [$400-700mm] Share composition: [100% primary] Greenshoe: 15% (100% primary) Use of proceeds General corporate purposes, including working capital and capital expenditures Bookrunners: J.P. Morgan, [ ] Stabilization: J.P. Morgan Logistics, billing & delivery: J.P. Morgan Lock-up agreement: 90 days for company, directors, officers and selling shareholders (if any) Company counsel: [TBD] Underwriter counsel: [TBD] Auditor: [Deloitte] 4
Plan to prepare for equity follow-on launch Key considerations Milestones Timing = Broader market backdrop Other = Outcomes of recent new issuance = Investor day and NDR engagement Board meeting 6/9-10 = Peer earnings calendar Legal = Desire to raise capital Engage counsel to begin preparation 6/11 July 2021 June 2021 M T W T F M T W T F Draft S-3ASR, prosupp and press release Week of 6/14 1 2 1 2 3 4 5 6 7 8 9 7 8 9 10 11 Draft legal and other documents: Underwriting Agreement, Week of 6/14 12 13 14 15 16 14 15 16 17 18 Comfort Letter, Lockup Agreements 19 20 21 22 23 21 22 23 24 25 28 29 30 26 27 28 29 30 Diligence Business, financial , auditor, and legal diligence (1-2 calls, Holiday August 2021 Week of 6/14 pending management availability) M T W T F Investor Day 2 3 4 5 6 Execution window Roadshow Prep 9 10 11 12 13 Needham TMT Conference 16 17 18 19 20 Roadshow drafting Week of 6/14 J.P. Morgan TMT Conference 23 24 25 26 27 Estimated Inovalon earnings (late July) 30 31 NetRoadshow recording Week of 6/14 Board meeting 5Plan to prepare for equity follow-on launch Key considerations Milestones Timing = Broader market backdrop Other = Outcomes of recent new issuance = Investor day and NDR engagement Board meeting 6/9-10 = Peer earnings calendar Legal = Desire to raise capital Engage counsel to begin preparation 6/11 July 2021 June 2021 M T W T F M T W T F Draft S-3ASR, prosupp and press release Week of 6/14 1 2 1 2 3 4 5 6 7 8 9 7 8 9 10 11 Draft legal and other documents: Underwriting Agreement, Week of 6/14 12 13 14 15 16 14 15 16 17 18 Comfort Letter, Lockup Agreements 19 20 21 22 23 21 22 23 24 25 28 29 30 26 27 28 29 30 Diligence Business, financial , auditor, and legal diligence (1-2 calls, Holiday August 2021 Week of 6/14 pending management availability) M T W T F Investor Day 2 3 4 5 6 Execution window Roadshow Prep 9 10 11 12 13 Needham TMT Conference 16 17 18 19 20 Roadshow drafting Week of 6/14 J.P. Morgan TMT Conference 23 24 25 26 27 Estimated Inovalon earnings (late July) 30 31 NetRoadshow recording Week of 6/14 Board meeting 5
Execution timeline for revolving credit facility RCF execution timeline (overlaid on equity Week Financing events windows) Draft legal documentation (Engagement / Fee Letter) = July 2021 June 2021 = Drafting Lender Presentation (“LP”) M T W T F M T W T F Week = Engage broader lending syndicate banks 1 2 1 2 3 4 1 / 2 Company to provide 5-year projection model to JPM = 5 6 7 8 9 7 8 9 10 11 = Drafting Amended and Restated Credit Agreement 12 13 14 15 16 14 15 16 17 18 19 20 21 22 23 21 22 23 24 25 26 27 28 29 30 28 29 30 = Respond to Lenders’ due diligence questions = Commitments due from Lenders August 2021 Holiday = Determine and distribute final allocations M T W T F Investor Day = Lender comments due on Amended and Restated Credit Agreement Week 2 3 4 5 6 Execution window = Execute Amended and Restated Credit Agreement distributed via SyndTrak 2 / 3 Needham TMT Conference 9 10 11 12 13 = Closing and Effectiveness J.P. Morgan TMT Conference 16 17 18 19 20 Estimated Inovalon earnings (late July) 23 24 25 26 27 RCF material preparation 30 31 RCF launch 6
Update on exploration of interest in Ocala 7Update on exploration of interest in Ocala 7
Summary of dialogue with interested parties n 13 parties (5 sponsors and 8 strategics) contacted Strategics Sponsors – 1 sponsor submitted an unsolicited proposal n Held management discussions with 7 parties n Received proposals from 3 parties 5 3 6 6 8 5 3 3 2 1 Contacted Signed NDAs Management Declined Submitted Continue meeting proposal dialogue 8Summary of dialogue with interested parties n 13 parties (5 sponsors and 8 strategics) contacted Strategics Sponsors – 1 sponsor submitted an unsolicited proposal n Held management discussions with 7 parties n Received proposals from 3 parties 5 3 6 6 8 5 3 3 2 1 Contacted Signed NDAs Management Declined Submitted Continue meeting proposal dialogue 8
Summary of proposals Offer pricen $34 / sharen $35 / sharen $36–39 / share (unsolicited) n $38–40 / share (updated) Implied premium to currentn 6%n 9%n 12–22% (unsolicited) n 19–25% (updated) Implied multiples n 22.5x² n 23.1x² n 23.7–25.4x (unsolicited)¹ (FV / CY21E) n 27.9x (incl. capitalized software)n 28.6x (incl. capitalized software)n 29.3–31.5x (incl. capitalized software) n 24.8–26.0x (updated)² n 30.7–32.2x (incl. capitalized software) Implied multiples 18.5x² 19.0x² 20.6–22.1x (unsolicited)¹ nnn (FV / CY22E) n 22.7x (incl. capitalized software)n 23.3x (incl. capitalized software)n 25.6–27.5x (incl. capitalized software) n 20.4–21.4x (updated)² n 25.0–26.2x (incl. capitalized software) Key assumptionsn Based on public and confidential informationn 156mm fully diluted sharesn Based on public and confidential information n $803mm of net debt Equity financingn Entirely from Blackstonen Entirely from Thoma Bravo equity funds and n Entirely from Leonard Green & Partners Thoma Bravo XIV ($17.8bn committed capital) Debt financingn Third-party debt financing, will provide fully n Not specified, however, definitive agreement will n Senior and subordinated debt committed financing prior to signing not be subject to any financing contingencies (subject to further diligence) Timing to signn No commitment on specific timing but can n 4 weeksn No commitment on specific timing but can move quickly move quickly 9 Source: Ocala management; FactSet as of 6/8/21 ¹ Based on street consensus; ² Based on Ocala management caseSummary of proposals Offer pricen $34 / sharen $35 / sharen $36–39 / share (unsolicited) n $38–40 / share (updated) Implied premium to currentn 6%n 9%n 12–22% (unsolicited) n 19–25% (updated) Implied multiples n 22.5x² n 23.1x² n 23.7–25.4x (unsolicited)¹ (FV / CY21E) n 27.9x (incl. capitalized software)n 28.6x (incl. capitalized software)n 29.3–31.5x (incl. capitalized software) n 24.8–26.0x (updated)² n 30.7–32.2x (incl. capitalized software) Implied multiples 18.5x² 19.0x² 20.6–22.1x (unsolicited)¹ nnn (FV / CY22E) n 22.7x (incl. capitalized software)n 23.3x (incl. capitalized software)n 25.6–27.5x (incl. capitalized software) n 20.4–21.4x (updated)² n 25.0–26.2x (incl. capitalized software) Key assumptionsn Based on public and confidential informationn 156mm fully diluted sharesn Based on public and confidential information n $803mm of net debt Equity financingn Entirely from Blackstonen Entirely from Thoma Bravo equity funds and n Entirely from Leonard Green & Partners Thoma Bravo XIV ($17.8bn committed capital) Debt financingn Third-party debt financing, will provide fully n Not specified, however, definitive agreement will n Senior and subordinated debt committed financing prior to signing not be subject to any financing contingencies (subject to further diligence) Timing to signn No commitment on specific timing but can n 4 weeksn No commitment on specific timing but can move quickly move quickly 9 Source: Ocala management; FactSet as of 6/8/21 ¹ Based on street consensus; ² Based on Ocala management case
Summary of dialogue with interested parties Sponsors Strategics 1 • Strong interest 1• Very slow to engage 2 2 • Engaging senior leadership and healthcare & • Disconnect between senior leadership and software industry-focused teams industry / business development teams 3 3 • Good understanding of market opportunity, growth • Limited knowledge of Ocala acceleration and margin improvement potential 4 • Focus on understanding product differentiation 4 • Able to move and perform deep analysis quickly and go-to-market strategy 5 • Some over focus on legacy-related issues (services, risk-scoring, etc.) 6 • Conflict with other large deals in the market 10Summary of dialogue with interested parties Sponsors Strategics 1 • Strong interest 1• Very slow to engage 2 2 • Engaging senior leadership and healthcare & • Disconnect between senior leadership and software industry-focused teams industry / business development teams 3 3 • Good understanding of market opportunity, growth • Limited knowledge of Ocala acceleration and margin improvement potential 4 • Focus on understanding product differentiation 4 • Able to move and perform deep analysis quickly and go-to-market strategy 5 • Some over focus on legacy-related issues (services, risk-scoring, etc.) 6 • Conflict with other large deals in the market 10
Valuation update 11
Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 12 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 12 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21
Public company trading and operating metrics Revenue CAGR Revenue growth Gross margin EBITDA margin FV / EBITDA Firm value CY19A – CY21E CY22E CY22E CY22E CY22E ($bn) 3 $5.8 9% 12% 76% 36% 23.1x Street 18.6x Management 10% 16% 74% 37% $5.8 17% 10% 85% 34% 26.7x $17.5 12% 11% 65% 24% 16.6x $16.3 8% 10% 71% 35% 20.8x $14.7 2 10% 8% NA 51% 18.4x $14.5 14% 15% 73% 23% 28.3x $4.5 12% 11% 80% 41% 20.6x $3.8 16% 14% 75% 27% 19.8x $3.5 11% 17% 26% 24% 20.4x $8.3 1 2% 8% 56% 34% 27.6x $8.0 11% 13% 50% 23% 22.8x $6.5 Source: Company filings, Ocala management; FactSet as of 06/08/21; Note: Ocala FYE of 12/31; Sorted by firm value within groupings 3 ¹ Represents organic growth, which excludes revenue from WageWorks acquisition; ² Not reported; Adjusted EBITDA burdened by capitalized software, for reference only; Inovalon EBITDA reflects adjusted EBITDA which excludes SBC, acquisition costs, and other non- comparable items 13 Healthcare tech Software
Transaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers 13.9x For reference only¹ 11.1x 10.0x (Current)³ 9.3x 9.1x 8.6x Leonard Green : 8.3–8.7x 8.1x 7.8x 7.9x 7.8x 7.4x 7.2x 7.0x Thoma Bravo: 7.8x 6.6x 6.3x 6.2x Blackstone: 7.6x 4.6x 4.0x ² Target ¹ Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.9 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 13% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 14 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release ² Considered 2020 revenue as LTM revenue and 2021E as NTM revenue, 2021E revenue calculated by applying 2020-25 management CAGR projection to 2020E revenue; ³ NTM as of 3/31/21, reflects INOV current FV / NTM Revenue as of 6/8/21 market data Transaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers 13.9x For reference only¹ 11.1x 10.0x (Current)³ 9.3x 9.1x 8.6x Leonard Green : 8.3–8.7x 8.1x 7.8x 7.9x 7.8x 7.4x 7.2x 7.0x Thoma Bravo: 7.8x 6.6x 6.3x 6.2x Blackstone: 7.6x 4.6x 4.0x ² Target ¹ Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.9 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 13% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 14 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release ² Considered 2020 revenue as LTM revenue and 2021E as NTM revenue, 2021E revenue calculated by applying 2020-25 management CAGR projection to 2020E revenue; ³ NTM as of 3/31/21, reflects INOV current FV / NTM Revenue as of 6/8/21 market data
Appendix 15Appendix 15
Preliminary Inovalon valuation summary (as presented at last Board meeting) For illustrative purposes only Sponsor 52-week Analyst Trading Premiums Discounted Discounted Transaction ability to pay² range price targets multiples equity value¹ cash flow multiples paid $55.00 $54.25 $53.75 $48.50 $47.75 $44.75 $35.00 $39.75 $38.75 $31.00 $35.25 $35.00 $34.25 $34.50 Current share price: $29.78 $22.00 $15.25 Metrics '22E EBITDA ($mm) '23E–'24E EBITDA ($mm) Discount rate NTM Revenue ($mm) Revenue CAGR ('20A-'26E) Current share price $321 $382–$431 7.5%–8.5% $789 11.0%–15.0% $29.78 Multiples (x) '22E FV / EBITDA '22E FV / EBITDA Terminal growth FV / NTM Revenue EBITDA margin ('26E) 1-day premiums paid 20.0–25.0x 20.0–25.0x 2.5%–3.5% 8.0–12.0x 40.0%–45.0% 30%–60% to current At 22.5x exit multiple and 20% required IRR 16 Note: Share prices rounded to the nearest $0.25; Current share price reflects as of 4/29/21; Based on adjusted street case; ¹ Assumes 8.0% discount rate; ² Assumes transaction entry date of 12/31/21 and exit of 12/31/26, 7.5x max pro forma net debtPreliminary Inovalon valuation summary (as presented at last Board meeting) For illustrative purposes only Sponsor 52-week Analyst Trading Premiums Discounted Discounted Transaction ability to pay² range price targets multiples equity value¹ cash flow multiples paid $55.00 $54.25 $53.75 $48.50 $47.75 $44.75 $35.00 $39.75 $38.75 $31.00 $35.25 $35.00 $34.25 $34.50 Current share price: $29.78 $22.00 $15.25 Metrics '22E EBITDA ($mm) '23E–'24E EBITDA ($mm) Discount rate NTM Revenue ($mm) Revenue CAGR ('20A-'26E) Current share price $321 $382–$431 7.5%–8.5% $789 11.0%–15.0% $29.78 Multiples (x) '22E FV / EBITDA '22E FV / EBITDA Terminal growth FV / NTM Revenue EBITDA margin ('26E) 1-day premiums paid 20.0–25.0x 20.0–25.0x 2.5%–3.5% 8.0–12.0x 40.0%–45.0% 30%–60% to current At 22.5x exit multiple and 20% required IRR 16 Note: Share prices rounded to the nearest $0.25; Current share price reflects as of 4/29/21; Based on adjusted street case; ¹ Assumes 8.0% discount rate; ² Assumes transaction entry date of 12/31/21 and exit of 12/31/26, 7.5x max pro forma net debt
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Exhibit C.V Project Ocala Board Materials August 17, 2021 0Exhibit C.V Project Ocala Board Materials August 17, 2021 0
Offer summary Nordic proposal¹ Current (08/13/2021)² Unaffected trading (07/26/2021)³ $mm, except per share data Implied price per share $41.00 $37.77 $32.71 Premiums / (discount) to: Unaffected share price of $32.71 as of 07/26/21 25% 15% – Current share price of $37.77 as of 08/13/21 9% – (13%) 52-week high of $34.47 19% 10% (5%) 30-day VWAP of $32.95 24% 15% (1%) 90-day VWAP of $30.74 33% 23% 6% Equity value $6,414 $5,915 $5,108 Firm value $7,225 $6,682 $5,865 Metric FV / CY22E Revenue (Ocala management case) $902 8.0x 7.4x 6.5x FV / CY22E Adj. EBITDA⁴ (Ocala management case) $330 21.9x 20.3x 17.8x 1 Source: FactSet; Ocala management; Company filings; Note: Market data as of unaffected share price on 07/26/21, unless noted otherwise; ¹ Net debt balance and fully diluted shares outstanding as of 08/03/21 per Ocala management ² Net debt balance and fully diluted shares outstanding as of 06/30/21; ³ Net debt balance and fully diluted shares outstanding as of 03/31/21; ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Ocala financial forecast comparison Ocala management case Street consensus (for reference only) Reflects street consensus (post-unaffected date of 7/26/21) Revenue ($mm) Gross margin (%) $1,040 76% 76% 75% $902 $973 75% 74% 74% $775 $870 $773 CY21E CY22E CY23E CY21E CY22E CY23E % growth Gross profit ($mm) Mgmt. 16% 16% 15% Mgmt. $577 $668 $770 Street 16% 13% 12% Street $577 $658 $741 Operating expenses ($mm) Adjusted EBITDA¹ ($mm) $404 $386 $338 $330 $306 $365 $271 $355 $347 $311 $307 $270 CY21E CY22E CY23E CY21E CY22E CY23E % sales % margin Mgmt. 40% 38% 35% Mgmt. 35% 37% 39% Street 40% 40% 40% Street 35% 36% 36% 2 Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31 ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable itemsOcala financial forecast comparison Ocala management case Street consensus (for reference only) Reflects street consensus (post-unaffected date of 7/26/21) Revenue ($mm) Gross margin (%) $1,040 76% 76% 75% $902 $973 75% 74% 74% $775 $870 $773 CY21E CY22E CY23E CY21E CY22E CY23E % growth Gross profit ($mm) Mgmt. 16% 16% 15% Mgmt. $577 $668 $770 Street 16% 13% 12% Street $577 $658 $741 Operating expenses ($mm) Adjusted EBITDA¹ ($mm) $404 $386 $338 $330 $306 $365 $271 $355 $347 $311 $307 $270 CY21E CY22E CY23E CY21E CY22E CY23E % sales % margin Mgmt. 40% 38% 35% Mgmt. 35% 37% 39% Street 40% 40% 40% Street 35% 36% 36% 2 Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31 ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $55.75 $54.50 $45.75 $45.00³ $41.50 Nordic offer: $41.00 $34.50 Current share price: $37.77 $35.75 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.25 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 3 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/13/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 8.75%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $55.75 $54.50 $45.75 $45.00³ $41.50 Nordic offer: $41.00 $34.50 Current share price: $37.77 $35.75 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.25 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 3 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/13/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 8.75%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21
Public company trading and operating metrics For reference only For reference only For reference only For reference only Revenue CAGR Revenue growth Gross margin EBITDA margin FV / EBITDA Firm value CY19A – CY21E CY22E CY22E CY22E CY22E ($bn) Street Unaffected¹ 4 $5.9 9% 12% 76% 36% 18.8x 23.4x Street Current 4 $6.7 10% 13% 75% 36% 21.5x 26.7x (For reference only) Management 10% 16% 74% 37% $6.7 18% 10% 84% 36% 24.3x $17.1 8% 10% 71% 36% 23.5x $17.1 3 12% 9% N/A 50% 19.0x $15.1 3 NA 12% 10% 65% 23% 15.1x $14.6 15% 16% 74% 23% 26.6x $4.4 17% 16% 75% 28% 19.1x $4.0 12% 12% 80% 42% 21.0x $4.0 26% 24% 17.8x $7.2 11% 15% 2 57% 34% 23.4x $6.8 2% 8% 50% 22% 25.9x $7.2 11% 14% Source: Company filings, Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; Sorted by firm value within groupings; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 2 3 4 ¹ Unaffected market date as of 07/26/21; Represents organic growth, which excludes revenue from WageWorks acquisition; Not reported; Adjusted EBITDA burdened by capitalized software (2022E capitalized software calculated as 3-yr historical average), for reference only. Inovalon EBITDA reflects adjusted EBITDA which excludes SBC, acquisition costs, and other non-comparable items 4 Healthcare tech SoftwarePublic company trading and operating metrics For reference only For reference only For reference only For reference only Revenue CAGR Revenue growth Gross margin EBITDA margin FV / EBITDA Firm value CY19A – CY21E CY22E CY22E CY22E CY22E ($bn) Street Unaffected¹ 4 $5.9 9% 12% 76% 36% 18.8x 23.4x Street Current 4 $6.7 10% 13% 75% 36% 21.5x 26.7x (For reference only) Management 10% 16% 74% 37% $6.7 18% 10% 84% 36% 24.3x $17.1 8% 10% 71% 36% 23.5x $17.1 3 12% 9% N/A 50% 19.0x $15.1 3 NA 12% 10% 65% 23% 15.1x $14.6 15% 16% 74% 23% 26.6x $4.4 17% 16% 75% 28% 19.1x $4.0 12% 12% 80% 42% 21.0x $4.0 26% 24% 17.8x $7.2 11% 15% 2 57% 34% 23.4x $6.8 2% 8% 50% 22% 25.9x $7.2 11% 14% Source: Company filings, Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; Sorted by firm value within groupings; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 2 3 4 ¹ Unaffected market date as of 07/26/21; Represents organic growth, which excludes revenue from WageWorks acquisition; Not reported; Adjusted EBITDA burdened by capitalized software (2022E capitalized software calculated as 3-yr historical average), for reference only. Inovalon EBITDA reflects adjusted EBITDA which excludes SBC, acquisition costs, and other non-comparable items 4 Healthcare tech Software
Transaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers For 13.9x reference only¹ 11.1x ~10.0x 9.3x 9.1x Implied FV / NTM Revenue based on Nordic offer: 8.5x² 8.1x 7.6x 7.8x 8.1x 7.9x 7.8x 7.0x 6.6x 6.3x 6.2x 5.2x 4.0x Target Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.2 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 10% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 5 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release, reflects transaction value of $7bn and pro forma revenue of $700mm+; ² NTM as of 08/03/21, reflects Ocala FV / NTM Revenue based on Ocala management case and at Nordic’s offer price of $41 / shareTransaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers For 13.9x reference only¹ 11.1x ~10.0x 9.3x 9.1x Implied FV / NTM Revenue based on Nordic offer: 8.5x² 8.1x 7.6x 7.8x 8.1x 7.9x 7.8x 7.0x 6.6x 6.3x 6.2x 5.2x 4.0x Target Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.2 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 10% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 5 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release, reflects transaction value of $7bn and pro forma revenue of $700mm+; ² NTM as of 08/03/21, reflects Ocala FV / NTM Revenue based on Ocala management case and at Nordic’s offer price of $41 / share
Discounted cash flow analysis Ocala management case FYE of 12/31, ($mm) CY21E CY22E CY23E CY24E CY25E CY26E CY27E CY28E CY29E CY30E Terminal year Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,212 % growth 16.1% 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% 3.5% Adjusted EBITDA¹ $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $949 % margin 35% 37% 39% 41% 43% 43% 43% 43% 43% 43% 43% EBIT 153 210 284 372 474 546 620 692 749 786 814 % margin 20% 23% 27% 31% 34% 35% 35% 36% 36% 37% 37% Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (228) % tax rate 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% EBIAT $110 $151 $205 $268 $341 $393 $446 $498 $539 $566 $586 % margin 14% 17% 20% 22% 25% 25% 25% 26% 26% 26% 26% Plus: D&A 118 120 120 120 120 129 135 138 137 131 135 % of capex 181% 185% 185% 160% 139% 131% 123% 114% 106% 98% 98% Less: SBC, net of tax (23) (25) (25) (25) (25) (29) (32) (35) (38) (39) (40) % of sales 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% Less: Capex (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (138) % of sales 8% 7% 6% 6% 6% 6% 6% 6% 6% 6% 6% Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) % change in sales 14% 14% 15% 15% 15% 15% 15% 15% 15% 15% 15% Unlevered free cash flow $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $532 % margin 16% 18% 21% 22% 23% 23% 23% 23% 24% 24% 24% Terminal growth rate 3.00% 3.50% 4.00% Discount rate 7.75% 8.25% 8.75% 7.75% 8.25% 8.75% 7.75% 8.25% 8.75% PV of cash flows $2,164 $2,113 $2,064 $2,166 $2,114 $2,065 $2,167 $2,116 $2,066 PV of terminal value 5,702 4,950 4,338 6,431 5,521 4,794 7,355 6,227 5,347 Terminal value % of total value 72% 70% 68% 75% 72% 70% 77% 75% 72% Firm value $7,866 $7,063 $6,401 $8,596 $7,636 $6,859 $9,522 $8,343 $7,414 Equity value 7,055 6,252 5,590 7,785 6,824 6,048 8,710 7,531 6,602 Implied share price $45.00 $40.00 $35.75 $49.75 $43.50 $38.75 $55.75 $48.25 $42.25 FV / 2022E Revenue multiple 8.7x 7.8x 7.1x 9.5x 8.5x 7.6x 10.6x 9.3x 8.2x FV / 2022E Adj. EBITDA¹ multiple 23.9x 21.4x 19.4x 26.1x 23.2x 20.8x 28.9x 25.3x 22.5x Implied TV / terminal Adj. EBITDA¹ 11.8x 10.7x 9.8x 13.2x 11.8x 10.7x 14.9x 13.1x 11.8x 6 Source: Ocala management; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; Implied share prices rounded to the nearest $0.25 Reflects total net debt as of 08/03/21; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items DCF analysis ($mm) Free cash f low ($mm)Discounted cash flow analysis Ocala management case FYE of 12/31, ($mm) CY21E CY22E CY23E CY24E CY25E CY26E CY27E CY28E CY29E CY30E Terminal year Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,212 % growth 16.1% 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% 3.5% Adjusted EBITDA¹ $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $949 % margin 35% 37% 39% 41% 43% 43% 43% 43% 43% 43% 43% EBIT 153 210 284 372 474 546 620 692 749 786 814 % margin 20% 23% 27% 31% 34% 35% 35% 36% 36% 37% 37% Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (228) % tax rate 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% EBIAT $110 $151 $205 $268 $341 $393 $446 $498 $539 $566 $586 % margin 14% 17% 20% 22% 25% 25% 25% 26% 26% 26% 26% Plus: D&A 118 120 120 120 120 129 135 138 137 131 135 % of capex 181% 185% 185% 160% 139% 131% 123% 114% 106% 98% 98% Less: SBC, net of tax (23) (25) (25) (25) (25) (29) (32) (35) (38) (39) (40) % of sales 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% Less: Capex (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (138) % of sales 8% 7% 6% 6% 6% 6% 6% 6% 6% 6% 6% Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) % change in sales 14% 14% 15% 15% 15% 15% 15% 15% 15% 15% 15% Unlevered free cash flow $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $532 % margin 16% 18% 21% 22% 23% 23% 23% 23% 24% 24% 24% Terminal growth rate 3.00% 3.50% 4.00% Discount rate 7.75% 8.25% 8.75% 7.75% 8.25% 8.75% 7.75% 8.25% 8.75% PV of cash flows $2,164 $2,113 $2,064 $2,166 $2,114 $2,065 $2,167 $2,116 $2,066 PV of terminal value 5,702 4,950 4,338 6,431 5,521 4,794 7,355 6,227 5,347 Terminal value % of total value 72% 70% 68% 75% 72% 70% 77% 75% 72% Firm value $7,866 $7,063 $6,401 $8,596 $7,636 $6,859 $9,522 $8,343 $7,414 Equity value 7,055 6,252 5,590 7,785 6,824 6,048 8,710 7,531 6,602 Implied share price $45.00 $40.00 $35.75 $49.75 $43.50 $38.75 $55.75 $48.25 $42.25 FV / 2022E Revenue multiple 8.7x 7.8x 7.1x 9.5x 8.5x 7.6x 10.6x 9.3x 8.2x FV / 2022E Adj. EBITDA¹ multiple 23.9x 21.4x 19.4x 26.1x 23.2x 20.8x 28.9x 25.3x 22.5x Implied TV / terminal Adj. EBITDA¹ 11.8x 10.7x 9.8x 13.2x 11.8x 10.7x 14.9x 13.1x 11.8x 6 Source: Ocala management; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; Implied share prices rounded to the nearest $0.25 Reflects total net debt as of 08/03/21; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items DCF analysis ($mm) Free cash f low ($mm)
Appendix 7Appendix 7
Ocala forecast assumptions n Ocala management has provided J.P. Morgan a financial plan for fiscal years 2021E–2023E, an extrapolation plan for 2024E–2030E, and terminal year (“Ocala management case”) Source n Revenue: n 2021E–2025E: Grows at 16% in 2021E and 2022E and then 15% in 2023E, 2024E, and 2025E, respectively n 2026E–2030E: Growth linearly slows down from management estimate for 2025E of 15% and then decelerates to 3.5% by 2030E; terminal growth rate Revenue and provided by Ocala management profitability n Adjusted EBITDA¹ margin : assumptions n 2021E–2025E: 35%, 37%, 39%, 41%, and 43%, respectively n 2026E–2030E: Held flat at 43% through the forecast period n D&A as a % of capex decreases from 181% to 139% from 2021E–2025E and then from 2025E–2030E declines linearly from 139% to 98% n Stock-based compensation as a % of sales is 4% in each of 2021E and 2022E, then 3% from 2023E–2025E, and then held flat at 3% through the forecast period Other n Capex as a % of sales is 8% and 7% in 2021E and 2022E, respectively, and then held flat at 2023E of 6% through the forecast period n Change in net working capital as % of change in sales is 14% in each of 2021E and 2022E and then held flat at 2023E of 15% through the forecast period n Tax rate held constant at 28% through the entire forecast period 8 Source: Ocala management; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable itemsOcala forecast assumptions n Ocala management has provided J.P. Morgan a financial plan for fiscal years 2021E–2023E, an extrapolation plan for 2024E–2030E, and terminal year (“Ocala management case”) Source n Revenue: n 2021E–2025E: Grows at 16% in 2021E and 2022E and then 15% in 2023E, 2024E, and 2025E, respectively n 2026E–2030E: Growth linearly slows down from management estimate for 2025E of 15% and then decelerates to 3.5% by 2030E; terminal growth rate Revenue and provided by Ocala management profitability n Adjusted EBITDA¹ margin : assumptions n 2021E–2025E: 35%, 37%, 39%, 41%, and 43%, respectively n 2026E–2030E: Held flat at 43% through the forecast period n D&A as a % of capex decreases from 181% to 139% from 2021E–2025E and then from 2025E–2030E declines linearly from 139% to 98% n Stock-based compensation as a % of sales is 4% in each of 2021E and 2022E, then 3% from 2023E–2025E, and then held flat at 3% through the forecast period Other n Capex as a % of sales is 8% and 7% in 2021E and 2022E, respectively, and then held flat at 2023E of 6% through the forecast period n Change in net working capital as % of change in sales is 14% in each of 2021E and 2022E and then held flat at 2023E of 15% through the forecast period n Tax rate held constant at 28% through the entire forecast period 8 Source: Ocala management; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Key updates to J.P Morgan’s analyses of Ocala June 2021 August 2021 Board presentation (Current) n Management provided projections (May 2021)n Management provided projections (August 2021) Management model n Valuation date: 03/31/21n Valuation date: 08/03/21 n 18.0–22.0x CY22E FV / Adj. EBITDAn 18.5–24.0x CY22E FV / Adj. EBITDA Trading multiples n 7.0–11.0x FV / NTM Revenuen No change Transactions multiples n Discount rate: 7.75–8.75%n Discount rate: No change n Beta range: 0.90–1.30n Beta range: No change n Risk free rate: 1.63%n Risk free rate: 1.31% Discounted cash flow Equity risk premium range: 6.00–7.00% Equity risk premium range: 6.25–7.25% nn n Cost of debt: 4.18%n Cost of debt: 3.98% n Terminal growth rate: 3.0–4.0%n Terminal growth rate: No change 9Key updates to J.P Morgan’s analyses of Ocala June 2021 August 2021 Board presentation (Current) n Management provided projections (May 2021)n Management provided projections (August 2021) Management model n Valuation date: 03/31/21n Valuation date: 08/03/21 n 18.0–22.0x CY22E FV / Adj. EBITDAn 18.5–24.0x CY22E FV / Adj. EBITDA Trading multiples n 7.0–11.0x FV / NTM Revenuen No change Transactions multiples n Discount rate: 7.75–8.75%n Discount rate: No change n Beta range: 0.90–1.30n Beta range: No change n Risk free rate: 1.63%n Risk free rate: 1.31% Discounted cash flow Equity risk premium range: 6.00–7.00% Equity risk premium range: 6.25–7.25% nn n Cost of debt: 4.18%n Cost of debt: 3.98% n Terminal growth rate: 3.0–4.0%n Terminal growth rate: No change 9
Discount rate analysis Discount rate summary Capital structure benchmarks Market cap Debt/ Levered beta Relevered Risk free rate¹ 1.31% Company ($mm) total cap Barra Historical historical² Equity risk premium 6.25% ― 7.25% Software Other software Levered beta 0.90 ― 1.30 PTC inc. $15,938 8.5% 1.254 1.609 1.603 NICE 17,771 4.0% 0.978 N/A N/A Cost of equity 6.9% ― 10.7% Black Knight 12,139 17.1% 0.875 0.853 0.792 GoDaddy 11,787 25.0% 1.094 1.283 1.117 Pre-tax cost of debt 4.0% Datto 4,605 0.0% 1.052 1.092 1.179 Post-tax cost of debt 2.9% Mimecast 4,240 2.4% 1.116 1.239 1.310 Qualys 4,489 0.0% 0.890 0.706 0.762 Debt/total cap target 10.0% Healthcare tech Calculated discount rate 6.5% ― 9.9% R1 RCM $6,546 11.1% 1.244 1.210 1.172 Health Equity 5,953 14.2% 1.293 1.681 1.626 Selected discount rate 7.75% ― 8.75% Omnicell 7,035 7.6% 0.964 1.202 1.226 Ocala³ $5,108 14.8% 0.972 1.011 0.971 Source: FactSet, Alacra Barra Beta, J.P. Morgan estimates Note: Market data as of 08/13/21; ¹ U.S. 10-year treasury bond yield as of 07/15/21; ² Historical levered beta is implied based on unlevering beta for each respective company based on their current capital structure and relevering beta based on debt/total cap target of 10.0% and 28.0% tax rate; ³ Reflects as of unaffected market date on 07/26/21 10
Summary valuation perspectives of Ocala (as presented at June 9, 2021 Board Meeting) Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 11 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21Summary valuation perspectives of Ocala (as presented at June 9, 2021 Board Meeting) Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 11 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21
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Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. 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Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan's policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan is a party to the SEC Research Settlement and as such, is generally not permitted to utilize the firm's research capabilities in pitching for investment banking business. All views contained in this presentation are the views of J.P. 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Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is a marketing name for investment businesses of JPMorgan Chase & Co. and its subsidiaries and affiliates worldwide. Securities, syndicated loan arranging, financial advisory, lending, derivatives and other investment banking and commercial banking activities are performed by a combination of J.P. Morgan Securities LLC, J.P. Morgan Securities plc, J.P. Morgan AG, JPMorgan Chase Bank, N.A. and the appropriately licensed subsidiaries and affiliates of JPMorgan Chase & Co. worldwide. J.P. Morgan deal team members may be employees of any of the foregoing entities. J.P. 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Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. Copyright 2021 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A., organized under the laws of U.S.A. with limited liability. 12
Exhibit C.VI Project Ocala Board Materials August 18, 2021 0Exhibit C.VI Project Ocala Board Materials August 18, 2021 0
Offer summary Nordic proposal¹ Current (08/18/2021)² Unaffected trading (07/26/2021)³ $mm, except per share data Implied price per share $41.00 $37.22 $32.71 Premiums / (discount) to: Unaffected share price of $32.71 as of 07/26/21 25% 14% – Current share price of $37.22 as of 08/18/21 10% – (12%) 52-week high of $34.47 19% 8% (5%) 30-day VWAP of $32.95 24% 13% (1%) 90-day VWAP of $30.74 33% 21% 6% Equity value $6,414 $5,829 $5,108 Firm value $7,225 $6,596 $5,865 Metric FV / CY22E Revenue (Ocala management case) $902 8.0x 7.3x 6.5x FV / CY22E Adj. EBITDA⁴ (Ocala management case) $330 21.9x 20.0x 17.8x 1 Source: FactSet; Ocala management; Company filings; Note: Market data as of unaffected share price on 07/26/21, unless noted otherwise; ¹ Net debt balance and fully diluted shares outstanding as of 08/03/21 per Ocala management ² Net debt balance and fully diluted shares outstanding as of 06/30/21; ³ Net debt balance and fully diluted shares outstanding as of 03/31/21; ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable itemsOffer summary Nordic proposal¹ Current (08/18/2021)² Unaffected trading (07/26/2021)³ $mm, except per share data Implied price per share $41.00 $37.22 $32.71 Premiums / (discount) to: Unaffected share price of $32.71 as of 07/26/21 25% 14% – Current share price of $37.22 as of 08/18/21 10% – (12%) 52-week high of $34.47 19% 8% (5%) 30-day VWAP of $32.95 24% 13% (1%) 90-day VWAP of $30.74 33% 21% 6% Equity value $6,414 $5,829 $5,108 Firm value $7,225 $6,596 $5,865 Metric FV / CY22E Revenue (Ocala management case) $902 8.0x 7.3x 6.5x FV / CY22E Adj. EBITDA⁴ (Ocala management case) $330 21.9x 20.0x 17.8x 1 Source: FactSet; Ocala management; Company filings; Note: Market data as of unaffected share price on 07/26/21, unless noted otherwise; ¹ Net debt balance and fully diluted shares outstanding as of 08/03/21 per Ocala management ² Net debt balance and fully diluted shares outstanding as of 06/30/21; ³ Net debt balance and fully diluted shares outstanding as of 03/31/21; ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Ocala financial forecast comparison Ocala management case Street consensus (for reference only) Revenue ($mm) Gross margin (%) $1,040 76% 76% 75% $902 $973 75% 74% 74% $775 $870 $773 CY21E CY22E CY23E CY21E CY22E CY23E % growth Gross profit ($mm) Mgmt. 16% 16% 15% Mgmt. $577 $668 $770 Street 16% 13% 12% Street $577 $658 $741 Operating expenses ($mm) Adjusted EBITDA¹ ($mm) $404 $386 $338 $330 $306 $365 $271 $355 $347 $311 $307 $270 CY21E CY22E CY23E CY21E CY22E CY23E % sales % margin Mgmt. 40% 38% 35% Mgmt. 35% 37% 39% Street 40% 40% 40% Street 35% 36% 36% 2 Source: Ocala management; FactSet as of 08/18/21; Note: Ocala FYE of 12/31 ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable itemsOcala financial forecast comparison Ocala management case Street consensus (for reference only) Revenue ($mm) Gross margin (%) $1,040 76% 76% 75% $902 $973 75% 74% 74% $775 $870 $773 CY21E CY22E CY23E CY21E CY22E CY23E % growth Gross profit ($mm) Mgmt. 16% 16% 15% Mgmt. $577 $668 $770 Street 16% 13% 12% Street $577 $658 $741 Operating expenses ($mm) Adjusted EBITDA¹ ($mm) $404 $386 $338 $330 $306 $365 $271 $355 $347 $311 $307 $270 CY21E CY22E CY23E CY21E CY22E CY23E % sales % margin Mgmt. 40% 38% 35% Mgmt. 35% 37% 39% Street 40% 40% 40% Street 35% 36% 36% 2 Source: Ocala management; FactSet as of 08/18/21; Note: Ocala FYE of 12/31 ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $54.50 $51.75 $45.75 $45.00³ $41.25 Nordic offer: $41.00 $34.50 Current share price: $37.22 $34.00 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.00 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 8.00%–9.00% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/18/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 3 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/18/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 9.00%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21Summary valuation perspectives of Ocala Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $54.50 $51.75 $45.75 $45.00³ $41.25 Nordic offer: $41.00 $34.50 Current share price: $37.22 $34.00 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.00 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 8.00%–9.00% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/18/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 3 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/18/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 9.00%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21
Public company trading and operating metrics For reference only For reference only For reference only For reference only Revenue CAGR Revenue growth Gross margin EBITDA margin FV / EBITDA Firm value CY19A – CY21E CY22E CY22E CY22E CY22E ($bn) Street Unaffected¹ 4 9% 12% 76% 36% 18.8x 23.4x $5.9 Street Current 4 10% 13% 75% 36% 21.2x 26.4x $6.6 (For reference only) Management 10% 16% 74% 37% $6.6 $17.4 8% 10% 71% 36% 24.1x $16.4 18% 10% 84% 36% 23.3x $14.9 3 12% 9% N/A 49% 18.8x $14.3 3 NA 12% 10% 65% 23% 14.8x $4.3 15% 16% 74% 23% 25.6x $3.9 12% 12% 81% 42% 20.5x $3.9 17% 16% 75% 28% 18.5x $7.1 50% 22% 25.6x 11% 14% $7.1 26% 24% 17.4x 11% 15% 2 57% 34% 21.7x $6.3 2% 8% Source: Company filings, Ocala management; FactSet as of 08/18/21; Note: Ocala FYE of 12/31; Sorted by firm value within groupings; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 2 3 4 ¹ Unaffected market date as of 07/26/21; Represents organic growth, which excludes revenue from WageWorks acquisition; Not reported; Adjusted EBITDA burdened by capitalized software (2022E capitalized software calculated as 3-yr historical average), for reference only. Inovalon EBITDA reflects adjusted EBITDA which excludes SBC, acquisition costs, and other non-comparable items 4 Healthcare tech Software
Transaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers For 13.9x reference only¹ 11.1x ~10.0x 9.3x 9.1x Implied FV / NTM Revenue based on Nordic offer: 8.5x² 8.1x 7.6x 7.8x 8.1x 7.9x 7.8x 7.0x 6.6x 6.3x 6.2x 5.2x 4.0x Target Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.2 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 10% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 5 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release, reflects transaction value of $7bn and pro forma revenue of $700mm+; ² NTM as of 08/03/21, reflects Ocala FV / NTM Revenue based on Ocala management case and at Nordic’s offer price of $41 / shareTransaction multiples FV / NTM Revenue Strategic buyers Sponsor buyers For 13.9x reference only¹ 11.1x ~10.0x 9.3x 9.1x Implied FV / NTM Revenue based on Nordic offer: 8.5x² 8.1x 7.6x 7.8x 8.1x 7.9x 7.8x 7.0x 6.6x 6.3x 6.2x 5.2x 4.0x Target Acquirer Announce Date Jun-21 Apr-21 Apr-21 Aug-19 Jun-19 Jun-19 Oct-18 Jun-18 Jan-18 Apr-21 Dec-20 Nov-20 Feb-20 Oct-19 Feb-19 Feb-19 Nov-18 Firm value (bn) $7.0bn $8.5 $19.6 $2.1 $6.0 $15.7 $33.4 $5.0 $2.3 $11.3 $10.2 $1.6 $1.5 $3.8 $10.7 $3.3 $1.8 NTM Rev. growth NA 10% (3%) 14% 17% 18% 15% 5% 18% 14% 13% 8% 13% 12% 19% 5% 17% 5 Source: Company filings, FactSet, Broker research; Note: All analyses marked as “for reference only” are illustrative and presented for informational purposes only; ¹ For reference only, as sources are estimates based on press release, reflects transaction value of $7bn and pro forma revenue of $700mm+; ² NTM as of 08/03/21, reflects Ocala FV / NTM Revenue based on Ocala management case and at Nordic’s offer price of $41 / share
Discounted cash flow analysis Ocala management case FYE of 12/31, ($mm) CY21E CY22E CY23E CY24E CY25E CY26E CY27E CY28E CY29E CY30E Terminal year Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,212 % growth 16.1% 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% 3.5% Adjusted EBITDA¹ $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $949 % margin 35% 37% 39% 41% 43% 43% 43% 43% 43% 43% 43% EBIT 153 210 284 372 474 546 620 692 749 786 814 % margin 20% 23% 27% 31% 34% 35% 35% 36% 36% 37% 37% Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (228) % tax rate 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% 28% EBIAT $110 $151 $205 $268 $341 $393 $446 $498 $539 $566 $586 % margin 14% 17% 20% 22% 25% 25% 25% 26% 26% 26% 26% Plus: D&A 118 120 120 120 120 129 135 138 137 131 135 % of capex 181% 185% 185% 160% 139% 131% 123% 114% 106% 98% 98% Less: SBC, net of tax (23) (25) (25) (25) (25) (29) (32) (35) (38) (39) (40) % of sales 3% 3% 2% 2% 2% 2% 2% 2% 2% 2% 2% Less: Capex (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (138) % of sales 8% 7% 6% 6% 6% 6% 6% 6% 6% 6% 6% Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) % change in sales 14% 14% 15% 15% 15% 15% 15% 15% 15% 15% 15% Unlevered free cash flow $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $532 % margin 16% 18% 21% 22% 23% 23% 23% 23% 24% 24% 24% Terminal growth rate 3.00% 3.50% 4.00% Discount rate 8.00% 8.50% 9.00% 8.00% 8.50% 9.00% 8.00% 8.50% 9.00% PV of cash flows $2,138 $2,088 $2,039 $2,140 $2,089 $2,041 $2,141 $2,091 $2,042 PV of terminal value 5,306 4,629 4,073 5,949 5,138 4,484 6,754 5,761 4,977 Terminal value % of total value 71% 69% 67% 74% 71% 69% 76% 73% 71% Firm value $7,444 $6,717 $6,112 $8,089 $7,228 $6,525 $8,895 $7,852 $7,019 Equity value 6,633 5,906 5,301 7,278 6,416 5,713 8,084 7,041 6,208 Implied share price $42.50 $37.75 $34.00 $46.50 $41.00 $36.50 $51.75 $45.00 $39.75 FV / 2022E Revenue multiple 8.3x 7.4x 6.8x 9.0x 8.0x 7.2x 9.9x 8.7x 7.8x FV / 2022E Adj. EBITDA¹ multiple 22.6x 20.4x 18.5x 24.5x 21.9x 19.8x 27.0x 23.8x 21.3x Implied TV / terminal Adj. EBITDA¹ 11.2x 10.2x 9.4x 12.4x 11.2x 10.2x 14.0x 12.4x 11.2x 6 Source: Ocala management; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; Implied share prices rounded to the nearest $0.25 Reflects total net debt as of 08/03/21; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items DCF analysis ($mm) Free cash f low ($mm)
Appendix 7Appendix 7
Ocala forecast assumptions n Ocala management has provided J.P. Morgan a financial plan for fiscal years 2021E–2023E, an extrapolation plan for 2024E–2030E, and terminal year (“Ocala management case”) Source n Revenue: n 2021E–2025E: Grows at 16% in 2021E and 2022E and then 15% in 2023E, 2024E, and 2025E, respectively n 2026E–2030E: Growth linearly slows down from management estimate for 2025E of 15% and then decelerates to 3.5% by 2030E; terminal growth rate Revenue and provided by Ocala management profitability n Adjusted EBITDA¹ margin : assumptions n 2021E–2025E: 35%, 37%, 39%, 41%, and 43%, respectively n 2026E–2030E: Held flat at 43% through the forecast period n D&A as a % of capex decreases from 181% to 139% from 2021E–2025E and then from 2025E–2030E declines linearly from 139% to 98% n Stock-based compensation as a % of sales is 4% in each of 2021E and 2022E, then 3% from 2023E–2025E, and then held flat at 3% through the forecast period Other n Capex as a % of sales is 8% and 7% in 2021E and 2022E, respectively, and then held flat at 2023E of 6% through the forecast period n Change in net working capital as % of change in sales is 14% in each of 2021E and 2022E and then held flat at 2023E of 15% through the forecast period n Tax rate held constant at 28% through the entire forecast period 8 Source: Ocala management; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable itemsOcala forecast assumptions n Ocala management has provided J.P. Morgan a financial plan for fiscal years 2021E–2023E, an extrapolation plan for 2024E–2030E, and terminal year (“Ocala management case”) Source n Revenue: n 2021E–2025E: Grows at 16% in 2021E and 2022E and then 15% in 2023E, 2024E, and 2025E, respectively n 2026E–2030E: Growth linearly slows down from management estimate for 2025E of 15% and then decelerates to 3.5% by 2030E; terminal growth rate Revenue and provided by Ocala management profitability n Adjusted EBITDA¹ margin : assumptions n 2021E–2025E: 35%, 37%, 39%, 41%, and 43%, respectively n 2026E–2030E: Held flat at 43% through the forecast period n D&A as a % of capex decreases from 181% to 139% from 2021E–2025E and then from 2025E–2030E declines linearly from 139% to 98% n Stock-based compensation as a % of sales is 4% in each of 2021E and 2022E, then 3% from 2023E–2025E, and then held flat at 3% through the forecast period Other n Capex as a % of sales is 8% and 7% in 2021E and 2022E, respectively, and then held flat at 2023E of 6% through the forecast period n Change in net working capital as % of change in sales is 14% in each of 2021E and 2022E and then held flat at 2023E of 15% through the forecast period n Tax rate held constant at 28% through the entire forecast period 8 Source: Ocala management; ¹ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items
Key updates to J.P Morgan’s analyses of Ocala June 9, 2021 August 17, 2021 August 18, 2021 Board presentation Board presentation (Current) n Management provided projections n Management provided projections No change n (May 2021) (August 2021) Management model n No change n Valuation date: 03/31/21n Valuation date: 08/03/21 Trading multiplesn 18.0–22.0x CY22E FV / Adj. EBITDAn 18.5–24.0x CY22E FV / Adj. EBITDAn No change Transactions multiplesn 7.0–11.0x FV / NTM Revenuen No changen No change n Discount rate: 7.75–8.75%n Discount rate: No changen Discount rate: 8.00–9.00% n Beta range: 0.90–1.30n Beta range: No changen Beta range: No change n Risk free rate: 1.63%n Risk free rate: 1.31%n Risk free rate: 1.26% Discounted cash flow n Equity risk premium range: 6.00–7.00%n Equity risk premium range: 6.25–7.25%n Equity risk premium range: 6.50–7.50% n Cost of debt: 4.18%n Cost of debt: 3.98%n Cost of debt: No change n Terminal growth rate: 3.0–4.0%n Terminal growth rate: No changen Terminal growth rate: No change 9Key updates to J.P Morgan’s analyses of Ocala June 9, 2021 August 17, 2021 August 18, 2021 Board presentation Board presentation (Current) n Management provided projections n Management provided projections No change n (May 2021) (August 2021) Management model n No change n Valuation date: 03/31/21n Valuation date: 08/03/21 Trading multiplesn 18.0–22.0x CY22E FV / Adj. EBITDAn 18.5–24.0x CY22E FV / Adj. EBITDAn No change Transactions multiplesn 7.0–11.0x FV / NTM Revenuen No changen No change n Discount rate: 7.75–8.75%n Discount rate: No changen Discount rate: 8.00–9.00% n Beta range: 0.90–1.30n Beta range: No changen Beta range: No change n Risk free rate: 1.63%n Risk free rate: 1.31%n Risk free rate: 1.26% Discounted cash flow n Equity risk premium range: 6.00–7.00%n Equity risk premium range: 6.25–7.25%n Equity risk premium range: 6.50–7.50% n Cost of debt: 4.18%n Cost of debt: 3.98%n Cost of debt: No change n Terminal growth rate: 3.0–4.0%n Terminal growth rate: No changen Terminal growth rate: No change 9
Discount rate analysis Discount rate summary Capital structure benchmarks Market cap Debt/ Levered beta Relevered Risk free rate¹ 1.26% Company ($mm) total cap Barra Historical historical² Equity risk premium 6.50% ― 7.50% Software Other software Levered beta 0.90 ― 1.30 PTC inc. $15,281 8.9% 1.254 1.609 1.597 NICE 18,117 4.0% 0.978 N/A N/A Cost of equity 7.1% ― 11.0% Black Knight 11,914 17.4% 0.875 0.853 0.791 GoDaddy 11,470 25.6% 1.094 1.285 1.113 Pre-tax cost of debt 4.0% Datto 4,436 0.0% 1.052 1.092 1.179 Post-tax cost of debt 2.9% Mimecast 4,123 2.4% 1.116 1.230 1.300 Qualys 4,392 0.0% 0.890 0.709 0.766 Debt/total cap target 10.0% Healthcare tech Calculated discount rate 6.7% ― 10.2% R1 RCM $6,383 11.4% 1.244 1.203 1.163 Health Equity 5,460 15.3% 1.293 1.682 1.611 Selected discount rate 8.00% ― 9.00% Omnicell 6,955 7.6% 0.964 1.203 1.227 Ocala³ $5,108 14.8% 0.972 1.011 0.971 Source: FactSet, Alacra Barra Beta, J.P. Morgan estimates Note: Market data as of 08/18/21; ¹ U.S. 10-year treasury bond yield as of 08/16/21; ² Historical levered beta is implied based on unlevering beta for each respective company based on their current capital structure and relevering beta based on debt/total cap target of 10.0% and 28.0% tax rate; ³ Reflects as of unaffected market date on 07/26/21 10Discount rate analysis Discount rate summary Capital structure benchmarks Market cap Debt/ Levered beta Relevered Risk free rate¹ 1.26% Company ($mm) total cap Barra Historical historical² Equity risk premium 6.50% ― 7.50% Software Other software Levered beta 0.90 ― 1.30 PTC inc. $15,281 8.9% 1.254 1.609 1.597 NICE 18,117 4.0% 0.978 N/A N/A Cost of equity 7.1% ― 11.0% Black Knight 11,914 17.4% 0.875 0.853 0.791 GoDaddy 11,470 25.6% 1.094 1.285 1.113 Pre-tax cost of debt 4.0% Datto 4,436 0.0% 1.052 1.092 1.179 Post-tax cost of debt 2.9% Mimecast 4,123 2.4% 1.116 1.230 1.300 Qualys 4,392 0.0% 0.890 0.709 0.766 Debt/total cap target 10.0% Healthcare tech Calculated discount rate 6.7% ― 10.2% R1 RCM $6,383 11.4% 1.244 1.203 1.163 Health Equity 5,460 15.3% 1.293 1.682 1.611 Selected discount rate 8.00% ― 9.00% Omnicell 6,955 7.6% 0.964 1.203 1.227 Ocala³ $5,108 14.8% 0.972 1.011 0.971 Source: FactSet, Alacra Barra Beta, J.P. Morgan estimates Note: Market data as of 08/18/21; ¹ U.S. 10-year treasury bond yield as of 08/16/21; ² Historical levered beta is implied based on unlevering beta for each respective company based on their current capital structure and relevering beta based on debt/total cap target of 10.0% and 28.0% tax rate; ³ Reflects as of unaffected market date on 07/26/21 10
Summary valuation perspectives of Ocala (as presented at August 17, 2021 Board Meeting) Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $55.75 $54.50 $45.75 $45.00³ $41.50 Nordic offer: $41.00 $34.50 Current share price: $37.77 $35.75 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.25 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 11 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/13/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 8.75%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21Summary valuation perspectives of Ocala (as presented at August 17, 2021 Board Meeting) Implied equity value per share For reference only For reference only Discounted PV of analyst Transaction 52-week range¹ Trading multiples price targets² multiples cash flow $55.75 $54.50 $45.75 $45.00³ $41.50 Nordic offer: $41.00 $34.50 Current share price: $37.77 $35.75 $34.00 Unaffected share price: $32.71⁶ $32.75 $23.00³ $21.25 $17.50 Metrics CY22E Adj. EBITDA⁴ ($mm) NTM Revenue ($mm)⁵ Discount rate $330 $849 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA⁴ FV / NTM Revenue Terminal growth 18.5–24.0x 7.0–11.0x 3.0%–4.0% Source: Ocala management; FactSet as of 08/13/21; Note: Ocala FYE of 12/31; DCF assumes valuation date as of 08/03/21; DCF and transaction multiples reflect total net debt and share count as of 08/03/21, Trading multiples reflects total net debt and share count as of 06/30/21; All analyses marked as “for reference only” are illustrative and presented for informational purposes only 11 Share prices rounded to the nearest $0.25; Current share price reflects as of 08/13/21 ¹ Reflects 52-week range as of unaffected date on 07/26/21; ² Discounted one year using cost of equity of 8.75%; ³ Represents actual price targets ⁴ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁵ NTM as of 08/03/21; ⁶ As of unaffected date on 07/26/21
Summary valuation perspectives of Ocala (as presented at June 9, 2021 Board Meeting) Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 12 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21Summary valuation perspectives of Ocala (as presented at June 9, 2021 Board Meeting) Implied equity value per share For reference only For reference only PV of analyst Discounted 52-week range Trading multiples Transaction multiples price targets¹ cash flow $51.75 $49.25 $41.50 $41.00² $37.50 $32.50 $33.00 $31.00 $31.50 $22.00² Current share price: $32.02 $20.25 $17.50 Metrics CY22E Adj. EBITDA³ ($mm) NTM Revenue ($mm)⁴ Discount rate $330 $806 7.75%–8.75% Multiples (x) CY22E FV / Adj. EBITDA³ FV / NTM Revenue Terminal growth 18.0–22.0x 7.0–11.0x 3.0%–4.0% 12 Source: Ocala management; FactSet as of 6/8/21 Note: Ocala FYE of 12/31; PV of analyst price targets and DCF assume valuation date as of 3/31/21; Reflects total debt of $915mm and cash and cash equiv. of $129mm; DCF assumes mid-period discount convention All analyses marked as “for reference only” are illustrative and presented for informational purposes only; Share prices rounded to the nearest $0.25; Current share price reflects as of 6/8/21 ¹ Discounted one year using cost of equity of 9.0%; ² Represents actual price targets; ³ Adjusted EBITDA excludes SBC, acquisition costs, and other non-comparable items; ⁴ NTM as of 3/31/21
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Preliminary Draft (8/10/2021 1PM) - Confidential Exhibit C.VII DRAFT – PRELIMINARY – SUBJECT TO CHANGE Project Ocala Preliminary Discussion Materials Preliminary Draft (8/10/2021 1PM) - Confidential Exhibit C.VII DRAFT – PRELIMINARY – SUBJECT TO CHANGE Project Ocala Preliminary Discussion Materials
Preliminary Draft (8/10/2021 1PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis IIIPreliminary Draft (8/10/2021 1PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis III
Preliminary Draft (8/10/2021 1PM) - Confidential I. Transaction SummaryPreliminary Draft (8/10/2021 1PM) - Confidential I. Transaction Summary
Preliminary Draft (8/10/2021 1PM) - Confidential Summary of Implied Premia and Transaction Multiples Offer Premium to Share Price Transaction Multiples Merger Implied Premium Ocala to Ocala Consideration Share Price Shareholders Offer per Share: $44.00 2 $44.00 Offer per Share: 156.432 Fully Diluted Shares Outstanding $6,883 Equity Value Current Share Price (8/3/21): $38.00 15.8% 2 Plus: Debt 901 Share Price as of 7/26/21: $32.71 34.5% 3 Plus: Capitalized Leases 27 2 Intraday 52-Week High (7/29/21): $38.61 14.0% Less: Cash (89) 1 Intraday 52-Week High (7/13/21): 34.47 27.6% $7,722 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 150.6% 4 Implied Premiums Relative to 8/3/21 Metric Total Enterprise Value To: Multiple 1-Month Average $34.31 28.2% 2021E Revenue $775 10.0x 3-Month Average 32.55 35.2% 2022E Revenue 902 8.6x 6-Month Average 30.18 45.8% 2021E Adjusted EBITDA 271 28.5x 1-Year Average 26.59 65.5% 2022E Adjusted EBITDA 330 23.4x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 32.4% 3-Month Average 31.86 38.1% 6-Month Average 29.59 48.7% 1-Year Average 26.25 67.6% Source: Company filings, Company management projections as of August 2021, FactSet as of 8/3/21 1. Reflects 52-week high as of 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 1Preliminary Draft (8/10/2021 1PM) - Confidential Summary of Implied Premia and Transaction Multiples Offer Premium to Share Price Transaction Multiples Merger Implied Premium Ocala to Ocala Consideration Share Price Shareholders Offer per Share: $44.00 2 $44.00 Offer per Share: 156.432 Fully Diluted Shares Outstanding $6,883 Equity Value Current Share Price (8/3/21): $38.00 15.8% 2 Plus: Debt 901 Share Price as of 7/26/21: $32.71 34.5% 3 Plus: Capitalized Leases 27 2 Intraday 52-Week High (7/29/21): $38.61 14.0% Less: Cash (89) 1 Intraday 52-Week High (7/13/21): 34.47 27.6% $7,722 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 150.6% 4 Implied Premiums Relative to 8/3/21 Metric Total Enterprise Value To: Multiple 1-Month Average $34.31 28.2% 2021E Revenue $775 10.0x 3-Month Average 32.55 35.2% 2022E Revenue 902 8.6x 6-Month Average 30.18 45.8% 2021E Adjusted EBITDA 271 28.5x 1-Year Average 26.59 65.5% 2022E Adjusted EBITDA 330 23.4x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 32.4% 3-Month Average 31.86 38.1% 6-Month Average 29.59 48.7% 1-Year Average 26.25 67.6% Source: Company filings, Company management projections as of August 2021, FactSet as of 8/3/21 1. Reflects 52-week high as of 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 1
Preliminary Draft (8/10/2021 1PM) - Confidential Overview of Buyer Outreach As of 8/2/21 Contact Log 13 9 11 9 14 13 4 4 3 All parties Signed NDAs Management meeting Declined Submitted proposal Source: Contact log as of 8/2/21 2
Preliminary Draft (8/10/2021 1PM) - Confidential Proposal Summary n 7/14/21: $44.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 Offer Per Share n 7/12/21: $43.00n 6/9/21: $38.00-$40.00 n 6/4/21: $36.00-$39.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and co-investors Partners funds and Thoma Partners VIII Bravo XIV ($17.8bn n Includes preferred committed capital) equity financing Equity Financing rd n Includes 3 party equity financing (in discussions with Microsoft) n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Completion during the n No commitment on n 4 weeksn No commitment on week of August 2, specific timing, but can specific timing, but can Timing to Sign 2021 move quickly move quickly Source: Offer letters submitted 3Preliminary Draft (8/10/2021 1PM) - Confidential Proposal Summary n 7/14/21: $44.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 Offer Per Share n 7/12/21: $43.00n 6/9/21: $38.00-$40.00 n 6/4/21: $36.00-$39.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and co-investors Partners funds and Thoma Partners VIII Bravo XIV ($17.8bn n Includes preferred committed capital) equity financing Equity Financing rd n Includes 3 party equity financing (in discussions with Microsoft) n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Completion during the n No commitment on n 4 weeksn No commitment on week of August 2, specific timing, but can specific timing, but can Timing to Sign 2021 move quickly move quickly Source: Offer letters submitted 3
Preliminary Draft (8/10/2021 1PM) - Confidential II. Company OverviewPreliminary Draft (8/10/2021 1PM) - Confidential II. Company Overview
Preliminary Draft (8/10/2021 1PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 preliminary Q4 and quarterly consensus 211.5% results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% 200.0% revenue estimates Conference by 10% 8/1/19: 7/26/21: After market hours, Announced Q2 ’19 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced reported Nordic quarterly consensus 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; stock closed up 6/24/21: ~13% on 100.0% Announced 7/27/21 over 2/21/19: extension of previous close Announced FY’18 customer contract of $32.71 results, missing with Walmart quarterly consensus 55.7% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 May-20 Dec-20 Aug-21 Ocala S&P 500 Source: FactSet (8/3/21), Company filings 4Preliminary Draft (8/10/2021 1PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 preliminary Q4 and quarterly consensus 211.5% results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% 200.0% revenue estimates Conference by 10% 8/1/19: 7/26/21: After market hours, Announced Q2 ’19 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced reported Nordic quarterly consensus 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; stock closed up 6/24/21: ~13% on 100.0% Announced 7/27/21 over 2/21/19: extension of previous close Announced FY’18 customer contract of $32.71 results, missing with Walmart quarterly consensus 55.7% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 May-20 Dec-20 Aug-21 Ocala S&P 500 Source: FactSet (8/3/21), Company filings 4
Preliminary Draft (8/10/2021 1PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Price Prem / (Disc) 1 Broker Date Rating Target to Current 57% 57% 57% 57% 8/2/21 Buy $45.00 18.4% 67% 67% 71% 71% 71% 71% 71% 71% 71% 7/30/21 Sell 23.00 (39.5%) 29% 29% 29% 29% 17% 14% 14% 14% 14% 14% 14% 14% 33% 7/29/21 Buy 45.00 18.4% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 8/20 9/20 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 7/28/21 Buy 45.00 18.4% Sell Rating Hold Rating Buy Rating LTM Price Target vs. Share Price 7/28/21 Buy 45.00 18.4% $50.00 7/28/21 Buy 40.00 5.3% $40.50 $40.00 $38.00 7/28/21 Hold NA NA $30.00 $20.00 Mean $40.50 6.6% $10.00 Median 45.00 18.4% 8/3/20 10/2/20 12/2/20 2/1/21 4/3/21 6/3/21 8/3/21 Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/3/21) 1. Current share price of $38.00 as of 8/3/21 5Preliminary Draft (8/10/2021 1PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Price Prem / (Disc) 1 Broker Date Rating Target to Current 57% 57% 57% 57% 8/2/21 Buy $45.00 18.4% 67% 67% 71% 71% 71% 71% 71% 71% 71% 7/30/21 Sell 23.00 (39.5%) 29% 29% 29% 29% 17% 14% 14% 14% 14% 14% 14% 14% 33% 7/29/21 Buy 45.00 18.4% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 8/20 9/20 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 7/28/21 Buy 45.00 18.4% Sell Rating Hold Rating Buy Rating LTM Price Target vs. Share Price 7/28/21 Buy 45.00 18.4% $50.00 7/28/21 Buy 40.00 5.3% $40.50 $40.00 $38.00 7/28/21 Hold NA NA $30.00 $20.00 Mean $40.50 6.6% $10.00 Median 45.00 18.4% 8/3/20 10/2/20 12/2/20 2/1/21 4/3/21 6/3/21 8/3/21 Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/3/21) 1. Current share price of $38.00 as of 8/3/21 5
Preliminary Draft (8/10/2021 1PM) - Confidential Ocala Financial Projections ($ in millions, except per share data) Revenue '21E - '23E 23E - '25E $1,600 $1,385 CAGR CAGR $1,200 $1,200 12.2% NA $1,040 $973 $902 $870 15.9% 15.4% $773 $775 $800 $400 $0 2021E 2022E 2023E 2024E 2025E Research Projections 12.6% 11.9% NA NA Growth % Management Projections 16.4% 15.4% 15.4% 15.4% Growth % Adj. EBITDA '21E - '23E 23E - '25E $594 $600 CAGR CAGR $492 14.8% NA $404 $450 22.2% 21.2% $356 $330 $311 $270 $271 $300 $150 $0 2021E 2022E 2023E 2024E 2025E Research Projections 34.9% 35.8% 36.5% NA NA Margin % Management Projections 35.0% 36.6% 38.9% 41.0% 42.9% Margin % Research Projections Management Projections Source: FactSet (8/3/21), Company management projections as of August 2021 6
Preliminary Draft (8/10/2021 1PM) - Confidential III. Valuation AnalysisPreliminary Draft (8/10/2021 1PM) - Confidential III. Valuation Analysis
Preliminary Draft (8/10/2021 1PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $44.00 Peer Multiples: 7.0x - 10.0x $775 $5,423 - $7,748 $29.32 $44.19 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $5,410 - $8,115 $29.24 $46.54 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $32.76 $43.16 $5,961 - $7,587 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 $26.81 $45.20 Precedent LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $5,029 - $8,382 $48.25 $26.80 NTM 6/30/21 Revenue 10-Year DCF: Discounted Cash $33.82 $51.29 Perpetuity Growth: 3.0% - 4.0%; $6,129 - $8,862 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile M ean (7/26/21) M ean (8/3/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company Management projections as of August 2021, FactSet (8/3/21) Note: For reference values are for informational purposes only and are not part of fairness determination; Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 7Preliminary Draft (8/10/2021 1PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $44.00 Peer Multiples: 7.0x - 10.0x $775 $5,423 - $7,748 $29.32 $44.19 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $5,410 - $8,115 $29.24 $46.54 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $32.76 $43.16 $5,961 - $7,587 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 $26.81 $45.20 Precedent LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $5,029 - $8,382 $48.25 $26.80 NTM 6/30/21 Revenue 10-Year DCF: Discounted Cash $33.82 $51.29 Perpetuity Growth: 3.0% - 4.0%; $6,129 - $8,862 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile M ean (7/26/21) M ean (8/3/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company Management projections as of August 2021, FactSet (8/3/21) Note: For reference values are for informational purposes only and are not part of fairness determination; Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 7
Preliminary Draft (8/10/2021 1PM) - Confidential Public Market Trading Analysis TEV / Revenue Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 8.6x 2021E Median: 4.7x 2021E Median: 8.9x 2022E Median: 7.9x 2022E Median: 4.1x 2022E Median: 7.8x 11.8x 10.5x 9.6x 10.3x 10.3x 9.5x 9.6x 9.5x 8.8x 8.6x 9.0x 8.9x 8.1x 8.7x 8.6x 7.7x 8.2x 7.8x 7.9x 7.2x 6.9x 6.8x 6.9x 7.0x 6.7x 6.3x 6.2x 6.0x 6.3x 6.0x 5.5x 5.7x 5.3x 4.7x 4.9x 4.1x 4.1x 3.6x 3.3x 3.5x Ocala Ocala (Current) (as of 1 7/26/21) TEV / EBITDA Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 26.5x 2021E Median: 30.5x 2021E Median: 26.8x 2022E Median: 23.5x 2022E Median: 25.1x 2022E Median: 23.6x 49.1x 48.9x 38.5x 37.0x 37.3x 35.6x 30.1x 31.6x 30.5x 30.3x 31.1x 29.9x 26.8x 27.5x 26.8x 27.3x 26.5x 26.1x 26.4x 25.1x 25.1x 24.3x 22.1x 23.1x 22.5x 23.5x 22.9x 21.8x 19.1x 20.6x 17.9x 21.1x 18.4x 18.2x 16.9x 16.3x 14.2x 12.8x 13.3x 12.1x Ocala Ocala (Current) (as of 1 7/26/21) Source: Company filings, FactSet (8/3/21), Ocala Management projections as of August 2021 2021E 2022E Note: Ocala share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company; Additional detail regarding this analysis is included in the appendix 1. Market data as of 7/26/21 8Preliminary Draft (8/10/2021 1PM) - Confidential Public Market Trading Analysis TEV / Revenue Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 8.6x 2021E Median: 4.7x 2021E Median: 8.9x 2022E Median: 7.9x 2022E Median: 4.1x 2022E Median: 7.8x 11.8x 10.5x 9.6x 10.3x 10.3x 9.5x 9.6x 9.5x 8.8x 8.6x 9.0x 8.9x 8.1x 8.7x 8.6x 7.7x 8.2x 7.8x 7.9x 7.2x 6.9x 6.8x 6.9x 7.0x 6.7x 6.3x 6.2x 6.0x 6.3x 6.0x 5.5x 5.7x 5.3x 4.7x 4.9x 4.1x 4.1x 3.6x 3.3x 3.5x Ocala Ocala (Current) (as of 1 7/26/21) TEV / EBITDA Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 26.5x 2021E Median: 30.5x 2021E Median: 26.8x 2022E Median: 23.5x 2022E Median: 25.1x 2022E Median: 23.6x 49.1x 48.9x 38.5x 37.0x 37.3x 35.6x 30.1x 31.6x 30.5x 30.3x 31.1x 29.9x 26.8x 27.5x 26.8x 27.3x 26.5x 26.1x 26.4x 25.1x 25.1x 24.3x 22.1x 23.1x 22.5x 23.5x 22.9x 21.8x 19.1x 20.6x 17.9x 21.1x 18.4x 18.2x 16.9x 16.3x 14.2x 12.8x 13.3x 12.1x Ocala Ocala (Current) (as of 1 7/26/21) Source: Company filings, FactSet (8/3/21), Ocala Management projections as of August 2021 2021E 2022E Note: Ocala share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company; Additional detail regarding this analysis is included in the appendix 1. Market data as of 7/26/21 8
Preliminary Draft (8/10/2021 1PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 9Preliminary Draft (8/10/2021 1PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 9
Preliminary Draft (8/10/2021 1PM) - Confidential Selected Transactions Analysis | Technology ($ in billions) TEV / Revenue 13.4x 13.2x 12.8x 10.3x 10.2x 10.1x 9.3x 9.1x 8.9x Median: 9.0x 8.8x 8.8x 8.7x 8.4x 8.1x Median: 7.6x 7.8x 7.6x 7.4x 7.4x 7.5x 6.8x 5.1x 4.6x 3.9x NA LTM NTM Acquiror Target Cash / 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Stock 100% Cash 100% Cash 100% Cash 100% Cash Stock % Ann. Date Apr-21 Apr-21 Apr-21 Dec-20 Feb-20 Oct-19 Aug-19 Jun-19 Feb-19 Nov-18 Oct-18 Jan-18 Trans. $11.2 $19.7 $8.5 $10.2 $1.5 $3.7 $2.1 $15.7 $10.6 $1.8 $33.2 $2.4 Value Source: Company filings and press releases 10Preliminary Draft (8/10/2021 1PM) - Confidential Selected Transactions Analysis | Technology ($ in billions) TEV / Revenue 13.4x 13.2x 12.8x 10.3x 10.2x 10.1x 9.3x 9.1x 8.9x Median: 9.0x 8.8x 8.8x 8.7x 8.4x 8.1x Median: 7.6x 7.8x 7.6x 7.4x 7.4x 7.5x 6.8x 5.1x 4.6x 3.9x NA LTM NTM Acquiror Target Cash / 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Stock 100% Cash 100% Cash 100% Cash 100% Cash Stock % Ann. Date Apr-21 Apr-21 Apr-21 Dec-20 Feb-20 Oct-19 Aug-19 Jun-19 Feb-19 Nov-18 Oct-18 Jan-18 Trans. $11.2 $19.7 $8.5 $10.2 $1.5 $3.7 $2.1 $15.7 $10.6 $1.8 $33.2 $2.4 Value Source: Company filings and press releases 10
Preliminary Draft (8/10/2021 1PM) - Confidential Illustrative 10-year Discounted Cash Flow Analysis ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Terminal Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,137 % Growth 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% Adj. EBITDA $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $917 % Margin 35.0% 36.6% 38.9% 41.0% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% Less: Stock-Based Compensation (Post-Tax) ($23) ($25) ($25) ($25) ($25) ($29) ($32) ($35) ($38) ($39) ($39) Less: Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (220) Less: CapEx (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (134) Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) Unlevered FCF $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $514 PV of Unlevered FCF $51 $151 $183 $208 $234 $246 $254 $258 $257 $248 NPV of Cash Flows $2,089 Perpetuity Growth Rate: 3.50% PV of Cash Flows $2,089 Terminal Year Cash Flow $514 PV of Terminal Value $5,136 Total Enterprise Value $7,225 Less: Debt (928) Plus: Cash 89 Total Equity Value $6,387 Shares Outstanding 156.4 Implied Share Price $40.83 Source: Company Management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 11
Preliminary Draft (8/10/2021 1PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,466 $7,760 $8,086 $8,451 $8,862 8.50% 6,736 6,969 7,225 7,509 7,824 9.00% 6,129 6,317 6,522 6,747 6,994 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.36 $44.24 $46.33 $48.66 $51.29 8.50% $37.70 $39.19 $40.83 $42.64 $44.65 9.00% $33.82 $35.02 $36.33 $37.77 $39.35 Source: Company Management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 12 WACC WACCPreliminary Draft (8/10/2021 1PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,466 $7,760 $8,086 $8,451 $8,862 8.50% 6,736 6,969 7,225 7,509 7,824 9.00% 6,129 6,317 6,522 6,747 6,994 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.36 $44.24 $46.33 $48.66 $51.29 8.50% $37.70 $39.19 $40.83 $42.64 $44.65 9.00% $33.82 $35.02 $36.33 $37.77 $39.35 Source: Company Management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 12 WACC WACC
Preliminary Draft (8/10/2021 1PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 13Preliminary Draft (8/10/2021 1PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 13
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Exhibit C.VIII DRAFT – PRELIMINARY – SUBJECT TO CHANGE Project Ocala Fairness Opinion Presentation Materials August 16, 2021 Preliminary Draft (8/16/2021 1:00 PM) - Confidential Exhibit C.VIII DRAFT – PRELIMINARY – SUBJECT TO CHANGE Project Ocala Fairness Opinion Presentation Materials August 16, 2021
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis IIIPreliminary Draft (8/16/2021 1:00 PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis III
Preliminary Draft (8/16/2021 1:00 PM) - Confidential I. Transaction SummaryPreliminary Draft (8/16/2021 1:00 PM) - Confidential I. Transaction Summary
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Key Transaction Terms § The Special Committee has asked us whether, in our opinion, the Merger Consideration to be received by holders of shares of Scope of the Company Common Stock (other than holders of Excluded Shares) in the Merger is fair, from a financial point of view, to Assignment such holders. n Ocala Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Buyer (“Merger Sub”) will merge with and Transaction Overview into [Ocala], a Delaware corporation (“the Company” or “Ocala”), with the Company as the surviving corporation Considerationn Ocala shareholders will receive $[41.00] n [For 60 days following the signing of the Merger Agreement, Ocala may solicit competing acquisition offers, provide confidential information to potential bidders and negotiate potential competing acquisition transactions] Go-Shop / Non- Solicitation Provisions n [Ocala must give the Buyer [two] opportunities to match / beat any competing offer prior to terminating the merger agreement and accepting such offer] n The Board is permitted to: (a) change its recommendation to stockholders regarding the merger, or (b) terminate the Merger Agreement and accept a Superior Proposal if a failure to do so would be inconsistent with the directors’ fiduciary duties Fiduciary Out Match Rights n However, Ocala must give the Buyer [two] opportunities to match / beat any competing offer prior to terminating the merger agreement and accepting such offer n Limited set of customary closing conditions, including: (1) receipt of required regulatory approvals including HSR,CFIUS and any Selected Conditions to regulatory approvals required under applicable healthcare laws (2) receipt of stockholder approvals; (3) no orders or injunctions Close prohibiting transaction; (4) accuracy of representations and warranties; no Ocala Material Adverse Effect; and (5) compliancewith covenants n Keith R. Dunleavy, M.D. and Andre Hoffman to deliver support agreements pursuant to which they will agree to vote to approve Shareholders the merger n Financing consists of aggregate debt financing of $3.0 billon, new equity financing from a Buyer led consortium of $3.175 billion, Financing and roll-over equity financing from existing shareholders of $1.3 billion n The Company Termination Fee is equal to [3.25]% of equity value, [unless the merger agreement is terminated in order to accept a Superior Proposal during the Go-Shop period, in which case the Company Termination Fee will be equal to [1.25]% of equity Termination Fees value] n The Parent Termination Fee is equal to [5.5]% of equity value Source: Draft merger agreement dated 8/15/21 1
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Executive Summary Scope of Engagement and Selected Qualifications The full text of our opinion provided with this presentation sets forth assumptions made, matters considered and limitations on the review undertaken in conjunction with the opinion. You are urged to read the opinion carefully and in its entirety n In connection with rendering our opinion, we have, among other things: „ reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant, including publicly available research analysts’ estimates; „ reviewed certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as approved for our use by the Company (the “Forecasts”); „ discussed with management of the Company their assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); „ reviewed the reported prices and the historical trading activity of shares of the Company Common Stock; „ compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that we deemed relevant; „ compared the financial performance of the Company and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant; „ reviewed the financial terms and conditions of the Merger Agreement; and „ performed such other analyses and examinations and considered such other factors that we deemed appropriate Source: Draft fairness opinion letter dated 8/14/21 2Preliminary Draft (8/16/2021 1:00 PM) - Confidential Executive Summary Scope of Engagement and Selected Qualifications The full text of our opinion provided with this presentation sets forth assumptions made, matters considered and limitations on the review undertaken in conjunction with the opinion. You are urged to read the opinion carefully and in its entirety n In connection with rendering our opinion, we have, among other things: „ reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant, including publicly available research analysts’ estimates; „ reviewed certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as approved for our use by the Company (the “Forecasts”); „ discussed with management of the Company their assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); „ reviewed the reported prices and the historical trading activity of shares of the Company Common Stock; „ compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that we deemed relevant; „ compared the financial performance of the Company and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant; „ reviewed the financial terms and conditions of the Merger Agreement; and „ performed such other analyses and examinations and considered such other factors that we deemed appropriate Source: Draft fairness opinion letter dated 8/14/21 2
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Summary of Implied Premia and Transaction Multiples ($ in millions, except per share values) Offer Premium to Share Price Transaction Multiples Merger Implied Premium Consideration Ocala to Ocala Share Price Shareholders Offer per Share: $41.00 2 Offer per Share: $41.00 156.431 Fully Diluted Shares Outstanding $6,414 Equity Value Current Share Price (8/13/21): $37.77 8.6% 2 901 Plus: Debt Share Price as of 7/26/21: $32.71 25.3% 3 27 Plus: Capitalized Leases 2 Intraday 52-Week High (8/6/21): $39.28 4.4% (89) Less: Cash 1 Intraday 52-Week High (7/13/21): 34.47 18.9% $7,252 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 133.5% 4 Implied Premiums Relative to 8/13/21 Metric Total Enterprise Value To: Multiple 1-Month Average $35.81 14.5% 2021E Revenue $775 9.4x 3-Month Average 33.54 22.2% 2022E Revenue 902 8.0x 6-Month Average 30.84 33.0% 2021E Adjusted EBITDA 271 26.8x 1-Year Average 27.01 51.8% 2022E Adjusted EBITDA 330 22.0x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 23.4% 3-Month Average 31.86 28.7% 6-Month Average 29.59 38.5% 1-Year Average 26.25 56.2% Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company 1. Reflects 52-week high as of 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 3Preliminary Draft (8/16/2021 1:00 PM) - Confidential Summary of Implied Premia and Transaction Multiples ($ in millions, except per share values) Offer Premium to Share Price Transaction Multiples Merger Implied Premium Consideration Ocala to Ocala Share Price Shareholders Offer per Share: $41.00 2 Offer per Share: $41.00 156.431 Fully Diluted Shares Outstanding $6,414 Equity Value Current Share Price (8/13/21): $37.77 8.6% 2 901 Plus: Debt Share Price as of 7/26/21: $32.71 25.3% 3 27 Plus: Capitalized Leases 2 Intraday 52-Week High (8/6/21): $39.28 4.4% (89) Less: Cash 1 Intraday 52-Week High (7/13/21): 34.47 18.9% $7,252 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 133.5% 4 Implied Premiums Relative to 8/13/21 Metric Total Enterprise Value To: Multiple 1-Month Average $35.81 14.5% 2021E Revenue $775 9.4x 3-Month Average 33.54 22.2% 2022E Revenue 902 8.0x 6-Month Average 30.84 33.0% 2021E Adjusted EBITDA 271 26.8x 1-Year Average 27.01 51.8% 2022E Adjusted EBITDA 330 22.0x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 23.4% 3-Month Average 31.86 28.7% 6-Month Average 29.59 38.5% 1-Year Average 26.25 56.2% Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company 1. Reflects 52-week high as of 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 3
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Overview of Buyer Outreach As of 8/2/21 Contact Log 13 9 11 9 14 13 4 4 3 All parties Signed NDAs Management meeting Declined Submitted proposal Source: J.P. Morgan Contact log as of 8/2/21 4Preliminary Draft (8/16/2021 1:00 PM) - Confidential Overview of Buyer Outreach As of 8/2/21 Contact Log 13 9 11 9 14 13 4 4 3 All parties Signed NDAs Management meeting Declined Submitted proposal Source: J.P. Morgan Contact log as of 8/2/21 4
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Proposal Summary n 8/15/21: $41.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 n 8/13/21: $41.00n 6/9/21: $38.00-$40.00 Offer Per Share n 8/11/21: $40.25n 6/4/21: $36.00-$39.00 n 7/14/21: $44.00 n 7/12/21: $43.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and LP co-investors, Partners funds and Thoma Partners VIII GIC, Insight, and 22C Bravo XIV ($17.8bn committed capital) Equity Financing n Rollover equity from Mr. Keith Dunleavy and Mr. Andre Hoffman n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Ready to move n No commitment on n 4 weeksn No commitment on forward quickly specific timing, but can specific timing, but can Timing to Sign move quickly move quickly Source: Offer letters submitted 5Preliminary Draft (8/16/2021 1:00 PM) - Confidential Proposal Summary n 8/15/21: $41.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 n 8/13/21: $41.00n 6/9/21: $38.00-$40.00 Offer Per Share n 8/11/21: $40.25n 6/4/21: $36.00-$39.00 n 7/14/21: $44.00 n 7/12/21: $43.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and LP co-investors, Partners funds and Thoma Partners VIII GIC, Insight, and 22C Bravo XIV ($17.8bn committed capital) Equity Financing n Rollover equity from Mr. Keith Dunleavy and Mr. Andre Hoffman n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Ready to move n No commitment on n 4 weeksn No commitment on forward quickly specific timing, but can specific timing, but can Timing to Sign move quickly move quickly Source: Offer letters submitted 5
Preliminary Draft (8/16/2021 1:00 PM) - Confidential II. Company Overview
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 217.4% preliminary Q4 and quarterly consensus results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% revenue estimates 200.0% Conference by 10% 8/1/19: 7/26/21: After Announced Q2 ’19 market hours, 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced quarterly consensus reported Nordic 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; 6/24/21: stock closed up Announced ~13% on 100.0% extension of 7/27/21 over 2/21/19: customer contract previous close Announced FY’18 of $32.71 with Walmart results, missing quarterly consensus 58.3% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 Jun-20 Jan-21 Aug-21 Ocala S&P 500 Source: FactSet (8/13/21), Company filings 6Preliminary Draft (8/16/2021 1:00 PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 217.4% preliminary Q4 and quarterly consensus results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% revenue estimates 200.0% Conference by 10% 8/1/19: 7/26/21: After Announced Q2 ’19 market hours, 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced quarterly consensus reported Nordic 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; 6/24/21: stock closed up Announced ~13% on 100.0% extension of 7/27/21 over 2/21/19: customer contract previous close Announced FY’18 of $32.71 with Walmart results, missing quarterly consensus 58.3% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 Jun-20 Jan-21 Aug-21 Ocala S&P 500 Source: FactSet (8/13/21), Company filings 6
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Price Prem / (Disc) 1 Broker Date Rating Target to Current 57% 57% 57% 57% 8/2/21 Buy $45.00 19.1% 67% 67% 71% 71% 71% 71% 71% 71% 71% 7/30/21 Sell 23.00 (39.1%) 29% 29% 29% 29% 17% 14% 14% 14% 14% 14% 14% 14% 33% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 7/29/21 Buy 45.00 19.1% 8/20 9/20 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 Sell Rating Hold Rating Buy Rating 7/28/21 Buy 45.00 19.1% LTM Price Target vs. Share Price 7/28/21 Buy 45.00 19.1% $50.00 $40.50 7/28/21 Buy 40.00 5.9% $40.00 $37.77 $30.00 NA 7/28/21 Hold NA $20.00 Mean $40.50 7.2% $10.00 8/13/20 10/12/20 12/12/20 2/11/21 4/13/21 6/13/21 8/13/21 Median 45.00 19.1% Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/13/21) 1. Current share price of $37.77 as of 8/13/21 7Preliminary Draft (8/16/2021 1:00 PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Price Prem / (Disc) 1 Broker Date Rating Target to Current 57% 57% 57% 57% 8/2/21 Buy $45.00 19.1% 67% 67% 71% 71% 71% 71% 71% 71% 71% 7/30/21 Sell 23.00 (39.1%) 29% 29% 29% 29% 17% 14% 14% 14% 14% 14% 14% 14% 33% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 7/29/21 Buy 45.00 19.1% 8/20 9/20 10/20 11/20 12/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 Sell Rating Hold Rating Buy Rating 7/28/21 Buy 45.00 19.1% LTM Price Target vs. Share Price 7/28/21 Buy 45.00 19.1% $50.00 $40.50 7/28/21 Buy 40.00 5.9% $40.00 $37.77 $30.00 NA 7/28/21 Hold NA $20.00 Mean $40.50 7.2% $10.00 8/13/20 10/12/20 12/12/20 2/11/21 4/13/21 6/13/21 8/13/21 Median 45.00 19.1% Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/13/21) 1. Current share price of $37.77 as of 8/13/21 7
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Ocala Financial Projections ($ in millions, except per share data) Revenue '21E - '23E 23E - '25E $1,600 $1,385 CAGR CAGR $1,200 $1,200 12.2% NA $1,040 $973 $902 $870 15.9% 15.4% $773 $775 $800 $400 $0 2021E 2022E 2023E 2024E 2025E Research Projections 12.5% 11.9% NA NA Growth % Management Projections 16.4% 15.4% 15.4% 15.4% Growth % Adj. EBITDA '21E - '23E 23E - '25E $594 $600 CAGR CAGR $492 14.6% NA $450 $404 22.2% 21.2% $355 $330 $311 $270 $271 $300 $150 $0 2021E 2022E 2023E 2024E 2025E Research Projections 34.9% 35.8% 36.4% NA NA Margin % Management Projections 35.0% 36.6% 38.9% 41.0% 42.9% Margin % Research Projections Management Projections Source: FactSet (8/13/21), Company management projections as of August 2021 8Preliminary Draft (8/16/2021 1:00 PM) - Confidential Ocala Financial Projections ($ in millions, except per share data) Revenue '21E - '23E 23E - '25E $1,600 $1,385 CAGR CAGR $1,200 $1,200 12.2% NA $1,040 $973 $902 $870 15.9% 15.4% $773 $775 $800 $400 $0 2021E 2022E 2023E 2024E 2025E Research Projections 12.5% 11.9% NA NA Growth % Management Projections 16.4% 15.4% 15.4% 15.4% Growth % Adj. EBITDA '21E - '23E 23E - '25E $594 $600 CAGR CAGR $492 14.6% NA $450 $404 22.2% 21.2% $355 $330 $311 $270 $271 $300 $150 $0 2021E 2022E 2023E 2024E 2025E Research Projections 34.9% 35.8% 36.4% NA NA Margin % Management Projections 35.0% 36.6% 38.9% 41.0% 42.9% Margin % Research Projections Management Projections Source: FactSet (8/13/21), Company management projections as of August 2021 8
Preliminary Draft (8/16/2021 1:00 PM) - Confidential III. Valuation AnalysisPreliminary Draft (8/16/2021 1:00 PM) - Confidential III. Valuation Analysis
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $41.00 Peer Multiples: 7.0x - 10.0x $775 $29.32 $44.19 $5,423 - $7,748 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $29.24 $46.54 $5,410 - $8,115 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $5,961 - $7,587 $32.76 $43.16 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 $26.81 $45.20 Precedent LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $48.25 $5,029 - $8,382 $26.80 NTM 6/30/21 Revenue M idpoint ($40.84) 10-Year DCF: Discounted Cash $33.83 $51.31 Perpetuity Growth: 3.0% - 4.0%; $6,131 - $8,865 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile M ean (7/26/21) M ean (8/13/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company Note: “For reference” values are for informational purposes only and are not part of fairness determination; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 9Preliminary Draft (8/16/2021 1:00 PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $41.00 Peer Multiples: 7.0x - 10.0x $775 $29.32 $44.19 $5,423 - $7,748 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $29.24 $46.54 $5,410 - $8,115 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $5,961 - $7,587 $32.76 $43.16 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 $26.81 $45.20 Precedent LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $48.25 $5,029 - $8,382 $26.80 NTM 6/30/21 Revenue M idpoint ($40.84) 10-Year DCF: Discounted Cash $33.83 $51.31 Perpetuity Growth: 3.0% - 4.0%; $6,131 - $8,865 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile M ean (7/26/21) M ean (8/13/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company Note: “For reference” values are for informational purposes only and are not part of fairness determination; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 9
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Public Market Trading Analysis TEV / Revenue Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 8.1x 2021E Median: 4.4x 2021E Median: 8.8x 2022E Median: 7.5x 2022E Median: 3.8x 2022E Median: 7.8x 12.8x 10.9x 10.1x 10.7x 10.1x 9.5x 9.4x 8.7x 9.1x 8.3x 9.1x 8.6x 7.7x 8.1x 7.9x 8.1x 7.9x 7.8x 7.5x 7.2x 7.2x 7.1x 6.8x 7.0x 6.4x 6.6x 6.3x 6.3x 6.2x 6.2x 5.6x 5.8x 5.4x 4.4x 5.0x 3.6x 3.8x 3.5x 3.4x 3.0x Ocala Ocala (Current) (as of (as of 1 7/26/21) 2 8/5/21) TEV / EBITDA Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 25.2x 2021E Median: 31.1x 2021E Median: 27.5x 2022E Median: 22.3x 2022E Median: 25.6x 2022E Median: 23.7x 51.0x 43.6x 39.0x 38.7x 37.3x 31.8x 32.5x 31.1x 28.9x 30.0x 28.1x 28.9x 26.7x 27.8x 27.8x 27.2x 26.6x 25.2x 25.6x 25.6x 25.0x 24.2x 22.1x 23.1x 22.8x 23.2x 22.3x 21.7x 21.6x 19.4x 18.8x 17.6x 19.1x 18.6x 14.8x 16.1x 16.3x 12.6x 11.3x 10.9x Ocala Ocala (Current) (as of (as of 2 1 8/5/21) 7/26/21) Source: Company filings, FactSet (8/13/21), Company management projections as of August 2021, August 2021 Detailed Capitalization Schedule per the Company Note: Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company; Additional detail regarding this analysis is included in the appendix 2021E 2022E 1. Market data as of 7/26/21 2. Market data as of 8/5/21, last trading day prior to announcement of acquisition by Clearlake Capital 10
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 11Preliminary Draft (8/16/2021 1:00 PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 11
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Selected Transactions Analysis | Technology ($ in billions) TEV / Revenue 13.4x 13.2x 12.8x 10.3x 10.2x 10.1x 9.3x 9.1x 8.9x Median: 9.0x 8.8x 8.8x 8.7x 8.4x 8.1x Median: 7.6x 7.8x 7.6x 7.4x 7.4x 7.5x 6.8x 5.1x 4.6x 3.9x NA LTM NTM Acquiror Target Cash / 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Stock 100% Cash 100% Cash 100% Cash 100% Cash Stock % Ann. Date Apr-21 Apr-21 Apr-21 Dec-20 Feb-20 Oct-19 Aug-19 Jun-19 Feb-19 Nov-18 Oct-18 Jan-18 Trans. $11.2 $19.7 $8.5 $10.2 $1.5 $3.7 $2.1 $15.7 $10.6 $1.8 $33.2 $2.4 Value Source: Company filings and press releases 12Preliminary Draft (8/16/2021 1:00 PM) - Confidential Selected Transactions Analysis | Technology ($ in billions) TEV / Revenue 13.4x 13.2x 12.8x 10.3x 10.2x 10.1x 9.3x 9.1x 8.9x Median: 9.0x 8.8x 8.8x 8.7x 8.4x 8.1x Median: 7.6x 7.8x 7.6x 7.4x 7.4x 7.5x 6.8x 5.1x 4.6x 3.9x NA LTM NTM Acquiror Target Cash / 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Stock 100% Cash 100% Cash 100% Cash 100% Cash Stock % Ann. Date Apr-21 Apr-21 Apr-21 Dec-20 Feb-20 Oct-19 Aug-19 Jun-19 Feb-19 Nov-18 Oct-18 Jan-18 Trans. $11.2 $19.7 $8.5 $10.2 $1.5 $3.7 $2.1 $15.7 $10.6 $1.8 $33.2 $2.4 Value Source: Company filings and press releases 12
Preliminary Draft (8/16/2021 1:00 PM) - Confidential Illustrative 10-year Discounted Cash Flow Analysis ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Terminal Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,137 % Growth 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% Adj. EBITDA $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $917 % Margin 35.0% 36.6% 38.9% 41.0% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% Less: Stock-Based Compensation (Post-Tax) ($23) ($25) ($25) ($25) ($25) ($29) ($32) ($35) ($38) ($39) ($39) Less: Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (220) Less: CapEx (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (134) Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) 1 Unlevered FCF $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $514 PV of Unlevered FCF $50 $151 $183 $208 $234 $246 $254 $258 $257 $248 NPV of Cash Flows $2,089 Perpetuity Growth Rate: 3.50% PV of Cash Flows $2,089 Terminal Year Cash Flow $514 PV of Terminal Value $5,138 Total Enterprise Value $7,228 Less: Debt (928) Plus: Cash 89 Total Equity Value $6,389 Shares Outstanding 156.4 Implied Share Price $40.84 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. Terminal year unlevered free cash flow assumed to be equal to 2030E unlevered free cash flow per Company management 13Preliminary Draft (8/16/2021 1:00 PM) - Confidential Illustrative 10-year Discounted Cash Flow Analysis ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Terminal Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,137 % Growth 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% Adj. EBITDA $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $917 % Margin 35.0% 36.6% 38.9% 41.0% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% Less: Stock-Based Compensation (Post-Tax) ($23) ($25) ($25) ($25) ($25) ($29) ($32) ($35) ($38) ($39) ($39) Less: Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (220) Less: CapEx (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (134) Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) 1 Unlevered FCF $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $514 PV of Unlevered FCF $50 $151 $183 $208 $234 $246 $254 $258 $257 $248 NPV of Cash Flows $2,089 Perpetuity Growth Rate: 3.50% PV of Cash Flows $2,089 Terminal Year Cash Flow $514 PV of Terminal Value $5,138 Total Enterprise Value $7,228 Less: Debt (928) Plus: Cash 89 Total Equity Value $6,389 Shares Outstanding 156.4 Implied Share Price $40.84 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. Terminal year unlevered free cash flow assumed to be equal to 2030E unlevered free cash flow per Company management 13
Preliminary Draft (8/16/2021 1:00 PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,468 $7,762 $8,089 $8,454 $8,865 8.50% 6,738 6,971 7,228 7,511 7,826 9.00% 6,131 6,319 6,525 6,749 6,997 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.38 $44.26 $46.35 $48.68 $51.31 8.50% $37.71 $39.20 $40.84 $42.66 $44.67 9.00% $33.83 $35.04 $36.35 $37.78 $39.37 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 14 WACC WACCPreliminary Draft (8/16/2021 1:00 PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,468 $7,762 $8,089 $8,454 $8,865 8.50% 6,738 6,971 7,228 7,511 7,826 9.00% 6,131 6,319 6,525 6,749 6,997 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.38 $44.26 $46.35 $48.68 $51.31 8.50% $37.71 $39.20 $40.84 $42.66 $44.67 9.00% $33.83 $35.04 $36.35 $37.78 $39.37 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 14 WACC WACC
Preliminary Draft (8/16/2021 1:00 PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 15Preliminary Draft (8/16/2021 1:00 PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 15
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Exhibit C.IX DRAFT – PRELIMINARY – SUBJECT TO CHANGE Project Ocala Fairness Opinion Presentation Materials August 17, 2021
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis IIIPreliminary Draft (8/17/2021 1:00 PM) - Confidential Table of Contents Section Transaction Summary I Company Overview II Valuation Analysis III
Preliminary Draft (8/17/2021 1:00 PM) - Confidential I. Transaction SummaryPreliminary Draft (8/17/2021 1:00 PM) - Confidential I. Transaction Summary
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Key Transaction Terms § The Special Committee has asked us whether, in our opinion, the Merger Consideration to be received by the Public Scope of Stockholders (as defined in the Merger Agreement) of Ocala in the Merger is fair, from a financial point of view, to such Assignment holders. n Ocala Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Buyer (“Merger Sub”) will merge with and Transaction Overview into Ocala, a Delaware corporation (“the Company” or “Ocala”), with the Company as the surviving corporation Considerationn Ocala shareholders will receive $[41.00] n For 60 days following the signing of the Merger Agreement, Ocala may solicit competing acquisition offers, provide confidential information to potential bidders and negotiate potential competing acquisition transactions Go-Shop / Non- Solicitation Provisions n Ocala must give the buyer [three] opportunities to match / beat any competing offer that is a Superior Proposal (as defined in the merger agreement) prior to terminating the merger agreement and accepting such Superior Proposal n The Board is permitted to: (a) change its recommendation to stockholders regarding the merger in connection with a superior proposal or an Intervening Event (as defined in the Merger Agreement), and/or (b) terminate the Merger Agreement and accept a Superior Proposal, in each case, if a failure to do so would be inconsistent with the directors’ fiduciary duties Fiduciary Out Match Rights n However, Ocala must give the Buyer, as applicable, opportunities to amend the terms of the merger such that the intervening event no longer necessitates a change in recommendation or [three] opportunities to match / beat any Superior Proposal prior to terminating the merger agreement and accepting such superior proposal n Limited set of customary closing conditions, including: (1) receipt of required regulatory approvals including HSR, CFIUS and any Selected Conditions to regulatory approvals required under applicable healthcare laws (2) receipt of stockholder approvals; (3) no orders or injunctions Close prohibiting transaction; (4) accuracy of representations and warranties; (5) no Ocala Material Adverse Effect; and (6) compliance with covenants n Keith R. Dunleavy, M.D. and Andre Hoffman to deliver support agreements pursuant to which they will agree to vote to approve Shareholders the merger n Financing consists of aggregate debt financing of $3.0 billon, new equity financing from a Buyer led consortium of $3.175 billion, Financing and roll-over equity financing from existing shareholders of $1.3 billion n The Company Termination Fee is equal to [2.5]% of equity value, [unless the merger agreement is terminated in order to accept a Superior Proposal during the Go-Shop period, in which case the Company Termination Fee will be equal to [1.25]% of equity Termination Fees value] n The Parent Termination Fee is equal to [7]% of equity value Source: Draft merger agreement dated 8/17/21 1Preliminary Draft (8/17/2021 1:00 PM) - Confidential Key Transaction Terms § The Special Committee has asked us whether, in our opinion, the Merger Consideration to be received by the Public Scope of Stockholders (as defined in the Merger Agreement) of Ocala in the Merger is fair, from a financial point of view, to such Assignment holders. n Ocala Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Buyer (“Merger Sub”) will merge with and Transaction Overview into Ocala, a Delaware corporation (“the Company” or “Ocala”), with the Company as the surviving corporation Considerationn Ocala shareholders will receive $[41.00] n For 60 days following the signing of the Merger Agreement, Ocala may solicit competing acquisition offers, provide confidential information to potential bidders and negotiate potential competing acquisition transactions Go-Shop / Non- Solicitation Provisions n Ocala must give the buyer [three] opportunities to match / beat any competing offer that is a Superior Proposal (as defined in the merger agreement) prior to terminating the merger agreement and accepting such Superior Proposal n The Board is permitted to: (a) change its recommendation to stockholders regarding the merger in connection with a superior proposal or an Intervening Event (as defined in the Merger Agreement), and/or (b) terminate the Merger Agreement and accept a Superior Proposal, in each case, if a failure to do so would be inconsistent with the directors’ fiduciary duties Fiduciary Out Match Rights n However, Ocala must give the Buyer, as applicable, opportunities to amend the terms of the merger such that the intervening event no longer necessitates a change in recommendation or [three] opportunities to match / beat any Superior Proposal prior to terminating the merger agreement and accepting such superior proposal n Limited set of customary closing conditions, including: (1) receipt of required regulatory approvals including HSR, CFIUS and any Selected Conditions to regulatory approvals required under applicable healthcare laws (2) receipt of stockholder approvals; (3) no orders or injunctions Close prohibiting transaction; (4) accuracy of representations and warranties; (5) no Ocala Material Adverse Effect; and (6) compliance with covenants n Keith R. Dunleavy, M.D. and Andre Hoffman to deliver support agreements pursuant to which they will agree to vote to approve Shareholders the merger n Financing consists of aggregate debt financing of $3.0 billon, new equity financing from a Buyer led consortium of $3.175 billion, Financing and roll-over equity financing from existing shareholders of $1.3 billion n The Company Termination Fee is equal to [2.5]% of equity value, [unless the merger agreement is terminated in order to accept a Superior Proposal during the Go-Shop period, in which case the Company Termination Fee will be equal to [1.25]% of equity Termination Fees value] n The Parent Termination Fee is equal to [7]% of equity value Source: Draft merger agreement dated 8/17/21 1
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Executive Summary Scope of Engagement and Selected Qualifications The full text of our opinion provided with this presentation sets forth assumptions made, matters considered and limitations on the review undertaken in conjunction with the opinion. You are urged to read the opinion carefully and in its entirety n In connection with rendering our opinion, we have, among other things: „ reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant, including publicly available research analysts’ estimates; „ reviewed certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as approved for our use by the Company (the “Forecasts”); „ discussed with management of the Company their assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); „ reviewed the reported prices and the historical trading activity of shares of the Company Common Stock; „ compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that we deemed relevant; „ compared the financial performance of the Company and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant; „ reviewed the financial terms and conditions of the Merger Agreement; and „ performed such other analyses and examinations and considered such other factors that we deemed appropriate Source: Draft fairness opinion letter dated 8/16/21 2Preliminary Draft (8/17/2021 1:00 PM) - Confidential Executive Summary Scope of Engagement and Selected Qualifications The full text of our opinion provided with this presentation sets forth assumptions made, matters considered and limitations on the review undertaken in conjunction with the opinion. You are urged to read the opinion carefully and in its entirety n In connection with rendering our opinion, we have, among other things: „ reviewed certain publicly available business and financial information relating to the Company that we deemed to be relevant, including publicly available research analysts’ estimates; „ reviewed certain internal projected financial data relating to the Company prepared and furnished to us by management of the Company, as approved for our use by the Company (the “Forecasts”); „ discussed with management of the Company their assessment of the past and current operations of the Company, the current financial condition and prospects of the Company, and the Forecasts (including their views on the risks and uncertainties of achieving the Forecasts); „ reviewed the reported prices and the historical trading activity of shares of the Company Common Stock; „ compared the financial performance of the Company and its stock market trading multiples with those of certain other publicly traded companies that we deemed relevant; „ compared the financial performance of the Company and the valuation multiples relating to the Merger with the financial terms, to the extent publicly available, of certain other transactions that we deemed relevant; „ reviewed the financial terms and conditions of the Merger Agreement; and „ performed such other analyses and examinations and considered such other factors that we deemed appropriate Source: Draft fairness opinion letter dated 8/16/21 2
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Summary of Implied Premia and Transaction Multiples ($ in millions, except per share values) Offer Premium to Share Price Transaction Multiples Merger Implied Premium Consideration Ocala to Ocala Share Price Shareholders Offer per Share: $41.00 2 Offer per Share: $41.00 156.431 Fully Diluted Shares Outstanding Equity Value $6,414 Current Share Price (8/13/21): $37.77 8.6% 2 901 Plus: Debt Share Price as of 7/26/21: $32.71 25.3% 3 27 Plus: Capitalized Leases 2 Intraday 52-Week High (8/6/21): $39.28 4.4% (89) Less: Cash 1 Intraday 52-Week High (7/13/21): 34.47 18.9% $7,252 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 133.5% 4 Implied Premiums Relative to 8/13/21 Metric Total Enterprise Value To: Multiple 1-Month Average $35.81 14.5% 2021E Revenue $775 9.4x 3-Month Average 33.54 22.2% 2022E Revenue 902 8.0x 6-Month Average 30.84 33.0% 2021E Adjusted EBITDA 271 26.8x 1-Year Average 27.01 51.8% 2022E Adjusted EBITDA 330 22.0x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 23.4% 3-Month Average 31.86 28.7% 6-Month Average 29.59 38.5% 1-Year Average 26.25 56.2% Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company 1. Reflects 52-week high as of the period ended 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 3Preliminary Draft (8/17/2021 1:00 PM) - Confidential Summary of Implied Premia and Transaction Multiples ($ in millions, except per share values) Offer Premium to Share Price Transaction Multiples Merger Implied Premium Consideration Ocala to Ocala Share Price Shareholders Offer per Share: $41.00 2 Offer per Share: $41.00 156.431 Fully Diluted Shares Outstanding Equity Value $6,414 Current Share Price (8/13/21): $37.77 8.6% 2 901 Plus: Debt Share Price as of 7/26/21: $32.71 25.3% 3 27 Plus: Capitalized Leases 2 Intraday 52-Week High (8/6/21): $39.28 4.4% (89) Less: Cash 1 Intraday 52-Week High (7/13/21): 34.47 18.9% $7,252 Total Enterprise Value Intraday 52-Week Low (12/21/20): 17.56 133.5% 4 Implied Premiums Relative to 8/13/21 Metric Total Enterprise Value To: Multiple 1-Month Average $35.81 14.5% 2021E Revenue $775 9.4x 3-Month Average 33.54 22.2% 2022E Revenue 902 8.0x 6-Month Average 30.84 33.0% 2021E Adjusted EBITDA 271 26.8x 1-Year Average 27.01 51.8% 2022E Adjusted EBITDA 330 22.0x Implied Premiums Relative to 7/26/21 1-Month Average $33.23 23.4% 3-Month Average 31.86 28.7% 6-Month Average 29.59 38.5% 1-Year Average 26.25 56.2% Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company 1. Reflects 52-week high as of the period ended 7/26/21, the last trading day prior to Bloomberg report of rumored sale to Nordic Capital 2. Per August 2021 Detailed Capitalization Schedule from the Company 3. Per Company filings 4. Company management projections as of August 2021; adjusted figures are exclusive of stock-based compensation expense and non-recurring expenses 3
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Overview of Buyer Outreach As of 8/13/21 Contact Log Source: J.P. Morgan contact log as of 8/13/21 4
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Proposal Summary n 8/15/21: $41.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 n 8/13/21: $41.00n 6/9/21: $38.00-$40.00 Offer Per Share n 8/11/21: $40.25n 6/4/21: $36.00-$39.00 n 7/14/21: $44.00 n 7/12/21: $43.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and LP co-investors, Partners funds and Thoma Partners VIII GIC, Insight, and 22C Bravo XIV ($17.8bn committed capital) Equity Financing n Rollover equity from Mr. Keith Dunleavy and Mr. Andre Hoffman n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Ready to move n No commitment on n 4 weeksn No commitment on forward quickly specific timing, but can specific timing, but can Timing to Sign move quickly move quickly Source: Offer letters submitted 5Preliminary Draft (8/17/2021 1:00 PM) - Confidential Proposal Summary n 8/15/21: $41.00n 7/1/21: $38.00 n 6/8/21: $35.00n 6/9/21: $34.00 n 8/13/21: $41.00n 6/9/21: $38.00-$40.00 Offer Per Share n 8/11/21: $40.25n 6/4/21: $36.00-$39.00 n 7/14/21: $44.00 n 7/12/21: $43.00 n Nordic Capital Fund X n Leonard Green & n Thoma Bravo equity n Blackstone Capital and LP co-investors, Partners funds and Thoma Partners VIII GIC, Insight, and 22C Bravo XIV ($17.8bn committed capital) Equity Financing n Rollover equity from Mr. Keith Dunleavy and Mr. Andre Hoffman n Third-party debt n Senior and n Not specified, n Third party debt financing subordinated debt however, definitive financing, will provide (subject to further) agreement will not be fully committed n Preferred equity Debt Financing subject to any financing prior to financing financing signing contingencies n Ready to move n No commitment on n 4 weeksn No commitment on forward quickly specific timing, but can specific timing, but can Timing to Sign move quickly move quickly Source: Offer letters submitted 5
Preliminary Draft (8/17/2021 1:00 PM) - Confidential II. Company OverviewPreliminary Draft (8/17/2021 1:00 PM) - Confidential II. Company Overview
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 preliminary Q4 and 217.4% quarterly consensus results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% revenue estimates 200.0% Conference by 10% 8/1/19: 7/26/21: After Announced Q2 ’19 market hours, 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced quarterly consensus reported Nordic 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; 6/24/21: stock closed up Announced ~13% on 100.0% extension of 7/27/21 over 2/21/19: previous close customer contract Announced FY’18 with Walmart of $32.71 results, missing quarterly consensus 58.3% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 Jun-20 Jan-21 Aug-21 Ocala S&P 500 Source: FactSet (8/13/21), Company filings 6Preliminary Draft (8/17/2021 1:00 PM) - Confidential Ocala Share Price Performance Over Last 3 Years Trading days post Bloomberg report 300.0% 10/31/19: 250.0% 1/11/21: Announced Q3 ’19 10/28/20: Announced results, beating Announced Q3 ’20 preliminary Q4 and 217.4% quarterly consensus results, missing FY ’20 results at revenue estimates quarterly consensus JPM Healthcare by ~3% revenue estimates 200.0% Conference by 10% 8/1/19: 7/26/21: After Announced Q2 ’19 market hours, 9/24/20: 3/23/20: results, beating Bloomberg Announced launch Announced quarterly consensus reported Nordic 150.0% of DataStream API telehealth revenue estimates Capital rumored configuration of by ~12% to be in talks to ONE platform acquire Ocala; 6/24/21: stock closed up Announced ~13% on 100.0% extension of 7/27/21 over 2/21/19: previous close customer contract Announced FY’18 with Walmart of $32.71 results, missing quarterly consensus 58.3% revenue estimates 50.0% by ~17% 0.0% (50.0%) Aug-18 Mar-19 Oct-19 Jun-20 Jan-21 Aug-21 Ocala S&P 500 Source: FactSet (8/13/21), Company filings 6
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Reference: On 7/26 Price Prem / (Disc) Price Prem / (Disc) 1 2 Broker Date Rating Target to Current Target to Close 57% 57% 57% 57% 67% 67% 71% 71% 71% 71% 71% 71% 71% 8/2/21 Buy $45.00 19.1% $41.00 25.3% 29% 29% 29% 29% 7/30/21 Sell 23.00 (39.1%) 22.00 (32.7%) 17% 14% 14% 14% 14% 14% 14% 14% 33% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 7/29/21 Buy 45.00 19.1% 40.00 22.3% 8/20 9/20 10/2011/2012/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 Sell Rating Hold Rating Buy Rating 3 7/28/21 Buy NA NA 45.00 37.6% LTM Price Target vs. Share Price 7/28/21 Buy 45.00 19.1% 35.00 7.0% $50.00 $39.60 $40.00 7/28/21 Buy 40.00 5.9% 35.00 7.0% $37.77 $30.00 7/28/21 Hold NA NA NA NA $20.00 Mean $39.60 4.8% $36.33 11.1% $10.00 8/13/20 10/12/20 12/12/20 2/11/21 4/13/21 6/13/21 8/13/21 Median 45.00 19.1% 37.50 14.6% Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/13/21) 1. Current share price of $37.77 as of 8/13/21 2. Close share price of $32.71 as of 7/26/21 3. Truist had a price target of $45/share before dropping coverage on 8/5/21 7Preliminary Draft (8/17/2021 1:00 PM) - Confidential Reference Analysis: Ocala Research Analyst Price Targets Current Price Targets LTM Analyst Recommendations Reference: On 7/26 Price Prem / (Disc) Price Prem / (Disc) 1 2 Broker Date Rating Target to Current Target to Close 57% 57% 57% 57% 67% 67% 71% 71% 71% 71% 71% 71% 71% 8/2/21 Buy $45.00 19.1% $41.00 25.3% 29% 29% 29% 29% 7/30/21 Sell 23.00 (39.1%) 22.00 (32.7%) 17% 14% 14% 14% 14% 14% 14% 14% 33% 17% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14% 7/29/21 Buy 45.00 19.1% 40.00 22.3% 8/20 9/20 10/2011/2012/20 1/21 2/21 3/21 4/21 5/21 6/21 7/21 8/21 Sell Rating Hold Rating Buy Rating 3 7/28/21 Buy NA NA 45.00 37.6% LTM Price Target vs. Share Price 7/28/21 Buy 45.00 19.1% 35.00 7.0% $50.00 $39.60 $40.00 7/28/21 Buy 40.00 5.9% 35.00 7.0% $37.77 $30.00 7/28/21 Hold NA NA NA NA $20.00 Mean $39.60 4.8% $36.33 11.1% $10.00 8/13/20 10/12/20 12/12/20 2/11/21 4/13/21 6/13/21 8/13/21 Median 45.00 19.1% 37.50 14.6% Average Price Target Share Price Source: Bloomberg, Wall Street research and FactSet (8/13/21) 1. Current share price of $37.77 as of 8/13/21 2. Close share price of $32.71 as of 7/26/21 3. Truist had a price target of $45/share before dropping coverage on 8/5/21 7
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Ocala Financial Projections ($ in millions, except per share data) Revenue '21E - '23E 23E - '25E $1,600 $1,385 CAGR CAGR $1,200 $1,200 12.2% NA $1,040 $973 $902 $870 15.9% 15.4% $775 $773 $800 $400 $0 2021E 2022E 2023E 2024E 2025E Research Projections 12.5% 11.9% NA NA Growth % Management Projections 16.4% 15.4% 15.4% 15.4% Growth % Adj. EBITDA '21E - '23E 23E - '25E $594 $600 CAGR CAGR $492 14.6% NA $404 $450 22.2% 21.2% $355 $330 $311 $270 $271 $300 $150 $0 2021E 2022E 2023E 2024E 2025E Research Projections 34.9% 35.8% 36.4% NA NA Margin % Management Projections 35.0% 36.6% 38.9% 41.0% 42.9% Margin % Research Projections Management Projections Source: FactSet (8/13/21), Company management projections as of August 2021 8Preliminary Draft (8/17/2021 1:00 PM) - Confidential Ocala Financial Projections ($ in millions, except per share data) Revenue '21E - '23E 23E - '25E $1,600 $1,385 CAGR CAGR $1,200 $1,200 12.2% NA $1,040 $973 $902 $870 15.9% 15.4% $775 $773 $800 $400 $0 2021E 2022E 2023E 2024E 2025E Research Projections 12.5% 11.9% NA NA Growth % Management Projections 16.4% 15.4% 15.4% 15.4% Growth % Adj. EBITDA '21E - '23E 23E - '25E $594 $600 CAGR CAGR $492 14.6% NA $404 $450 22.2% 21.2% $355 $330 $311 $270 $271 $300 $150 $0 2021E 2022E 2023E 2024E 2025E Research Projections 34.9% 35.8% 36.4% NA NA Margin % Management Projections 35.0% 36.6% 38.9% 41.0% 42.9% Margin % Research Projections Management Projections Source: FactSet (8/13/21), Company management projections as of August 2021 8
Preliminary Draft (8/17/2021 1:00 PM) - Confidential III. Valuation Analysis
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $41.00 Peer Multiples: 7.0x - 10.0x $775 $29.32 $44.19 $5,423 - $7,748 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $29.24 $46.54 $5,410 - $8,115 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $5,961 - $7,587 $32.76 $43.16 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 Precedent $26.81 $45.20 LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $5,029 - $8,382 $48.25 $26.80 NTM 6/30/21 Revenue Midpoint ($40.84) 10-Year DCF: Discounted Cash $33.83 $51.31 Perpetuity Growth: 3.0% - 4.0%; $6,131 - $8,865 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile Mean (7/26/21) Mean (8/13/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company Note: “For reference” values are for informational purposes only and are not part of fairness determination; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 9Preliminary Draft (8/17/2021 1:00 PM) - Confidential Summary of Valuation Methodologies ($ in millions, except per share data) Methodology Metric Implied Price Per Share Implied TEV Offer Price: $41.00 Peer Multiples: 7.0x - 10.0x $775 $29.32 $44.19 $5,423 - $7,748 CY 2021E Revenue Peer Multiples: 6.0x - 9.0x $902 $29.24 $46.54 $5,410 - $8,115 CY 2022E Revenue Public Market Trading Analysis Peer Multiples: 22.0x - 28.0x $271 $5,961 - $7,587 $32.76 $43.16 CY 2021E Adj. EBITDA Peer Multiples: 19.0x - 25.0x $330 $6,266 - $8,244 $34.71 $47.36 CY 2022E Adj. EBITDA Transaction Multiples: 7.0x - 11.0x $719 $5,031 - $7,906 Precedent $26.81 $45.20 LTM 6/30/21 Revenue Transaction Transaction Multiples: 6.0x - 10.0x 1 Analysis $838 $5,029 - $8,382 $48.25 $26.80 NTM 6/30/21 Revenue Midpoint ($40.84) 10-Year DCF: Discounted Cash $33.83 $51.31 Perpetuity Growth: 3.0% - 4.0%; $6,131 - $8,865 Flow Analysis Discount Rate: 8.0% - 9.0% Intraday 52-Week Low / High $17.56 $34.47 $3,585 - $6,231 (as of 7/26/21) Premium Paid to Price on 7/26/21 For Reference Only: $39.25 $44.16 $6,979 - $7,747 2 25th to 75th Percentile Mean (7/26/21) Mean (8/13/21) Current Analyst Price Targets $23.00 $45.00 $4,436 - $7,878 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: Company filings, Company management projections as of August 2021, FactSet (8/13/21), August 2021 Detailed Capitalization Schedule per the Company Note: “For reference” values are for informational purposes only and are not part of fairness determination; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. NTM Revenue shown as average of CY 2021E and CY 2022E revenues, as forecasted by management th th 2. 25 to 75 percentile represents an ~20% to ~35% premium paid to the unaffected share price of select all cash healthcare and technology deals in the $1.0-$15.0 billion range 9
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Public Market Trading Analysis TEV / Revenue Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 8.1x 2021E Median: 4.4x 2021E Median: 8.8x 2022E Median: 7.5x 2022E Median: 3.8x 2022E Median: 7.8x 12.8x 10.9x 10.1x 10.7x 10.1x 9.5x 9.4x 8.7x 9.1x 8.3x 9.1x 8.6x 7.7x 8.1x 7.9x 8.1x 7.9x 7.8x 7.5x 7.2x 7.2x 7.1x 7.0x 6.8x 6.4x 6.3x 6.6x 6.3x 6.2x 6.2x 5.6x 5.8x 5.4x 4.4x 5.0x 3.6x 3.8x 3.5x 3.4x 3.0x Ocala Ocala (Current) (as of (as of 1 7/26/21) 2 8/5/21) TEV / EBITDA Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 25.2x 2021E Median: 31.1x 2021E Median: 27.5x 2022E Median: 22.3x 2022E Median: 25.6x 2022E Median: 23.7x 51.0x 43.6x 39.0x 38.7x 37.3x 31.8x 32.5x 31.1x 28.9x 30.0x 28.1x 28.9x 26.7x 27.8x 27.8x 27.2x 26.6x 25.2x 25.6x 25.6x 25.0x 24.2x 22.1x 23.1x 22.8x 23.2x 22.3x 21.7x 21.6x 19.4x 18.8x 17.6x 19.1x 18.6x 14.8x 16.1x 16.3x 12.6x 11.3x 10.9x Ocala Ocala (Current) (as of (as of 1 2 7/26/21) 8/5/21) Source: Company filings, FactSet (8/13/21), Company management projections as of August 2021, August 2021 Detailed Capitalization Schedule per the Company Note: Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 2021E 2022E 1. Market data as of 7/26/21 2. Market data as of 8/5/21, last trading day prior to announcement of acquisition by Clearlake Capital 10Preliminary Draft (8/17/2021 1:00 PM) - Confidential Public Market Trading Analysis TEV / Revenue Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 8.1x 2021E Median: 4.4x 2021E Median: 8.8x 2022E Median: 7.5x 2022E Median: 3.8x 2022E Median: 7.8x 12.8x 10.9x 10.1x 10.7x 10.1x 9.5x 9.4x 8.7x 9.1x 8.3x 9.1x 8.6x 7.7x 8.1x 7.9x 8.1x 7.9x 7.8x 7.5x 7.2x 7.2x 7.1x 7.0x 6.8x 6.4x 6.3x 6.6x 6.3x 6.2x 6.2x 5.6x 5.8x 5.4x 4.4x 5.0x 3.6x 3.8x 3.5x 3.4x 3.0x Ocala Ocala (Current) (as of (as of 1 7/26/21) 2 8/5/21) TEV / EBITDA Multiples Payor Technology Provider Technology Technology / Software 2021E Median: 25.2x 2021E Median: 31.1x 2021E Median: 27.5x 2022E Median: 22.3x 2022E Median: 25.6x 2022E Median: 23.7x 51.0x 43.6x 39.0x 38.7x 37.3x 31.8x 32.5x 31.1x 28.9x 30.0x 28.1x 28.9x 26.7x 27.8x 27.8x 27.2x 26.6x 25.2x 25.6x 25.6x 25.0x 24.2x 22.1x 23.1x 22.8x 23.2x 22.3x 21.7x 21.6x 19.4x 18.8x 17.6x 19.1x 18.6x 14.8x 16.1x 16.3x 12.6x 11.3x 10.9x Ocala Ocala (Current) (as of (as of 1 2 7/26/21) 8/5/21) Source: Company filings, FactSet (8/13/21), Company management projections as of August 2021, August 2021 Detailed Capitalization Schedule per the Company Note: Share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 2021E 2022E 1. Market data as of 7/26/21 2. Market data as of 8/5/21, last trading day prior to announcement of acquisition by Clearlake Capital 10
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 11Preliminary Draft (8/17/2021 1:00 PM) - Confidential Selected Transactions Analysis | Healthcare Platform Technology ($ in billions) TEV / Revenue 8.8x 7.6x 6.6x 6.3x Median: 5.1x 5.1x 4.3x 4.4x 4.3x 4.1x 4.1x Median: 4.4x LTM NTM Acquiror Target 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash Cash / Stock % Ann. Date Jan-21 Dec-20 Jun-19 Nov-18 Jun-18 Trans. Value $13.4 $3.4 $6.0 $5.7 $4.9 Source: Company filings and press releases 11
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Selected Transactions Analysis | Technology ($ in billions) TEV / Revenue 13.4x 13.2x 12.8x 10.3x 10.2x 10.1x 9.3x 9.1x 8.9x 8.8x 8.8x Median: 9.0x 8.7x 8.4x 8.1x Median: 7.6x 7.8x 7.6x 7.4x 7.4x 7.5x 6.8x 5.1x 4.6x 3.9x NA LTM NTM Acquiror Target Cash / 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Cash 100% Stock 100% Cash 100% Cash 100% Cash 100% Cash Stock % Ann. Date Apr-21 Apr-21 Apr-21 Dec-20 Feb-20 Oct-19 Aug-19 Jun-19 Feb-19 Nov-18 Oct-18 Jan-18 Trans. $11.2 $19.7 $8.5 $10.2 $1.5 $3.7 $2.1 $15.7 $10.6 $1.8 $33.2 $2.4 Value Source: Company filings and press releases 12
Preliminary Draft (8/17/2021 1:00 PM) - Confidential Illustrative 10-year Discounted Cash Flow Analysis ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Terminal Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,137 % Growth 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% Adj. EBITDA $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $917 % Margin 35.0% 36.6% 38.9% 41.0% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% Less: Stock-Based Compensation (Post-Tax) ($23) ($25) ($25) ($25) ($25) ($29) ($32) ($35) ($38) ($39) ($39) Less: Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (220) Less: CapEx (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (134) Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) 1 Unlevered FCF $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $514 PV of Unlevered FCF $50 $151 $183 $208 $234 $246 $254 $258 $257 $248 NPV of Cash Flows $2,089 Perpetuity Growth Rate: 3.50% PV of Cash Flows $2,089 Terminal Year Cash Flow $514 PV of Terminal Value $5,138 Total Enterprise Value $7,228 Less: Debt (928) Plus: Cash 89 Total Equity Value $6,389 Shares Outstanding 156.4 Implied Share Price $40.84 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company; Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. Terminal year unlevered free cash flow assumed to be equal to 2030E unlevered free cash flow per Company management 13Preliminary Draft (8/17/2021 1:00 PM) - Confidential Illustrative 10-year Discounted Cash Flow Analysis ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Terminal Revenue $775 $902 $1,040 $1,200 $1,385 $1,573 $1,759 $1,935 $2,065 $2,137 $2,137 % Growth 16.4% 15.4% 15.4% 15.4% 13.6% 11.8% 10.0% 6.7% 3.5% Adj. EBITDA $271 $330 $404 $492 $594 $675 $755 $830 $886 $917 $917 % Margin 35.0% 36.6% 38.9% 41.0% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% 42.9% Less: Stock-Based Compensation (Post-Tax) ($23) ($25) ($25) ($25) ($25) ($29) ($32) ($35) ($38) ($39) ($39) Less: Taxes (43) (59) (80) (104) (133) (153) (174) (194) (210) (220) (220) Less: CapEx (65) (65) (65) (75) (87) (98) (110) (121) (129) (134) (134) Less: Change in NWC (15) (18) (21) (24) (28) (28) (28) (26) (20) (11) (11) 1 Unlevered FCF $124 $163 $214 $264 $322 $367 $411 $454 $490 $514 $514 PV of Unlevered FCF $50 $151 $183 $208 $234 $246 $254 $258 $257 $248 NPV of Cash Flows $2,089 Perpetuity Growth Rate: 3.50% PV of Cash Flows $2,089 Terminal Year Cash Flow $514 PV of Terminal Value $5,138 Total Enterprise Value $7,228 Less: Debt (928) Plus: Cash 89 Total Equity Value $6,389 Shares Outstanding 156.4 Implied Share Price $40.84 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company; Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 1. Terminal year unlevered free cash flow assumed to be equal to 2030E unlevered free cash flow per Company management 13
Preliminary Draft (8/17/2021 1:00 PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,468 $7,762 $8,089 $8,454 $8,865 8.50% 6,738 6,971 7,228 7,511 7,826 9.00% 6,131 6,319 6,525 6,749 6,997 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.38 $44.26 $46.35 $48.68 $51.31 8.50% $37.71 $39.20 $40.84 $42.66 $44.67 9.00% $33.83 $35.04 $36.35 $37.78 $39.37 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 14 WACC WACCPreliminary Draft (8/17/2021 1:00 PM) - Confidential For Reference | Illustrative 10-year Discounted Cash Flow Analysis (Cont’d) ($ in millions, except per share data) Assumes 8/3/21 valuation date, 8.5% discount rate, 3.5% PGR Total Enterprise Value Implied Share Price Perpetuity Growth Rate Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $7,468 $7,762 $8,089 $8,454 $8,865 8.50% 6,738 6,971 7,228 7,511 7,826 9.00% 6,131 6,319 6,525 6,749 6,997 Implied Share Price Perpetuity Growth Rate 3.00% 3.25% 3.50% 3.75% 4.00% 8.00% $42.38 $44.26 $46.35 $48.68 $51.31 8.50% $37.71 $39.20 $40.84 $42.66 $44.67 9.00% $33.83 $35.04 $36.35 $37.78 $39.37 Source: Company management projections as of August 2021; August 2021 Detailed Capitalization Schedule per the Company, Company filings Note: Cash flows discounted using mid-year convention; 28.0% tax rate per Company management; share count and balance sheet per August 2021 Detailed Capitalization Schedule per the Company 14 WACC WACC
Preliminary Draft (8/17/2021 1:00 PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 15Preliminary Draft (8/17/2021 1:00 PM) - Confidential These materials have been prepared by Evercore Group L.L.C. (“Evercore”) for the Special Committee of the Board of Directors of Ocala (the “Company”) to whom such materials are directly addressed and delivered and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with Evercore. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by Evercore. Evercore assumes no responsibility for independent investigation or verification of such information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the management of the Company and/or other potential transaction participants or obtained from public sources, Evercore has assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such management (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials have been developed by and are proprietary to Evercore and were prepared exclusively for the benefit and internal use of the Special Committee of the Board of Directors of the Company. These materials were compiled on a confidential basis for use by the Special Committee of the Board of Directors of the Company in evaluating the potential transaction described herein and not with a view to public disclosure or filing thereof under state or federal securities laws, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Evercore. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Evercore (or any affiliate) to provide or arrange any financing for any transaction or to purchase any security in connection therewith. Evercore assumes no obligation to update or otherwise revise these materials. These materials may not reflect information known to other professionals in other business areas of Evercore and its affiliates. Evercore and its affiliates do not provide legal, accounting or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Evercore or its affiliates to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his, her or its particular circumstances from independent advisors regarding the impact of the transactions or matters described herein. 15
Exhibit D.VI
EXECUTION VERSION
LIMITED GUARANTEE
LIMITED GUARANTEE, dated as of August 19, 2021 (this “Limited Guarantee”), by Nordic Capital Epsilon SCA, SICAV-RAIF (“Nordic Capital X”), société d’investissement à capital variable in the form of a société en commandite par actions organized and qualifying as reserved alternative investment fund, fonds d’investissement alternatif réservé incorporated and existing under the law of Grand Duchy of Luxembourg, having its registered office at 8, rue Lou Hemmer, L-1748 Senningerberg, Grand-Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce des Sociétés, Luxembourg) under number B 245.768, acting in respect and on behalf of its compartment “Nordic Capital Epsilon SCA, SICAV-RAIF—Compartment 1” (acting through and represented by its managing general partner Nordic Capital Epsilon GP SARL, a private limited liability company, société à responsabilité limitée, incorporated under the law of the Grand Duchy of Luxembourg, having its registered office at 8, rue Lou Hemmer, L-1748 Senningerberg, Grand-Duchy of Luxembourg and registered with the Luxembourg Register under number B 243978 (the “General Partner”)), each of the other guarantors listed on Exhibit A hereto (together with Nordic Capital X, each, a “Guarantor” and collectively, the “Guarantors”), in favor of Inovalon Holdings, Inc., a Delaware corporation (the “Guaranteed Party”).
1. GUARANTEE.
To induce the Guaranteed Party to enter into that certain Agreement and Plan of Merger, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”; capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement), by and among the Guaranteed Party, Ocala Bidco, Inc., a Delaware corporation (“Parent”), and Ocala Merger Sub, Inc., a Delaware corporation, each Guarantor, intending to be legally bound, hereby (severally and not jointly) absolutely, irrevocably and unconditionally guarantees to the Guaranteed Party, but subject to such Guarantor’s Pro Rata Share of the Cap (each as defined below) (such amount with respect to such Guarantor, such Guarantor’s “Maximum Commitment”), the due and punctual payment of such Guarantor’s Pro Rata Share of (A) the obligation of Parent to pay the Parent Termination Fee to the Guaranteed Party in accordance with Section 8.03(d) of the Merger Agreement, if, as and when due and subject to the conditions and limitations set forth in Section 8.03(d) of the Merger Agreement (the “Termination Fee Obligation”), (B) the obligation of Parent to pay to the Guaranteed Party the reasonable out-of-pocket fees, cost and expenses incurred by the Guaranteed Party in connection with any suit contemplated by, and solely to the extent reimbursable under, Section 8.03(g) of the Merger Agreement, which in no event shall exceed $7,500,000 in the aggregate (collectively, the “Enforcement Costs”), and (C) the obligations of Parent to pay for the reasonable out-of-pocket cost and expenses incurred by the Acquired Companies pursuant to, and solely to the extent reimbursable under, Section 6.16(c) of the Merger Agreement (the “Debt Financing Cooperation Payment Obligations” and, together with the Termination Fee Obligation and Enforcement Costs, the “Payment Obligations”) in an amount up to and not exceed such Guarantor’s Maximum Commitment.
The term “Pro Rata Share” means, with respect to each Guarantor, the percentage set forth opposite such Guarantor’s name on Exhibit B hereto. In no event shall the Guarantors’ aggregate liability under this Limited Guarantee exceed an amount equal to $376,305,000 (the “Cap”), it being understood that this Limited Guarantee may not be enforced against any Guarantor without giving effect to such Guarantor’s Maximum Commitment and the Cap. The Guaranteed Party, on behalf of itself and the holders of equity interests in the Guaranteed Party, hereby agree that in no event shall any Guarantor be required to pay any Person under, in respect of, or in connection with this Limited Guarantee, more than such Guarantor’s Maximum Commitment and no Guarantor shall have any obligation or liability to the Guaranteed Party or any of its Affiliates relating to, arising out of or in connection with, this Limited Guarantee or the Merger Agreement other than as expressly set forth herein or in the Equity Commitment Letter, of even date herewith, by and among the Guarantors and Parent (the “Equity Commitment Letter”). All payments hereunder shall be made in lawful money of the United States in immediately available funds. Each Guarantor promises and undertakes to make all payments hereunder free and clear of any deduction, offset, defense, claim or counterclaim of any kind (other than defenses and claims that are available to Parent under the Merger Agreement or for any breach by the Guaranteed Party of this Limited Guarantee as well as any defenses in respect of any fraud of the Guaranteed Party, but excluding defenses arising from bankruptcy or insolvency of Parent and other defenses waived in this Limited Guarantee).
If the Parent fails to discharge its Payment Obligations when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of such Payment Obligations or operated as a discharge thereof), taking into account any relevant grace or cure periods under the Merger Agreement, the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s option, and for so long as the Parent has failed to perform any of its Payment Obligations, take any and all actions available hereunder or under applicable Law to enforce Guarantor’s obligations hereunder in respect of such Payment Obligations, subject to each Guarantor’s Maximum Commitment and the Cap.
In furtherance of the foregoing each Guarantor acknowledges that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against such Guarantor for the full amount of Guarantor’s liabilities hereunder in respect of the Payment Obligations (subject to such Guarantor’s Maximum Commitment), regardless of whether action is brought against the Parent or whether the Parent is joined in any such action or actions but provided always that the Parent has defaulted in its obligations to discharge the Payment Obligations.
Each Guarantor acknowledges and agrees that in addition to any rights of the Guaranteed Party set forth in this Limited Guarantee, (a) with respect to the Parent, the Guaranteed Party shall have the rights and remedies specified in, and subject to the limitations set forth in, the Merger Agreement and (b) with respect to such Guarantor, the Guaranteed Party shall have the rights and remedies specified in, and subject to the limitations set forth in, this Limited Guarantee and in the Equity Commitment Letter.
2. NATURE OF GUARANTEE. Subject to the express terms and conditions of this Limited Guarantee (including always each Guarantor’s Maximum Commitment and the Cap), each Guarantor’s several liability hereunder is absolute, unconditional, irrevocable and continuing irrespective of any modification, amendment or waiver of or any consent to departure from the Merger Agreement, the Equity Commitment Letter or any agreement or instrument related thereto that may be agreed to by the Parent. Without limiting the foregoing, the Guaranteed Party shall not be obligated to file any claim relating to the Payment Obligations in the event that the Parent becomes subject to an insolvency, bankruptcy, reorganization or similar
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proceeding, and the failure of the Guaranteed Party to so file shall not affect any Guarantor’s obligations hereunder. In the event that any payment hereunder is rescinded or must otherwise be returned for any reason whatsoever (other than as set forth in the penultimate sentence of Section 8), the applicable Guarantor(s) shall remain liable hereunder as if such payment had not been made. This Limited Guarantee is an unconditional and continuing guarantee of payment when due and not merely of collection, and the Guaranteed Party shall not be required to proceed against the Parent first before proceeding against Guarantor hereunder but provided always that the Parent has defaulted in its obligations to discharge the Payment Obligations.
3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. Each Guarantor agrees that the Guaranteed Party may, at any time and from time to time, without notice to or further consent of any Guarantor, extend the time of payment of any of the Payment Obligations, and may also make any agreement with the Parent or any other Person (including any Guarantor) interested in the transactions contemplated by the Merger Agreement for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party and Parent or any other Person (including any Guarantor) interested in the transactions contemplated by the Merger Agreement without in any way impairing or affecting any Guarantor’s obligations under this Limited Guarantee or affecting the validity or enforceability of this Limited Guarantee. Each Guarantor agrees that the obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by: (a) any delay or failure on the part of the Guaranteed Party in asserting any claim or demand or to enforce any right or remedy against the Parent or any other Person (including any Guarantor) interested in the transactions contemplated by the Merger Agreement; (b) any change in the time, place or manner of payment of any of the Payment Obligations, or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement (other than amendments to the Payment Obligations) made in accordance with the terms thereof or any agreement evidencing, securing or otherwise executed in connection with any of the Payment Obligations; (c) the addition, substitution or release of any entity or other Person now or hereafter liable with respect to the Payment Obligations or otherwise interested in the transactions contemplated by the Merger Agreement; (d) any change in the legal existence, structure or ownership of the Parent or any other Person (including any Guarantor) now or hereafter liable with respect to the Payment Obligations or otherwise interested in the transactions contemplated by the Merger Agreement; (e) any voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustment, or other similar proceeding or any other inability to pay or perform affecting the Parent or any other Person (including any Guarantor to the fullest extent permitted by Law) interested in the transactions contemplated by the Merger Agreement; (f) the existence of any claim, set-off or other right which any Guarantor may have at any time against the Parent or the Guaranteed Party, whether in connection with the Payment Obligations or otherwise; (g) the adequacy of any other means the Guaranteed Party may have of obtaining payment related to the Payment Obligations; or (h) the value, genuineness, validity, regularity, illegality or enforceability of the Merger Agreement or any agreement or instrument related thereto, in each case in accordance with its terms, provided that this sentence is subject to the last sentence of this paragraph. To the fullest extent permitted by Law, each Guarantor hereby expressly waives any and all rights or defenses arising by reason of any Law which would otherwise
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require any election of remedies by the Guaranteed Party (including any bénéfice de division and the bénéfice de discussion, to the extent applicable). Each Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Payment Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Payment Obligations incurred and all other notices of any kind (other than notices required to be made to the Parent pursuant to the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium Law or other similar Law now or hereafter in effect or any right to require the marshaling of assets of Parent or any other Person now or hereafter liable with respect to the Payment Obligations or otherwise interested in the transactions contemplated by the Merger Agreement. 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. The Guaranteed Party hereby covenants and agrees that it shall not, directly or indirectly, institute, and shall cause its controlled Affiliates and any of their employees, equityholders and representatives not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the Equity Commitment Letter or the respective transactions contemplated thereby, against any Guarantor or any of the Non-Recourse Parties (as defined below), except for claims against (i) the General Partner, acting in its capacity as described above, under the Confidentiality Agreement, (ii) any Guarantor under this Limited Guarantee or (iii) any Guarantor for specific performance of such Guarantor’s obligations under the Equity Commitment Letter to fund its commitment in accordance with the terms thereof pursuant to, and subject to the limitations in, Section 9.02 of the Merger Agreement. Each Guarantor hereby covenants and agrees that it shall not assert as a defense in any proceeding to enforce this Limited Guarantee, and shall cause its Affiliates not to assert as a defense in any such proceeding, that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms.
Each Guarantor hereby agrees not to assert any rights that it may now have or hereafter acquire against the Parent that arise from the existence, payment, performance, or enforcement of such Guarantor’s obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against the Parent, whether or not such claim, remedy or right arises in equity or under contract, statute or common Law, including, without limitation, the right to take or receive from the Parent, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts payable by such Guarantor under this Limited Guarantee shall have been paid in full in immediately available funds. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in immediately available funds of all amounts payable under this Limited Guarantee, such amount shall be received and held on behalf of and for the benefit of the Guaranteed Party, shall be segregated from other property and funds of such Guarantor and shall forthwith be promptly paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to all amounts payable by such Guarantor under this Limited Guarantee.
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Notwithstanding anything to the contrary contained in this Limited Guarantee or otherwise, the Guaranteed Party hereby agrees that (i) to the extent the Parent is relieved of any of its Payment Obligations under the Merger Agreement, including pursuant to Section 8.02 thereof (other than solely as a result of bankruptcy of the Parent), each Guarantor shall be similarly relieved of its corresponding Payment Obligations under this Limited Guarantee solely in respect of such relieved obligation and (ii) each Guarantor shall have all defenses to the payment of the Payment Obligations that would be available to Parent under the Merger Agreement (other than any defenses based solely on the bankruptcy of Parent).
4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder or under the Merger Agreement or otherwise preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by Law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. The Guaranteed Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Guaranteed Party’s rights against, Parent or any other Person now or hereafter liable for any Payment Obligations or interested in the transactions contemplated by the Merger Agreement prior to proceeding against any Guarantor hereunder.
5. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby severally in respect of itself only represents and warrants that:
(a) it is a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization;
(b) it has all requisite corporate, limited partnership or other power and authority to execute, deliver and perform this Limited Guarantee and the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene any provision of such Guarantor’s articles of association, issuing document or similar organizational documents, any Law, regulation, rule, decree, order, judgment or contractual restriction binding on such Guarantor or its assets;
(c) all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Authority 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 Authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee;
(d) this Limited Guarantee constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and
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(e) such Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and all funds necessary for such Guarantor to fulfill its obligations 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 8 hereof.
6. NO ASSIGNMENT. Neither any Guarantor nor the Guaranteed Party may assign or delegate their rights, interests or obligations hereunder to any other Person (by operation of Law or otherwise) without the prior written consent of the other parties hereto; provided, however, that each Guarantor may assign, transfer or delegate all or part of its rights, interests and obligations hereunder to a commonly controlled Affiliate without the prior written consent of the Guaranteed Party; provided, that no such assignment, transfer or delegation shall relieve the Guarantor of its obligations under this Limited Guarantee.
7. NOTICES. Section 9.01 (Notices) of the Merger Agreement (the address of Nordic Capital X being the address set out above and the address of each other Guarantor set forth on the signature pages hereto, with a copy to the same address as for the Parent) shall apply to this Letter, mutatis mutandis.
8. CONTINUING GUARANTEE. Subject to the last sentence of Section 3 hereof, this Limited Guarantee may not be revoked or terminated and shall remain in full force and effect and shall be binding on each Guarantor, its successors and assigns until all amounts payable by such Guarantor under this Limited Guarantee with respect to the Payment Obligations have been indefeasibly paid in full. Notwithstanding the foregoing, this Limited Guarantee shall terminate and no Guarantor shall have any further obligations under this Limited Guarantee as of the earliest of (i) the Closing, (ii) receipt in full by the Guaranteed Party (or its designee(s) if the Guaranteed Party has given its prior written consent to such receipt by such designee(s)) of the Payment Obligations of each Guarantor, (iii) the valid termination of the Merger Agreement pursuant to Section 8.01 thereof (other than under circumstances in which Parent would be obligated to pay any of its Payment Obligations) and (iv) the three (3) month anniversary of the termination of the Merger Agreement in accordance with its terms under circumstances in which Parent would be obligated to pay the Parent Termination Fee if, by such three month anniversary, the Guaranteed Party has not presented a written claim for payment of any Payment Obligation to the Parent or any Guarantor by the end of such three month period, setting forth in reasonable detail the basis of such claim. Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its Affiliates asserts in writing in any pleading or filing with, or orally before, any Governmental Authority in any litigation or other proceeding that the provisions of Section 1 hereof limiting any Guarantor’s liability to its Maximum Commitment or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable, in whole or in part, asserts in writing in any pleading or filing with, or orally before, any Governmental Authority in any litigation or other proceeding that any Guarantor is liable for Payment Obligations in excess of or to a greater extent than its Maximum Commitment or asserts in writing in any pleading or filing with, or orally before, any Governmental Authority in any litigation or other proceeding any theory of liability against any Guarantor or any Non-Recourse Party with respect to the transactions contemplated by the Merger Agreement other than liability of (w) Parent or Ocala Topco LP under the Rollover Agreement and Support Agreement, if any, to the other parties to such agreements pursuant to the terms and conditions therein, (x) the General Partner under the Confidentiality Agreement, (y) any Guarantor under this Limited Guarantee (as limited by the provisions of Section 1), or (z) any Guarantor for specific performance of
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such Guarantor’s obligation under the Equity Commitment Letter to fund its commitment in accordance with the terms thereof pursuant to, and subject to the limitations in, Section 9.02 of the Merger Agreement, then unless within five (5) Business Days within making any such assertion, the Guaranteed Party or applicable Affiliate withdraws such assertion, (i) the obligations of each Guarantor under this Limited Guarantee shall terminate ab initio and be null and void, (ii) if any Guarantor has previously made any payments under this Limited Guarantee, it shall be entitled to recover such payments, and (iii) neither any Guarantor nor any Non-Recourse Party shall have any liability to the Guaranteed Party with respect to the transactions contemplated by the Merger Agreement or under this Limited Guarantee. Notwithstanding anything set forth in this Section 8, Sections 9 through 13 shall survive indefinitely (subject to the applicable statute of limitations) following the termination of this Limited Guarantee.
9. NO RECOURSE. The Guaranteed Party acknowledges that the sole asset of Parent is the Equity Commitment Letter, and that no additional funds are expected to be contributed to Parent unless and until the Closing occurs. Notwithstanding anything to the contrary that may be expressed or implied in this Limited Guarantee or any document or instrument delivered in connection herewith or otherwise, and notwithstanding the fact that a Guarantor may be a partnership, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party acknowledges and agrees that no Person other than any Guarantor and the Guaranteed Party has any rights or obligations hereunder and that no recourse shall be had hereunder or under any document or instrument delivered in connection herewith, or for any claim based on, in respect of, or by reason of, such obligations on their creation, against, and no personal liability shall attach to, the former, current and future equity holders, controlling persons, directors, officers, employees, agents, Affiliates, members, managers, general or limited partners, representatives (each in their capacities of such) of any Guarantor, Parent or any former, current or future stockholder, member, controlling person, director, officer, employee, general or limited partner, member, manager, Affiliate, agent, representative or successor or assignee of any of the foregoing, but not including the Parent (such parties (excluding, for the avoidance of doubt, the Guarantor with respect to the rights of the Guaranteed Party hereunder and the Parent), each a “Non-Recourse Party”, and collectively the “Non-Recourse Parties”), through the Parent or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of the Guaranteed Party against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise, except for its rights under the Confidentiality Agreement with the General Partner or the rights of the Guaranteed Party under the Equity Commitment Letter. Except under the Confidentiality Agreement with the General Partner, the Equity Commitment Letter to which the Guarantors are a party (subject to the limitations set forth therein) and Section 9.02 of the Merger Agreement (subject to the limitations set forth therein), recourse against the Guarantors pursuant to this Limited Guarantee shall be the sole and exclusive remedy of the Guaranteed Party and all of its controlled Affiliates against the Guarantors and the Non-Recourse Parties in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby or in respect of any oral representations made or alleged to be made in connection therewith. Nothing set forth in this Limited Guarantee shall confer or give or shall be construed to confer or give to any Person (including any Person acting in a representative capacity) any rights or remedies against any Person other than the Guarantors as expressly set forth herein. Without limiting the foregoing, the Guaranteed Party hereby covenants and agrees that it shall not, and shall cause each of its Subsidiaries, officers, directors and controlled Affiliates not to, directly or indirectly, and it shall use its reasonable best efforts
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to cause its other Affiliates not to, institute any proceeding or bring any claim arising under, or in connection with, this Limited Guarantee against any Non-Recourse Party other than claims permitted under the Confidentiality Agreement for breach thereof. The Guaranteed Party acknowledges that the Guarantors are agreeing to enter into this Limited Guarantee in reliance on the provisions set forth in this Section 9. This Section 9 shall survive the termination of this Limited Guarantee.
10. LIMITED RECOURSE. The Guaranteed Party acknowledges that the Guarantee (as it relates to Nordic Capital X) is granted only by Nordic Capital Epsilon SCA, SICAV-RAIF acting in respect and on behalf of its compartment “Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1” and the Guaranteed Party shall have no recourse against Nordic Capital Epsilon SCA, SICAV-RAIF itself or any other of its compartment.
11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. Sections 9.07 (Governing Law), 9.08 (Jurisdiction) and 9.09 (Waiver of Jury Trial) of the Merger Agreement shall apply to this Limited Guarantee, mutatis mutandis.
12. COUNTERPARTS
This Limited Guarantee may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Limited Guarantee shall become effective when each party to this Limited Guarantee shall have received a counterpart hereof signed by the other party to this Limited Guarantee. Until and unless each party to this Limited Guarantee has received a counterpart hereof signed by the parties, this Limited Guarantee shall have no effect and no party to this Limited Guarantee shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The parties irrevocably agree that this Limited Guarantee may be executed by way of electronic signatures and the parties agree that this Limited Guarantee, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record.
13. MISCELLANEOUS.
(a) This Limited Guarantee, the Merger Agreement, the Confidentiality Agreement and the Equity Commitment Letter to which the Guarantors are a party (to the extent the Guaranteed Party is a third party beneficiary thereof) constitute the entire agreement with respect to the subject matter hereof and supersede any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among the Guarantors or any of their respective Affiliates, on the one hand, and the Guaranteed Party or any of their Affiliates, on the other hand. This Limited Guarantee may not be amended or modified other than in accordance with its terms, and no modification or waiver of any provision hereof shall be enforceable unless approved by the Guaranteed Party and each Guarantor in writing.
8
(b) If any term, provision, covenant or restriction of this Limited Guarantee is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Limited Guarantee shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that this Limited Guarantee may not be enforced without giving effect to the limitation of the amount payable hereunder to the Cap provided in Section 1 hereof and to the provisions of Sections 8 and 9 hereof. No party hereto shall assert, and each party shall cause its respective controlled Affiliates, and shall use its reasonable best efforts to cause its other Affiliates, not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.
(c) The titles and headings contained in this Limited Guarantee are for reference purposes only and shall not affect in any way the meaning or interpretation of this Limited Guarantee.
(d) The parties to this Limited Guarantee acknowledge that each party and its attorney has reviewed and participated in the drafting of this Limited Guarantee and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Limited Guarantee.
(e) This Limited Guarantee shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the transactions contemplated by the Merger Agreement and may not be used, circulated, quoted or otherwise referred to in any document (other than the Merger Agreement and the Equity Commitment Letter), except with the prior written consent of each Guarantor and the Guaranteed Party agrees to keep, and agrees to cause its Affiliates and representatives to keep, this Limited Guarantee confidential; provided that the Guaranteed Party may disclose this Limited Guarantee to (i) its Affiliates and advisors, (ii) to the extent required by Law or the applicable rules of any national securities exchange, and (iii) in connection with any litigation relating to the Closing, the Merger Agreement and the transactions contemplated thereby.
(f) Each party to this Limited Guarantee is individually and severally (and thus not jointly) liable under this Limited Guarantee.
[Remainder of page intentionally left blank]
9
IN WITNESS WHEREOF, the Guarantors have caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.
| NORDIC CAPITAL EPSILON SCA, SICAV-RAIF acting through and represented by its managing general partner Nordic Capital Epsilon GP SARL for and on behalf of its compartment Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1 | ||
| By: | /s/ Ian Charoub | |
| Name: Ian Charoub | ||
| Title: Class A Manager | ||
| By: | /s/ Monica Morsch | |
| Name: Monica Morsch | ||
| Title: Class B Manager | ||
| 22C Capital I, L.P. | ||
| By: 22C Capital GP I, L.L.C., its general partner | ||
| By: 22C Capital GP I MM LLC, its managing member | ||
| By: | /s/ D. Randall Winn | |
| Name: D. Randall Winn | ||
| Title: Member | ||
| By: | /s/ Eric Edell | |
| Name: Eric Edell | ||
| Title: Member | ||
| 445 Park Avenue, 13th Floor | ||
| New York, NY 10022 | ||
| 22C Capital I-A, L.P. | ||
| By: 22C Capital GP I, L.L.C., its general partner, | ||
| By: 22C Capital GP I MM LLC, its managing member | ||
| By: | /s/ D. Randall Winn | |
| Name: D. Randall Winn | ||
| Title: Member | ||
| By: | /s/ Eric Edell | |
| Name: Eric Edell | ||
| Title: Member | ||
| 445 Park Avenue, 13th Floor | ||
| New York, NY 10022 | ||
[Limited Guarantee Signature Page]
| Insight Partners XII, L.P. | ||
| By: Insight Associates XII, L.P., its general partner | ||
| By: Insight Associates XII, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners (Cayman) XII, L.P. | ||
| By: Insight Associates XII, L.P., its general partner | ||
| By: Insight Associates XII, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners (Delaware) XII, L.P. | ||
| By: Insight Associates XII, L.P., its general partner | ||
| By: Insight Associates XII, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners (EU) XII, S.C.SP | ||
| By: Insight Associates (EU) XII, SARL, its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners XII (Co-Investors), L.P. | ||
| By: Insight Associates XII, L.P., its general partner | ||
| By: Insight Associates XII, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
[Limited Guarantee Signature Page]
| Insight Partners XII (Co-Investors) (B), L.P. | ||
| By: Insight Associates XII, L.P., its general partner | ||
| By: Insight Associates XII, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners XII Buyout Annex Fund, L.P. | ||
| By: Insight Associates XII Buyout Annex, L.P., its general partner | ||
| By: Insight Associates XII Buyout Annex, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners (Cayman) XII Buyout Annex Fund, L.P. | ||
| By: Insight Associates XII Buyout Annex, L.P., its general partner | ||
| By: Insight Associates XII Buyout Annex, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners (Delaware) XII Buyout Annex Fund, L.P. | ||
| By: Insight Associates XII Buyout Annex, L.P., its general partner | ||
| By: Insight Associates XII Buyout Annex, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
[Limited Guarantee Signature Page]
| Insight Partners (EU) XII Buyout Annex Fund, S.C.SP | ||
| By: Insight Associates (EU) XII Buyout Annex, SARL, its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
| Insight Partners XII Buyout Annex Fund (Co-Investors) (B), L.P. | ||
| By: Insight Associates XII Buyout Annex, L.P., its general partner By: Insight Associates XII Buyout Annex, Ltd., its general partner | ||
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer | |
[Limited Guarantee Signature Page]
| Ashburton Investment Pte. Ltd. | ||
| By: | /s/ Andrew Skrilow | |
| Name: Andrew Skrilow | ||
| Title: Authorized Signatory | ||
| Address: | ||
| Ashburton Investment Pte Ltd 168 Robinson Road #37-01 Capital Tower, Singapore 068912 Attention: Matthew Lim Oon Su | ||
| With a copy to: GIC Special Investments Pte. Ltd. 280 Park Ave, 9th Floor New York, NY 10017 Attention: Andrew Skrilow Email: [email protected] | ||
[Limited Guarantee Signature Page]
| Inovalon Holdings, Inc. | ||
| By: | /s/ Keith R. Dunleavy, M.D. | |
| Name: Keith R. Dunleavy, M.D. | ||
| Title: Chairman & Chief Executive Officer | ||
[Limited Guarantee Signature Page]
Exhibit A
Additional Guarantors
| 1. | 22C Capital I, L.P. |
| 2. | 22C Capital 1-A, L.P. |
| 3. | Insight Partners XII, L.P. |
| 4. | Insight Partners (Cayman) XII, L.P. |
| 5. | Insight Partners (Delaware) XII, L.P. |
| 6. | Insight Partners (EU) XII, S.C.Sp |
| 7. | Insight Partners XII (Co-Investors), L.P. |
| 8. | Insight Partners XII (Co-Investors) (B), L.P. |
| 9. | Insight Partners XII Buyout Annex Fund, L.P. |
| 10. | Insight Partners (Cayman) XII Buyout Annex Fund, L.P. |
| 11. | Insight Partners (Delaware) XII Buyout Annex Fund, L.P. |
| 12. | Insight Partners (EU) XII Buyout Annex Fund, S.C.Sp. |
| 13. | Insight Partners XII Buyout Annex Fund (Co-Investors) (B), L.P. |
| 14. | Ashburton Investment Pte. Ltd. |
Exhibit B
| Guarantor |
Maximum Commitment |
Pro Rata Share |
||||||
| Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1 |
$ | 248,894,645.67 | 66.14 | % | ||||
| 22C Capital I, L.P. |
$ | 7,874,769.99 | 2.09 | % | ||||
| 22C Capital 1-A, L.P. |
$ | 1,014,324.50 | 0.27 | % | ||||
| Insight Partners XII, L.P. |
$ | 14,966,864.69 | 3.98 | % | ||||
| Insight Partners (Cayman) XII, L.P. |
$ | 21,156,044.88 | 5.62 | % | ||||
| Insight Partners (Delaware) XII, L.P. |
$ | 1,526,553.83 | 0.41 | % | ||||
| Insight Partners (EU) XII, S.C.Sp |
$ | 3,418,153.13 | 0.91 | % | ||||
| Insight Partners XII (Co-Investors), L.P. |
$ | 24,889.46 | 0.01 | % | ||||
| Insight Partners XII (Co-Investors) (B), L.P. |
$ | 389,934.94 | 0.10 | % | ||||
| Insight Partners XII Buyout Annex Fund, L.P. |
$ | 16,136,669.53 | 4.29 | % | ||||
| Insight Partners (Cayman) XII Buyout Annex Fund, L.P. |
$ | 19,803,717.31 | 5.26 | % | ||||
| Insight Partners (Delaware) XII Buyout Annex Fund, L.P. |
$ | 2,729,544.61 | 0.73 | % | ||||
| Insight Partners (EU) XII Buyout Annex Fund, S.C.Sp. |
$ | 2,646,579.73 | 0.70 | % | ||||
| Insight Partners XII Buyout Annex Fund (Co-Investors) (B), L.P. |
$ | 165,929.76 | 0.04 | % | ||||
| Ashburton Investment Pte. Ltd. |
$ | 35,556,377.95 | 9.45 | % | ||||
|
|
|
|
|
|||||
| Total |
$ | 376,305,000 | 100 | % | ||||
|
|
|
|
|
|||||
18
Exhibit D.VII
| EXECUTION VERSION |
|
EQUITY COMMITMENT LETTER
| (1) | NORDIC CAPITAL EPSILON SCA, SICAV-RAIF, a société en commandite par actions – société d’investissement à capital variable – fonds d’investissement alternatif réservé registered in Luxembourg with registered number B 245.768 (acting through its general partner, NORDIC CAPITAL EPSILON GP SARL, a société à responsabilité limitée incorporated in Luxembourg with registered number B 243.978), of 8 Rue Lou Hemmer, L-1748 Senningerberg, Grand Duchy of Luxembourg, for and on behalf of its compartment, NORDIC CAPITAL EPSILON SCA, SICAV-RAIF - COMPARTMENT 1 (“Nordic Capital X”); |
| (2) | Ocala Bidco, Inc., a Delaware corporation (“Parent”); and |
| (3) | Each other equity investor listed on Exhibit A attached hereto (each, an “Additional Equity Investor” and together with Nordic Capital X, the “Equity Investors”). |
Unless otherwise stated, capitalized terms in this letter (the “Letter”) shall have the meaning ascribed to them in the Agreement and Plan of Merger (the “Merger Agreement”) to be entered into as of the date hereof by and among Inovalon Holdings, Inc., a Delaware corporation (the “Company”), Parent and Ocala Merger Sub, Inc., a Delaware corporation (“Merger Sub”), pursuant to which Parent, Merger Sub and the Company wish to effect a business combination through a merger of the Merger Sub with and into the Company on the terms and conditions set forth in the Merger Agreement and in accordance with the Delaware General Corporation Law.
| 1. | Undertakings |
| 1.1 | Each Equity Investor hereby, severally and not jointly, irrevocably undertakes to the Parent that, subject to the terms and conditions of this Letter, it will make, or cause to be made, directly or indirectly through Ocala Topco, Inc., a Delaware corporation, as directed by Nordic Capital X, a capital investment to the Parent of up to its pro rata percentage (as set forth on Exhibit A hereto) of USD $3,175,000,000 (in the case of each Equity Investor, such Equity Investor’s “Equity Investment”), and cause the Parent to receive such Equity Investment. |
| 1.2 | The Equity Investment shall be paid in immediately available funds, subject to (i) the terms of this Letter, (ii) the satisfaction or waiver of each of the conditions to completion of the Closing set forth in Article VII of the Merger Agreement (other than conditions that, by their nature, can only be satisfied by actions taken at the Closing, provided that each such condition is capable of and would be satisfied assuming a Closing would occur at such time prior to the Closing), (iii) the substantially simultaneous funding by each Equity Investor of the entirety of its Equity Investment set forth on Exhibit A to be funded pursuant to this Letter, (iv) the substantially simultaneous funding of the Debt Financing, (v) the Merger Agreement not being terminated in accordance with its terms and (vi) the substantially simultaneous occurrence of the Closing, solely for the purpose of funding, and solely to the extent necessary to fund (together with the Rollover Amount (if the rollover contemplated by the Merger Agreement is consummated), debt and cash on hand of the Acquired Companies), (A) the payments required to be made at the Closing pursuant to Section 2.03 and Section 3.02 of the Merger Agreement and (B) the payment of any and all out-of-pocket fees and expenses required to be paid by Parent and its Subsidiaries in connection with the transactions to be consummated at the Closing. |
| 1.3 | No Equity Investor nor any of their respective permitted assignees will have any obligation under any circumstance to, directly or indirectly, contribute to, purchase equity or debt securities of, or otherwise provide funds to, Parent or any other person in any amount in excess of its Equity Investment (and no claim may thus be made against any Equity Investor that has paid or procured the payment of its Equity Investment in accordance with the terms of this Letter). The funds contributed, directly or indirectly, by the Equity Investors to Parent pursuant to this Letter may only be used by Parent to satisfy the obligations described in clauses (A)–(B) of Section 1.2, and not for any other purpose. |
| 1.4 | If, and only if, Parent does not require the Equity Investors to fund at the Closing all of the equity financing with respect to which the Equity Investors have respectively made their Equity Investment in order to consummate the transactions contemplated by the Merger Agreement, then the amount required to be funded by the Equity Investors under this Letter shall be reduced by such amount on a pro rata basis accordingly. |
| 1.5 | Prior to the Closing: |
| (a) | the Parent shall not, and each Equity Investor undertakes to the Company to, as far as it is lawfully able, procure that the Parent does not: (i) repay the Equity Investment; or (ii) use the Equity Investment for any other purpose than as described in Section 1.2; and |
| (b) | Each Equity Investor undertakes to the Company not to withdraw or extract, or cause or suffer the repayment or redemption of, its Equity Investment. |
| 2. | Duration |
| 2.1 | This Letter shall terminate on the earlier of: |
| (a) | the consummation of the transactions to be consummated at the Closing in accordance with the terms of the Merger Agreement (at which time the obligations hereunder shall be satisfied in full); |
| (b) | in respect of each Equity Investor, such Equity Investor having satisfied in full its obligation under Section 1.2 to fund its Equity Investment; |
| (c) | the valid termination of the Merger Agreement in accordance with Section 8.01 of the Merger Agreement; |
| (d) | the date that Company or any of its Affiliates, direct or indirect equityholders, or Representatives asserts in any litigation or other proceeding any claim against any Equity Investor or a Related Person (as defined below) relating to this Letter, the Merger Agreement or any of the transactions contemplated hereby or thereby (including in respect of any oral representations made or alleged to be made in connection therewith) other than a claim against any Equity Investor (i) under the Limited Guarantee pursuant to the terms thereof and subject to the limitations set forth therein, (ii) seeking specific performance of an Equity Investor’s obligation to fund its Equity Investment in accordance with the terms hereof pursuant to, and subject to the limitations set forth in, Section 9.02 of the Merger Agreement or (iii) relating to a breach or seeking to prevent a breach of the Confidentiality Agreement; and |
2
| (e) | any judgment against the Parent in any action permitted under clause (d) above that includes any award of money damages or the payment of any amount due pursuant to the Limited Guarantee. |
| 2.2 | Section 1.5 shall survive a termination of this Letter pursuant to Section 2.1(b) but not otherwise. |
| 2.3 | Section 4 shall survive any termination of this Letter. |
| 3. | Limited Guarantee |
| 3.1 | Concurrently with the execution and delivery of this Letter, each Equity Investor is executing and delivering to the Company the Limited Guarantee. The Company’s remedies against the Equity Investors under the Limited Guarantee shall, and are intended to, be the sole and exclusive direct or indirect monetary remedies available to Company or any of its Affiliates, direct or indirect equityholders, or Representatives against the Equity Investors (except as expressly set forth in Section 4.3) or any of their respective Related Persons for any loss, damage or recovery of any kind (including consequential, indirect or punitive damages, and whether at law, in equity or otherwise) arising under or in connection with any breach of the Merger Agreement or of the failure of the Closing to be consummated or otherwise in connection with the transactions contemplated hereby and thereby or in respect of any oral representations made or alleged to be made in connection therewith (whether or not Parent’s breach is caused by our breach of our obligations under this Letter). |
| 4. | Miscellaneous |
| 4.1 | Each party to this Letter is individually and severally (and thus not jointly) liable under this Letter. |
| 4.2 | Any claim of any Equity Investor or its respective Affiliates against the Parent shall be subordinated to any claim of the Company against the Parent under this Letter or the Merger Agreement. Subject to the preceding sentence, Nordic Capital X may determine in its discretion whether to make, directly or indirectly, its Equity Investment in any combination of ordinary shares, preference shares, loan notes, shareholder loans or other debt or equity instruments, or capital contribution, or otherwise as it shall see fit; provided that each Equity Investor’s Equity Investment shall be of the same class and series as Nordic Capital X’s Equity Investment. |
| 4.3 | Notwithstanding anything to the contrary expressed or implied in this Letter or any other relevant agreement, document or otherwise: |
| (a) | no recourse under this Letter or otherwise in relation to the transaction contemplated by this Letter or the Merger Agreement, may be made against any Representative, agent, adviser, officer, director or employee, or any direct or indirect holder of any equity interests or securities of any kind, of any Equity Investor (whether such person is a limited or general partner (acting in its own capacity or otherwise), member, shareholder or otherwise) or any affiliate (other than Parent) of any of the aforementioned categories of persons (any such person or entity, a “Related Person”), 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, and no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any Related Person under this Letter or otherwise in relation to the transaction contemplated by this Letter or the Merger Agreement; and |
3
| (b) | Each Equity Investor’s aggregate liability under this Letter shall be limited to an amount equal to its Equity Investment and no claim may thus be made against any Equity Investor once it has made its entire Equity Investment to the Parent (provided that the undertakings in Section 1.5 are complied with). |
| 4.4 | The Company is a third-party beneficiary of this Letter if it seeks specific performance of Parent’s obligation to cause the Equity Investors to fund the Equity Investment, in each case, if and only to the extent permitted by, and subject to the limitations set forth in, Section 9.02 of the Merger Agreement. Other than the Company, there are no third-party beneficiaries to this Letter. This Letter may only be enforced by (i) Parent and (ii) the Company, pursuant to its right to seek specific performance of each Equity Investor’s obligation to fund its Equity Investment to the extent permitted by, and subject to the limitations set forth in, Section 9.02 of the Merger Agreement and for no other purpose (including, without limitation, any claim for monetary damages hereunder), and no other third party, including Parent’s creditors, shall have any right to enforce this Letter or to cause Parent to enforce this Letter. Each Equity Investor hereby acknowledges and agrees that the Company may seek specific performance of the obligations of such Equity Investor to fund its Equity Investment to Parent (and not to the Company or any other Person) to the extent permitted by, and subject to the limitations set forth in, Section 9.02 of the Merger Agreement. The parties to this Letter agree that, notwithstanding any other provision of this Letter and for the avoidance of doubt, the Equity Investors shall under no circumstances, whether following an enforcement by the Company of any of its rights under this Letter (if any) or otherwise, be required to pay or cause to be paid any funds (whether comprising all or some of the Equity Investment or otherwise) to the Company directly and that any such funds shall only require to be paid to the Parent in accordance with the provisions of this Letter. |
| 4.5 | This Letter may not be amended or terminated (other than in accordance with Section 2) and no provision of this Letter may be waived or modified except by an instrument in writing signed by Parent, each Equity Investor, and the Company; provided, however, that any Equity Investor may amend this Letter to reflect any assignment permitted by Section 4.6 (solely to the extent such assignment is permitted thereby). Together with the Limited Guarantee, this Letter constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between or among any of the Equity Investors or any of their respective Affiliates, on the one hand, and Parent or any of its Affiliates, on the other hand, with respect to the transactions contemplated hereby (other than the Merger Agreement, the Confidentiality Agreement and the other agreements referred to herein or therein as being entered into in connection with the Merger Agreement). |
| 4.6 | The benefits of this Letter may not assigned by either: |
| (a) | Parent without the prior written consent of the Equity Investors and the Company; or |
| (b) | any Equity Investor (other than to a commonly controlled Affiliate) without the prior written consent of Parent and the Company; provided, however, each Equity Investor acknowledges and agrees that, except to the extent otherwise agreed in writing by the Company, no permitted assignment shall relieve such Equity Investor of any of its accrued obligations under this Letter. Subject to the preceding sentence, the Equity Investment shall be binding upon and inure to the benefit of the parties to this Letter and their respective successors and permitted assigns. |
4
| 4.7 | If any term of this Letter is invalid, illegal or incapable of being enforced, all other terms and provisions of this Letter shall nevertheless remain in full force and effect. |
| 4.8 | This Letter may be executed in any number of counterparts and by the parties to it on separate counterparts, each of which shall be an original and which shall together (but not otherwise) constitute one and the same instrument. The parties irrevocably agree that this Letter may be executed by way of electronic signatures and the parties agree that this Letter, or any part thereof, shall not be challenged or denied any legal effect, validity and/or enforceability solely on the ground that it is in the form of an electronic record. |
| 4.9 | Other than as required by law, rule or regulation, including the rules of any national securities exchange or other self-regulatory organization, or, to the extent reasonably necessary, in connection with enforcing the terms of this Letter or seeking the approval, consent, waiver from or in connection with the filing of any notices or similar responses, in each case, with any Governmental Authority (“Legal Obligation”), each of the parties hereto agrees that it will not, nor will it permit its advisors or Affiliates to, disclose to any person the contents of this Letter, other than to (i) their respective Affiliates, limited partners, general partners, members, managers, directors, officers, employees, agents and advisors (collectively, “Representatives”) and (ii) the Company and its respective Representatives; provided, however, that each of the foregoing are instructed to maintain the confidentiality of this Letter in accordance herewith. Notwithstanding the foregoing, each Equity Investor, its respective Affiliates and Representatives will have the right to make such disclosures as are required by any Legal Obligation or any Governmental Authority having jurisdiction over such Equity Investor or its respective Representatives, and each Equity Investor will not be required to provide any notice of such disclosure. In the event that any Person (other than an Equity Investor and its respective Affiliates and Representatives) is required by Legal Obligation to disclose the contents of this Letter to any Person, such disclosing party will give the Equity Investors reasonably prompt written notice of such requirement, to the extent not prohibited by such Legal Obligation, so that any Equity Investor may seek an appropriate protective order or other remedy (at such Equity Investors’ sole expense), and the disclosing party will reasonably cooperate with such Equity Investor and its respective affiliates and Representatives to obtain such protective order, including by seeking confidentiality undertakings or designating the contents as exempt from disclosure pursuant to any Legal Obligation. |
| 4.10 | Sections 9.01 (Notices) (the address of Nordic Capital X being the address set out above and the address of each other Equity Investor set forth on the signature pages hereto, with a copy to the same address as for the Parent), 9.07 (Governing Law), 9.08 (Jurisdiction) and 9.09 (Waiver of Jury Trial) of the Merger Agreement shall apply to this Letter, mutatis mutandis. |
Yours faithfully
[Reminder of page intentionally left blank; signature page follows]
5
IN WITNESS WHEREOF, this Letter is executed on August 19, 2021 by or on behalf of:
NORDIC CAPITAL EPSILON SCA, SICAV-RAIF
(acting through its general partner
NORDIC CAPITAL EPSILON GP SARL)
for and on behalf of its compartment
NORDIC CAPITAL EPSILON SCA, SICAV-RAIF - COMPARTMENT 1
| /s/ Ian Charoub |
| Name: Ian Charoub |
| Title: Class A Manager |
| /s/ Monica Morsch |
| Name: Monica Morsch |
| Title: Class B Manager |
[Signature Page to Equity Commitment Letter]
Acknowledged and agreed by 22C Capital I, L.P., as an Equity Investor
22C Capital I, L.P.
By: 22C Capital GP I, L.L.C., its general partner
By: 22C Capital GP I MM LLC, its managing member
| By: | /s/ D. Randall Winn | |
| Name: | D. Randall Winn | |
| Title: Member | ||
| By: | /s/ Eric Edell | |
| Name: | Eric Edell | |
| Title: Member | ||
| 445 Park Avenue, 13th Floor | ||
| New York, NY 10022 | ||
Acknowledged and agreed by 22C Capital I-A, L.P., as an Equity Investor
22C Capital I-A, L.P.
By: 22C Capital GP I, L.L.C., its general partner,
By: 22C Capital GP I MM LLC, its managing member
| By: | /s/ D. Randall Winn | |
| Name: | D. Randall Winn | |
| Title: Member | ||
| By: | /s/ Eric Edell | |
| Name: | Eric Edell | |
| Title: Member | ||
| 445 Park Avenue, 13th Floor | ||
| New York, NY 10022 | ||
[Signature Page to Equity Commitment Letter]
Acknowledged and agreed by Insight, as an Equity Investor
Insight Partners XII, L.P.
By: Insight Associates XII, L.P., its general partner
By: Insight Associates XII, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners (Cayman) XII, L.P.
By: Insight Associates XII, L.P., its general partner
By: Insight Associates XII, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners XII (Co-Investors), L.P.
By: Insight Associates XII, L.P., its general partner
By: Insight Associates XII, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners XII (Co-Investors) (B), L.P.
By: Insight Associates XII, L.P., its general partner
By: Insight Associates XII, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
[Signature Page to Equity Commitment Letter]
Insight Partners (Delaware) XII, L.P.
By: Insight Associates XII, L.P., its general partner
By: Insight Associates XII, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners (EU) XII, S.C.Sp.
By: Insight Associates (EU) XII, S.a.r.l., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners XII Buyout Annex Fund, L.P.
By: Insight Associates XII Buyout Annex, L.P., its general partner
By: Insight Associates XII Buyout Annex, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners (Cayman) XII Buyout Annex Fund, L.P.
By: Insight Associates XII Buyout Annex, L.P., its general partner
By: Insight Associates XII Buyout Annex, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners (Delaware) XII Buyout Annex Fund, L.P.
By: Insight Associates XII Buyout Annex, L.P., its general partner
By: Insight Associates XII Buyout Annex, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
Insight Partners (EU) XII Buyout Annex Fund, S.C.SP
By: Insight Associates (EU) XII Buyout Annex, SARL, its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
[Signature Page to Equity Commitment Letter]
Insight Partners XII Buyout Annex Fund (Co-Investors) (B), L.P.
By: Insight Associates XII Buyout Annex, L.P., its general partner
By: Insight Associates XII Buyout Annex, Ltd., its general partner
| By: | /s/ Andrew Prodromos | |
| Name: | Andrew Prodromos | |
| Title: | Authorized Officer |
[Signature Page to Equity Commitment Letter]
Acknowledged and agreed by Ashburton Investment Pte. Ltd., as an Equity Investor
| By: | /s/ Andrew Skrilow | |
| Name: | Andrew Skrilow | |
| Title: | Authorized Signatory |
Address:
Ashburton Investment Pte Ltd
168 Robinson Road #37-01 Capital Tower, Singapore 068912
Attention: Matthew Lim Oon Su
With a copy to:
GIC Special Investments Pte. Ltd.
280 Park Ave, 9th Floor
New York, NY 10017
Attention: Andrew Skrilow
Email: [email protected]
[Signature Page to Equity Commitment Letter]
Acknowledged and agreed by Parent
| By: | /s/ Aditya Desaraju | |
| Name: | Aditya Desaraju | |
| Title: | President |
[Signature Page to Equity Commitment Letter]
Exhibit A
| Equity Investor |
Equity Commitment |
Pro Rata Percentage |
||||||
| Nordic Capital Epsilon SCA, SICAV-RAIF - Compartment 1 |
$ | 1,900,000,000 | 59.84 | % | ||||
| 22C Capital I, L.P. |
$ | 66,441,835 | 2.09 | % | ||||
| 22C Capital 1-A, L.P. |
$ | 8,558,165 | 0.27 | % | ||||
| Insight Partners XII, L.P. |
$ | 126,280,000 | 3.98 | % | ||||
| Insight Partners (Cayman) XII, L.P. |
$ | 178,500,000 | 5.62 | % | ||||
| Insight Partners (Delaware) XII, L.P. |
$ | 12,880,000 | 0.41 | % | ||||
| Insight Partners (EU) XII, S.C.Sp |
$ | 28,840,000 | 0.91 | % | ||||
| Insight Partners XII (Co-Investors), L.P. |
$ | 210,000 | 0.01 | % | ||||
| Insight Partners XII (Co-Investors) (B), L.P. |
$ | 3,290,000 | 0.10 | % | ||||
| Insight Partners XII Buyout Annex Fund, L.P. |
$ | 136,150,000 | 4.29 | % | ||||
| Insight Partners (Cayman) XII Buyout Annex Fund, L.P. |
$ | 167,090,000 | 5.26 | % | ||||
| Insight Partners (Delaware) XII Buyout Annex Fund, L.P. |
$ | 23,030,000 | 0.73 | % | ||||
| Insight Partners (EU) XII Buyout Annex Fund, S.C.Sp. |
$ | 22,330,000 | 0.70 | % | ||||
| Insight Partners XII Buyout Annex Fund (Co-Investors) (B), L.P. |
$ | 1,400,000 | 0.04 | % | ||||
| Ashburton Investment Pte. Ltd. |
$ | 500,000,000 | 15.75 | % | ||||
|
|
|
|
|
|||||
| Total |
$ | 3,175,000,000 | 100.00 | % | ||||
|
|
|
|
|
|||||
13
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