|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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Delaware
|
|
75-2788861
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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2201 Lakeside Boulevard
Richardson, Texas
|
|
75082-4305
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(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
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ý
|
|
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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|
Smaller reporting company
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¨
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|
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Emerging growth company
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¨
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Class
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|
July 21, 2017
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Common Stock, $0.001 par value
|
|
82,654,544
|
|
|
|
|
|
|
|
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June 30, 2017
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December 31, 2016
|
||||
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(unaudited)
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|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
324,591
|
|
|
$
|
104,886
|
|
Restricted cash
|
106,479
|
|
|
83,654
|
|
||
Accounts receivable, less allowance for doubtful accounts of $2,553 and $2,468 at June 30, 2017 and December 31, 2016, respectively
|
89,727
|
|
|
92,367
|
|
||
Prepaid expenses
|
13,293
|
|
|
10,836
|
|
||
Other current assets
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6,061
|
|
|
5,712
|
|
||
Total current assets
|
540,151
|
|
|
297,455
|
|
||
Property, equipment, and software, net
|
138,241
|
|
|
130,428
|
|
||
Goodwill
|
359,420
|
|
|
259,938
|
|
||
Identified intangible assets, net
|
110,318
|
|
|
74,976
|
|
||
Deferred tax assets, net
|
63,260
|
|
|
15,665
|
|
||
Other assets
|
10,057
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|
|
9,636
|
|
||
Total assets
|
$
|
1,221,447
|
|
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$
|
788,098
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
24,400
|
|
|
$
|
21,421
|
|
Accrued expenses and other current liabilities
|
53,316
|
|
|
50,464
|
|
||
Current portion of deferred revenue
|
101,100
|
|
|
89,583
|
|
||
Current portion of term loan
|
3,833
|
|
|
5,469
|
|
||
Customer deposits held in restricted accounts
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106,616
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|
|
83,590
|
|
||
Total current liabilities
|
289,265
|
|
|
250,527
|
|
||
Deferred revenue
|
5,896
|
|
|
6,308
|
|
||
Term loan, net
|
116,143
|
|
|
116,657
|
|
||
Convertible notes, net
|
275,673
|
|
|
—
|
|
||
Other long-term liabilities
|
34,899
|
|
|
29,843
|
|
||
Total liabilities
|
721,876
|
|
|
403,335
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|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value: 125,000,000 shares authorized, 86,801,958 and 86,062,191 shares issued and 82,964,638 and 81,087,353 shares outstanding at June 30, 2017 and December 31, 2016, respectively
|
87
|
|
|
86
|
|
||
Additional paid-in capital
|
601,836
|
|
|
534,348
|
|
||
Treasury stock, at cost: 3,837,320 and 4,974,838 shares at June 30, 2017 and December 31, 2016, respectively
|
(41,364
|
)
|
|
(30,358
|
)
|
||
Accumulated deficit
|
(61,015
|
)
|
|
(119,260
|
)
|
||
Accumulated other comprehensive income (loss)
|
27
|
|
|
(53
|
)
|
||
Total stockholders’ equity
|
499,571
|
|
|
384,763
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,221,447
|
|
|
$
|
788,098
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
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2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
On demand
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$
|
154,727
|
|
|
$
|
136,610
|
|
|
$
|
300,940
|
|
|
$
|
260,021
|
|
On premise
|
659
|
|
|
687
|
|
|
1,334
|
|
|
1,459
|
|
||||
Professional and other
|
5,920
|
|
|
5,422
|
|
|
11,951
|
|
|
9,622
|
|
||||
Total revenue
|
161,306
|
|
|
142,719
|
|
|
314,225
|
|
|
271,102
|
|
||||
Cost of revenue
|
67,544
|
|
|
62,078
|
|
|
130,586
|
|
|
116,826
|
|
||||
Gross profit
|
93,762
|
|
|
80,641
|
|
|
183,639
|
|
|
154,276
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Product development
|
21,290
|
|
|
18,878
|
|
|
41,677
|
|
|
36,150
|
|
||||
Sales and marketing
|
39,235
|
|
|
35,129
|
|
|
74,382
|
|
|
67,328
|
|
||||
General and administrative
|
27,370
|
|
|
21,932
|
|
|
51,621
|
|
|
40,278
|
|
||||
Total operating expenses
|
87,895
|
|
|
75,939
|
|
|
167,680
|
|
|
143,756
|
|
||||
Operating income
|
5,867
|
|
|
4,702
|
|
|
15,959
|
|
|
10,520
|
|
||||
Interest expense and other, net
|
(2,786
|
)
|
|
(1,074
|
)
|
|
(3,872
|
)
|
|
(1,782
|
)
|
||||
Income before income taxes
|
3,081
|
|
|
3,628
|
|
|
12,087
|
|
|
8,738
|
|
||||
Income tax (benefit) expense
|
(3,132
|
)
|
|
1,545
|
|
|
(2,321
|
)
|
|
3,659
|
|
||||
Net income
|
$
|
6,213
|
|
|
$
|
2,083
|
|
|
$
|
14,408
|
|
|
$
|
5,079
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
79,018
|
|
|
76,363
|
|
|
78,642
|
|
|
76,509
|
|
||||
Diluted
|
81,925
|
|
|
77,161
|
|
|
81,644
|
|
|
77,120
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
6,213
|
|
|
$
|
2,083
|
|
|
$
|
14,408
|
|
|
$
|
5,079
|
|
(Loss) gain on interest rate swaps, net
|
(24
|
)
|
|
(330
|
)
|
|
82
|
|
|
(409
|
)
|
||||
Foreign currency translation adjustment
|
48
|
|
|
8
|
|
|
(2
|
)
|
|
104
|
|
||||
Comprehensive income
|
$
|
6,237
|
|
|
$
|
1,761
|
|
|
$
|
14,488
|
|
|
$
|
4,774
|
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Accumulated other comprehensive income (loss)
|
|
Accumulated Deficit
|
|
Treasury Shares
|
|
Total
Stockholders’ Equity
|
||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Balance as of December 31, 2016
|
86,062
|
|
|
$
|
86
|
|
|
$
|
534,348
|
|
|
$
|
(53
|
)
|
|
$
|
(119,260
|
)
|
|
(4,975
|
)
|
|
$
|
(30,358
|
)
|
|
$
|
384,763
|
|
||||||
Cumulative effect of adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
43,837
|
|
|
—
|
|
|
—
|
|
|
43,843
|
|
||||||||||||
Issuance of common stock
|
640
|
|
|
1
|
|
|
13,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,151
|
|
||||||||||||
Issuance of restricted stock
|
100
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
1,605
|
|
|
2
|
|
|
—
|
|
||||||||||||
Treasury stock purchases, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(467
|
)
|
|
(11,008
|
)
|
|
(11,008
|
)
|
||||||||||||
Stock-based expense
|
—
|
|
|
—
|
|
|
23,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,983
|
|
||||||||||||
Interest rate swap agreements
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||||||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||||||||
Reclassification of realized loss on cash flow hedge to earnings, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||||||
Equity component of convertible notes, net of issuance costs
|
—
|
|
—
|
|
—
|
|
—
|
|
61,401
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
61,401
|
|
||||||
Purchases of convertible note hedges
|
—
|
|
—
|
|
—
|
|
—
|
|
(62,549
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(62,549
|
)
|
||||||
Issuance of warrants
|
—
|
|
—
|
|
—
|
|
—
|
|
31,499
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
31,499
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,408
|
|
|
—
|
|
|
—
|
|
|
14,408
|
|
||||||||||||
Balance as of June 30, 2017
|
86,802
|
|
|
$
|
87
|
|
|
$
|
601,836
|
|
|
$
|
27
|
|
|
$
|
(61,015
|
)
|
|
(3,837
|
)
|
|
$
|
(41,364
|
)
|
|
$
|
499,571
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
14,408
|
|
|
$
|
5,079
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
29,533
|
|
|
26,822
|
|
||
Amortization of debt discount and issuance costs
|
1,424
|
|
|
205
|
|
||
Deferred taxes
|
(3,088
|
)
|
|
2,320
|
|
||
Stock-based expense
|
23,968
|
|
|
19,128
|
|
||
Loss on disposal and impairment of other long-lived assets
|
87
|
|
|
85
|
|
||
Acquisition-related consideration
|
1,024
|
|
|
(251
|
)
|
||
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
|
|
|
|
||||
Accounts receivable
|
6,631
|
|
|
1,251
|
|
||
Prepaid expenses and other current assets
|
(1,369
|
)
|
|
2,656
|
|
||
Other assets
|
(464
|
)
|
|
(243
|
)
|
||
Accounts payable
|
4,066
|
|
|
62
|
|
||
Accrued compensation, taxes, and benefits
|
(759
|
)
|
|
1,828
|
|
||
Deferred revenue
|
3,607
|
|
|
(1,229
|
)
|
||
Other current and long-term liabilities
|
1,396
|
|
|
2,888
|
|
||
Net cash provided by operating activities
|
80,464
|
|
|
60,601
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, equipment, and software
|
(27,129
|
)
|
|
(38,486
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(130,878
|
)
|
|
(71,305
|
)
|
||
Net cash used in investing activities
|
(158,007
|
)
|
|
(109,791
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from term loan
|
—
|
|
|
124,688
|
|
||
Payments on term loan
|
(767
|
)
|
|
(781
|
)
|
||
Payments on revolving line of credit
|
—
|
|
|
(40,000
|
)
|
||
Proceeds from borrowings on convertible notes
|
345,000
|
|
|
—
|
|
||
Purchase of convertible note hedges
|
(62,549
|
)
|
|
—
|
|
||
Proceeds from issuance of warrants
|
31,499
|
|
|
—
|
|
||
Deferred financing costs
|
(10,755
|
)
|
|
(392
|
)
|
||
Payments on capital lease obligations
|
(136
|
)
|
|
(426
|
)
|
||
Payments of acquisition-related consideration
|
(7,185
|
)
|
|
(2,736
|
)
|
||
Issuance of common stock
|
13,151
|
|
|
8,008
|
|
||
Purchase of treasury stock related to stock-based compensation
|
(11,008
|
)
|
|
(2,179
|
)
|
||
Purchase of treasury stock under share repurchase program
|
—
|
|
|
(21,244
|
)
|
||
Net cash provided by financing activities
|
297,250
|
|
|
64,938
|
|
||
Net increase in cash and cash equivalents
|
219,707
|
|
|
15,748
|
|
||
Effect of exchange rate on cash
|
(2
|
)
|
|
29
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
104,886
|
|
|
30,911
|
|
||
End of period
|
$
|
324,591
|
|
|
$
|
46,688
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
1,976
|
|
|
$
|
1,747
|
|
Cash paid for income taxes, net of refunds
|
$
|
1,157
|
|
|
$
|
1,200
|
|
Non-cash investing activities:
|
|
|
|
||||
Accrued property, equipment, and software
|
$
|
951
|
|
|
$
|
8,927
|
|
•
|
there is persuasive evidence of an arrangement;
|
•
|
the solution and/or service has been provided to the client;
|
•
|
the collection of the fees is probable; and
|
•
|
the amount of fees to be paid by the client is fixed or determinable.
|
|
Axiometrics
|
|
AUM
|
||||
|
(in thousands)
|
||||||
Restricted cash
|
$
|
—
|
|
|
$
|
7,637
|
|
Accounts receivable
|
1,642
|
|
|
2,183
|
|
||
Property, equipment, and software
|
416
|
|
|
341
|
|
||
Intangible assets:
|
|
|
|
||||
Developed product technologies
|
15,500
|
|
|
10,800
|
|
||
Client relationships
|
6,830
|
|
|
7,470
|
|
||
Trade names
|
3,200
|
|
|
208
|
|
||
Non-compete agreements
|
—
|
|
|
3,920
|
|
||
Goodwill
|
54,154
|
|
|
45,292
|
|
||
Other assets
|
273
|
|
|
1,149
|
|
||
Accounts payable and accrued liabilities
|
(368
|
)
|
|
(1,630
|
)
|
||
Client deposits held in restricted accounts
|
—
|
|
|
(7,637
|
)
|
||
Deferred revenue
|
(7,115
|
)
|
|
(321
|
)
|
||
Other long-term liabilities
|
(774
|
)
|
|
—
|
|
||
Total purchase price
|
$
|
73,758
|
|
|
$
|
69,412
|
|
|
NWP
|
|
AssetEye
|
|
eSupply
|
||||||
|
(in thousands)
|
||||||||||
Restricted cash
|
$
|
4,960
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable
|
7,902
|
|
|
90
|
|
|
287
|
|
|||
Property, equipment, and software
|
3,194
|
|
|
—
|
|
|
—
|
|
|||
Intangible assets:
|
|
|
|
|
|
||||||
Developed product technologies
|
2,740
|
|
|
1,638
|
|
|
2,160
|
|
|||
Client relationships
|
12,900
|
|
|
1,041
|
|
|
1,390
|
|
|||
Trade names
|
709
|
|
|
6
|
|
|
35
|
|
|||
Goodwill
|
33,520
|
|
|
3,154
|
|
|
3,194
|
|
|||
Deferred tax assets, net
|
11,173
|
|
|
—
|
|
|
—
|
|
|||
Other assets, net of other liabilities
|
3,065
|
|
|
8
|
|
|
53
|
|
|||
Accounts payable and accrued liabilities
|
(6,962
|
)
|
|
—
|
|
|
(44
|
)
|
|||
Client deposits held in restricted accounts
|
(5,018
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred revenue
|
—
|
|
|
(16
|
)
|
|
(29
|
)
|
|||
Deferred tax liabilities, net
|
—
|
|
|
(1,010
|
)
|
|
—
|
|
|||
Total purchase price
|
$
|
68,183
|
|
|
$
|
4,911
|
|
|
$
|
7,046
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
Pro Forma
|
|
2016
Pro Forma
|
|
2017
Pro Forma
|
|
2016
Pro Forma
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Total revenue
|
$
|
167,862
|
|
|
$
|
153,831
|
|
|
$
|
330,106
|
|
|
$
|
293,167
|
|
Net income
|
6,222
|
|
|
351
|
|
|
12,647
|
|
|
1,483
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.08
|
|
|
$
|
—
|
|
|
$
|
0.16
|
|
|
$
|
0.02
|
|
Diluted
|
$
|
0.08
|
|
|
$
|
—
|
|
|
$
|
0.15
|
|
|
$
|
0.02
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Leasehold improvements
|
$
|
54,107
|
|
|
$
|
51,242
|
|
Data processing and communications equipment
|
81,916
|
|
|
76,773
|
|
||
Furniture, fixtures, and other equipment
|
26,652
|
|
|
26,513
|
|
||
Software
|
97,636
|
|
|
86,983
|
|
||
Property, equipment, and software, gross
|
260,311
|
|
|
241,511
|
|
||
Less: Accumulated depreciation and amortization
|
(122,070
|
)
|
|
(111,083
|
)
|
||
Property, equipment, and software, net
|
$
|
138,241
|
|
|
$
|
130,428
|
|
Balance as of December 31, 2016
|
$
|
259,938
|
|
Goodwill acquired
|
99,446
|
|
|
Other
|
36
|
|
|
Balance as of June 30, 2017
|
$
|
359,420
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technologies
|
|
$
|
101,974
|
|
|
$
|
(68,078
|
)
|
|
$
|
33,896
|
|
|
$
|
75,671
|
|
|
$
|
(62,249
|
)
|
|
$
|
13,422
|
|
Client relationships
|
|
122,768
|
|
|
(69,894
|
)
|
|
52,874
|
|
|
108,468
|
|
|
(64,173
|
)
|
|
44,295
|
|
||||||
Vendor relationships
|
|
5,650
|
|
|
(5,650
|
)
|
|
—
|
|
|
5,650
|
|
|
(5,650
|
)
|
|
—
|
|
||||||
Trade names
|
|
9,680
|
|
|
(2,229
|
)
|
|
7,451
|
|
|
5,899
|
|
|
(1,225
|
)
|
|
4,674
|
|
||||||
Non-compete agreements
|
|
4,173
|
|
|
(209
|
)
|
|
3,964
|
|
|
253
|
|
|
(170
|
)
|
|
83
|
|
||||||
Total finite-lived intangible assets
|
|
244,245
|
|
|
(146,060
|
)
|
|
98,185
|
|
|
195,941
|
|
|
(133,467
|
)
|
|
62,474
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
12,133
|
|
|
—
|
|
|
12,133
|
|
|
12,502
|
|
|
—
|
|
|
12,502
|
|
||||||
Total identified intangible assets
|
|
$
|
256,378
|
|
|
$
|
(146,060
|
)
|
|
$
|
110,318
|
|
|
$
|
208,443
|
|
|
$
|
(133,467
|
)
|
|
$
|
74,976
|
|
2017
|
$
|
1,533
|
|
2018
|
5,366
|
|
|
2019
|
6,133
|
|
|
2020
|
10,732
|
|
|
2021
|
12,266
|
|
|
Thereafter
|
85,859
|
|
|
|
$
|
121,889
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on
June 30, 2017
(and only during such calendar quarter), if the last reported sale price of our common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the “Measurement Period”) in which the trading price per
$1,000
principal amount of the Convertible Notes for each trading day of the Measurement Period was less than
98%
of the product of the last reported sales price of our common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events, as defined in the Indenture.
|
Liability component:
|
|
||
Principal amount
|
$
|
345,000
|
|
Unamortized discount
|
(61,497
|
)
|
|
Unamortized debt issuance costs
|
(7,830
|
)
|
|
|
$
|
275,673
|
|
|
|
||
Equity component, net of issuance costs:
|
$
|
61,401
|
|
Contractual interest expense
|
$
|
561
|
|
Amortization of debt discount
|
1,052
|
|
|
Amortization of debt issuance costs
|
134
|
|
|
|
$
|
1,747
|
|
Effective interest rate of the liability component
|
5.87
|
%
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
|
Vesting
|
||
67,437
|
|
|
1,120,339
|
|
|
Shares vest ratably over a period of twelve quarters beginning on the first day of the second calendar quarter immediately following the grant date.
|
40,103
|
|
|
49,563
|
|
|
Shares vest ratably over a period of four quarters beginning on the first day of the calendar quarter immediately following the grant date.
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
|
Condition to Become Eligible to Vest
|
||
3,134
|
|
|
178,480
|
|
|
After the grant date and prior to July 1, 2020, the average closing price per share of our common stock equals or exceeds $38.05 for twenty consecutive trading days.
|
3,134
|
|
|
178,480
|
|
|
After the grant date and prior to July 1, 2020, the average closing price per share of our common stock equals or exceeds $41.09 for twenty consecutive trading days.
|
3,136
|
|
|
178,481
|
|
|
After the grant date and prior to July 1, 2020, the average closing price per share of our common stock equals or exceeds $45.66 for twenty consecutive trading days.
|
2017
|
$
|
6,355
|
|
2018
|
12,771
|
|
|
2019
|
11,835
|
|
|
2020
|
9,651
|
|
|
2021
|
9,047
|
|
|
Thereafter
|
54,348
|
|
|
|
$
|
104,007
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
6,213
|
|
|
$
|
2,083
|
|
|
$
|
14,408
|
|
|
$
|
5,079
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares used in computing basic net income per share
|
79,018
|
|
|
76,363
|
|
|
78,642
|
|
|
76,509
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
||||||||
Add weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options and restricted stock
|
2,907
|
|
|
798
|
|
|
3,002
|
|
|
611
|
|
||||
Weighted average common shares used in computing diluted net income per share
|
81,925
|
|
|
77,161
|
|
|
81,644
|
|
|
77,120
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Discount rates
|
|
16.3 - 28.0%
|
|
|
14.8 - 27.8%
|
Volatility rates
|
|
26.0
|
%
|
|
29.9%
|
Risk free rate of return
|
|
1.2 - 1.3%
|
|
|
0.7%
|
|
Fair value at June 30, 2017
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
1,103
|
|
|
$
|
—
|
|
|
$
|
1,103
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration related to the acquisition of:
|
|
|
|
|
|
|
|
||||||||
AssetEye
|
$
|
771
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
771
|
|
Axiometrics
|
623
|
|
|
—
|
|
|
—
|
|
|
623
|
|
||||
Total liabilities measured at fair value
|
$
|
1,394
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,394
|
|
|
Fair value at December 31, 2016
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
1,098
|
|
|
$
|
—
|
|
|
$
|
1,098
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration related to the acquisition of:
|
|
|
|
|
|
|
|
||||||||
Indatus
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
AssetEye
|
539
|
|
|
—
|
|
|
—
|
|
|
539
|
|
||||
Total liabilities measured at fair value
|
$
|
541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
541
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Balance at beginning of period
|
$
|
541
|
|
|
$
|
841
|
|
Initial contingent consideration
|
812
|
|
|
245
|
|
||
Net loss (gain) on change in fair value
|
41
|
|
|
(427
|
)
|
||
Balance at end of period
|
$
|
1,394
|
|
|
$
|
659
|
|
|
Fair Value
|
|
Carrying Value
|
||||
|
(in thousands)
|
||||||
Convertible Notes
|
$
|
375,612
|
|
|
$
|
275,673
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Number of shares repurchased
|
—
|
|
|
235,154
|
|
|
—
|
|
|
1,012,823
|
|
||||
Weighted-average cost per share
|
$
|
—
|
|
|
$
|
21.71
|
|
|
$
|
—
|
|
|
$
|
20.98
|
|
Total cost of shares repurchased, in thousands
|
$
|
—
|
|
|
$
|
5,106
|
|
|
$
|
—
|
|
|
$
|
21,244
|
|
|
Balance Sheet Location
|
|
Notional
|
|
Fair Value
|
||||
|
|
|
(in thousands)
|
||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
||||
Swap agreements as of June 30, 2017
|
Other assets
|
|
$
|
75,000
|
|
|
$
|
1,103
|
|
Swap agreements as of December 31, 2016
|
Other assets
|
|
$
|
75,000
|
|
|
$
|
1,098
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
Derivatives Designated as Cash Flow Hedges
|
|
Gain (Loss) Recognized in OCI
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
||||||
Three months ended June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
(21
|
)
|
|
Interest expense and other
|
|
$
|
(3
|
)
|
|
Interest expense and other
|
|
$
|
10
|
|
Three months ended June 30, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
(550
|
)
|
|
Interest expense and other
|
|
$
|
(86
|
)
|
|
Interest expense and other
|
|
$
|
—
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
Derivatives Designated as Cash Flow Hedges
|
|
Gain (Loss) Recognized in OCI
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
||||||
Six months ended June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
73
|
|
|
Interest expense and other
|
|
$
|
9
|
|
|
Interest expense and other
|
|
$
|
28
|
|
Six months ended June 30, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
(629
|
)
|
|
Interest expense and other
|
|
$
|
(86
|
)
|
|
Interest expense and other
|
|
$
|
—
|
|
•
|
conventional single family properties;
|
•
|
conventional multifamily properties;
|
•
|
affordable Housing and Urban Development ("HUD") properties;
|
•
|
affordable tax credit properties;
|
•
|
rural housing properties;
|
•
|
privatized military housing;
|
•
|
commercial properties;
|
•
|
student housing;
|
•
|
senior living; and
|
•
|
vacation rentals.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands, except dollar per unit data and percentages)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
161,306
|
|
|
$
|
142,719
|
|
|
$
|
314,225
|
|
|
$
|
271,102
|
|
On demand revenue
|
$
|
154,727
|
|
|
$
|
136,610
|
|
|
$
|
300,940
|
|
|
$
|
260,021
|
|
On demand revenue as a percentage of total revenue
|
95.9
|
%
|
|
95.7
|
%
|
|
95.8
|
%
|
|
96.0
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP total revenue
|
$
|
162,251
|
|
|
$
|
142,461
|
|
|
$
|
315,875
|
|
|
$
|
270,501
|
|
Non-GAAP on demand revenue
|
$
|
155,672
|
|
|
$
|
136,352
|
|
|
$
|
302,590
|
|
|
$
|
259,420
|
|
Adjusted EBITDA
|
$
|
39,444
|
|
|
$
|
30,662
|
|
|
$
|
76,522
|
|
|
$
|
58,114
|
|
|
|
|
|
|
|
|
|
||||||||
Ending on demand units
|
11,485
|
|
|
11,141
|
|
|
|
|
|
||||||
Average on demand units
|
11,298
|
|
|
11,070
|
|
|
|
|
|
||||||
On demand annual client value
|
$
|
649,017
|
|
|
$
|
548,917
|
|
|
|
|
|
||||
Annualized on demand revenue per average on demand unit
|
$
|
56.51
|
|
|
$
|
49.27
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Total revenue
|
$
|
161,306
|
|
|
$
|
142,719
|
|
|
$
|
314,225
|
|
|
$
|
271,102
|
|
Acquisition-related and other deferred revenue adjustments
|
945
|
|
|
(258
|
)
|
|
1,650
|
|
|
(601
|
)
|
||||
Non-GAAP total revenue
|
$
|
162,251
|
|
|
$
|
142,461
|
|
|
$
|
315,875
|
|
|
$
|
270,501
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
On demand revenue
|
$
|
154,727
|
|
|
$
|
136,610
|
|
|
$
|
300,940
|
|
|
$
|
260,021
|
|
Acquisition-related and other deferred revenue adjustments
|
945
|
|
|
(258
|
)
|
|
1,650
|
|
|
(601
|
)
|
||||
Non-GAAP on demand revenue
|
$
|
155,672
|
|
|
$
|
136,352
|
|
|
$
|
302,590
|
|
|
$
|
259,420
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income
|
$
|
6,213
|
|
|
$
|
2,083
|
|
|
$
|
14,408
|
|
|
$
|
5,079
|
|
Acquisition-related and other deferred revenue adjustments
|
945
|
|
|
(258
|
)
|
|
1,650
|
|
|
(601
|
)
|
||||
Depreciation, asset impairment, and loss on disposal of assets
|
6,929
|
|
|
6,563
|
|
|
13,604
|
|
|
12,059
|
|
||||
Amortization of intangible assets
|
8,227
|
|
|
7,737
|
|
|
16,016
|
|
|
14,848
|
|
||||
Acquisition-related expense (income)
|
1,354
|
|
|
(9
|
)
|
|
2,564
|
|
|
(66
|
)
|
||||
Costs arising from Hart-Scott-Rodino review process
|
2,228
|
|
|
—
|
|
|
2,709
|
|
|
—
|
|
||||
Interest expense, net
|
2,804
|
|
|
1,090
|
|
|
3,924
|
|
|
1,809
|
|
||||
Income tax (benefit) expense
|
(3,132
|
)
|
|
1,545
|
|
|
(2,321
|
)
|
|
3,659
|
|
||||
Headquarters relocation costs
|
—
|
|
|
1,174
|
|
|
—
|
|
|
2,199
|
|
||||
Stock-based expense
|
13,876
|
|
|
10,737
|
|
|
23,968
|
|
|
19,128
|
|
||||
Adjusted EBITDA
|
$
|
39,444
|
|
|
$
|
30,662
|
|
|
$
|
76,522
|
|
|
$
|
58,114
|
|
•
|
Revenue recognition;
|
•
|
Fair value measurements;
|
•
|
Business combinations;
|
•
|
Goodwill and other intangible assets with indefinite lives;
|
•
|
Impairment of long-lived assets;
|
•
|
Stock-based expense;
|
•
|
Income taxes, including deferred tax assets and liabilities; and
|
•
|
Capitalized product development costs.
|
|
Three Months Ended June 30,
|
||||||||||||
|
2017
|
|
2017
|
|
2016
|
|
2016
|
||||||
|
(in thousands, except per share and ratio amounts)
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
On demand
|
$
|
154,727
|
|
|
95.9
|
%
|
|
$
|
136,610
|
|
|
95.7
|
%
|
On premise
|
659
|
|
|
0.4
|
|
|
687
|
|
|
0.5
|
|
||
Professional and other
|
5,920
|
|
|
3.7
|
|
|
5,422
|
|
|
3.8
|
|
||
Total revenue
|
161,306
|
|
|
100.0
|
|
|
142,719
|
|
|
100.0
|
|
||
Cost of revenue
(1)
|
67,544
|
|
|
41.9
|
|
|
62,078
|
|
|
43.5
|
|
||
Gross profit
|
93,762
|
|
|
58.1
|
|
|
80,641
|
|
|
56.5
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Product development
(1)
|
21,290
|
|
|
13.2
|
|
|
18,878
|
|
|
13.2
|
|
||
Sales and marketing
(1)
|
39,235
|
|
|
24.3
|
|
|
35,129
|
|
|
24.6
|
|
||
General and administrative
(1)
|
27,370
|
|
|
17.0
|
|
|
21,932
|
|
|
15.4
|
|
||
Total operating expenses
|
87,895
|
|
|
54.5
|
|
|
75,939
|
|
|
53.2
|
|
||
Operating income
|
5,867
|
|
|
3.6
|
|
|
4,702
|
|
|
3.3
|
|
||
Interest expense and other, net
|
(2,786
|
)
|
|
(1.7
|
)
|
|
(1,074
|
)
|
|
(0.8
|
)
|
||
Income before income taxes
|
3,081
|
|
|
1.9
|
|
|
3,628
|
|
|
2.5
|
|
||
Income tax (benefit) expense
|
(3,132
|
)
|
|
(1.9
|
)
|
|
1,545
|
|
|
1.1
|
|
||
Net income
|
$
|
6,213
|
|
|
3.8
|
%
|
|
$
|
2,083
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.08
|
|
|
|
|
$
|
0.03
|
|
|
|
||
Diluted
|
$
|
0.08
|
|
|
|
|
$
|
0.03
|
|
|
|
||
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
79,018
|
|
|
|
|
76,363
|
|
|
|
||||
Diluted
|
81,925
|
|
|
|
|
77,161
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
(1)
Includes stock-based expense as follows:
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,050
|
|
|
|
|
$
|
826
|
|
|
|
||
Product development
|
2,454
|
|
|
|
|
1,897
|
|
|
|
||||
Sales and marketing
|
4,266
|
|
|
|
|
3,799
|
|
|
|
||||
General and administrative
|
6,106
|
|
|
|
|
4,215
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2017
|
|
2016
|
|
2016
|
||||||
|
(in thousands, except per share and ratio amounts)
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
On demand
|
$
|
300,940
|
|
|
95.8
|
%
|
|
$
|
260,021
|
|
|
96.0
|
%
|
On premise
|
1,334
|
|
|
0.4
|
|
|
1,459
|
|
|
0.5
|
|
||
Professional and other
|
11,951
|
|
|
3.8
|
|
|
9,622
|
|
|
3.5
|
|
||
Total revenue
|
314,225
|
|
|
100.0
|
|
|
271,102
|
|
|
100.0
|
|
||
Cost of revenue
(1)
|
130,586
|
|
|
41.6
|
|
|
116,826
|
|
|
43.1
|
|
||
Gross profit
|
183,639
|
|
|
58.4
|
|
|
154,276
|
|
|
56.9
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Product development
(1)
|
41,677
|
|
|
13.3
|
|
|
36,150
|
|
|
13.3
|
|
||
Sales and marketing
(1)
|
74,382
|
|
|
23.7
|
|
|
67,328
|
|
|
24.8
|
|
||
General and administrative
(1)
|
51,621
|
|
|
16.4
|
|
|
40,278
|
|
|
14.9
|
|
||
Total operating expenses
|
167,680
|
|
|
53.4
|
|
|
143,756
|
|
|
53.0
|
|
||
Operating income
|
15,959
|
|
|
5.0
|
|
|
10,520
|
|
|
3.9
|
|
||
Interest expense and other, net
|
(3,872
|
)
|
|
(1.2
|
)
|
|
(1,782
|
)
|
|
(0.7
|
)
|
||
Income before income taxes
|
12,087
|
|
|
3.8
|
|
|
8,738
|
|
|
3.2
|
|
||
Income tax (benefit) expense
|
(2,321
|
)
|
|
(0.7
|
)
|
|
3,659
|
|
|
1.3
|
|
||
Net income
|
$
|
14,408
|
|
|
4.5
|
%
|
|
$
|
5,079
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.18
|
|
|
|
|
$
|
0.07
|
|
|
|
||
Diluted
|
$
|
0.18
|
|
|
|
|
$
|
0.07
|
|
|
|
||
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
78,642
|
|
|
|
|
76,509
|
|
|
|
||||
Diluted
|
81,644
|
|
|
|
|
77,120
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
(1)
Includes stock-based expense as follows:
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,903
|
|
|
|
|
$
|
1,577
|
|
|
|
||
Product development
|
4,333
|
|
|
|
|
3,346
|
|
|
|
||||
Sales and marketing
|
7,394
|
|
|
|
|
6,773
|
|
|
|
||||
General and administrative
|
10,338
|
|
|
|
|
7,432
|
|
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands, except per unit data and percentages)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
On demand
|
$
|
154,727
|
|
|
$
|
136,610
|
|
|
$
|
18,117
|
|
|
13.3
|
%
|
On premise
|
659
|
|
|
687
|
|
|
(28
|
)
|
|
(4.1
|
)
|
|||
Professional and other
|
5,920
|
|
|
5,422
|
|
|
498
|
|
|
9.2
|
|
|||
Total revenue
|
$
|
161,306
|
|
|
$
|
142,719
|
|
|
$
|
18,587
|
|
|
13.0
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP on demand revenue
|
$
|
155,672
|
|
|
$
|
136,352
|
|
|
$
|
19,320
|
|
|
14.2
|
|
|
|
|
|
|
|
|
|
|||||||
Ending on demand units
|
11,485
|
|
|
11,141
|
|
|
344
|
|
|
3.1
|
|
|||
Average on demand units
|
11,298
|
|
|
11,070
|
|
|
228
|
|
|
2.1
|
|
|||
On demand annual client value
|
$
|
649,017
|
|
|
$
|
548,917
|
|
|
$
|
100,100
|
|
|
18.2
|
|
Annualized on demand revenue per average on demand unit
|
$
|
56.51
|
|
|
$
|
49.27
|
|
|
$
|
7.24
|
|
|
14.7
|
%
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands, except per unit data and percentages)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
On demand
|
$
|
300,940
|
|
|
$
|
260,021
|
|
|
$
|
40,919
|
|
|
15.7
|
%
|
On premise
|
1,334
|
|
|
1,459
|
|
|
(125
|
)
|
|
(8.6
|
)
|
|||
Professional and other
|
11,951
|
|
|
9,622
|
|
|
2,329
|
|
|
24.2
|
|
|||
Total revenue
|
$
|
314,225
|
|
|
$
|
271,102
|
|
|
$
|
43,123
|
|
|
15.9
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP on demand revenue
|
$
|
302,590
|
|
|
$
|
259,420
|
|
|
$
|
43,170
|
|
|
16.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Cost of revenue
|
$
|
59,740
|
|
|
$
|
54,057
|
|
|
$
|
5,683
|
|
|
10.5
|
%
|
|
$
|
115,357
|
|
|
$
|
101,197
|
|
|
$
|
14,160
|
|
|
14.0
|
%
|
Stock-based expense
|
1,050
|
|
|
826
|
|
|
224
|
|
|
27.1
|
|
|
1,903
|
|
|
1,577
|
|
|
326
|
|
|
20.7
|
|
||||||
Depreciation and amortization
|
6,754
|
|
|
7,195
|
|
|
(441
|
)
|
|
(6.1
|
)
|
|
13,326
|
|
|
14,052
|
|
|
(726
|
)
|
|
(5.2
|
)
|
||||||
Total cost of revenue
|
$
|
67,544
|
|
|
$
|
62,078
|
|
|
$
|
5,466
|
|
|
8.8
|
%
|
|
$
|
130,586
|
|
|
$
|
116,826
|
|
|
$
|
13,760
|
|
|
11.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Product development
|
$
|
17,275
|
|
|
$
|
15,518
|
|
|
$
|
1,757
|
|
|
11.3
|
%
|
|
$
|
34,253
|
|
|
$
|
30,141
|
|
|
$
|
4,112
|
|
|
13.6
|
%
|
Stock-based expense
|
2,454
|
|
|
1,897
|
|
|
557
|
|
|
29.4
|
|
|
4,333
|
|
|
3,346
|
|
|
987
|
|
|
29.5
|
|
||||||
Depreciation
|
1,561
|
|
|
1,463
|
|
|
98
|
|
|
6.7
|
|
|
3,091
|
|
|
2,663
|
|
|
428
|
|
|
16.1
|
|
||||||
Total product development expense
|
$
|
21,290
|
|
|
$
|
18,878
|
|
|
$
|
2,412
|
|
|
12.8
|
%
|
|
$
|
41,677
|
|
|
$
|
36,150
|
|
|
$
|
5,527
|
|
|
15.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Sales and marketing
|
$
|
29,770
|
|
|
$
|
27,120
|
|
|
$
|
2,650
|
|
|
9.8
|
%
|
|
$
|
57,101
|
|
|
$
|
52,793
|
|
|
$
|
4,308
|
|
|
8.2
|
%
|
Stock-based expense
|
4,266
|
|
|
3,799
|
|
|
467
|
|
|
12.3
|
|
|
7,394
|
|
|
6,773
|
|
|
621
|
|
|
9.2
|
|
||||||
Depreciation and amortization
|
5,199
|
|
|
4,210
|
|
|
989
|
|
|
23.5
|
|
|
9,887
|
|
|
7,762
|
|
|
2,125
|
|
|
27.4
|
|
||||||
Total sales and marketing expense
|
$
|
39,235
|
|
|
$
|
35,129
|
|
|
$
|
4,106
|
|
|
11.7
|
%
|
|
$
|
74,382
|
|
|
$
|
67,328
|
|
|
$
|
7,054
|
|
|
10.5
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
General and administrative
|
$
|
19,685
|
|
|
$
|
16,370
|
|
|
$
|
3,315
|
|
|
20.3
|
%
|
|
$
|
38,054
|
|
|
$
|
30,501
|
|
|
$
|
7,553
|
|
|
24.8
|
%
|
Stock-based expense
|
6,106
|
|
|
4,215
|
|
|
1,891
|
|
|
44.9
|
|
|
10,338
|
|
|
7,432
|
|
|
2,906
|
|
|
39.1
|
|
||||||
Depreciation
|
1,579
|
|
|
1,347
|
|
|
232
|
|
|
17.2
|
|
|
3,229
|
|
|
2,345
|
|
|
884
|
|
|
37.7
|
|
||||||
Total general and administrative expense
|
$
|
27,370
|
|
|
$
|
21,932
|
|
|
$
|
5,438
|
|
|
24.8
|
%
|
|
$
|
51,621
|
|
|
$
|
40,278
|
|
|
$
|
11,343
|
|
|
28.2
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Stock-based expense
|
$
|
13,876
|
|
|
$
|
10,737
|
|
|
$
|
3,139
|
|
|
29.2
|
%
|
|
$
|
23,968
|
|
|
$
|
19,128
|
|
|
$
|
4,840
|
|
|
25.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Depreciation expense
|
$
|
6,866
|
|
|
$
|
6,478
|
|
|
$
|
388
|
|
|
6.0
|
%
|
|
$
|
13,517
|
|
|
$
|
11,974
|
|
|
$
|
1,543
|
|
|
12.9
|
%
|
Amortization expense
|
8,227
|
|
|
7,737
|
|
|
490
|
|
|
6.3
|
|
|
16,016
|
|
|
14,848
|
|
|
1,168
|
|
|
7.9
|
|
||||||
Total depreciation and amortization expense
|
$
|
15,093
|
|
|
$
|
14,215
|
|
|
$
|
878
|
|
|
6.2
|
%
|
|
$
|
29,533
|
|
|
$
|
26,822
|
|
|
$
|
2,711
|
|
|
10.1
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
80,464
|
|
|
$
|
60,601
|
|
Net cash used in investing activities
|
(158,007
|
)
|
|
(109,791
|
)
|
||
Net cash provided by financing activities
|
297,250
|
|
|
64,938
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More Than
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Convertible Notes
(1)
|
$
|
373,376
|
|
|
$
|
3,148
|
|
|
$
|
10,350
|
|
|
$
|
10,350
|
|
|
$
|
349,528
|
|
Credit Facility
(2)
|
136,646
|
|
|
2,981
|
|
|
17,455
|
|
|
29,857
|
|
|
86,353
|
|
|||||
Operating lease obligations
|
104,007
|
|
|
6,355
|
|
|
24,606
|
|
|
18,698
|
|
|
54,348
|
|
|||||
Acquisition-related liabilities
(3)
|
22,455
|
|
|
7,482
|
|
|
13,973
|
|
|
1,000
|
|
|
—
|
|
|||||
|
$
|
636,484
|
|
|
$
|
19,966
|
|
|
$
|
66,384
|
|
|
$
|
59,905
|
|
|
$
|
490,229
|
|
(1)
|
Represents the aggregate principal amount of
$345.0 million
and anticipated interest payments related to our Convertible Notes and excludes the unamortized discount and debt issuance costs reflected in our Condensed Consolidated Balance Sheets.
|
(2)
|
Represents the contractually required principal payments for our Term Loan and excludes unamortized debt issuance costs reflected in our Condensed Consolidated Balance Sheets. These amounts also include the future interest obligations of our Term Loan, which were estimated using a LIBOR forward rate curve and include the related effects of our interest rate swap agreements.
|
(3)
|
We have made several acquisitions in which a portion of the cash purchase price is payable at various times through
2021
.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Number of shares repurchased
|
—
|
|
|
235,154
|
|
|
—
|
|
|
1,012,823
|
|
||||
Weighted-average cost per share
|
$
|
—
|
|
|
$
|
21.71
|
|
|
$
|
—
|
|
|
$
|
20.98
|
|
Total cost of shares repurchased, in thousands
|
$
|
—
|
|
|
$
|
5,106
|
|
|
$
|
—
|
|
|
$
|
21,244
|
|
•
|
the extent to which on demand software solutions maintain current and achieve broader market acceptance;
|
•
|
fluctuations in leasing activity by our clients;
|
•
|
increase in the number or severity of insurance claims on policies sold by us;
|
•
|
our ability to timely introduce enhancements to our existing solutions and new solutions;
|
•
|
our ability to renew the use of our on demand solutions for units managed by our existing clients and to increase the use of our on demand solutions for the management of units by our existing and new clients;
|
•
|
changes in our pricing policies or those of our competitors or new competitors;
|
•
|
changes in local economic, political and regulatory environments of our international operations;
|
•
|
the variable nature of our sales and implementation cycles;
|
•
|
general economic, industry and market conditions in the rental housing industry that impact our current and potential clients;
|
•
|
the amount and timing of our investment in research and development activities;
|
•
|
technical difficulties, service interruptions, data or document losses or security breaches;
|
•
|
Internet usage trends among consumers and the methodologies Internet search engines utilize to direct those consumers to websites such as our LeaseStar product family;
|
•
|
our ability to hire and retain qualified key personnel, including particular key positions in our sales force and IT department;
|
•
|
our ability to anticipate and adapt to external forces and the emergence of new technologies and products;
|
•
|
our ability to enter into new markets and capture additional market share;
|
•
|
changes in the legal, regulatory or compliance environment related to the rental housing industry or the markets in which we operate, including without limitation changes related to fair credit reporting, payment processing, data protection and privacy, social media, utility billing, insurance, the Internet and e-commerce, licensing, telemarketing, electronic communications, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology Economic and Clinical Health Act (“HITECH”);
|
•
|
the amount and timing of operating expenses and capital expenditures related to the expansion of our operations and infrastructure;
|
•
|
the timing of revenue and expenses related to recent and potential acquisitions or dispositions of businesses or technologies;
|
•
|
our ability to integrate acquisition operations in a cost-effective and timely manner;
|
•
|
litigation and settlement costs, including unforeseen costs; and
|
•
|
new accounting pronouncements and changes in accounting standards or practices, particularly any affecting the recognition of subscription revenue or accounting for mergers and acquisitions.
|
•
|
successfully supporting and maintaining a broad range of current and emerging solutions;
|
•
|
identifying suitable acquisition targets and efficiently managing the closing of acquisitions and the integration of targets into our operations;
|
•
|
maintaining continuity in our senior management and key personnel;
|
•
|
attracting, retaining, training and motivating our employees, particularly technical, client service and sales personnel;
|
•
|
enhancing our financial and accounting systems and controls;
|
•
|
enhancing our information technology infrastructure, processes and controls;
|
•
|
successfully completing system upgrades and enhancements; and
|
•
|
managing expanded operations in geographically dispersed locations.
|
•
|
our failure to develop new or additional solutions;
|
•
|
our inability to market our solutions in a cost-effective manner to new clients or in new vertical or geographic markets;
|
•
|
our inability to expand our sales to existing clients;
|
•
|
the inability of our LeaseStar product family to grow traffic to its websites, resulting in lower levels of lead and lease/move-in traffic to clients;
|
•
|
our inability to build and promote our brand; and
|
•
|
perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions.
|
•
|
difficulties in integrating and managing the operations and technologies of the companies we acquire;
|
•
|
diversion of our management’s attention from normal daily operations of our business;
|
•
|
our inability to maintain the clients, the key employees, the key business relationships and the reputations of the businesses we acquire;
|
•
|
our inability to generate sufficient revenue from acquisitions to offset our increased expenses associated with acquisitions;
|
•
|
difficulties in predicting or achieving the synergies between acquired businesses and our own businesses;
|
•
|
our responsibility for the liabilities of the businesses we acquire, including, without limitation, liabilities arising out of their failure to maintain effective data security, data integrity, disaster recovery and privacy controls prior to the acquisition, or their infringement or alleged infringement of third-party intellectual property, contract or data access rights prior to the acquisition;
|
•
|
difficulties in complying with new markets or regulatory standards to which we were not previously subject;
|
•
|
delays in our ability to implement internal standards, controls, procedures and policies in the businesses we acquire; and
|
•
|
adverse effects of acquisition activity on the key performance indicators we use to monitor our performance as a business.
|
•
|
develop superior products or services, gain greater market acceptance and expand their offerings more efficiently or more rapidly;
|
•
|
adapt to new or emerging technologies and changes in client requirements more quickly;
|
•
|
take advantage of acquisition and other opportunities more readily;
|
•
|
adopt more aggressive pricing policies, such as offering discounted pricing for purchasing multiple bundled products;
|
•
|
devote greater resources to the promotion of their brand and marketing and sales of their products and services; and
|
•
|
devote greater resources to the research and development of their products and services.
|
•
|
a reduction in new sales or subscription renewal rates;
|
•
|
unexpected sales credits or refunds to our clients, loss of clients and other potential liabilities;
|
•
|
delays in client payments, increasing our collection reserve and collection cycle;
|
•
|
diversion of development resources and associated costs;
|
•
|
harm to our reputation and brand; and
|
•
|
unanticipated litigation costs.
|
•
|
liability for client costs related to disputed or fraudulent transactions if those costs exceed the amount of the client reserves we have during the clearing period or after renter payments have been settled to our clients;
|
•
|
electronic processing limits on the amount of custodial balances that any single ODFI, or collectively all of our ODFIs, will underwrite;
|
•
|
reliance on sponsor banks, card payment processors and other payment service provider partners to process electronic transactions;
|
•
|
failure by us or our sponsor banks to adhere to applicable laws and regulatory requirements or the standards of the electronic payments rules and regulations and other rules and regulations that may impact the provision of electronic payment services;
|
•
|
continually evolving and developing laws and regulations governing payment processing and money transmission, the application or interpretation of which is not clear in some jurisdictions;
|
•
|
incidences of fraud, a security breach or our failure to comply with required external audit standards; and
|
•
|
our inability to increase our fees at times when electronic payment partners or associations increase their transaction processing fees.
|
•
|
decreasing demand for leasing and marketing solutions;
|
•
|
reducing the number of occupied sites and units on which we earn revenue;
|
•
|
preventing our clients from expanding their businesses and managing new properties;
|
•
|
causing our clients to reduce spending on our solutions;
|
•
|
subjecting us to increased pricing pressure in order to add new clients and retain existing clients;
|
•
|
causing our clients to switch to lower-priced solutions provided by our competitors or internally developed solutions;
|
•
|
delaying or preventing our collection of outstanding accounts receivable; and
|
•
|
causing payment processing losses related to an increase in client insolvency.
|
•
|
increasing the number of consumers of our LeaseStar products and services;
|
•
|
demonstrating lead generation value to our LeaseStar clients;
|
•
|
competing effectively for advertising dollars with other online media companies;
|
•
|
continuing to develop our advertising products and services;
|
•
|
keeping pace with changes in technology and with our competitors; and
|
•
|
offering an attractive return on investment to our advertiser clients for their advertising spending with us.
|
•
|
incur additional indebtedness or guarantee indebtedness of others;
|
•
|
create liens on our assets;
|
•
|
enter into mergers or consolidations;
|
•
|
dispose of assets;
|
•
|
prepay certain indebtedness;
|
•
|
make changes to our governing documents and certain of our agreements;
|
•
|
pay dividends and make other distributions on our capital stock, and redeem and repurchase our capital stock;
|
•
|
make investments, including acquisitions; and
|
•
|
enter into transactions with affiliates.
|
•
|
political, social, economic or environmental instability, terrorist attacks and security concerns in general;
|
•
|
limitations of local infrastructure;
|
•
|
fluctuations in currency exchange rates;
|
•
|
higher levels of credit risk and payment fraud;
|
•
|
reduced protection for intellectual property rights in some countries;
|
•
|
difficulties in staffing and managing global operations and the increased travel, infrastructure and legal compliance costs associated with multiple international locations;
|
•
|
compliance with statutory equity requirements and management of tax consequences; and
|
•
|
outbreaks of highly contagious diseases.
|
•
|
variations in our operating results or in expectations regarding our operating results;
|
•
|
variations in operating results of similar companies;
|
•
|
announcements of technological innovations, new solutions or enhancements, strategic alliances or agreements by us or by our competitors;
|
•
|
announcements by competitors regarding their entry into new markets, and new product, service and pricing strategies;
|
•
|
marketing, advertising or other initiatives by us or our competitors;
|
•
|
increases or decreases in our sales of products and services for use in the management of units by clients and increases or decreases in the number of units managed by our clients;
|
•
|
threatened or actual litigation;
|
•
|
major changes in our board of directors or management;
|
•
|
recruitment or departure of key personnel;
|
•
|
changes in our financial guidance and how our actual results compare to such guidance;
|
•
|
changes in the estimates of our operating results or changes in recommendations by any research analysts that elect to follow our common stock;
|
•
|
market conditions in our industry and the economy as a whole;
|
•
|
the overall performance of the equity markets;
|
•
|
sales of our shares of common stock by existing stockholders;
|
•
|
volatility in our stock price, which may lead to higher stock-based expense under applicable accounting standards; and
|
•
|
adoption or modification of regulations, policies, procedures or programs applicable to our business.
|
•
|
a classified board of directors whose members serve staggered three-year terms;
|
•
|
not providing for cumulative voting in the election of directors;
|
•
|
authorizing our board of directors to issue, without stockholder approval, preferred stock with rights senior to those of our common stock;
|
•
|
prohibiting stockholder action by written consent; and
|
•
|
requiring advance notification of stockholder nominations and proposals.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||
April 1, 2017 through April 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
44,894,113
|
|
May 1, 2017 through May 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,894,113
|
|
||
June 1, 2017 through June 30, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,894,113
|
|
||
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
44,894,113
|
|
By:
|
|
/s/ W. Bryan Hill
|
|
|
W. Bryan Hill
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
||||
Number
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Herewith
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant
|
|
S-1/A
|
|
7/26/2010
|
|
3.2
|
|
|
3.2
|
|
Amended and Restated Bylaws of the Registrant
|
|
S-1/A
|
|
7/26/2010
|
|
3.4
|
|
|
4.1
|
|
Form of Common Stock certificate of the Registrant
|
|
S-1/A
|
|
7/26/2010
|
|
4.1
|
|
|
4.2
|
|
Shareholders’ Agreement among the Registrant and certain stockholders, dated December 1, 1998, as amended July 16, 1999 and November 3, 2000
|
|
S-1
|
|
4/29/2010
|
|
4.2
|
|
|
4.3
|
|
Second Amended and Restated Registration Rights Agreement among the Registrant and certain stockholders, dated February 22, 2008
|
|
S-1
|
|
4/29/2010
|
|
4.3
|
|
|
4.4
|
|
Indenture between the Registrant and Wells Fargo Bank, National Association, dated May 23, 2017
|
|
|
|
|
|
|
|
X
|
4.5
|
|
Form of Global Note to represent the 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
|
|
|
|
|
|
X
|
4.6
|
|
Form of Warrant Confirmation in connection with 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
|
|
|
|
|
|
X
|
4.7
|
|
Form of Call Option Confirmation in connection with 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
|
|
|
|
|
|
X
|
10.1
|
|
Fourth Amendment to Credit Agreement among the Registrant, certain subsidiaries of the Registrant party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent, dated April 3, 2017
|
|
10-Q
|
|
5/8/2017
|
|
10.3
|
|
|
10.2
|
|
Fifth Amendment to Credit Agreement among the Registrant, certain subsidiaries of the Registrant party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent, dated May 11, 2017
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
Instance
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
Taxonomy Extension Schema
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
Taxonomy Extension Calculation
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
Taxonomy Extension Labels
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
Taxonomy Extension Presentation
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
Taxonomy Extension Definition
|
|
|
|
|
|
|
|
X
|
|
Page
|
Article 1
|
|
Definitions
|
|
Section 1.01 . Definitions
|
|
Section 1.02 . References to Interest
|
|
Article 2
|
|
Issue, Description, Execution, Registration and Exchange of Notes
|
|
Section 2.01 . Designation and Amount
|
|
Section 2.02 . Form of Notes
|
|
Section 2.03 . Date and Denomination of Notes; Payments of Interest and Defaulted Amounts
|
|
Section 2.04 . Execution, Authentication and Delivery of Notes
|
|
Section 2.05 . Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary
|
|
Section 2.06 . Mutilated, Destroyed, Lost or Stolen Notes
|
|
Section 2.07 . Temporary Notes
|
|
Section 2.08 . Cancellation of Notes Paid, Converted, Etc.
|
|
Section 2.09 . CUSIP Numbers
|
|
Section 2.10 . Additional Notes; Repurchases
|
|
Article 3
|
|
Satisfaction and Discharge
|
|
Section 3.01 . Satisfaction and Discharge
|
|
Article 4
|
|
Particular Covenants of the Company
|
|
Section 4.01 . Payment of Principal and Interest
|
|
Section 4.02 . Maintenance of Office or Agency
|
|
Section 4.03 . Appointments to Fill Vacancies in Trustee’s Office
|
Section 4.04 . Provisions as to Paying Agent
|
|
Section 4.05 . Existence
|
|
Section 4.06 . Rule 144A Information Requirement and Annual Reports
|
|
Section 4.07 . Stay, Extension and Usury Laws
|
|
Section 4.08 . Compliance Certificate; Statements as to Defaults
|
|
Section 4.09 . Further Instruments and Acts
|
|
Article 5
|
|
Lists of Holders and Reports by the Company and the Trustee
|
|
Section 5.01 . Lists of Holders
|
|
Section 5.02 . Preservation and Disclosure of Lists
|
|
Article 6
|
|
Defaults and Remedies
|
|
Section 6.01 . Events of Default
|
|
Section 6.02 . Acceleration; Rescission and Annulment
|
|
Section 6.03 . Additional Interest
|
|
Section 6.04 . Payments of Notes on Default; Suit Therefor
|
|
Section 6.05 . Application of Monies Collected by Trustee
|
|
Section 6.06 . Proceedings by Holders
|
|
Section 6.07 . Proceedings by Trustee
|
|
Section 6.08 . Remedies Cumulative and Continuing
|
|
Section 6.09 . Direction of Proceedings and Waiver of Defaults by Majority of Holders
|
|
Section 6.10 . Notice of Defaults
|
|
Section 6.11 . Undertaking to Pay Costs
|
|
Article 7
|
|
Concerning the Trustee
|
|
Section 7.01 . Duties and Responsibilities of Trustee
|
Section 7.02 . Reliance on Documents, Opinions, Etc.
|
|
Section 7.03 . No Responsibility for Recitals, Notes, Etc.
|
|
Section 7.04 . Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes
|
|
Section 7.05 . Monies and Shares of Common Stock to Be Held in Trust
|
|
Section 7.06 . Compensation and Expenses of Trustee
|
|
Section 7.07 . Officers’ Certificate as Evidence
|
|
Section 7.08 . Eligibility of Trustee
|
|
Section 7.09 . Resignation or Removal of Trustee
|
|
Section 7.10 . Acceptance by Successor Trustee
|
|
Section 7.11 . Succession by Merger, Etc.
|
|
Section 7.12 . Trustee’s Application for Instructions from the Company
|
|
Article 8
|
|
Concerning the Holders
|
|
Section 8.01 . Action by Holders
|
|
Section 8.02 . Proof of Execution by Holders
|
|
Section 8.03 . Who Are Deemed Absolute Owners
|
|
Section 8.04 . Company-Owned Notes Disregarded
|
|
Section 8.05 . Revocation of Consents; Future Holders Bound
|
|
Article 9
|
|
Holders’ Meetings
|
|
Section 9.01 . Purpose of Meetings
|
|
Section 9.02 . Call of Meetings by Trustee
|
|
Section 9.03 . Call of Meetings by Company or Holders
|
|
Section 9.04 . Qualifications for Voting
|
|
Section 9.05 . Regulations
|
Section 9.06 . Voting
|
|
Section 9.07 . No Delay of Rights by Meeting
|
|
Article 10
|
|
Supplemental Indentures
|
|
Section 10.01 . Supplemental Indentures Without Consent of Holders
|
|
Section 10.02 . Supplemental Indentures with Consent of Holders
|
|
Section 10.03 . Effect of Supplemental Indentures
|
|
Section 10.04 . Notation on Notes
|
|
Section 10.05 . Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee
|
|
Article 11
|
|
Consolidation, Merger, Sale, Conveyance and Lease
|
|
Section 11.01 . Company May Consolidate, Etc. on Certain Terms
|
|
Section 11.02 . Successor Corporation to Be Substituted
|
|
Section 11.03 . Opinion of Counsel to Be Given to Trustee
|
|
Article 12
|
|
Immunity of Incorporators, Stockholders, Officers and Directors
|
|
Section 12.01 . Indenture and Notes Solely Corporate Obligations
|
|
Article 13
|
|
[Intentionally Omitted]
|
|
Article 14
|
|
Conversion of Notes
|
|
Section 14.01 . Conversion Privilege
|
|
Section 14.02 . Conversion Procedure; Settlement Upon Conversion
|
|
Section 14.03 . Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes
|
|
Section 14.04 . Adjustment of Conversion Rate
|
|
Section 14.05 . Adjustments of Prices
|
|
Section 14.06 . Shares to Be Fully Paid
|
Section 14.07 . Effect of Recapitalizations, Reclassifications and Changes of the Common Stock
|
|
Section 14.08 . Certain Covenants
|
|
Section 14.09 . Responsibility of Trustee
|
|
Section 14.10 . Notice to Holders Prior to Certain Actions
|
|
Section 14.11 . Stockholder Rights Plans
|
|
Article 15
|
|
Repurchase of Notes at Option of Holders
|
|
Section 15.01 . [Intentionally Omitted]
|
|
Section 15.02 . Repurchase at Option of Holders Upon a Fundamental Change
|
|
Section 15.03 . Withdrawal of Fundamental Change Repurchase Notice
|
|
Section 15.04 . Deposit of Fundamental Change Repurchase Price
|
|
Section 15.05 . Covenant to Comply with Applicable Laws Upon Repurchase of Notes
|
|
Article 16
|
|
No Redemption
|
|
Section 16.01 . No Redemption
|
|
Article 17
|
|
Miscellaneous Provisions
|
|
Section 17.01 . Provisions Binding on Company’s Successors
|
|
Section 17.02 . Official Acts by Successor Corporation
|
|
Section 17.03 . Addresses for Notices, Etc.
|
|
Section 17.04 . Governing Law; Jurisdiction
|
|
Section 17.05 . Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee
|
|
Section 17.06 . Legal Holidays
|
|
Section 17.07 . No Security Interest Created
|
|
Section 17.08 . Benefits of Indenture
|
|
Section 17.09 . Table of Contents, Headings, Etc.
|
|
Stock Price
|
||||||||||
Effective Date
|
$32.90
|
$37.00
|
$38.00
|
$41.95
|
$45.00
|
$50.00
|
$65.00
|
$75.00
|
$85.00
|
$95.00
|
$105.00
|
May 23, 2017
|
6.5558
|
4.9508
|
4.6379
|
3.6269
|
3.0382
|
2.3260
|
1.2162
|
0.8729
|
0.6627
|
0.5228
|
0.4230
|
November 15, 2017
|
6.5558
|
4.7100
|
4.3832
|
3.3402
|
2.7447
|
2.0410
|
1.0063
|
0.7107
|
0.5371
|
0.4243
|
0.3447
|
November 15, 2018
|
6.5558
|
4.4532
|
4.1074
|
3.0191
|
2.4136
|
1.7216
|
0.7838
|
0.5445
|
0.4114
|
0.3271
|
0.2677
|
November 15, 2019
|
6.5558
|
4.1659
|
3.7916
|
2.6367
|
2.0187
|
1.3476
|
0.5482
|
0.3772
|
0.2881
|
0.2323
|
0.1923
|
November 15, 2020
|
6.5558
|
3.8068
|
3.3858
|
2.1290
|
1.5004
|
0.8826
|
0.3058
|
0.2149
|
0.1694
|
0.1396
|
0.1170
|
November 15, 2021
|
6.5558
|
3.3143
|
2.7787
|
1.2789
|
0.6818
|
0.2768
|
0.0882
|
0.0685
|
0.0565
|
0.0473
|
0.0399
|
November 15, 2022
|
6.5558
|
3.1877
|
2.4765
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
CR
0
|
= the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;
|
CR'
|
= the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date;
|
OS
0
|
= the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date; and
|
OS'
|
= the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.
|
CR
0
|
= the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance;
|
CR'
|
= the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;
|
OS
0
|
= the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;
|
X
|
= the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and
|
Y
|
= the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants,
divided by
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.
|
CR
0
|
= the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;
|
CR'
|
= the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;
|
SP
0
|
= the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and
|
FMV
|
= the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution.
|
CR
0
|
= the Conversion Rate in effect immediately prior to the end of the Valuation Period;
|
CR'
|
= the Conversion Rate in effect immediately after the end of the Valuation Period;
|
FMV
0
|
= the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “
Valuation Period
”); and
|
MP
0
|
= the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period.
|
CR
0
|
= the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;
|
CR'
|
= the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;
|
SP
0
|
= the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and
|
C
|
= the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock.
|
CR
0
|
= the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;
|
CR'
|
= the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;
|
AC
|
= the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;
|
OS
0
|
= the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);
|
OS'
|
= the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and
|
SP'
|
= the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.
|
REALPAGE, INC.
|
|
By:
|
/s/ W. Bryan Hill
|
Name: W. Bryan Hill
|
|
Title: CFO
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
|
|
By:
|
/s/ Patrick Giorano
|
Name: Patrick Gioroano
|
|
Title: Vice President
|
REALPAGE, INC.
|
|
By:
|
|
Name:
|
|
Title:
|
Date of exchange
|
Amount of decrease in principal amount of this Global Note
|
Amount of increase in principal amount of this Global Note
|
Principal amount of this Global Note following such decrease or increase
|
Signature of authorized signatory of Trustee or Custodian
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REALPAGE, INC.
|
|
By:
|
/s/ Stephen T. Winn
|
Name: Stephen T. Winn
|
|
Title: President and Chief Executive Officer
|
Date of exchange
|
Amount of decrease in principal amount of this Global Note
|
Amount of increase in principal amount of this Global Note
|
Principal amount of this Global Note following such decrease or increase
|
Signature of authorized signatory of Trustee or Custodian
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date
|
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant
|
Shares:
|
The common stock of Company, par value USD 0.001 per share (Exchange symbol “RP”)
|
Number of Warrants:
|
3,575,895. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero.
|
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 80
th
Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date;
provided
that, notwithstanding anything to the contrary in the Equity Definitions, if any
|
First Expiration Date:
|
February 15, 2023 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below.
|
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date.
|
Valuation Time:
|
Scheduled Closing Time;
provided
that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.
|
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified
|
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page RP <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume- weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event.
|
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section
9(k)(i)
hereof.
|
3.
|
Additional Terms applicable to the Transaction
.
|
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section
9(f)
of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions.
|
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are publicly quoted, traded or listed) on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person that is a corporation organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”.
|
Merger Event:
|
Applicable;
provided
that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section
9(h)(ii)(B)
of this Confirmation, the provisions of Section
9(h)(ii)(B)
will apply.
|
Share-for-Other:
|
Cancellation
|
and
|
Payment
|
(Calculation
|
Agent
|
Share-for-Combined:
|
Determination)
Cancellation
|
and
|
Payment
|
(Calculation
|
Agent
|
Tender Offer:
|
Applicable;
provided
that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under
|
Announcement Event:
|
(i) The public announcement by any entity of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, (y) any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 20% of the market capitalization of Issuer as of the date of such announcement (an “
Acquisition Transaction
”) or (z) the intention to enter into a Merger Event or Tender Offer or an Acquisition Transaction, (ii) the public announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or an Acquisition Transaction or (iii) any subsequent public announcement by any entity of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a
|
Change in Law:
|
Applicable;
provided
that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption, effectiveness or promulgation of new regulations authorized or mandated by existing statute)”.
|
(i)
|
Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: “in the manner contemplated by the Hedging Party on the Trade Date” and (b) inserting the following two phrases at the end of such Section:
|
(ii)
|
Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.
|
|
Increased Cost of Hedging: Loss of Stock Borrow:
Maximum Stock Loan Rate: Increased Cost of Stock Borrow:
Initial Stock Loan Rate:
|
Applicable Applicable
100 basis points Applicable
0 basis points until November 15, 2022 and 25 basis
|
|
points thereafter.
|
|
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer
provided
that all actions or judgments shall be taken or made, as the case may be, by Hedging Party in good faith and in a commercially reasonable manner.
|
|
Determining Party:
|
For all applicable Extraordinary Events, Dealer;
provided
that all determinations by the Determining Party hereunder shall be made in good faith and in a commercially reasonable manner;
provided further
that, upon receipt of a written request from Counterparty following any determination made by Determining Party hereunder, Determining Party shall, with reasonable promptness, provide Counterparty with a written explanation describing in reasonable detail such determination (including any quotations, market data or information from internal sources used in making such determination, but without disclosing Determining Party’s proprietary or confidential models or other information that may be proprietary or confidential).
|
|
Non-Reliance:
|
Applicable
|
|
Agreements and Acknowledgments Regarding Hedging Activities:
|
Applicable
|
|
Additional Acknowledgments:
|
Applicable
|
|
4.
|
Calculation Agent.
|
Dealer;
provided
that all determinations and adjustments by the Calculation Agent hereunder shall be made in good faith and in a commercially reasonable manner;
provided further
that, upon receipt of a written request from Company following any determination or adjustment made by the Calculation Agent hereunder, the Calculation Agent shall, with reasonable promptness, provide Company with a written explanation describing in reasonable detail such determination or adjustment (including any quotations, market data or information from internal sources used in making such determination or adjustment, but without disclosing the
|
5.
|
Account Details
.
|
(a)
|
Account for payments to Company:
|
(b)
|
Account for payments to Dealer:
|
6.
|
Offices
.
|
(a)
|
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.
|
(b)
|
The Office of Dealer for the Transaction is:
|
7.
|
Notices
.
|
(a)
|
Address for notices or communications to Company:
|
(b)
|
Address for notices or communications to Dealer: For purpose of Giving Notice:
|
8.
|
Representations and Warranties of Company
.
|
(a)
|
Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
|
(b)
|
Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its
|
(c)
|
No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “
Securities Act
”) or state securities laws.
|
(d)
|
A number of Shares equal to the Maximum Number of Shares (as defined below) (the “
Warrant Shares
”) have been reserved for issuance by all required corporate action of Company. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.
|
(e)
|
Company is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
|
(f)
|
Company is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of the Commodity Exchange Act).
|
(g)
|
Company and each of its affiliates is not, on the date hereof, in possession of any material non- public information with respect to Company or the Shares.
|
(h)
|
No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares;
provided
that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities by Dealer or its affiliates solely as a result of their being a financial institution or broker-dealer.
|
(i)
|
Company (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.
|
9.
|
Other Provisions
.
|
(a)
|
Opinions
. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections
8(a)
through
(d)
of this Confirmation. Delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.
|
(b)
|
Repurchase Notices
. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “
Repurchase Notice
”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 75.3 million (in the case of the first such notice) or (ii) thereafter more than 6.3 million less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “
Indemnified Person
”) from and against any and all reasonable losses (including losses relating to Dealer’s commercially reasonable hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without
|
(c)
|
Regulation M
. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution.
|
(d)
|
No Manipulation
. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.
|
(e)
|
Transfer or Assignment
. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party;
provided
that Company will not be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Company would have been required to pay to Dealer in the absence of such transfer and assignment and Dealer shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Company to permit Company to determine that such additional payment will not be required. Company will not, as a result of such transfer and assignment, be required to pay or deliver to the transferee any amount that is more than that which Dealer would have been entitled to receive from Company in the absence of such transfer and assignment. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit
|
(f)
|
Dividends
. If at any time during the period from and including the Effective Date, to and including the last Expiration Date, an ex-dividend date for a cash dividend occurs with respect to the Shares, then the Calculation Agent will adjust any of the Strike Price, Number of Warrants, Daily Number of Warrants and/or any other variable relevant to the exercise, settlement or payment of the Transaction to preserve the fair value of the Warrants after taking into account such dividend.
|
(g)
|
Role of Agent
. Dealer has appointed as its agent, [ ], for purposes of conducting on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Counterparty hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized
|
(h)
|
Additional Provisions
.
|
(i)
|
Amendments to the Equity Definitions:
|
(A)
|
Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence.
|
(B)
|
Section 11.2(c) of the Equity Definitions is hereby amended by (w) replacing the words “a diluting or concentrative” with “an” in the fifth line thereof, (x) adding the phrase “or Warrants” after the words “the relevant Shares” in the same sentence, (y) deleting the words “diluting or concentrative” in the sixth to last line thereof and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing it with the phrase “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).”
|
(C)
|
Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence.
|
(D)
|
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer.”
|
(E)
|
Section 12.9(b)(iv) of the Equity Definitions is hereby amended by:
|
(x)
|
deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and
|
(y)
|
replacing the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such Lending Party does not lend Shares” in the penultimate sentence.
|
(F)
|
Section 12.9(b)(v) of the Equity Definitions is hereby amended by:
|
(x)
|
adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and
|
(y)
|
(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C), (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other.” and (4) deleting clause (X) in the final sentence.
|
(G)
|
Section 12.9(b)(vi) of the Equity Definitions is hereby amended by inserting immediately prior to the period at the end of subsection (C) the words “;
provided
that Company may only elect to terminate the Transaction upon the occurrence of an Increased Cost of Hedging if concurrently with electing to terminate the Transaction Company represents and warrants to Dealer that it is not in possession of any material non-public information with respect to Issuer or the Shares”.
|
(ii)
|
Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction, or, at the election of Dealer in its sole discretion, any portion of the Transaction, shall be deemed the sole Affected Transaction;
provided
that if Dealer so designates an Early Termination Date with respect to a portion of the Transaction, (a) a payment shall be made pursuant to Section 6 of the Agreement as if an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants included in the terminated portion of the Transaction, and (b) for the avoidance of doubt, the Transaction shall remain in full force and effect except that the Number of Warrants shall be reduced by the number of Warrants included in such terminated portion:
|
(A)
|
Except as described in clause (B) below, a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its wholly owned subsidiaries and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Shares representing more than 50% of the voting power of the Shares.
|
(B)
|
Consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property or assets or (III) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Company and its subsidiaries, taken as a whole, to any person other than one of Company’s wholly owned subsidiaries. Notwithstanding the foregoing, any transaction or transactions set forth in this clause (B) shall not constitute an Additional Termination Event if (x) at least 90% of the consideration received or to be received by holders of the Shares, excluding cash payments for fractional Shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions, and (y) as a result of such transaction or transactions, the Shares will consist of such consideration, excluding cash payments for fractional Shares.
|
(C)
|
Default by Company or any of its subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of USD 15 million (or its foreign currency equivalent) in the aggregate of Company and/or any such subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being
|
(D)
|
A final judgment or judgments for the payment of USD 15 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against Company or any of its subsidiaries, which judgment is not discharged, bonded, paid, waived or stayed within 60 days after
|
(E)
|
Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer).
|
(i)
|
No Collateral or Setoff
. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, no obligations of either party hereunder are secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.
|
(j)
|
Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events
.
|
(i)
|
If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to all holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Company’s control, or (iii) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Company’s control), and if Company would owe any amount to Dealer pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “
Payment Obligation
”), then Company shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Company gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Company remakes the representation set forth in Section
8(g)
as of the date of such election and (c) Dealer agrees, in its commercially reasonable discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.
|
Property:
|
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation
divided by
the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price (without giving effect to any discount pursuant to Section
9(k)(i)
).
|
(k)
|
Registration/Private Placement Procedures
. If, in the reasonable opinion of Dealer, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “
Restricted Shares
”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the first applicable Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all remaining Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
|
(i)
|
If Company elects to settle the Transaction pursuant to this clause (i) (a “
Private Placement Settlement
”), then delivery of Restricted Shares by Company shall be effected in customary private placement procedures with respect to such Restricted Shares reasonably acceptable to Dealer;
provided
that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any
|
(ii)
|
If Company elects to settle the Transaction pursuant to this clause (ii) (a “
Registration Settlement
”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements of similar size, all reasonably acceptable to Dealer. If Dealer, in its commercially reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “
Resale Period
”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section
9(j)
above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the Exchange Business Day on which Dealer completes the sale of all Restricted Shares in a commercially reasonable manner or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above). If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following such resale the amount of such excess (the “
Additional Amount
”) in cash or in a number of Shares (“
Make- whole Shares
”) in an amount that, based on the Settlement Price on such day (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares.
|
(iii)
|
Without limiting the generality of the foregoing, Company agrees that (A) any Restricted Shares delivered to Dealer may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed in respect of any Restricted Shares delivered to Dealer, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer). Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property.
|
(iv)
|
If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party.
|
(l)
|
Limit on Beneficial Ownership
. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit.
|
(m)
|
Share Deliveries
. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary.
|
(n)
|
Waiver of Jury Trial.
Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
|
(o)
|
Tax Disclosure.
Effective from the date of commencement of discussions concerning the Transaction, Company and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
|
(p)
|
Maximum Share Delivery
.
|
(i)
|
Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than 5,363,843 (the “
Maximum Number of Shares
”) to Dealer in connection with the Transaction.
|
(ii)
|
In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares that are not reserved for other transactions (such deficit, the “
Deficit Shares
”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section
9(p)(ii),
when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions;
provided
that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section
9(p)(ii)
to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter.
|
(iii)
|
Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, the Maximum Number of Shares shall not be adjusted on account of any event that (x) constitutes a Potential Adjustment Event solely on account of Section 11.2(e)(vii) of the Equity Definitions and (y) is not an event within Company’s control.
|
(q)
|
Right to Extend.
Dealer may postpone or add, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment, that such extension is reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer.
|
(r)
|
Status of Claims in Bankruptcy.
Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company;
provided
that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction;
provided
,
further
, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction.
|
(s)
|
Securities Contract; Swap Agreement.
The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the
|
(t)
|
Wall Street Transparency and Accountability Act
. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“
WSTAA
”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)).
|
(u)
|
Agreements and Acknowledgements Regarding Hedging
. Company understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Settlement Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Settlement Prices, each in a manner that may be adverse to Company.
|
(v)
|
Early Unwind
.
In the event the sale of the “Firm Securities” (as defined in the Purchase Agreement) is not consummated with the Initial Purchasers for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section
9(a),
in each case by 5:00
|
(w)
|
Payment by Dealer
. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.
|
(x)
|
Listing of Warrant Shares
. Company shall have submitted an application for the listing of the Warrant Shares on the Exchange, and such application and listing shall have been approved by the Exchange, subject only to official notice of issuance, in each case, on or prior to the Premium Payment Date. Company agrees and acknowledges that such submission and approval shall be a
|
(y)
|
Adjustments
. For the avoidance of doubt, whenever the Calculation Agent or Determining Party is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent or Determining Party shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position.
|
(z)
|
Delivery or Receipt of Cash
. For the avoidance of doubt, other than receipt of the Premium by Company, nothing in this Confirmation shall be interpreted as requiring Company to cash settle the Transaction, except in circumstances where cash settlement is within Company’s control (including, without limitation, where Company elects to deliver or receive cash, or where Company has made Private Placement Settlement unavailable due to the occurrence of events within its control) or in those circumstances in which holders of Shares would also receive cash.
|
2.
|
The terms of the particular Transaction to which this Confirmation relates are as follows:
|
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date
|
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below
|
Shares:
|
The common stock of Counterparty, par value USD 0.001 per share (Exchange symbol “RP”).
|
Number of Options:
|
300,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero.
|
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 23.8393.
|
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Section 14.02(b) of the Indenture.
|
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below.
|
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date in respect of which a Notice of Conversion (as defined in the Indenture) that is effective as to Counterparty has been delivered by the relevant converting Holder, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised;
provided
that such Options shall be exercised or deemed exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below.
|
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised (the “
Exercise Notice Deadline
”) of (i) the number of such Options, (ii) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (iii) the Relevant Settlement Method for such Options, and (iv) if the settlement method for the related Convertible Notes is not Settlement in Shares or Settlement in Cash (each as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is defined in the Indenture) of the related Convertible Notes (the “
Specified Cash Amount
”);
provided
that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (i) above, and
|
Valuation Time:
|
At the close of trading of the regular trading session on the Exchange;
provided
that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.
|
Settlement Method:
|
For any Option, Net Share Settlement;
provided
that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if Counterparty shall have notified
|
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “
Net Share Settlement Amount
”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day,
divided by
(b) the Relevant Price on such Valid Day,
divided by
(ii) the number of Valid Days in the Settlement Averaging Period;
provided
that in no event shall the Net Share Settlement Amount for any Option exceed a number of Shares equal to the Applicable Limit for such Option
divided by
the Applicable Limit Price on the Settlement Date for such Option.
|
(i)
|
cash (the “
Combination Settlement Cash Amount
”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (A) an amount (the “
Daily Combination Settlement Cash Amount
”) equal to the lesser of (1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount
minus
USD 1,000 and (2) the Daily Option Value,
divided by
(B) the number
|
(ii)
|
Shares (the “
Combination Settlement Share Amount
”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the “
Daily Combination Settlement Share Amount
”) equal to (A) (1) the Daily Option Value on such Valid Day
minus
the Daily Combination Settlement Cash Amount for such Valid Day,
divided by
(2) the Relevant Price on such Valid Day,
divided by
(B) the number of Valid Days in the Settlement Averaging Period;
provided
that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such Valid Day shall be deemed to be zero;
|
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash (the “
Cash Settlement Amount
”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day,
divided by
(ii) the number of Valid Days in the Settlement Averaging Period.
|
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day,
multiplied by
(ii) the Relevant Price on such Valid Day
less
the Strike Price on such Valid Day;
provided
that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero.
|
Applicable Limit:
|
For any Option, an amount of cash equal to the Applicable Percentage
multiplied by
the excess of (i) the aggregate of (A) the amount of cash, if any, paid to the Holder of the related Convertible Note upon conversion of such Convertible Note and (B) the number of Shares, if any, delivered to the Holder of the related Convertible Note upon conversion of such Convertible Note
multiplied by
the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD 1,000.
|
Applicable Limit Price:
|
On any day, the opening price as displayed under the heading “Op” on Bloomberg page RP <equity> (or any successor thereto).
|
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed
|
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal United States national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day.
|
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
|
Relevant Price:
|
On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page RP <equity> AQR (or its equivalent successor if such page is not available) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or if such volume-weighted average price is unavailable at such time, the market value of one Share on such Valid Day, as determined by the Calculation Agent using, if practicable, a volume- weighted average method). The Relevant Price will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
|
(i)
|
if the related Conversion Date occurs prior to the Free Convertibility Date, the 40 consecutive Valid Days commencing on, and including, the second Valid Day following such Conversion Date; or
|
(ii)
|
if the related Conversion Date occurs on or following the Free Convertibility Date, the 40 consecutive Valid Days commencing on, and including, the 42nd Scheduled Valid Day immediately prior to the Expiration Date.
|
Settlement Date:
|
For any Option, the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option.
|
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.
|
(i)
|
if the Calculation Agent in good faith disagrees with any adjustment to the Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 14.05 of the Indenture, Section 14.07 of the Indenture or any supplemental indenture entered into thereunder or in connection with any
|
(ii)
|
in connection with any Potential Adjustment Event as a result of an event or condition set forth in Section 14.04(b) of the Indenture or Section 14.04(c) of the Indenture where, in either case, the period for determining “Y” (as such term is used in Section 14.04(b) of the Indenture) or “SP
0
” (as such term is used in Section 14.04(c) of the Indenture), as the case may be, begins before Counterparty has publicly announced the event or condition giving rise to such Potential Adjustment Event, then the Calculation Agent shall have the right to adjust any variable relevant to the exercise, settlement or payment for the Transaction as appropriate to reflect the costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer (assuming Dealer has maintained a commercially reasonable hedge position) in connection with its hedging activities as a result of such event or condition not having been publicly announced prior to the beginning of such period; and
|
(iii)
|
if any Potential Adjustment Event is declared and (a) the event or condition giving rise to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned, (b) the “Conversion Rate” (as defined in the Indenture) is otherwise not adjusted at the time or in the manner contemplated by the relevant Dilution Adjustment Provision based on such declaration or (c) the “Conversion Rate” (as defined in the Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently re-adjusted (each of clauses (a), (b) and (c), a “
Potential Adjustment Event
|
Merger Events:
|
Applicable;
provided
that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Share Exchange Event” in Section 14.07(a) of the Indenture.
|
Tender Offers:
|
Applicable;
provided
that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture.
|
Tender Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, subject to the second paragraph under “Method of Adjustment”;
provided
,
however
, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision;
provided further
that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation organized under the laws of the United States, any State thereof or the District of Columbia, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer’s sole election in good faith.
|
Change in Law:
|
Applicable;
provided
that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase
|
(i)
|
Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: “in the manner contemplated by the Hedging Party on the Trade Date” and (b) inserting the following two phrases at the end of such Section:
|
(ii)
|
Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.
|
|
|
made, as the case may be, by Hedging Party in good faith and in a commercially reasonable manner.
|
Determining Party:
|
For all applicable Extraordinary Events, Dealer;
provided
that all determinations by the Determining Party hereunder shall be made in good faith and in a commercially reasonable manner;
provided further
that, upon receipt of a written request from Counterparty following any determination made by Determining Party hereunder, Determining Party shall, with reasonable promptness, provide Counterparty with a written explanation describing in reasonable detail such determination (including any quotations, market data or information from internal sources used in making such determination, but without disclosing Determining Party’s proprietary or confidential models or other information that may be proprietary or confidential).
|
|
Non-Reliance:
|
Applicable
|
|
Agreements and Acknowledgments Regarding Hedging Activities:
|
Applicable
|
|
Additional Acknowledgments:
|
Applicable
|
|
4.
|
Calculation Agent
.
|
Dealer;
provided
that all determinations and adjustments by the Calculation Agent hereunder shall be made in good faith and in a commercially reasonable manner;
provided further
that, upon receipt of a written request from Counterparty following any determination or adjustment made by the Calculation Agent hereunder, the Calculation Agent shall, with reasonable promptness, provide Counterparty with a written explanation describing in reasonable detail such determination or adjustment (including any quotations, market data or information from internal sources used in making such determination or adjustment, but without disclosing the Calculation Agent’s proprietary or confidential models or other information that may be proprietary or confidential).
|
5.
|
Account Details
.
|
|
(a)
|
Account for payments to Counterparty:
|
(b)
|
Account for payments to Dealer:
|
6.
|
Offices
.
|
(a)
|
The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party.
|
(b)
|
The Office of Dealer for the Transaction is:
|
7.
|
Notices
.
|
(a)
|
Address for notices or communications to Counterparty:
|
(b)
|
Address for notices or communications to Dealer: For purpose of Giving Notice:
|
8.
|
Representations and Warranties of Counterparty
.
|
(a)
|
Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.
|
(b)
|
Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument.
|
(c)
|
No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws.
|
(d)
|
Counterparty is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
|
(e)
|
Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of the Commodity Exchange Act).
|
(f)
|
Each of it and its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares.
|
(g)
|
No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares;
provided
that Counterparty makes no representation or warranty regarding any such requirement that is applicable generally to the ownership of equity securities by Dealer or its affiliates solely as a result of their being a financial institution or broker-dealer.
|
(h)
|
Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least USD 50 million.
|
9.
|
Other Provisions
.
|
(a)
|
Opinions
. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections
8(a)
through
(c)
of this Confirmation. Delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.
|
(b)
|
Repurchase Notices
. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “
Repurchase Notice
”) on such day if following such repurchase, the number of outstanding Shares as determined on such day is (i) less than 75.3 million (in the case of the first such notice) or (ii) thereafter more than 6.3 million less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “
Indemnified Person
”) from and against any and all reasonable losses (including losses relating to Dealer’s commercially reasonable hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and reasonable expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or
|
(c)
|
Regulation M
. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution.
|
(d)
|
No Manipulation
. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act.
|
(e)
|
Transfer or Assignment
.
|
(i)
|
Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “
Transfer Options
”);
provided
that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including but not limited, to the following conditions:
|
(A)
|
(B)
|
Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended) (the “
Code
”);
|
(C)
|
Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer;
|
(D)
|
Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
|
(E)
|
An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
|
(F)
|
Without limiting the generality of clause
(B),
Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to
|
(G)
|
Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment.
|
(ii)
|
Dealer may, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction (A) to any affiliate of Dealer (1) that has a long-term issuer rating that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (2) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer or Dealer’s ultimate parent, or (B) to any other third party with a long-term issuer rating equal to or better than the lesser of (1) the credit rating of Dealer at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“
S&P
”), or A3 by Moody’s Investor Service, Inc. (“
Moody’s
”) or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute rating agency mutually agreed by Counterparty and Dealer;
provided
that (x) Dealer and such transferee both qualify as “dealers in securities” (“
Securities Dealers
”) within the meaning of Section 475(c)(i) of the Code and (y) that in the event of a change in law pursuant to which final or temporary Treasury regulations promulgated under the Code (as in effect on the date of such transfer or assignment) no longer provide that a transfer or assignment hereunder by one Securities Dealer to another Securities Dealer will not constitute a disposition or termination of the Transaction to the Counterparty and the transfer or assignment is not otherwise clearly treated as a non-realization event to the Counterparty for U.S. federal income tax purposes, any such transfer or assignment would require Counterparty’s consent (not to be unreasonably withheld or delayed);
provided further
an Event of Default, Potential Event of Default or Termination Date will not occur as a result of such transfer or assignment. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “
Excess Ownership Position
”),
|
(iii)
|
Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance.
|
(f)
|
Staggered Settlement
. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on any Settlement Date for the Transaction,
|
(i)
|
in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (the first of which will be such Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date;
|
(ii)
|
the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and
|
(iii)
|
if the Net Share Settlement terms or the Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms or the Combination Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except that the Shares otherwise deliverable on such Nominal Settlement Date will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above.
|
(g)
Role of Agent
.
Dealer has appointed as its agent, [
|
], for purposes of conducting on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Counterparty hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized [_ ] to market, structure, negotiate, document, price, execute and hedge transactions in over-the-counter derivative products. [ ] has full, complete and unconditional authority to undertake such activities on behalf of Dealer. [ ] acts solely as agent and has no obligation, by way of issuance, endorsement, guarantee or otherwise with respect to the performance of either party under the Transaction. The Transaction is not insured or guaranteed by [
_].
|
(h)
|
Additional Termination Events
.
|
(i)
|
Notwithstanding anything to the contrary in this Confirmation if an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture, then such event of default shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement.
|
(ii)
|
Notwithstanding anything to the contrary in this Confirmation, the occurrence of an Amendment Event shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement. “
Amendment Event
” means that Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Notes governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible Notes (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Notes to amend (other than, in each case, any amendment or supplement (x) pursuant to Section 10.01(j) of the Indenture that, as determined by the Calculation Agent, conforms the Indenture to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 14.07 of the Indenture), in each case, without the consent of Dealer.
|
(i)
|
Amendments to Equity Definitions
.
|
(i)
|
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that Issuer.”
|
(ii)
|
Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “such an event” in the second line thereof with “(x) an Insolvency Filing Dealer may elect or (y) a Change in Law”, (2) inserting the words “(as applicable)” immediately following the words “notice to the other party” in the fourth line thereof and (3) inserting immediately prior to the period at the end thereof the words “; provided that Counterparty may only elect to terminate the Transaction upon the occurrence of a Change in Law if concurrently with electing to terminate the Transaction Counterparty represents and warrants to Dealer that it is not in possession of any material non-public information with respect to Issuer or the Shares”.
|
(iii)
|
Section 12.9(b)(vi) of the Equity Definitions is hereby amended by inserting immediately prior to the period at the end of subsection (C) the words “;
provided
that Counterparty may only elect to terminate the Transaction upon the occurrence of an Increased Cost of Hedging if concurrently with electing to terminate the Transaction Counterparty represents and warrants to Dealer that it is not in possession of any material non-public information with respect to Issuer or the Shares”.
|
(j)
|
No Setoff
. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.
|
(k)
|
Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events
. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to all holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Counterparty’s control), and if Dealer would owe any amount to Counterparty (x) pursuant to Section 6(d)(ii) of the Agreement, (y) in respect of any Extraordinary Event in which Cancellation and Payment applies or (z) or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “
Payment Obligation
”), then Dealer shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless
|
(l)
|
Waiver of Jury Trial
. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein.
|
(m)
|
Registration
. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, the Shares (“
Hedge Shares
”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering customary for Counterparty or companies of a similar size in the same or a similar industry;
provided
,
however
, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities by Counterparty or companies of a similar size in the same or a similar industry, in form and substance reasonably satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the
|
(n)
|
Tax Disclosure
. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
|
(o)
|
Right to Extend
. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines, in its discretion, that such action is reasonably necessary or appropriate to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self- regulatory requirements, or with related policies and procedures applicable to Dealer.
|
(p)
|
Status of Claims in Bankruptcy
. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty;
provided
that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction;
provided further
that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction.
|
(q)
|
Securities Contract; Swap Agreement
. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “
Bankruptcy Code
”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and
|
(r)
|
Notice of Certain Other Events
. Counterparty covenants and agrees that:
|
(i)
|
promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any Merger Event, Counterparty shall give Dealer written notice of (x) the weighted average of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such Merger Event or (y) if no holders of Shares affirmatively make such election, the types and amounts of consideration actually received by holders of Shares (the date of such notification, the “
Consideration Notification Date
”);
provided
that in no event shall the Consideration Notification Date be later than the date on which such Merger Event is consummated; and
|
(ii)
|
(A) Counterparty shall give Dealer commercially reasonable advance (but in no event less than one Exchange Business Day) written notice of the section or sections of the Indenture and, if applicable, the formula therein, pursuant to which any adjustment will be made to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer and (B) promptly following any such adjustment, Counterparty shall give Dealer written notice of the details of such adjustment.
|
(s)
|
Wall Street Transparency and Accountability Act
. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“
WSTAA
”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)).
|
(t)
|
Agreements and Acknowledgements Regarding Hedging
. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction;
|
(u)
|
Early Unwind
.
In the event the sale of the “Firm Securities” (as defined in the Purchase Agreement) is not consummated with the Initial Purchasers for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section
9(a),
in each case by 5:00
|
(v)
|
Payment by Counterparty
. In the event that, following payment of the Premium, (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.
|
(w)
|
Certain Withholding Taxes Imposed on Payments to Non-U.S. Parties
. “Tax” (solely for purposes of Section 3(e) of the Agreement) and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not include any U.S. federal withholding tax imposed or collected pursuant to
|
(x)
|
Tax Representation and Tax Forms
. For the purposes of Section 3(f) of the Agreement, Dealer and Counterparty each represent either (i) that they are “United States persons” within the meaning of Section 7701(a)(30) of the Code or (ii) that payments received or deemed received pursuant to this Confirmation will be treated as income effectively connected with the conduct of a trade or business within the United States. To the extent clause (i) applies, the relevant party shall deliver to the other party, on or prior to the Trade Date, promptly upon reasonable demand by the other party and promptly upon learning that the information on any such previously delivered form is inaccurate or incorrect, a properly completed and executed Internal Revenue Service Form W-9. To the extent clause (ii) applies, the relevant party shall deliver to the other party, on or prior to the Trade Date, promptly upon reasonable demand by the other party and promptly upon learning that the information on any such previously delivered form is inaccurate or incorrect, a properly completed and executed Internal Revenue Service Form W-8ECI. In addition, Dealer and Counterparty each agree, to the extent it is legally entitled to do so, to provide any other form or document that may be required or reasonably requested in order to allow the other party to make a payment under this Confirmation without any deduction or withholding for or on account of any Tax or with such deduction at a reduced rate, with such forms or documents to be delivered promptly upon (A) execution of this Confirmation, (B) reasonable request of the other party, and
|
Title:
|
Executive Vice President, Chief Financial Officer and Treasurer
|
Title:
|
Executive Vice President, Chief Financial Officer and Treasurer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ending
June 30, 2017
of RealPage, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Stephen T. Winn
|
Stephen T. Winn
|
Chairman of the Board of Directors, Chief Executive Officer, President and Director
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ending
June 30, 2017
of RealPage, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ W. Bryan Hill
|
W. Bryan Hill
|
Executive Vice President, Chief Financial Officer and Treasurer
|
/s/ Stephen T. Winn
|
Stephen T. Winn
|
Chairman of the Board of Directors, Chief Executive Officer, President and Director
|
/s/ W. Bryan Hill
|
W. Bryan Hill
|
Executive Vice President, Chief Financial Officer and Treasurer
|